Key Highlights

  • The ATO says it has finished applying the 20% HELP reduction.
  • Accounts left in Credit after the reduction were refunded where there were no other debts.
  • Some refunds may need to be processed manually, particularly for card repayments.
  • Repayment thresholds are indexed each 1 July in line with average weekly earnings.

If you were close to clearing your HELP Debt when the 20% cut landed, your study Loan account may now show a credit rather than a balance. The ATO says it has finished applying the reduction and has paid refunds where accounts went into credit. But not every refund goes out automatically.

With 2025–26 tax returns now lodged by most self-preparers, this is a good time to check where any credit has gone.

The cut is done, the ATO says

The ATO's study and Training loans page, updated on 13 October 2026, says it has "completed processing of the 20% reduction for all student and training support debts that existed on 1 June 2025".

The reduction is enacted law. It applies to HELP and other study and training support debts as they stood on 1 June 2025.

For most people, the result is simply a smaller debt. For people who had paid down most of their balance, including through voluntary repayments, the reduction could be larger than what they still owed. That leaves the account in credit.

The ATO says plainly: "If your study loan is in credit after the 20% reduction, you may get a refund."

Where automatic refunds were sent

According to the ATO, refunds were processed where a study loan account was in credit after the reduction and the person had no outstanding tax or other Commonwealth debts.

In most cases, the refund was paid to the bank account the ATO had on record. The ATO notes that this may have been a tax agent's account rather than the person's own.

Many people nominate their agent's trust account so that the fee can be deducted from a tax refund before the balance is passed on. A HELP credit refund may have followed the same route.

If you had a tax debt or another Commonwealth debt, the credit may have been applied to that debt rather than paid out.

Where a refund is still due, the ATO asks people to check their income tax account first. Both the ATO app and ATO online services, accessed through myGov, show study loan and income tax account details.

Paid by card? You may need to ask

The ATO flags one group that may not have been refunded automatically: people who made repayments by card.

Its page says some refunds may need to be processed manually, "especially if you made repayments by credit or debit card". In those cases, the ATO says, people may need to contact it so the refund can be processed.

The ATO does not say why card payments are handled differently. The practical effect is that a credit can sit on an account until the person asks for it.

Hypothetical example: from debt to credit

Consider a hypothetical graduate whose HELP balance was $10,000 on 1 June 2025.

Over the following year, she made $9,000 of voluntary repayments by credit card, leaving $1,000 owing on her account. For simplicity, this example ignores indexation and any compulsory repayments made through her tax return.

When the ATO applied the 20% reduction, it was calculated on her 1 June 2025 balance. Twenty per cent of $10,000 is $2,000.

Taking $2,000 off a $1,000 balance leaves her account $1,000 in credit.

Because she paid by card, her refund may not have been sent automatically.

Real accounts will differ. Indexation, compulsory repayments and the timing of payments all change the figures.

Over-withheld from your pay

A separate refund may come through your tax return.

The law also changed how compulsory repayments work. From the 2025–26 income year, repayments are calculated on a marginal basis, only on the income above the minimum repayment threshold. The ATO says the minimum repayment income for 2025–26 is $67,000.

Because employers were still Withholding under the old system for part of the year, some workers had more taken from their pay than they now need to repay. The ATO says "any additional amounts already withheld may be refunded to you when you lodge your 2026 tax return", again only if there are no outstanding tax or other Commonwealth debts.

The ATO's own example is Grace, with repayment income of $80,000 in 2025–26. Under the old rules, her compulsory repayment would have been $2,800. Under the new rules, she pays 15% of the $13,000 above $67,000, or $1,950. That is $850 less, and the ATO says she gets around $32 extra in each fortnightly pay.

Separately, people who pay tax by PAYG instalments, such as investors and some self-employed workers, are treated differently.

The ATO says the changes are not applied to instalment payers until 1 July 2026. Any extra tax paid in 2025–26 is returned in the 2026 tax assessment, as long as there are no outstanding debts.

The ATO also says instalment payers may want to vary their instalments to reflect a lower compulsory repayment, and suggests a registered tax agent can advise on that.

Checklist and what to watch

  • If you used a tax agent, ask whether a HELP refund was paid into their account.
  • If you repaid by credit or debit card and still have a credit, the ATO says you may need to contact it for a manual refund.
  • Late 2026: refunds of over-withheld repayments flow through as 2026 tax returns are assessed.
  • Each 1 July: repayment thresholds and rates are indexed in line with average weekly earnings, the ATO says, so the figures for 2026–27 and later years differ from the 2025–26 numbers above.
  • 1 July 2027: the 2026–27 income year ends, and returns for that year open, with HELP repayments again worked out on the marginal system.