Indexation is added to your Higher Education Loan Program (HELP) debt each year. This means means the amount you repay in total will be more than the original amount of the loan.
What's on this page
light-pink
Why is indexation applied to my loan?
Indexation is when your HELP debt is adjusted to reflect the changes in the cost of living. This is to ensure education maintains its value over time, like other goods and services. No matter how long it takes to repay, a student will repay an amount that is more like the cost of education today.
Proposed changes
The indexation rate is currently based on the Consumer Price Index (CPI) but the government has introduced legislation to cap the indexation rate at the CPI or the Wage Price Index (WPI), whichever is lowest.
The Universities Accord (Student Support and Other Measures) Bill (the Bill), which includes the measure to cap the indexation rate, was introduced into Parliament on 15 August 2024.
The Bill has to be passed by both Houses of Parliament. It has passed the House of Representatives and will be considered by the Senate when parliamentary sittings resume in early November. You can follow the progress of the Bill at: Universities Accord (Student Support and Other Measures) Bill 2024 – Parliament of Australia (aph.gov.au).
When passed, the changes will be backdated to 1 June 2023.
When is indexation applied?
Indexation is applied on 1 June each year.
Who applies indexation?
The Australian Taxation Office (ATO) is responsible for applying indexation to HELP debts.
What HELP debts is indexation applied to?
Indexation is only applied to HELP debts older than 11 months.
How is the indexation rate calculated?
The indexation rate is currently based on the Consumer Price Index (CPI).
The rate of indexation applied to your HELP debt will change each year.
For example
Tash undertook a three-year undergraduate degree from 2019-2021. She hasn’t made any repayments yet. Her HELP debt is indexed each year as follows:
- 1 June 2019 – no indexation was applied, as no part of the debt was 11 months old yet.
- 1 June 2020 - the part of the debt that was 11 months old (Semester 1, 2019) is indexed at 1.8%.
- 1 June 2021 – the part of the debt that was 11 months old is indexed at 0.6%.
- 1 June 2022 – the part of the debt that was 11 months old is indexed at 3.9%.
- 1 June each year after – the HELP debt is indexed as per the indexation rate each year.
Check indexation rates
You can check current and prior indexation rates on the Australian Taxation Office (ATO) website.
Proposed changes to how the indexation rate will be calculated
What does this change mean to the 2023 and 2024 indexation rates?
Once the legislation is changed, the indexation rates for 2023 and 2024 will be reduced.
-
The 2023 indexation rate of 7.1% will be reduced to 3.2%
-
The 2024 indexation rate of 4.7% will be reduced to 4%
Does this apply to you?
The change to the 2023 and 2024 indexation rates will impact you if you had a HELP debt as of 1 June 2023 and / or 1 June 2024
-
If you had outstanding HELP debt that was indexed on 1 June 2023, you will receive an indexation credit for 2023.
-
If you had an outstanding HELP debt that was indexed on 1 June 2024, you will receive an indexation credit for 2024.
-
If you had outstanding HELP debt that was indexed on 1 June 2023 and 1 June 2024 you will receive an indexation credit for both years.
How does this change impact my existing HELP debt?
Once the indexation rates have been amended, your HELP debt will be re-calculated by the ATO using the amended indexation rates and you will be issued with an indexation credit.
For example
Fredrik studied his business degree from 2019 to 2021 and on 31 May 2023 he had a HELP debt of $30,000.
Assuming he did not make any repayments, indexation was applied to Fredrik’s HELP debt as follows:
- On 1 June 2023, the HELP debt of $30,000 was indexed at 7.1% so the HELP debt became $32,130
- On 1 June 2024 the HELP debt of $32,130 was indexed at 4.7% so the HELP debt became $33,640.11
- Fredrik currently has a HELP debt of $33,640.11
Once the legislation is changed, the indexation rates for 2023 and 2024 will be reduced.
Fredrik’s HELP debt following the changes to the indexation rate:
- The 2023 indexation applied to HELP debt of $30,000 will be 3.2% instead so the HELP debt becomes $30,960
- The 2024 indexation applied to HELP debt of $30,960 will be 4% instead so the HELP debt becomes $32,198.40
- Fredrik currently has a HELP debt of $32,198.40
Fredrik will receive an indexation credit of $1,441.71
What do I need to do to receive the indexation credit?
You do not need to do anything to receive the indexation credit.
If the legislation is passed, the ATO will automatically update your HELP debt to reflect the changes to indexation.
How much indexation credit can I expect to receive?
You can find out about your estimated indexation credit by using the HELP indexation credit estimator, available on the Department of Education website.
Where can I find more information about indexation credits?
A series of FAQs has been developed to answer your questions about the indexation credit. These are also available on the Department of Education website.
Useful links and resources
The ATO is responsible for managing HELP debts.
You can check the amount of indexation applied to your HELP debt through ATO online services in myGov or by contacting the ATO directly on 13 28 61.
More information about indexation is also available on the ATO website.