HELP/HECS Debt
A government loan for tertiary education tuition fees, repaid through the tax system once your income exceeds the minimum threshold.
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+).
How it works
HELP, still widely called HECS, is a government loan for tertiary tuition fees, and the debt is recorded with the ATO rather than a bank. You start making compulsory repayments once your repayment income exceeds the minimum threshold — $69,528 for 2026-27 — and since 2025-26 the repayment amount is calculated on a marginal system: 15 cents for every dollar above the threshold, rising to 17 cents for every dollar above $129,717, capped at 10% of your total repayment income overall.
In practice, your employer withholds extra tax through the year based on the HELP debt you declare on your TFN declaration, and the actual compulsory repayment is reconciled when you lodge your tax return. Your HELP balance is visible through ATO online services via myGov, and it's indexed every 1 June.
Indexation since 2023 uses whichever is lower of CPI or the Wage Price Index, and a separate one-off 20% reduction was applied automatically to HELP and other study loan balances outstanding on 1 June 2025 under the Universities Accord Act — no application was needed. The voluntary repayment bonus that used to give a 5% discount on extra payments has been removed, and the shift from a flat percentage of your whole income to a marginal system in 2025-26 is a common source of confusion when comparing older explanations of how HELP repayments are calculated.
Example: compulsory HELP repayment under the marginal system
Your repayment income for 2026-27 is $90,000. Only the amount above the $69,528 minimum threshold attracts a compulsory repayment, so the calculation applies to $20,472 of income at 15 cents in the dollar, giving a compulsory repayment of about $3,071 for the year, withheld progressively through your pay rather than as one lump sum.
Because the overall repayment is capped at 10% of repayment income — $9,000 in this case — someone at $90,000 is well below that ceiling; the cap only starts to matter at much higher repayment incomes, closer to or above the $129,717 second threshold where the marginal rate steps up to 17 cents.
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Repayment Income
The income measure used to calculate compulsory HELP/HECS repayments — taxable income plus other adjustments.
VSL (VET Student Loans)
Government loans for students undertaking eligible vocational education and training (VET) courses at diploma level and above.
HELP Indexation
Annual adjustment of HELP debt balances on 1 June, using the lower of CPI or Wage Price Index since 2023.
Commonwealth Supported Place (CSP)
A university place where the government subsidises part of the tuition cost, with the student paying a reduced "student contribution".
Income Tax
Tax levied by the federal government on your taxable income, calculated using progressive tax brackets.