HECS-HELP repayment in Australia: thresholds and 2024 indexation reform

What is HECS-HELP?

HECS-HELP (Higher Education Contribution Scheme — Higher Education Loan Program) is Australia’s income-contingent student loan scheme for domestic university students. Unlike a bank loan, HECS-HELP:

Does not charge interest in the traditional sense.
Adjusts the outstanding balance annually by an indexation factor (effectively linked to inflation or wages — see below).
Is automatically deducted through the tax system — no manual repayments required.

2025–26 repayment threshold

The mandatory repayment threshold for 2025–26 is $54,435 of repayment income. Once your income reaches this level, your employer withholds an additional percentage from your pay towards your HECS debt (provided you declared a study loan on your Tax File Number Declaration).

Repayment rates scale upward with income, starting at 1% and reaching up to 10% at very high income levels. Repayments are over and above your ordinary income tax — they are debt repayments, not a tax surcharge.

The 2024 indexation reform

Before 2024, HECS-HELP balances were indexed to CPI (Consumer Price Index). In 2023, CPI hit 7.1%, causing outrage as balances jumped significantly.

From 2024, the government capped indexation at the lower of CPI or WPI (Wage Price Index). Critically, this was applied retrospectively from 1 June 2023 — anyone who paid the higher 2023 indexation had the difference credited automatically to their ATO account (applied from December 2024 onwards).

Result: from 2024, HECS-HELP balances grow much more slowly during periods of high inflation.

Checking your HECS-HELP balance

Log in to myGov → ATO → “Loans” or “Study and training”.
View your current balance, the indexation rate applied, and your repayment history.
Your balance also appears on your Notice of Assessment after lodging your tax return.

Voluntary repayments: you can pay down your HECS debt early via BPAY to the ATO. Note that the previous 5% voluntary repayment bonus was abolished in 2021 — there is no longer a financial incentive to prepay beyond reducing future indexation exposure.

Visa holders and overseas residents

Permanent residents and Australian/NZ citizens studying at an Australian university can access HECS-HELP. International students on student visas cannot — they must pay tuition fees upfront.

If you have a HECS debt and move overseas, you are still required to repay once your worldwide income exceeds the threshold. You must self-assess and lodge an overseas levy return with the ATO each year (not withheld by a foreign employer).

Temporary visa workers (e.g., 482) who previously studied in Australia on a student visa and accumulated a HECS debt must still repay when working in Australia and earning above the threshold.