Indexation is added to your Higher Education Loan Program (HELP) debt each year. This means the amount you repay in total will be more than the original amount of the loan.
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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 that is applied to your HELP debt changes each year as it is based on the lower of the Consumer Price Index (CPI) or Wage Price Index (WPI).
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 2023 – the part of the debt that was 11 months old is indexed at 3.2 %
- 1 June 2024 – the part of the debt that was 11 months old is indexed at 4.0%
- 1 June 2025 – the part of the debt that was 11 months old is indexed at 3.2%
- 1 June each year after – the HELP debt is indexed as per the indexation rate each year.
Recent changes to the indexation rate and indexation credits
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), so that HELP debts cannot grow faster than wages.
This change has been backdated to 1 June 2023 indexation.
- The 2023 indexation rate of 7.1% was reduced to 3.2%
- The 2024 indexation rate of 4.7% was reduced to 4%
If you had indexation added to your HELP debt in 2023 and/or 2024, the ATO recalculated your HELP debt and issued you with an indexation credit.
A series of FAQs with further information about the indexation credit is 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.