Quick Summary:
- Learn the repayment obligations for HELP, VSL, and AASL loans.
- Understand income thresholds, repayment rates, and methods.
- Explore real-life scenarios with 2025 figures.
- Pro Tax Tips to manage your debt efficiently.
The Reality of Student Loans
Managing student loans can feel like juggling flaming torches while riding a unicycle, exciting, but stressful. Whether you’re a student, professional, or business owner, understanding how HELP (Higher Education Loan Program), VSL (Veterans’ Study Loan), and AASL (Austudy Assistance Student Loan) repayments work in 2025 is crucial. Miss a step, and you could face unnecessary interest or delayed progress toward financial freedom.
This guide breaks down your obligations, repayment strategies, and practical examples to help you tackle your student loan confidently.
How Do HELP, VSL, and AASL Loans Work?
HELP, VSL, and AASL are Australian government-backed student loans that allow you to defer tuition payments until your income reaches a certain threshold. These loans are designed to make education accessible without upfront financial stress.
HELP: Higher Education Loan Program
HELP is the most common government study loan in Australia and is designed specifically for university and higher education students. It covers eligible tuition fees so students can study now and repay later through the tax system.
This includes programs such as:
- HECS-HELP for Commonwealth-supported university students
- FEE-HELP for full-fee-paying students
- OS-HELP for students studying part of their course overseas
HELP allows students to focus on completing their degree without needing to pay upfront, making higher education more accessible and financially manageable.
VSL: Veterans’ Study Loan
The Veterans’ Study Loan (VSL) is tailored for former or current defence personnel who want to continue their education after service. It helps veterans transition into new careers by covering approved vocational education and training (VET) courses.
Key benefits include:
- Support for nationally recognised qualifications
- Flexible learning options for career change or upskilling
- Structured repayment through the tax system once income reaches the threshold
VSL is particularly valuable for veterans wanting a smooth transition into civilian employment or further professional development.
AASL: Austudy / Youth Allowance Student Loan
The AASL provides additional financial support to students receiving Austudy or Youth Allowance who need help covering education-related expenses.
It assists eligible full-time students who may struggle with upfront costs such as:
- Course materials
- Equipment
- Study resources
- Other approved education expenses
Because AASL is added to your overall study loan balance, repayments are made through the ATO once your income exceeds the annual threshold. It acts as a safety net for students who need extra support beyond living allowances.
Key Features:
- Loan balances are indexed annually to reflect inflation.
- Repayments are income-contingent.
- No traditional interest; indexation is applied instead.
- Managed through the Australian Taxation Office (ATO).
Need help understanding these rules? Visit ITP Accounting Professionals, Australia’s trusted tax experts.
Who Needs to Repay and When?
Income Thresholds in 2025
Your repayment obligation starts once your income exceeds $52,973 (2025 threshold for HELP/VSL/AASL). Repayment rates vary depending on your income:
- 1%: $52,973 – $60,000
- 2%: $60,001 – $65,000
- 2.5%: $65,001 – $70,000
- 3%: $70,001 – $75,000
- 3.5%: $75,001 – $80,000
- 4%: $80,001 – $85,000
- 4.5%: $85,001 – $90,000
- 5%: $90,001 – $95,000
- 5.5%: $95,001 – $100,000
- 6%: $100,001+
Reporting Your Income
Repayments are collected through the tax system, so it’s essential to report your income accurately on your annual tax return. Your employer will withhold HELP repayments automatically if you’ve opted in via your tax file number.
Pro Tax Tip: A registered tax agent like ITP Accounting Professionals can help ensure your income reporting and loan deductions are accurate.
How Are Repayments Calculated?
Using Real Numbers
Imagine your taxable income in 2025 is $75,000:
- Income above the threshold: $75,000 – $52,973 = $22,027
- Repayment rate: 3.5%
- Annual repayment: 3.5% of $75,000 = $2,625
If you are employed, this amount is deducted via PAYG withholding. If self-employed, you’ll need to pay via your tax return.
Multiple Loans
If you have both HELP and VSL debts, repayments are combined into one total debt. The same income threshold applies, simplifying your repayment calculation.
Can You Repay Voluntarily?
Yes. Making voluntary repayments can save you time and prevent debt growth due to annual indexation.
Benefits:
- Reduce long-term indexation costs
- Decrease the total repayment period
- Improve credit standing
How: Through myGov, online banking, or ATO payment options.
Pro Tax Tip: Even small voluntary payments help. Consider rounding up your monthly PAYG withholding to pay extra.
