Aussies with student debt, listen up! This might be the biggest plot twist since (*GOT spoiler alert*) Jon Snow came back from the dead. If you’ve got student loans lurking in the background like a Netflix subscription you forgot you still pay for, we’ve got some good news. 

👩‍🎓👨‍🎓 First, let’s talk about the debt monster no one warned us about...

You know how in high school they taught us Pythagoras's theorem but not how student loans could haunt your adult life? Classic. Most of us signed up for uni or TAFE without really grasping what HECS-HELP debt would mean years down the line.

Fast-forward to post-grad life:

• You get your first proper paycheck and notice a weird little deduction.
  
  
• Then you try to buy a house and discover your borrowing power is lower than your chances of finding parking at Costco on Sunday

You're not alone. Nearly 3 million Australians are in the same boat, with the average student debt sitting at $27,640 (2024). And with rent, groceries, and fuel prices skyrocketing post-covid…it’s been rough. But thankfully, help (not HELP) is on the way.

💸 2025–2026 Changes That’ll Actually Make a Difference

1. A 20% discount on student loans – no, this is not a drill.

From June 1, 2025, the government is giving your HECS-HELP debt a dramatic glow-up with a once-off 20% automatic discount. No forms, no awkward phone calls, no Centrelink admin drama.

So if you’ve got the average student debt of $27,640, you’re getting a solid $5,528 wiped off – bringing it down to $22,112. That’s enough to cover a Euro summer holiday (on a tight budget). 

2. The repayment threshold is going up

From July 1, 2025, you won’t have to start repaying your student loan until you’re earning $67,000 (up from $54,000). That means more money in your pocket for essentials like rent, groceries… and pretending you’re fine at the Saturday bottomless brunch.

That’s not all, you’ll now only repay student debt on the income above $67,000, not your whole salary. If you’re earning $70,000? Before you’d repay around $1,750, but now, only about $450.

This does mean you’ll take a bit longer to pay off your HECS-HELP debt, but it might give your budget some breathing room in the meantime. If you decide you don’t need the extra change, you can always top up your repayments again!

3. Student debt won’t mess with your property buying dreams… as much

In the past, banks treated your student loan like any other debt (think: credit cards, car loans, buy now pay later debt), which could seriously hurt your chances of securing a loan to buy your dream home. 

As a rough rule of thumb, you could expect your maximum borrowing bower to reduce by around 10x the value of your annual HECS repayments. For example, if you were repaying $2,000 in HECS repayments per annum, then your borrowing power could be reduced by ~$20,000.

But the government is now telling banks to chill out when assessing HECS-HELP debt for home loan applications.

For example, CBA recently announced their rule changes:

• If your student loan can be paid off within 12 months or less, CBA will ignore it completely.
• If it can be paid off in 1–5 years, CBA will reduce the serviceability buffer from 3% to 1%.

Translation: Higher chances of qualifying for a home loan and/or increasing your borrowing capacity. Woohoo!

Previously in the HECS-HELP drama land...

Student debt used to get indexed based on CPI (Consumer Price Index). That was fine when inflation was averaging around 0.6% in the 2020-2021 financial year. 

But post-COVID? CPI spiked to an average of 7.1% in the 2022-2023 financial year. That meant the average $27,640 debt would have jumped around $1,962 in one year, instead of just $165. You could literally buy a flight to Europe with the difference.

In 2024, the government finally stepped in to say, “Yeah, that’s not fair,” and changed the HECS-HELP indexing formula. Now they take the lower of CPI or WPI (Wage Price Index) – which is a way more balanced approach. 

In conclusion, student debt just got a bit less evil. With big discounts, fairer repayment rules, and a softer touch from the banks, perhaps there’s now a bit more breathing room in your financial forecast, maybe even a path to that first home or long-overdue overseas trip.

So whether you’re a recent grad, halfway through your degree, or already deep into your post-uni adulting era, this is your sign to check in on your student loan situation. Future you (and your future budget) will thank you.