Does HECS-HELP charge interest?

No. HECS-HELP does not charge interest. Instead, your debt is indexed to inflation (CPI) on 1 June each year — 2.8% on 1 June 2026. Since 2023, the government has capped indexation at the lower of CPI or the Wage Price Index, preventing spikes like the 7.1% indexation in 2023.

Should I voluntarily pay off HECS faster?

Generally no. Since HECS only charges inflation indexation (typically 2-4%), your money almost always earns more invested elsewhere (e.g., shares at 7-10%, or even a savings account at 4.5%). The exception might be if you have a very large debt and indexation is unusually high.

What happens to HECS if I go overseas?

Since 2017, Australians living overseas must lodge a tax return and make HECS repayments if their worldwide income exceeds the threshold. You report your overseas income to the ATO each year. Failure to lodge can result in penalties.

Does HECS affect my borrowing power for a home loan?

Yes. Lenders include your HECS repayment as a liability in their serviceability calculations. A $30,000 HECS debt might reduce your borrowing power by $30,000-$50,000 depending on the lender. However, it doesn't affect your credit score.

§ Tool · tier 1 · independent

HECS/HELP Repayment Calculator.

Calculate your HECS-HELP repayment amount based on your income and see when your student debt will be paid off.

CalculatorFree, no signupOn-deviceupd August 2026

Inputs

Your numbers

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Move the sliders or type in the form on the left — the math updates live as you go. Click Get AI verdict when you want a written analysis.

Got a HECS-HELP debt? You're not alone — over 3 million Australians owe a combined $78+ billion in student debt. HECS-HELP repayments are income-contingent: you only start paying when your income exceeds the minimum repayment threshold. This calculator shows you exactly how much is deducted from your pay, when your debt will be cleared, and whether making voluntary repayments makes financial sense.

§ Worked examples

Real-world scenarios

Graduate Starting Career

Mia has $28,000 in HECS debt and starts a job earning $75,000/year. She expects 3% annual pay rises.

At $75,000, Mia is $5,472 above the $69,528 threshold, so her compulsory repayment is 15% of that gap = $821/year (~$32/fortnight). With 3% annual pay rises and HELP indexation at 2.8%, her HECS will be paid off in roughly 13 years without voluntary repayments.

High Earner Fast Payoff

James earns $130,000 and has $45,000 in HECS debt remaining.

At $130,000, James is just above the $129,717 mid threshold, so he pays $9,028 (15%) on the band below it plus 17% on the small amount above — about $9,076/year, an effective rate of ~7%. At this rate, his HECS is paid off in around 6 years. There's little benefit to making voluntary repayments — his money is likely better invested elsewhere.

§ FAQ

Questions Australians ask

§ Glossary

Plain-English definitions

HECS-HELP

Higher Education Contribution Scheme - Higher Education Loan Program. A government loan that covers tuition fees for eligible Australian students at Commonwealth-supported university places.

Repayment Threshold

The minimum annual income before compulsory HECS repayments begin. Set at $69,528 for 2026-27 and adjusted annually.

Indexation

The annual adjustment to your HELP debt to maintain its real value. Applied on 1 June each year at the lower of CPI or the Wage Price Index.

Worldwide Income

Your total income from all sources globally, used to calculate HECS repayments even if you live overseas.

§ Pair it with

Related tools

Savings Goal Calculator

Plan your savings while managing HECS repayments.

Compound Interest Calculator

See why investing beats voluntary HECS repayments.

Net Worth Calculator

Track your net worth including HECS as a liability.

How to use

01Enter your current HECS-HELP debt balance (check myGov).
02Input your gross annual income from all sources.
03Set your expected salary growth rate.
04Optionally add any voluntary extra repayments you plan to make.
05See your compulsory repayment amount, payoff timeline, and strategy advice.

Key info

The minimum repayment threshold for 2026-27 is $69,528. Below this, you pay nothing.
Since 1 July 2025, HECS uses a MARGINAL system: 15% of the amount over $69,528 (up to $129,717), then 17% of the amount over that (up to $186,050), then a flat 10% of total income once you reach $186,050 — not a flat percentage of your whole income like the old system.
HECS-HELP debt is indexed annually to CPI (inflation), NOT interest — 2.8% on 1 June 2026. In 2023, indexation spiked to 7.1%, which is why the government capped indexation at the lower of CPI or the Wage Price Index from June 2023 onwards.

Pro tips

HECS is the cheapest debt you'll ever have — no real interest, just inflation indexation. Prioritise paying off other debts first.
If you earn just above the threshold, consider salary sacrificing to super to drop below and defer repayments.
Voluntary repayments only make sense if your debt is large and indexation is high — otherwise, invest the money instead.
Overseas? You must still file a tax return and make repayments if your worldwide income exceeds the threshold.

Avoid these

Rushing to pay off HECS when you have credit card debt or personal loans at 10-20% interest.
Assuming HECS still uses the old whole-income banded system — since 1 July 2025 it's a MARGINAL system, so you only pay the higher rate on the income above each threshold, just like income tax brackets.
Forgetting that one-off income (bonuses, capital gains, investment income) can push you into a higher repayment bracket.
Ignoring the annual indexation — a $40,000 debt indexed at 2.8% (the June 2026 rate) adds $1,120/year before you've paid a cent.

Disclaimer: Estimates only. Interest rates, fees and policies change frequently. Always verify with lenders directly. General information, not personal financial advice.

Last updated · August 2026