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Last updated 6 Feb 2026 · 23,196 views
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We’ve started processing the Government’s 20% reductions for student and training support debts like HECS or HELP.

So, what does this mean for you? 

Your student debt balance as at 1 June 2025 was reduced by 20% before indexation was applied. We then adjusted the indexation, so it applies to the new lower debt balance. The best part is you don't need to do anything for the reduction to be applied. Most people would have received their reduction before the end of 2025, however more complex reductions may not be processed until early 2026.

When your reduction was applied to your debt, we let you know through SMS, email or a message to your myGov inbox. You can view your study loan account in the ATO app or on your ATO Online account through myGov.

You won’t be eligible for the 20% reduction if you didn’t have a student debt on 1 June 2025. Remember to lodge your 2025 tax return as normal, there's no benefit in delaying lodgment.

What if my loan account is in credit after the reduction?

If your loan account is in credit after the reduction, you may receive a refund to your nominated bank account. If you have an outstanding debt with us or another Commonwealth agency, the credit may be used to pay those instead. Any remaining credit will then be refunded to your nominated bank account.

We’re working to process refunds as quickly as possible. Refunds are processed separately to the reduction. Most refunds were processed by the end of January 2026, however some accounts are complex and require manual action. These complex accounts will have their refunds processed in February and March 2026.

You don’t need to call us to get your refund. It’s a good idea to check your bank account details are up to date with us or your tax agent to avoid any processing delays.

Once your refund is processed, allow for processing times before the amount will be in your nominated bank account. Our processing time is 3 business days, and bank processing times can vary.

If your loan is paid off, remember to tell your employer so they stop withholding additional amounts. Just fill out a Withholding declaration and give it to them.

What else has changed?

Compulsory repayments have changed

Next tax time, you won’t need to make a compulsory repayment unless your repayment income is more than $67,000. We’ll also only calculate your repayment on income above the $67,000 threshold, instead of your total income.  

This means most people will either have a smaller compulsory repayment or won’t need to make a repayment at all. You may notice your employer withhold less money from your pay to cover any compulsory repayment, giving you more money in your pocket each payday!

PAYG instalments

You won't notice the repayment changes on your PAYG instalments until the 2026-27 income year. You can vary your instalments at any time – be careful, it’s easy to underestimate and end up with a tax bill later. A tax agent can help you with this if you’re unsure.

For more info on the latest changes visit Study and training loans – what's new.

Liked by anniewarner67 and TrueBlueAussie
EdM(I'm new)I'm new
27 Apr 2026

I had a VET loan amount that is part of an income tax debt payment plan that was set up in 2024 which reduced my VET loan to $0 as of 1 June 2025. The payment plan is still in place with it scheduled to be paid in November 2026. I was wondering if because my VET loan debt is now showing as an income tax debt am I eligible for the 20% reduction

RobMitch37(I'm new)I'm new
20 Apr 2026

Another one wondering if anyone has had any luck with this? All the information online says by March 2026. No email address I can ask questions of. When I call to enquire it's peaktime and my call can't be answered so it then hangs up. Asking the AI is a pointless exercise.


Not impressed. Just want my refund sorted when I thought it would happen in January. Can it really be that 'complex'?

CC12345(Newbie)Newbie
1 Apr 2026

It is now April and my HECs is still in credit. When will I be receiving my refund?

it’s really frustrating because I counted on the money in January which was first advised as the timeframe and then it was changed to March which I was counting on again and here we are on the 1st April and nothing has changed.

I called in February and was advised it would happen within 2 weeks but no luck. There needs to be better communication as people are waiting and counting on this money!

KPerry26(I'm new)I'm new
24 Mar 2026

I am still waiting on my refund. Is there any updates of when these are going to happen. I have called the ATO and confirmed my bank account details.

Anna98(Initiate)Initiate
14 Mar 2026

ATO!!!! Where is our money? Half way through March and still nothing. Beyond furious. Y'all want our owed money immediately so why should we expect anything less?! Going to the media with this one.

PotatoKayo(I'm new)I'm new
3 Mar 2026

I was in credit 6.6k and only 5.6k went to my income tax account (still not in my bank account a week later, that’s another issue). Why would the hecs account have left 1k credit in it??


(sorry this next part is more of a rant but this has been a long process of annoyances so I had to get it out)


Also, how is it possible that when tax payers are late to pay the ATO we get fined, when the ATO is late to pay us we have to search a Forum to find out? This money is meant to be paying off my car debt at 10% interest. I’m very frustrated it’s extended out from December to sometime in March when this affects our finances in other ways with no compensation. I have also never been able to get to the ATO call line due to “peak demand.”

Jackson24(Newbie)Newbie
3 Mar 2026

My refund was not processed by the end of Jan, I had called up on 06 Feb to be told that there was no reason it was withheld, and that a manual payment would be made - and escalated. I called again on the 25th of February to be told that the case hadn't even been assigned, is there any reason why a cohort of people without outstanding debts/issues would be experiencing such a delay in the refund process?

Chicken_fan(Initiate)Initiate
3 Mar 2026

My HELP and SFSS were both in credit. They have now both been marked as ‘2025 HELP Compulsory repayment credit amended’ and are at $0. I did not have any other debts to pay. Does this mean the funds are in cyberspace somewhere and will hit my bank account soon?

hellohello(Newbie)Newbie
1 Mar 2026

Hi,


My HECs account is in credit and I am owed a refund.


I have made upcoming medical decisions that require finances based on the original date of refunds to be processed by end of Jan 2026. I have called the ATO individual line and am met with a message that my call cannot be answered due to “peak demand”.


Is there a way I can speak with someone please on the timing of my funds being released?


Thanks

SeanLambert(Newbie)Newbie
25 Feb 2026

Hi All,


Does anyone have an update on the dates for when the credits will be applied? The helpline is no use as they have no information on when the refund will occur.


I would apprecite any updates.


Cheers.

saralucia(I'm new)I'm new
10 Feb 2026

Hi!

Bit of a tricky one here.

I had a HECS debt, but in December 2024 the ATO transferred it to an ATO debt.

I now have an ATO debt but my HECs reads as zeroed. Am I still eligible for the reimbursement? And is there someone I can contact to discuss this if not, as I don't want to miss out because the debt was transferred to a different category despite still being a HECs debt.

TIA!

Elle1234(I'm new)I'm new
4 Feb 2026

I paid off my HELP debt in May of last year. My account was in credit $1100 until yesterday. Now I’m $4600DR but another one of my tax accounts (which I had a debt for and on a payment plan) is +$800CR. I was hoping the refund would go towards the next quarterly tax payment I’m owing for March.


Why has my student debt returned after I told my employer to stop paying SSL?



hellohello(Newbie)Newbie
1 Feb 2026

Hi,


My refund has not yet processed and is still showing as a credit.


I just called the ATO individual line and spoke to a staff member who told me no dates have ever been communicated to him for when refunds are expected and he wasn’t sure what I should do. He wasn’t even aware these refunds were expected “by January 2026”. Honestly didn’t fill me with much confidence.


Is there a new timeframe these refunds are expected by? Should I just trigger an amend of my FY25 return to begin the process of receiving my refund?


thanks

AliceTam(Newbie)Newbie
31 Jan 2026

Hello,

Today is the last day of January, when HECS credit refunds were meant to be paid by. I still have my credit amount sitting in my HELP debt showing on the ATO website. When will this credit be refunded? I have no outstanding payments. Please could some updated information be communicated. Thank you

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20% reduction of HECS-HELP and other student debts | ATO Community