Written by: Dylan Murphy
Were you affected by the huge indexation jump in student HECS debts? Or did you pay off your student loan in 2023 or 2024? Good news— you may have a study loan refund on its way.
On 26 November 2024, the government announced that three million Australians will receive a collective total of $3 billion in student loan refunds.
This change to study loan indexation will be backdated to the 1st of June 2023. This means, that dreaded 7% indexation is no longer in effect.
New Indexation Rates
The ATO outlined the new indexation rates for the two previous years as:
- 3.2% for 2023 year – reduced from 7.1%
- 4% for 2024 – reduced from 4.7%.
What this Change Means for You
Every student loan will now be on the 4% indexation rate going forward. If you’re eligible for the refund, the ATO will sort out the rebate on your behalf. Most people will see their loans adjusted and accounts credited by the end of January 2025.
Follow these steps to find your rebate:
1. Check Your Study or Training Loan for the Credit
The ATO will credit your loan for the excess money you paid in 2023 and/or 2024.
2. Look for Extra Funds in Your Income Tax Account
If you’ve fully repaid your student debt from 2023 and 2024, you’ll receive a credit from the ATO.
This credit will be transferred to your Income Tax Account as long as you don’t have any outstanding tax or debts owed to the Commonwealth.
3. Confirm Your Bank Account Details
Confirm your bank account details are up to date with the ATO to ensure your refund is processed quickly.
4. Speak with Your Accountant
If you have nominated your accountant or financial adviser’s account, they will receive the refund and will be responsible for reconciling that amount.
Student Debt in 2025
There’s still more hope on the horizon for students with Uni or skill-training debt.
Patrick Gorman MP posted on X:
“And there’s more to come. …all student debt [may be cut] by a further 20 per cent and make repayments fairer.”
If that happens, our accountants at Greenhalgh Pickard will keep you updated.
Disclaimer:
The information contained in this article is for general informational purposes only and is not intended to provide legal advice or substitute for the advice of a professional. This information does not consider your personal circumstances and may not reflect the most current legal developments. Should you need advice, please contact our firm for targeted information relating to personal your situation.