Important Updates on Study and Training Loan Repayment Changes
The Australian Government recently passed legislation to adjust the annual indexation of study and training loans. Going forward, the indexation will be based on the lower of either the Consumer Price Index (CPI) or the Wage Price Index (WPI).
The Universities Accord (Student Support and Other Measures) Bill 2024 passed both Houses on 26 November 2024 and is awaiting Royal Assent. Once the legislation is enacted, the new indexation rate will apply retrospectively, replacing the CPI rate with the lower WPI rate for both the 2023 and 2024 income years.
The updated indexation rates are:
- 3.2% for 1 June 2023 (reduced from 7.1%)
- 4% for 1 June 2024 (reduced from 4.7%)
What You Need to Know
If you have a study or training loan, the excess indexation amounts will be credited directly to your loan. If your loan account ends up in credit after the adjustment (i.e. if you have already paid off your loan), the credit will transfer to your Income Tax account. The credit will first be applied to any other primary tax or Commonwealth debts, and any remaining amount will be refunded to your nominated bank account.
Most clients will see these credits on their accounts by the end of January 2025. Some clients may experience slight delays, depending on the complexity of their individual cases.
No action is required; this process will happen automatically.