Real-World Loan Repayment Scenarios (So You Can See How It Actually Works)
Understanding percentages and thresholds is useful — but seeing how repayments work in real life is even better. Here are three practical scenarios showing what HELP, VSL, and AASL repayment obligations look like in 2025.
HELP Loan
Scenario 1: The Early Career Graduate Starting Out Strong
Loan Balance: $25,000
Salary (2025): $55,000
Repayment Rate: 1%
Annual Repayment: $550
Emily has just landed her first full-time job as a junior marketing coordinator. Her salary puts her just above the 2025 minimum repayment threshold of $52,973.
At a 1% repayment rate, her annual HELP repayment is fairly small — only $550 for the year, deducted gradually through her employer’s PAYG withholding.
This means Emily can start paying down her loan without feeling financial pressure, while still building her career and savings.
Pro Tip: Small voluntary payments (even $20–$50 a month) can help reduce indexation and shorten your repayment timeline.
VSL Loan
Scenario 2: The Mid-Career Professional With a Higher Income
Loan Balance: $40,000
Salary (2025): $95,000
Repayment Rate: 5.5%
Annual Repayment: $5,225
Michael used a Veterans’ Study Loan (VSL) to upskill after leaving the defence force. Now working in project management, his income of $95,000 places him in the 5.5% repayment bracket.
At this level, his compulsory annual repayment is $5,225, automatically withheld through his employer.
The higher income means higher repayments, but also faster progress. Michael could clear his VSL balance within a few years if his earnings continue to rise.
Pro Tip: Higher-income earners benefit the most from voluntary repayments because they minimise indexation on large balances.
HELP and AASL Loan
Scenario 3: The Part-Time Worker Managing Multiple
Total Loan Balance: $25,000 (HELP: $15,000 & AASL: $10,000)
Salary (2025): $60,000
Repayment Rate: 2%
Annual Repayment: $1,200
Chloe works part-time while completing further training. She has both HELP and AASL debts, which the ATO treats as one combined balance.
With a 2025 salary of $60,000, she sits in the 2% repayment bracket. This means her compulsory annual repayment is $1,200, applied against her total loan.
Even though Chloe works reduced hours, her repayments remain manageable — and because her income fluctuates, her repayments will rise or fall accordingly.
Pro Tip: Always check your myGov loan balance yearly. Multiple small loans often get forgotten, and indexation can sneak up if you’re not monitoring it.
What Happens if You Don’t Repay?
Failing to report or repay when required can lead to:
- Increased loan balance due to indexation
- Compounded repayment difficulties
- Potential penalties or interest in rare cases
Pro Tax Tip: Even if your income fluctuates, staying proactive and checking your myGov account regularly can prevent unpleasant surprises.
Your Next Moves: Staying Smart with Your Loans
- Know your thresholds – Keep updated on 2025 income levels.
- Report accurately – Your tax return drives repayments.
- Consider voluntary repayments – Every bit helps reduce long-term debt.
- Use official tools – ATO calculators and myGov make planning easy.
- Seek professional advice – Tax agents can save you time and money.
By taking these steps, you’re in control of your loan, not the other way around.
FAQs
Can I defer repayments if I’m unemployed?
Yes. If your income falls below the threshold, you are not required to make repayments.
Are HELP/VSL/AASL loans interest-free?
Yes. They are indexed annually to keep pace with inflation, but traditional interest does not apply.
Can international students access HELP?
No. HELP loans are generally available to Australian citizens and eligible permanent residents.
Do voluntary repayments reduce indexation?
Yes. Paying off part of your debt early reduces the total loan balance, limiting the impact of annual indexation.
How can I track my repayment progress?
Log into myGov and check the ATO section for real-time loan balance and repayment history.
Ready to Take Control of Your Study Loan?
Managing HELP, VSL, or AASL debt doesn’t have to feel overwhelming. Whether you’re just starting your career, juggling multiple loans, or preparing for a major financial milestone, the right advice can save you time, stress, and unnecessary costs.
At ITP Accounting Professionals, our tax experts help you:
- Understand your repayment obligations for 2025 and beyond
- Avoid common mistakes that lead to overpayments
- Plan voluntary repayments strategically to reduce indexation
- Make informed decisions that support your long-term financial goals
- Lodge your tax return accurately and confidently
Your student loan is just one part of your financial journey — and you don’t have to navigate it alone.
Book an appointment with your nearest ITP Accounting Professionals office today to get personalised guidance and start managing your loan with clarity and confidence.
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Disclaimer: This guide is for informational purposes only and does not constitute financial or tax advice. For personalized guidance, consult a registered tax agent or financial professional.