The ATO have commenced reducing all student and training support debts by 20% that existed on 1 June 2025. If you have multiple eligible student debts, each account will receive a 20% reduction.

The 20% reduction is applied to your student debt balance as at 1 June 2025, before indexation was applied. The 2025 indexation will be recalculated on the reduced debt amount.

Where your study loan account is in credit after the 20% reduction, you may receive a refund. If you have outstanding tax or other Commonwealth debts, the ATO will apply your credit to these debts first.

If you made a compulsory repayment after 1 June 2025, the ATO will refund your study loan credit by amending your tax return to adjust your assessed compulsory repayment. You’ll also receive a notice of amended assessment.

Source: Australian Taxation Office