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Tips for reducing a study loan balance

Last updated 9 March 2023

Don’t let rising indexation on study and training loans catch your clients unaware this year.

You can help your clients by advising them of the following tips.

  • Let their employer know if they have started studying or have a study loan.
  • Check the amount their employer is withholding. Is there enough withheld to cover their compulsory repayment? If not, they can ask their employer to increase the withholding amount. This will reduce their chances of getting a tax bill.
  • Advise their employer to calculate the correct withholding amount using the repayments calculator.
  • Check their loan balance. They can do this anytime by logging onto ATO online services via myGov. They can also find their payment reference number (PRN) and voluntary repayment options.
  • Make a voluntary repayment to reduce their total loan amount. Indexation on the loan is applied on 1 June, so a voluntary repayment prior to this date will reduce the balance that indexation is applied to. It may take a few business days for us to receive and process the payment.

Indexation won't apply to your clients' study or training loan on 1 June if their balance is $0. Any loan debt over 11 months old will be subject to indexation.

The compulsory repayment threshold for the 2022-23 financial year is $48,361. If your clients earn over this amount, they will be subject to a compulsory repayment. We will work out the repayment amount once they lodge their tax return and include it on their notice of assessment.

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