Most Australians who go to university leave with a HECS-HELP debt. Here’s how it works, when you have to start paying it back, and how recent changes affect what you owe.
HECS-HELP lets Australian students go to university without paying their fees upfront. The Government pays the fees, and students repay the loan later, once they are earning enough.
It began in 1989 as the Higher Education Contribution Scheme, which is why most people still call it HECS. Today it is part of the broader HELP system, which also covers some vocational courses. About three million Australians have a HELP debt.
Repayments
You don’t have to start repaying until your income passes a set threshold. For the 2026-27 financial year, that’s $69,528.
Repayments are taken through the tax system. Your employer withholds extra tax from your pay, and the amount is worked out when you lodge your tax return.
Since July 2025, repayments are calculated only on the income above the threshold, at 15 cents for every dollar over it, with a higher rate for very high incomes. Before that change, once you passed the threshold you repaid a percentage of your entire income, which could cause a sudden jump in repayments.
Indexation, and the 20% cut
HELP loans don’t charge interest. Instead, the balance is indexed every 1 June to keep pace with prices or wages.
In 2023, indexation hit 7.1%, adding thousands of dollars to many debts and causing an outcry. The Government changed the rules so indexation is now the lower of inflation or wages growth, and applied that change backwards to 2023. Indexation in June 2026 was 2.8%.
In 2025, Parliament also passed a law cutting all student debts by 20%. The cut was applied to balances as they stood before indexation on 1 June 2025, wiping out billions of dollars of debt.
Should you pay it off early?
You can make voluntary repayments at any time. Whether that makes sense depends on your situation.
Because HELP debt only grows with indexation, which is usually lower than the interest on a mortgage or personal loan, many people choose to pay down more expensive debts or save for a home deposit first.
HELP debt can also affect how much banks will lend you, because repayments reduce your take-home pay. If you move overseas, you still have to report your income and make repayments.
The ATO’s website and the myGov app show your current balance, and how much has been repaid.
