Education Loans in Australia: What You Need to Know About HELP, HECS & Repayments

Understanding how education loans work in Australia is crucial for managing your finances and planning your future repayments. Whether you have a HECS-HELP loan or another type of study loan, knowing how repayments work can help you stay on top of your financial commitments.

What Is an Education Loan in Australia?

In Australia, the government provides loans to help students cover the cost of tertiary education. The most common types include:

  • HECS-HELP – Available for Commonwealth-supported students to cover tuition fees.
  • FEE-HELP – For full-fee-paying students to assist with course costs.
  • VET Student Loans – For vocational education and training (VET) courses.
  • OS-HELP – For students who want to study part of their course overseas.

These loans are repaid through the tax system once your income reaches a certain threshold.

How Do Education Loan Repayments Work?

  • Repayment Threshold: For the 2024-2025 financial year, repayments start once your income exceeds $51,550.
  • Repayment Rates: The repayment percentage increases as your income rises, starting at 1% and going up to 10% for higher income brackets.
  • Automatic Deductions: Once you earn above the threshold, your employer will deduct repayments from your salary.

New Changes to Study Loan Indexation

The government has recently passed a bill to change how education loan indexation is calculated, ensuring lower repayment increases.

  • 2023 Indexation Rate Reduced: From 7.1% to 3.2%
  • 2024 Indexation Rate Reduced: From 4.7% to 4%

If you have already made repayments, your loan balance may be adjusted accordingly.

How to Check Your Education Loan Balance

You can check your outstanding loan balance and repayment history by:

  1. Logging into myGov and accessing your ATO account.
  2. Reviewing your loan statement under the “Study and Training Support Loans” section.
  3. Contacting the Australian Taxation Office (ATO) if you need further assistance.

Can You Make Voluntary Payments?

Yes! You can make voluntary contributions at any time to reduce your loan balance and minimise interest effects. Payments can be made directly through your myGov account or via BPAY.

Did you know your education loan repayments depend on your income? Always Stay informed about the latest changes and make smart financial moves