Education Loans in Australia: What You Need to Know About HELP, HECS & Repayments
Education loans in Australia: what to know about HELP and HECS repayments
Many Australians have a HELP or HECS education loan. While the loan itself is managed by the government, repayments are tied closely to your tax return and income.
This guide explains how education loans work in Australia and how repayments are handled through the tax system.
What is a HELP or HECS loan?
HELP (Higher Education Loan Program) is a government loan scheme that assists eligible students with the cost of tertiary education. HECS is an earlier name for the same system, and the terms are still commonly used interchangeably.
There are several types of HELP loans, including HECS‑HELP, FEE‑HELP and VET Student Loans. Regardless of the loan type, repayment rules are generally the same.
How education loan repayments work
HELP and HECS loans are repaid through the tax system once your income exceeds the minimum repayment threshold for the year.
Repayments are income‑contingent, meaning:
- no repayments are required while your income is below the threshold
- repayment amounts increase as income increases
- repayments are calculated by the ATO, not chosen by the taxpayer
How repayments show up in your tax return
If you earn above the repayment threshold, your employer will usually withhold additional amounts from your pay during the year.
At tax time, the ATO calculates your compulsory HELP repayment based on your repayment income and includes it in your assessment. This can affect whether you receive a refund or have tax to pay.
It is common for people with HELP or HECS loans to receive a smaller refund than expected, even when other aspects of their return look correct.
What is indexation?
HELP and HECS loans are not charged interest in the traditional sense. Instead, the balance is indexed each year to reflect changes in the cost of living.
Indexation is applied annually and adjusts the loan balance to maintain its real value over time. Indexation rates vary from year to year and are set under legislation.
Checking your loan balance and repayment details
You can check your current education loan balance and repayment history by logging in to your myGov account and accessing your ATO record.
This information is listed under study and training support loans.
Making voluntary repayments
Some people choose to make voluntary repayments to reduce their outstanding balance. These payments are optional and separate from compulsory repayments calculated in your tax return.
Whether voluntary repayments are appropriate depends on individual circumstances and should be considered carefully.
Where to find current repayment thresholds and rates
Repayment thresholds and rates change over time. To avoid relying on outdated figures, the ATO publishes the current thresholds and repayment information:
ATO study and training loan repayment thresholds and rates
Getting help with your tax return
A registered tax agent can help you understand how your education loan affects your tax return and ensure your income and withholding are reported correctly.
For individual tax assistance, you can find more information here: