HECS In Australia


The Australian Higher Education Contribution Scheme (HECS in Australia) plays a vital role in enabling students to pursue tertiary education in Australia. HECS, a government initiative, provides financial support to eligible students, easing the burden of upfront tuition fees. Understanding the intricacies of HECS is essential for students and their families to make informed decisions regarding higher education financing.

What is a HECS loan?

One of the key perks of being born in Australia is that you can avail the world-class educational facilities even when you cannot afford them. The Australian Government’s HECP-HELP loan initiative can help you get into the career of your choice.

You can get loans and assisted subsidies to pay your tuition during your studies. These loans are subject to repayment after you graduate and earn over a certain income threshold. Once you earn over the threshold income and can repay the loan, your employer will make regular contributions towards your loan payments.

Understanding HECS criteria and how to get one can get very confusing. And believe me, you would not be able to find a straight answer on any of the government sites. I have tried to simplify everything you need to know in this article.

What is HECS-HELP loan, and what does it cover?

HECS in Australia or Higher Education Contribution system, is primarily the financial assistance program students use to contribute to their study costs. This program is an initiative by Australian government to assist needy students.

Once approved for any HECS in Australia loan, the government pays your tuition fee directly to your educational institution. You won’t be getting any money in your account. It goes straight to your Uni/College or wherever you are enrolled to get higher education. And you pay it back once you are working and can pay it back.

HECS in Australia loan would only cover the tuition fee, you would still be responsible for covering other related costs of going to a University. These costs might include accommodation, stationary, transport, textbooks etc.

HECS in Australia

HECS loans are interest-free, which means you would not need to pay any interest on your loans. Unlike the mortgage, car loan or any other kind of loan, you are not required to pay any interest on your HECS in Australia loans.

However, HECS in Australia loans are subjected to indexation. What does that mean? It means that your loan would be increased and adjusted to the CPI. CPI stands for the consumer price index or in simple terms, it is the inflation rate.

To sum up, if everything is getting expensive due to inflation in the economy. Your loans will be adjusted, and they will increase in value too.

Well, how is this different from paying interest? Unlike interest rates, CPI is dependent on the performance of the country’s economy. Usually, it would be a minimum on good days, i.e. close to 1-2%. And when the economy is not behaving, it may get out of hand.

The best way to see how CPI affects you is to see how much of a bag of groceries you can fill in $100. Recently, you might have seen that your bag sizes would have shrunk. Due to high inflation rates post covid.

So, on the 1st of July every year, your HECS loan amount would be subjected to an increase. For the financial year 2023-24, starting 01 July 2023, your study loans would increase by 7.1%.

Anyways now coming back to HECS in Australia.

The Australian government does understand that just getting a degree won’t guarantee you will land a high-paying job. So, they give you some room before you are asked to repay the loan. That is, you need to earn above a certain income threshold.

How can government help you in covering your study costs?

The Australian government can assist you in two primary ways:

  1. Subsidising the cost of study at one of the CSPs
  2. Providing HECP loan

What are the eligibility criteria for a HECP-HELP loan?

To be eligible to get a HECS in Australia, you should be enrolled in one of the Commonwealth supported places (CSPs). CSPs are subsidised enrolments in higher education providers, such as a college, University or TAFE, where the government covers part of your fees.

To be eligible for the HECS study loan, you need to meet the following criteria:

  • You must be an Australian citizen or either of below.
    • A New Zealander on Special Category Visa (SCV)
      • Australian permanent residence holder  
  • You must be studying at a CSP
  • Apply for a HECP-HELP loan before the census date
  • Must have a Tax file Number (interlink Tax file number article)
  • You must have a Unique Student Identifier (USI)
  • Undertake 2 years or less worth of higher education study in a calendar year (unless approved by CSP)

How to apply for HECS loan?

Applying for the HECS-HELP loan is pretty straightforward. However, you must apply before the current financial year census date to be eligible.

You must make sure you meet the eligibility criteria mentioned above. Few essential things you must get before applying.

  1. A Tax file number
  2. Unique Student Identifier
  3. Submit a request for Commonwealth support and a HECS-HELP form – which can be procured from your education provider.

What are the limits to HELP loans?

For students enrolled in 2023 onwards HECS in Australia, the following limits to loan amount apply.

  • Max loan of $162,336 for students enrolled in
    • Medicine, dentistry, VET and certain aviation courses
  • Max loan of $113,028 for most other students

How can you fund your studies with HECS- HELP loan?

Let’s cut the crap and break them in easy-to-follow steps.

Below are the steps you can follow to ensure you land that HECS loan and can fund your degree quickly.

Step 1: You must be an Australian resident and desire to study.

Step 2: Check if you are eligible for a CSP

Step 3: Get onto Course Seeker to find the course that best suits you.

Step 4: Compare the institutions, courses, and costs and see your available support options.

Step 5: Get enrolled in one of the Commonwealth Supported Places (CSP) – assess how much of your tuition you get subsidised.

Step 6: Contact your Uni/College and apply online for a HECS-HELP loan.

Step 7: Study hard and ensure your time in Uni is worth the loan.

HECS in Australia

Do all students get HECS loans (HECS in Australia)?

Well, this is very subjective. The crust is that if you are a domestic student enrolled in a CSP, the chances of getting a HECS-HELP loan are usually moderate to high.

