The Australian Prudential Regulation Authority (APRA) has launched a consultation with banks on targeted changes to how Higher Education Loan Program (HELP) debt repayments are treated when assessing home loan applications, aiming to improve clarity and consistency across lenders. The proposals would remove HELP debts from debt-to-income reporting and clarify that banks may exempt a borrower’s HELP debt from serviceability assessments where the debt is expected to be repaid in the near term. APRA noted that, while banks commonly consider HELP debts in serviceability, HELP repayment obligations differ from most other debts because repayments are determined by income rather than the size of the outstanding balance or interest rates. Subject to feedback, APRA expects the final changes to be formally incorporated into its prudential framework in the second half of 2025.
Australian Prudential Regulation Authority 2025-02-20
Australian Prudential Regulation Authority consults on changing banks’ reporting and serviceability treatment of HELP debt for home loans
The Australian Prudential Regulation Authority (APRA) is consulting with banks on proposed changes to the treatment of Higher Education Loan Program (HELP) debt in home loan applications, aiming to enhance clarity and consistency. The changes would exclude HELP debts from debt-to-income reporting and allow banks to exempt HELP debt from serviceability assessments if repayment is imminent, with final changes expected in the second half of 2025.