HECS/HELP Repayments: Everything You Need to Know

HECS-HELP is one of the most generous student loan systems in the world — no interest, income-contingent repayments, and it dies with you. But the recent indexation changes have made it a hot topic. Here's the complete guide for 2025–26.

When Do Repayments Start?

You only start repaying when your income exceeds the minimum threshold of $54,435 for 2025–26. Below this, you pay nothing. Once you cross the threshold, repayments are calculated as a percentage of your total income — not just the amount above the threshold.

Repayment Rates by Income

Rates start at 1% and increase gradually: at $54,435–$62,850 you pay 1%, at $62,851–$66,620 you pay 2%, scaling up through 19 brackets to a maximum of 10% on incomes above $151,201. On an $85,000 salary, the rate is 4% = $3,400/year ($131/fortnight withheld by your employer).

Indexation: The "Interest" That Isn't Interest

HECS doesn't charge interest, but it is indexed annually on 1 June. Following public outcry over the 7.1% indexation in 2023, the government capped HECS indexation at the lower of CPI or the Wage Price Index (WPI) from 2023–24 onwards. For 2025–26, indexation is expected to be around 3–4%.

Should You Pay It Off Early?

Financially, usually no. Since HECS is indexed at roughly inflation (not a real interest rate), your money almost always works harder elsewhere — even in a high-interest savings account at 5%+. The exception is if you're about to buy a home and your HECS repayment is reducing your borrowing power — paying it down could free up $30,000–$50,000 in borrowing capacity.

The 10% voluntary repayment discount was abolished in 2017, so there's no bonus for paying early. And HECS debt is forgiven on death — it doesn't pass to your estate.

Check how HECS affects your borrowing power, or see your complete take-home pay with HECS deductions included.