Student loan policy Australia-wide has changed in three ways since 2024 and stayed the same in one important respect. Indexation is now the lower of CPI and wage growth, a one-off twenty per cent reduction was applied to every HELP balance under the Universities Accord (Cutting Student Debt by 20 Per Cent) Act 2025, and compulsory repayments moved to a marginal system with a higher threshold. What has not changed is the structure: HELP remains an income-contingent loan, collected through the tax system, with no interest and no fixed repayment term.
This article sets out the current settings as the Australian Taxation Office publishes them and what they mean for private providers whose students borrow through FEE-HELP. It is written from fifteen years of advising private providers on TEQSA registration and on the commercial realities that sit alongside it.
Indexation: what changed and what the rates now are
Until 2023 HELP balances were indexed each 1 June to the consumer price index. When inflation spiked, indexation followed, and the political response was legislation in 2024 to index at the lower of CPI and the wage price index, with the change backdated. The ATO's published indexation rates now show 3.2 per cent for 2023, 4.0 per cent for 2024, 3.2 per cent for 2025 and 2.8 per cent for 2026.
The mechanism is unchanged. Indexation applies on 1 June to any part of a balance that has been outstanding for more than eleven months, and it is not interest; it is an adjustment intended to keep the loan's value constant in real terms. What changed is the index. Providers explaining HELP to prospective students should describe it accurately, because Standard 7.1 of the Threshold Standards requires information to students to be accurate and not misleading, and I have seen marketing copy that still describes indexation as CPI-only.
The twenty per cent reduction
The Universities Accord (Cutting Student Debt by 20 Per Cent) Act 2025 received assent on 2 August 2025. It applied a one-off twenty per cent reduction to outstanding HELP and related study loan balances, calculated on the balance before the 2025 indexation was applied. Borrowers did not need to apply; the ATO applied the credit to accounts.
For a provider, the reduction has no direct operational effect. It changed the balances of past and current students, not the terms on which new loans are made, and it did not alter FEE-HELP loan limits or the approval requirements for providers. Its indirect effect is on sentiment: student debt has become a live political question, and our articles on student debt in Australian higher education and on the impact of student debt on the sector look at what that means for enrolment behaviour.
Repayment: the marginal system and the 2026-27 thresholds
The second schedule of the same Act rebuilt the repayment system. From the 2025-26 income year, compulsory repayments are calculated on income above a minimum threshold rather than as a percentage of total income. The ATO's repayment thresholds and rates page sets the 2025-26 minimum threshold at $67,000, with fifteen cents in the dollar payable on income between $67,001 and $125,000, seventeen cents in the dollar above that to $179,285, and ten per cent of total repayment income beyond it.
For 2026-27 the threshold is indexed to $69,528, with the fifteen cent band running to $129,717 and the seventeen cent band to $186,050. The practical consequence is that a graduate earning modestly above the threshold now repays a few hundred dollars a year rather than several thousand, which lengthens the time to repay but reduces the pressure on early-career income. Providers whose students are mature-age career changers, a large share of the private sector's market, will find this the change students ask about most.
What student loan policy Australia has settled on means for FEE-HELP providers
Private higher education providers are not part of the Commonwealth-supported system. Their students borrow through FEE-HELP, which requires the provider to be approved under the Higher Education Support Act 2003 in addition to holding TEQSA registration. Nothing in the 2024 or 2025 changes altered that approval process or the obligations that come with it, including tuition assurance, census date rules and the reporting of enrolment and loan data.
What the changes do alter is the conversation with students. The student loan policy Australia now runs is more generous at the margin than it was in 2023, and a provider whose fee levels were being justified against an outdated picture of repayment burdens should revisit its student-facing information. In my experience the providers that explain HELP clearly, including the loan fee where it applies and the way indexation and repayment actually work, have fewer complaints under Standard 2.4 and fewer refund disputes.
The other thing to watch is the direction of travel. The Universities Accord process produced these changes and has further recommendations on its list, and the establishment of the Australian Tertiary Education Commission means funding and loan settings will be reviewed on a schedule rather than by episode. Providers should assume the settings above are current, not permanent, and check the ATO pages each July.
What I tell providers to do about it
Read the ATO's published rates and thresholds once a year and update every student-facing document that mentions HELP on the same day. Do not paraphrase the policy; link to the source. And treat student debt as part of the market you operate in rather than a matter for government alone, because your students are the ones who will ask whether the degree was worth the loan.
Download the Financial Viability Model Template
— a fee, enrolment and cash-flow model that accounts for FEE-HELP timing and census dates, drawn from our TEQSA registration work with private providers. Get the template
Want the full article?
Enter your email for free access to the rest of this guide and our TEQSA resource library.
Frequently asked questions
Is HELP indexation still linked to CPI?
Partly. Since the 2024 changes indexation is the lower of the consumer price index and the wage price index, applied on 1 June. The ATO publishes the rate each year; for 2026 it was 2.8 per cent.
Did the twenty per cent HELP reduction change FEE-HELP for private providers?
No. It reduced existing borrower balances but did not change loan limits, provider approval under the Higher Education Support Act 2003, or reporting obligations.
What is the HELP repayment threshold for 2026-27?
The ATO sets the minimum repayment threshold for 2026-27 at $69,528, with repayments calculated at marginal rates on income above that figure.
Do private provider students pay a FEE-HELP loan fee?
A loan fee can apply to FEE-HELP loans for some undergraduate courses at non-university providers. Providers should state the current fee, as published by the Department of Education, in their student-facing information rather than rely on a figure from a previous year.
Dr Brendan Moloney is CEO of Darlo Higher Education, Australia's largest specialist TEQSA consultancy. He holds a PhD from the University of Melbourne, is a Cambridge University Press author on governance in higher education, and has advised private providers on registration and course accreditation for more than fifteen years.