HECS/HELP is Australia's income-contingent student loan — you only repay when your income crosses the threshold, and the balance is indexed to CPI each June.
- 1. The repayment threshold. Compulsory repayments kick in once your repayment income exceeds $67,000. Below that, nothing is withheld.
- 2. Marginal repayment rates. From 1 July 2025, only the income above each threshold is repaid: 15% on the slice between $67,000 and $125,000, then 17% above $125,000 — not your whole income, as under the old system.
- 3. Annual indexation. On 1 June each year, your outstanding balance is indexed to CPI. In recent years this has been 3–7%. Voluntary repayments made before June reduce the amount indexed.
- 4. No interest, but growth is real. Unlike a bank loan, HECS doesn't charge interest — but indexation has the same economic effect on your real balance.
- 5. Voluntary repayments. You can pay as much as you like at any time via myGov. There's no bonus for doing so any more (the 5% bonus was abolished in 2012), but you avoid future indexation on whatever you repay.
Compulsory repayment by income (marginal system)
| Income | Marginal rate | Annual repayment |
|---|---|---|
| $55,000 | Nil | $0 |
| $65,000 | Nil | $0 |
| $70,000 | 15% | $450 |
| $80,000 | 15% | $1,950 |
| $90,000 | 15% | $3,450 |
| $100,000 | 15% | $4,950 |
| $120,000 | 15% | $7,950 |
Only the slice of income above $67,000 is repaid · ATO source