Student Assistance Act 1973

Repayment works like HECS/HELP: You only start repaying once your income exceeds the minimum repayment threshold under the Higher Education Support Act 2003, and only after you've cleared any HECS/HELP debt first. Repayments are collected automatically through the tax system.

A 20% debt reduction applies to loans incurred between 1 January and 1 June 2025, reflecting a temporary government debt relief measure.

If you die, the debt is wiped. If you go bankrupt, the debt survives bankruptcy (it cannot be erased by going bankrupt).

2. Student Financial Supplement Scheme (Part 4A — now closed)

This scheme allowed tertiary students receiving ABSTUDY to take out loans from private financial corporations (like banks) instead of receiving their full ABSTUDY benefit. The scheme is no longer open to new applicants — it closed when the Student Assistance Legislation Amendment Act 2006 received Royal Assent — but people who took out loans under it may still be repaying them through the tax system.

Key features of the old scheme:

• No interest charged to students (the government paid a subsidy to the bank instead)
• The loan amount was indexed (grew with inflation) after the contract period ended
• Repayment happened through the tax system once income was high enough
• Overpayments and fraud could result in the loan becoming immediately repayable as a debt

3. Debt Recovery and Administration

The Act contains detailed rules about:

• How debts are calculated and tracked from year to year
• How the ATO assesses and collects repayments (treated similarly to income tax)
• Departure prohibition orders — the government can prevent you from leaving Australia if you owe a debt
• Your right to ask the ATO to defer or reduce your assessment if repayment would cause serious hardship
• Review rights through the Administrative Review Tribunal (ART)
• Confidentiality protections for your personal information

Why does it matter?

If you're an Indigenous Australian student receiving ABSTUDY Living Allowance, you may be eligible for start-up loans to help cover costs at the beginning of each semester. These loans accumulate as an income-contingent debt — meaning they grow with inflation each year but you only repay them once you're earning enough. Understanding when repayments kick in (after HECS/HELP is cleared) is important for financial planning.

If you took out a Financial Supplement loan before 2006, you may still have an outstanding debt being collected through your tax return.