HECS-HELP Debt Guide 2025: Repayment Thresholds & Strategies
IntuitiveCalc Team
Financial Content Specialist
HECS-HELP Guide
Over 3 million Australians carry HECS-HELP debt totaling more than $74 billion. Whether you've just graduated or have been repaying for years, understanding how your student loan works can help you make smarter financial decisions. This comprehensive guide covers everything you need to know about HECS-HELP in 2025.
What is HECS-HELP?
HECS-HELP (Higher Education Contribution Scheme - Higher Education Loan Program) is a government loan scheme that helps eligible students pay their university tuition fees. Key features:
- No upfront fees - the government pays your uni directly
- No interest - but debt is indexed to inflation (CPI)
- Repayments only when your income exceeds the threshold
- Debt doesn't affect your credit score
- Debt is written off when you pass away
HECS-HELP Repayment Thresholds 2024-25
You only start repaying your HECS-HELP debt when your Repayment Income exceeds the minimum threshold. For 2024-25, the minimum threshold is $54,435.
| Repayment Income | Rate | Annual Repayment | Per Fortnight |
|---|---|---|---|
| Below $54,435 | 0% | $0 | $0 |
| $54,435 - $62,850 | 1.0% | $544 - $629 | $21 - $24 |
| $62,851 - $66,620 | 2.0% | $1,257 - $1,332 | $48 - $51 |
| $66,621 - $70,618 | 2.5% | $1,666 - $1,765 | $64 - $68 |
| $70,619 - $74,855 | 3.0% | $2,119 - $2,246 | $81 - $86 |
| $74,856 - $79,346 | 3.5% | $2,620 - $2,777 | $101 - $107 |
| $79,347 - $84,107 | 4.0% | $3,174 - $3,364 | $122 - $129 |
| $84,108 - $89,154 | 4.5% | $3,785 - $4,012 | $146 - $154 |
| $89,155 - $94,503 | 5.0% | $4,458 - $4,725 | $171 - $182 |
| $94,504 - $100,174 | 5.5% | $5,198 - $5,510 | $200 - $212 |
| $100,175 - $106,185 | 6.0% | $6,011 - $6,371 | $231 - $245 |
| $106,186 - $112,556 | 6.5% | $6,902 - $7,316 | $265 - $281 |
| $112,557 - $119,309 | 7.0% | $7,879 - $8,352 | $303 - $321 |
| $119,310 - $126,467 | 7.5% | $8,948 - $9,485 | $344 - $365 |
| $126,468 - $134,056 | 8.0% | $10,117 - $10,724 | $389 - $412 |
| $134,057 - $142,100 | 8.5% | $11,395 - $12,079 | $438 - $465 |
| $142,101 - $150,626 | 9.0% | $12,789 - $13,556 | $492 - $521 |
| $150,627 - $159,663 | 9.5% | $14,310 - $15,168 | $550 - $583 |
| $159,664 and above | 10.0% | $15,966+ | $614+ |
What is Repayment Income?
Repayment Income = Taxable Income + Reportable Fringe Benefits + Reportable Employer Super Contributions + Net Investment Losses. It's typically higher than your taxable income if you have salary packaging or investment losses.
How HECS-HELP Indexation Works
HECS-HELP debt doesn't accrue interest, but it is indexed to inflation (CPI) each year on 1 June. This means your debt increases with the cost of living.
Recent Indexation Rates
| Year | Rate | On $30,000 Debt |
|---|---|---|
| 2024 | 4.7% | +$1,410 |
| 2023 | 7.1% | +$2,130 |
| 2022 | 3.9% | +$1,170 |
| 2021 | 0.6% | +$180 |
| 2020 | 1.8% | +$540 |
The high indexation in 2023 (7.1%) was particularly painful for many graduates, adding thousands to their debt.
2024 Reform: Indexation Cap
From 2025, HECS-HELP indexation will be capped at the lower of CPI or the Wage Price Index (WPI). This prevents massive indexation spikes like the 7.1% in 2023. The reform also applies retrospectively - if you had a debt on 1 June 2023, you may receive a reduction.
Should You Pay Off HECS-HELP Faster?
This is a common question, and the answer depends on your financial situation. Let's analyze:
Reasons TO Pay Off Faster
- High indexation rates (recently 4-7%)
- Peace of mind of being debt-free
- Improves borrowing capacity for home loans
- One less deduction from your payslip
- You have spare cash and no high-interest debt
Reasons NOT TO Pay Off Faster
- You have other high-interest debt (credit cards, personal loans)
- You don't have an emergency fund
- You could invest the money for higher returns
- Indexation is lower than investment returns (~7%)
- You might need the money for a house deposit
The Math: Voluntary Repayments vs. Investing
If indexation is 4% and you can invest in an ETF averaging 7-8% returns, mathematically you're better off investing. However, indexation is guaranteed while investment returns are not.
Priority Order for Extra Money
- 1. Emergency fund - 3-6 months expenses first
- 2. High-interest debt - Credit cards, personal loans, car loans
- 3. Employer super matching - Free money!
- 4. House deposit - If buying soon
- 5. Investing or HECS - Your choice based on risk tolerance
How to Make Voluntary HECS-HELP Repayments
If you decide to pay off your HECS-HELP faster, you can make voluntary repayments through the ATO:
Steps to Make a Voluntary Payment
- 1. Log in to myGov and go to your ATO account
- 2. Go to "Manage" → "Make a payment"
- 3. Select "HELP/VET/SSL/TSL debt" as the payment type
- 4. Choose your payment method (BPAY, direct debit, credit card)
- 5. Enter the amount and confirm
Note: There's no longer a discount for voluntary repayments (removed in 2017).
HECS-HELP and Your Home Loan
HECS-HELP debt affects your home loan borrowing capacity. Lenders consider your compulsory repayments as an ongoing expense, reducing how much you can borrow.
Impact Example
With a $80,000 salary and $30,000 HECS debt:
- Annual HECS repayment: $3,200 (4% of $80,000)
- Monthly reduction to borrowing power: ~$267
- Potential reduction in loan amount: ~$40,000-$50,000
If you're buying a home soon, it may make sense to pay down some HECS to increase your borrowing capacity.
Different HELP Loan Types
HECS-HELP is just one type of student loan. Others include:
- HECS-HELP: For Commonwealth Supported Place (CSP) students at public universities
- FEE-HELP: For full-fee paying students (not Commonwealth supported)
- VET Student Loans: For vocational education and training
- SA-HELP: For Student Services and Amenities Fees
- OS-HELP: For overseas study
All HELP debts are combined and treated the same way for repayment purposes.
Frequently Asked Questions
Does HECS-HELP affect my credit score?
No. HECS-HELP is not reported to credit bureaus and doesn't appear on your credit file.
What happens if I move overseas?
You must still make repayments if your worldwide income exceeds the threshold. You need to lodge an overseas HELP debt report annually. Failure to report can result in penalties.
Can I pause my repayments?
Compulsory repayments only occur when you earn above the threshold. If your income drops (e.g., parental leave, job loss), repayments automatically stop.
Is HECS-HELP debt inherited?
No. HECS-HELP debt is written off when you pass away. It doesn't transfer to your estate or family.
What's the maximum HELP debt I can have?
For 2024, the HELP loan limit is $116,654 for most students, or $174,998 for medicine, dentistry, and veterinary science students.