For many Australians, paying off a HECS-HELP debt can feel like a long journey. To ease this burden, the government introduced a 20% reduction on eligible HECS-HELP debts from 1 July 2025, giving millions of borrowers a welcome boost.
The reduction applies to debts that remained after January 2023, up to $100,000 per person. For example, someone with a $50,000 outstanding debt could see $10,000 automatically cleared, without needing to take any action.
Here’s how the reduction translates in practice:
- $30,000 debt → $6,000 reduction
- $50,000 debt → $10,000 reduction
- $80,000 debt → $16,000 reduction
- $100,000 or more → capped at $20,000
The Australian Tax Office began applying the reductions from mid-November 2025, with most borrowers seeing their balances updated by the end of the year.
It’s important to note that not all debts are included. Voluntary repayments and debts outside the HECS-HELP program are not eligible. For those who do qualify, however, this reduction provides a simple, automatic way to lower a significant portion of their debt.
For many borrowers, this change offers real relief, making it easier to plan ahead or feel a little lighter about ongoing repayments. It’s a practical step that can give you some breathing space in your financial journey.
For more information on eligibility and how the reduction works, check out the Department of Education’s page here.