Please also note that the HECS-HELP loan is unavailable to international students. Even if you abide by Commonwealth countries, you would still not be considered eligible for a HECP-HELP loan. This is an Australian government initiative for resident students only.

How do you repay the HECS-HELP loan?

You are only required to repay the HELP loan once you have completed your studies and are earning over the threshold income.

From 2023-24 onwards, the minimum threshold income is $51,550. You need not repay the loan if you earn less than $51,550 annually. For every $1 you earn over $51,550, a certain percentage would be contributed towards your loan repayment.

The table below shows how much you need to earn annually and the required repayment rate. Please note that these rates are subject to indexation, and they change every year.

Additionally, you can use our HECS loan calculator to calculate the annual repayments of your loan.

HECS Repayment rate 2023-24

Below $51,5500
$51,550 – $59,51811%
$59,519 – $63,08922%
$63,090 – $66,8752.50%
$66,876 – $70,8883%
$70,889 – $75,1403.50%
$75,141 – $79,6494%
$79,650 – $84,4294.50%
$84,430 – $89,4945%
$89,945 – $94,8655.50%
$94,866 – $100,5576%
$100,558 – $106,590 6.50%
$106,591 – $112,9857%
$112,986 – $119,7647.50%
$119,765 – $126,9508%
$126,951 – $134,5688.50%
$134,569 – $142,6429%
$142,643 – $151,2009.50%
$151,201 and above10%

HECS Repayment Rate 2022-23

Repayment incomeRepayment rate
Below $47,014Nil
$47,014 to $54,2811.00%
$54,282 to $57,5382.00%
$57,539 to $60,9912.50%
$60,992 to $64,6503.00%
$64,651 to $68,5293.50%
$68,530 to $72,6414.00%
$72,642 to $77,0004.50%
$77,001 to $81,6205.00%
$81,621 to $86,5185.50%
$86,519 to $91,7096.00%
$91,710 to $97,2126.50%
$97,213 to $103,0447.00%
$103,045 to $109,2267.50%
$109,227 to $115,6788.00%
$115,679 to $122,7288.50%
$122,729 to $130,0919.00%
$130,092 to $137,8979.50%
$137,898 and above10.00%

How is HECP repayment calculated?

Let’s say, in the financial year 2023 Jean landed a job as a fresh graduate. Jean is earning $53,000 annually, subject to rise next year. Does he need to pay back his HECS loan yet?

The answer is yes.

He would be required to pay back 1% of his total loan amount in the first year of his job.

Let’s assume Jean had a HECS loan of $24,000 from the table above, we can see that he is required to pay $2,400 for the current year.

Now you can use our calculator to estimate your yearly payments accurately.

Please note that these repayment rates are pro rata and apply only to the take-home annual taxable income.

In the example of Jean above. If he had started his job in March 2023, he would only have earned a portion of $53,000 by the end of the financial year on 30 June. And therefore, he will not be required to pay any HECS payment if his total taxable income is lower than the threshold, even though his employment contract says he would be earning over the threshold amount.

ATO’s initiative to take a portion of the HECS loan as part of your tax return simplifies this system with take-home taxable income.

How are HECS-HELP repayment made?

The annual repayments are added to your tax payable by the ATO. So, when it is time to file your tax returns, a portion of the HELP loan will pop up as tax payable based on your annual income.

Make sure that you are savings towards the payment of your loan.

Secondly, your employer knows your HECS debt payments and adds them to your tax withholding.  This is taken out by making additional deductions from your periodic salaries.

Alternatively, to get rid of your debt quicker you can ask your employer to make high PAYG or contribute towards your HELP payment by salary sacrificing.


How to know if a course is eligible for a HECP-HELP loan?

You can find all information regarding CSPs and eligible courses on Course Seeker. Usually you would know before enrolment if you are going to be eligible for the study loan.

Is there interest on the HECS loan?

HECS-HELP loans are interest-free loans. However, they are subjected to annual CPI indexation. CPI indexation is discussed in the article above

What is the minimum loan repayment income threshold?

The minimum income repayment threshold is the income cap set by ATO for the repayment of student loans. If you are earning below the income threshold, you need not to pay any loan amount for that financial year.
The loan repayment income threshold is different for each financial year. Below is the list of the past few years and the minimum income thresholds:
Year Minimum Income Threshold
2023-24 $51,550
2022-23 $48,361
2021-22 $47,104
2020-21 $46,620
2019-20 $45,881
2018-19 $51,957

What is the current indexation rate on HECS loans?

The following table shows the indexation rate applicable to all study (HECS) loans for past 6 years.
Year Indexation rate
2023-24 7.1%
2022-23 3.9%
2021-22 0.6%
2020-21 1.8%
2019-20 1.8%
2018-19 1.9%

What is the HECS loan limit?

The HECS study loan limit changes for every financial year. For 2023 financial year the HECS limits are as follow:

Medicine, Dentistry, Veterinary Sciences courses : $162,336
Certain Aviation Courses : $162,336
Most other Courses : $113,028

What is the difference between FEE-HELP and HECS?

HECS-HELP is the financial support available to Commonwealth supported students. FEE-HELP is a financial loan available to any eligible student enrolled with the approved providers.

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