Australians are getting an early Christmas surprise in their bank accounts as the Federal Government begins issuing refunds for changes made to student loans.
The refunds follow new legislation that updates how indexation is applied to HECS-HELP debts. Education Minister Jason Clare took to social media to encourage Australians to check how much debt has been wiped.
Last month, the government announced $3 billion in HECS-HELP debt relief. The big change? Indexation will now be determined by the lower of two rates—the Consumer Price Index (CPI) or the Wage Price Index (WPI). This is a significant shift from the previous system, where loans surged by 7.1% last year due to CPI calculations.
The changes are being backdated to June 2023, and those who paid off their student loans in 2023 or 2024 after indexation was applied will see refunds deposited into their accounts—some have already started receiving theirs today.
The Australian Taxation Office (ATO) has said most people will receive their refunds by the end of January. However, for more complex cases, it might take a bit longer.
“If your account is in credit after the adjustment, the funds will be used to offset any outstanding income tax first. Any leftover amount will be refunded to your bank account,” the ATO explained.
This move is part of the Federal Government’s broader efforts to ease the burden of student debt. They’ve also hinted at even bigger changes to the student loan system if Labor secures another term in office.
For now, many Australians are celebrating this unexpected boost as they prepare for the holiday season!
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