HELP/HECS Debt

HELP (Higher Education Loan Program), commonly still referred to as HECS (its former name, Higher Education Contribution Scheme), is a government loan scheme that allows eligible students to defer the cost of their tertiary education fees. The debt is recorded with the ATO and repaid through the tax system via compulsory repayments once your repayment income exceeds the minimum threshold — $69,528 for 2026–27.

Since 2025–26, repayments use a marginal system: you repay 15 cents per dollar of repayment income above the minimum threshold, rising to 17 cents per dollar above $129,717 (2026–27), capped at 10% of your total repayment income (whichever is lower). This replaced the old system where a flat percentage (1% to 10%) applied to your entire income once you crossed the threshold. Your employer is notified of your HELP debt through your TFN declaration and withholds additional tax to cover the compulsory repayments.

From 1 June 2023, HELP debts are indexed annually on 1 June using whichever is lower: the Consumer Price Index (CPI) or the Wage Price Index (WPI). This change was introduced to prevent the situation that occurred in 2023 when high CPI (7.1%) caused large debt increases. Separately, the Universities Accord (Cutting Student Debt by 20 per cent) Act 2025 applied a one-off 20% reduction to HELP and other study loan balances outstanding as at 1 June 2025 (before that year's indexation), cutting over $16 billion in debt for more than 3 million Australians — borrowers didn't need to apply, the ATO applied it automatically. Voluntary repayments can be made at any time to reduce the debt faster, though the government removed the voluntary repayment bonus (which used to provide a 5% discount on voluntary payments of $500+).