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.
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Changes to the Indexation Rate
Legislation was passed in November 2024 to cap the indexation rate to the lower of the Consumer Price Index (CPI) or the Wage Price Index (WPI).
These changes will be backdated to 1 June 2023.
The Australian Taxation Office (ATO) is now working towards applying the changes to individual HELP debt accounts.
Further information on how this change will impact students is detailed below.
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.
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 rate of indexation changes each year and until recently was based on solely on the Consumer Price Index (CPI).
Legislation was passed in November 2024 to change the way HELP indexation is calculated to use the lower of the CPI or Wage Price Index (WPI).
This change has been backdated to 1 June 2023.
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.
Recent changes to the indexation rate
Legislation was passed in November 2024 to cap the indexation rate to the lower of the Consumer Price Index (CPI) or the Wage Price Index (WPI).
This change has been backdated to 1 June 2023 indexation.
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The 2023 indexation rate of 7.1% will be reduced to 3.2%
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The 2024 indexation rate of 4.7% will be reduced to 4%
Does this indexation rate change 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
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If you had outstanding HELP debt that was indexed on 1 June 2023, you will receive an indexation credit for 2023.
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If you had an outstanding HELP debt that was indexed on 1 June 2024, you will receive an indexation credit for 2024.
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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 the indexation rate change impact my HELP debt?
Now the indexation rates have changed, if you had indexation added to your HELP debt in 2023 and 2024, the Australian Taxation Office (ATO) is recalculating your HELP debt and will issue you 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
Now the indexation rates for 2023 and 2024 have changed, Frederik’s HELP debt will be reduced:
- 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.
The Australian Taxation Office (ATO) is now working towards applying the changes to individual HELP debt accounts.
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.