Changes to student loan repayments – impacts for NFP staff with HECS / HELP debts

On 2 August 2025, the Universities Accord (Cutting Student Debt by 20 Per Cent) Bill 2025 became law.

This brings into effect several important changes to student loan indexation and repayment settings, which directly impact non-profit organisations employing staff with HECS / HELP debts.

What's changed?

In essence, the changes include:

• A one-off, 20% reduction to all outstanding HELP balances, as at 1 June 2025, easing the overall debt burden for many workers
  
• An increase to the minimum compulsory repayment threshold, from $56,156 to $67,000 for the 2025–26 income year, meaning these lower-income earners will be spared from making repayments
  

Impacts for your organisation

From 24 September 2025, employers must begin using the updated study and training support loans (STSL) withholding rates and PAYG tax tables. It’s important that non-profits adjust to these new tables and ensure the correct PAYG amounts are being withheld from staff. For FBT exempt organisations that make manual PAYG deductions for staff who take advantage of salsac, the manual withholding amount will reduce.

Note, there is no requirement to recalculate the STSL withholding amounts from payments that were made between 1 July and 23 September.

Where Purpose carries out our client’s payroll, we have checked that payroll settings reflect these new thresholds and withholding requirements. Where Purpose does not do your payroll, please check these settings to ensure ongoing compliance. See the ATO website for more info and don’t hesitate to reach out to us with any queries.