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Understanding the Study & Training Loan Indexation Rates

The repayment thresholds and rates are updated annually for the compulsory repayment of study and training loans. Recently the indexation rate from June 1 was set at 7.1% up from the previous 3.9%. Increases in the indexation rate can lead to higher outstanding loan balances and consequently larger repayments for borrowers.

One of the key components of the Study & Training Loan program is the repayment threshold, which determines when borrowers are required to start repaying their loans. The threshold has been set at $51,550, meaning that individuals with a taxable income above this level are obligated to make repayments on their debt.

With the recent changes, it's essential for borrowers to be aware that the indexation rate has increased to 7.1%. This figure represents the annual adjustment made to the debt based on changes in the Consumer Price Index (CPI). The rise from 3.9% to 7.1% indicates a significant shift in the calculation of debts.

The increase in the indexation rate can lead to higher outstanding loan balances and, consequently, larger repayments for borrowers. This change may particularly affect those who have already completed their studies and are currently in the workforce.

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If you have any questions please do not hesitate to contact your Client Manager or one of the team at Sullivan Dewing.

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