HECS-HELP Student Loan Guide
Everything you need to know about Australian student loans — the new $67,000 threshold, marginal repayment system, 20% debt reduction, and indexation in FY 2025-26.
Last updated: May 2026 (FY 2025-26 figures)
FY 2025-26 Threshold
$67,000
Up from $54,435 — new marginal system
Above $125k Rate
17c per $1
Plus $8,700 base
2025 Indexation
3.2%
Lower of CPI or WPI · Applied 1 Jun 2025
One-off 20% Reduction
1 Jun 2025
Auto-applied to all HELP balances
In This Guide
What is HECS-HELP?
HECS-HELP (Higher Education Contribution Scheme - Higher Education Loan Program) is an Australian Government loan scheme that helps eligible students pay for their university studies. The loan covers tuition fees and is repaid through the tax system once you earn above a certain income threshold.
Key Features of HELP Loans
- • No upfront costs: Study now, pay later when you're earning
- • Income contingent: Only repay when earning above threshold
- • No real interest: Only indexed to inflation (CPI), not charged interest
- • No credit checks: Eligibility based on citizenship/residency, not credit history
- • Debt doesn't expire: Remains until fully repaid (or death)
Types of HELP Loans
HECS-HELP
For Australian students enrolled at Commonwealth supported places (CSP) at universities. The government subsidises part of your fees and you pay a "student contribution" which can be deferred as a HECS-HELP loan.
FEE-HELP
For students paying full tuition fees (not subsidised). This applies to:
- Postgraduate coursework students
- Students at private universities
- Undergraduate students at non-Commonwealth supported places
- Open Universities Australia students
Note: FEE-HELP has a lifetime limit ($174,998 in 2024 for most courses, higher for medicine/dentistry/veterinary).
VET Student Loans
For students undertaking vocational education and training (VET) at Certificate IV level or above. Similar to FEE-HELP but for vocational qualifications.
SA-HELP
Student Amenities Loan covers compulsory student services and amenities fees charged by universities.
2024-25 Repayment Rates
Your HELP repayment is calculated as a percentage of your repayment income, which includes your taxable income plus any rental losses, reportable fringe benefits, super contributions, and net investment losses.
2024-25 HELP Repayment Thresholds
| Repayment Income | Rate | Annual Repayment |
|---|---|---|
| Below $67,000 | 0% | $0 — no compulsory repayment |
| $67,001 - $125,000 | 15c per $1 above $67,000 | e.g. $80k → $1,950 · $100k → $4,950 · $125k → $8,700 |
| Above $125,000 | $8,700 + 17c per $1 above $125,000 | e.g. $150k → $12,950 · $200k → $21,450 |
Example Calculation
If your repayment income is $85,000:
- • You fall in the 4.5% repayment bracket
- • Annual repayment: $85,000 × 4.5% = $3,825
- • Fortnightly (via PAYG): $3,825 ÷ 26 = $147.12
- • This is deducted automatically from your pay
Use our HECS Calculator to calculate your exact repayment.
How Repayments Work
Compulsory Repayments (PAYG)
If you're an employee earning above the threshold, your employer will withhold HELP repayments from your pay, similar to PAYG tax. You'll see "Study and training support loans" on your payslip.
These compulsory repayments are calculated based on your expected annual income and deducted each pay period.
Tax Time Reconciliation
At tax time, the ATO calculates your actual repayment based on your total repayment income for the year. If you've overpaid through PAYG withholding, you may get a refund. If you've underpaid (e.g., from investment income), you'll owe additional repayment.
Self-Employed & Other Income
If you're self-employed or have income not subject to PAYG withholding, you'll pay your HELP repayment when you lodge your tax return. Consider making voluntary repayments throughout the year to avoid a large bill.
