Bill to Reduce Student Debt Now Law

The Universities Accord (Cutting Student Debt by 20 Per Cent) Act 2025 (‘the Act’) recently
received Royal Assent, and it is now law. The Act delivered on the 2025/26 Federal Budget announcement to reduce student debts.

More particularly, the Act:
– Provides a one-off 20% reduction to Higher Education Loan Program (‘HELP’) debts
and other student loans that were incurred on or before 1 June 2025;
– Increases the minimum repayment threshold from $54,435 in the 2024/25 income year
to $67,000 in the 2025/26 income year (to continue to increase each year with the
growth in wages); and
– Introduces a marginal repayment system where compulsory student loan repayments
are calculated only on income above the new $67,000 threshold rather than having it
based on a percentage of the repayment income.