Making Sense of HECS


With the rising costs of tertiary education in Australia, going to university or college without financial assistance is becoming increasingly difficult. As a result, many eligible students turn to the government-funded program, Higher Education Contribution Scheme or HECS-HELP.

HECS has been around for years, yet many young Australian’s don’t understand it well enough. In this blog post, we’re going to take a closer look at HECS and help you understand everything you need to know about student loans in Australia.


So, what is HECS?


When you sign up for a Commonwealth-supported place in a university or college in Australia, you can choose to defer your fees and pay them off through HECS-HELP. The scheme covers the cost of your tuition fees, which are then paid by the government on behalf of the student. In this case, the student then owes the government the tuition fee and must repay it once they start earning above the repayment threshold. The current threshold is at $51,550 annually. Only then, the student starts making additional contributions towards their HECS debt, which are calculated based on a percentage of the student’s income.


Repayment income (RI) Repayment rate Repayment income (RI) Repayment rate
Below $51,550 Nil $94,866 – $100,557 6.0%
$51,550 – $59,518 1.0% $100,558 – $106,590 6.5%
$59,519 – $63,089 2.0% $106,591 – $112,985 7.0%
$63,090 – $66,875 2.5% $112,986 – $119,764 7.5%
$66,876 – $70,888 3.0% $119,765 – $126,950 8.0%
$70,889 – $75,140 3.5% $126,951 – $134,568 8.5%
$75,141 – $79,649 4.0% $134,569 – $142,642 9.0%
$79,650 – $84,429 4.5% $142,643 – $151,200 9.5%
$84,430 – $89,494 5.0% $151,201 and above 10%
$89,495 – $94,865 5.5%    


2023–2024 repayment income thresholds and rates


For students that do not reach the repayment threshold, HECS remains on hold. It’s important to note that even if you’re not earning above the repayment threshold, you should at least keep track of your HECS debt level. Interest is not applied to HECS debts; however they are subject to indexation annually on 1 June. This indexing is carried out to ensure that the debt’s real value remains constant by aligning it with fluctuations in the cost of living. It’s important to note that HECS debts only become subject to indexation after 11 months. Detailed information about how indexation is applied to HECS debts can be found in the loan information booklets and forms that students fill out and consent to when applying for a HECS loan. To see the current and pervious indexation rates, click here.


There is a limit to the amount of HECS debt one can incur which currently stands at $113,028, and for students studying, medicine, veterinary science and dentistry courses the limit will be $162,336 in 2023. Beyond that, students must pay the full fee charged by their institution. The concept of HECS can be confusing, and it could be further complicated if you are planning on moving overseas or have specific financial goals in mind.


Understanding HECS-HELP and how it works is essential if you’re planning to pursue tertiary education in Australia. It can be an incredible opportunity for young Australians to build a bright future, avoiding excessive upfront costs, and focusing on their education rather than on their finances. However, as with any financial agreement, we recommend doing your own due diligence and making informed financial decisions. At the end of the day, taking charge of your finances means taking control of your life.

If you would like to improve your current investment strategies or are looking to start your investment journey, click here to organise a complimentary 20-minute phone call with an EPG Wealth adviser.


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