Indexation Explained
HELP debts are indexed annually on 1 June to maintain their real value. Unlike commercial loans that charge interest, HELP debt is only adjusted for inflation.
| Year | Indexation Rate | Notes |
|---|---|---|
| 2025 | TBA | Announced May 2025 |
| 2024 | 4.7% | Capped at wage growth (was 7.1% CPI) |
| 2023 | 7.1% | Highest rate in history |
| 2022 | 3.9% | - |
| 2021 | 0.6% | COVID low inflation |
| 2020 | 1.8% | - |
2024 Indexation Reform
In 2024, the government changed the indexation rules. HELP debt is now indexed at the lower of CPI or Wage Price Index (WPI). This change was backdated to 2023, meaning many borrowers received a credit to their accounts. For 2024, the rate was capped at 4.7% (WPI) instead of the 7.1% CPI rate.
Voluntary Repayments
You can make voluntary repayments at any time through myGov. There are some important considerations:
No Bonus Discount
Important: As of 2017, there is no discount for voluntary repayments. Previously, a 5% bonus was offered. Now, every dollar you pay goes directly to reducing your debt balance with no added benefit.
When to Make Voluntary Repayments
Consider voluntary repayments if:
- You want to reduce your debt before 1 June (before indexation is applied)
- You have spare cash earning less than the expected indexation rate
- You're close to paying off your debt
- You want psychological peace of mind from reducing debt
When NOT to Make Voluntary Repayments
Generally, it's better to invest your money elsewhere if:
- You have other higher-interest debts (credit cards, personal loans)
- You can earn a higher return investing (shares, super contributions)
- You don't have an emergency fund established
- You're saving for a home deposit
Living or Working Overseas
If you move overseas, you're still required to repay your HELP debt. Since 2017, overseas income counts toward repayment thresholds.
Your Obligations
- Register: You must notify the ATO when you move overseas
- Report Income: Lodge an overseas HELP form annually by 31 October
- Make Repayments: Compulsory repayments assessed on worldwide income
- Penalties: Failure to report can result in fines
Currency Conversion
Your foreign income is converted to AUD using the average exchange rate for the financial year. The repayment thresholds are the same as for Australian residents.
Smart Repayment Strategies
Strategy 1: Pay Before June
Indexation is applied on 1 June to your balance at that date. Making a voluntary repayment in May reduces the balance that gets indexed.
Example: $30,000 debt × 4% indexation = $1,200 added. Paying $10,000 first means only $20,000 × 4% = $800 added.
Strategy 2: Salary Sacrifice to Super
Salary sacrificing to superannuation reduces your repayment income, potentially lowering your HELP repayment percentage.
Note: This extends the time to repay but can be tax-effective if managed correctly.
Strategy 3: Compare Returns
HELP debt only grows at CPI/WPI (currently ~4-5%). If you can earn more than this investing, you may be better off investing extra cash.
Example: Shares historically return ~7-10% annually, super contributions offer 15% tax.
Strategy 4: Clear Other Debts First
HELP is the "cheapest" debt you'll have. Always pay off higher-interest debts first:
- • Credit cards: 15-22% interest
- • Personal loans: 8-15% interest
- • Car loans: 6-12% interest
- • HELP: ~4-5% indexation
Frequently Asked Questions
Does HELP debt affect my credit score?
No. HELP debt doesn't appear on your credit report and doesn't affect your credit score. However, lenders may consider it when assessing your borrowing capacity for a mortgage.
Can I defer repayments if I lose my job?
Repayments are automatic based on income. If your income falls below the threshold ($67,000 in FY 2025-26), you won't have any compulsory repayments. There's no need to apply for deferral.
What happens to my debt if I die?
HELP debt is written off upon death. It's not passed to family members or your estate.
Can I claim HELP repayments as a tax deduction?
No. HELP repayments are not tax-deductible. They're repaying a loan, not an education expense.
How do I check my HELP balance?
Log into myGov and link your ATO account. Your HELP debt balance appears under "Tax" > "Study and training support loans".
What if I overpay through PAYG?
Any overpayment is credited to your HELP debt. You can request a refund of amounts over $500, but it's generally better to leave it applied to your debt.
Related Tools & Resources
- HECS/HELP Repayment Calculator - Calculate your exact repayments
- Income Tax Calculator - See your total tax including HELP
- Tax Distribution Calculator - See where your tax dollars go
- Superannuation Calculator - Project your retirement savings
- HELP Debt 20% Reduction Explained - Understanding the 2024 changes