Things You Need to Know About HECS-HELP Debt

By life@scape
Sep 09, 2022
Thinking about taking out a loan to finance your studies? Understanding what HECS debt is, and how it works, is important for making an informed decision about your finances. In this blog post, we'll look at what HECS debt is, how it works, and the options available to you if you need to pay it off. So, if you're looking for more information on HECS debt, read on!

You’ve gotten a great ATAR score and pondered over which university you want to study at, but you’ve made your decision and you’re going to be a uni student come next semester!

Now here comes the next big question: How are you going to pay for your tuition?

You can pay for it out of your own pocket but that’s quite an expensive option that may not be feasible at the moment. Luckily, that’s where a little something called HECS-HELP comes in!

We’re going to dive deep into what HECS-HELP is and how this will help you out when it comes to university tuition fees.

What is HECS-HELP Debt?

So, HECS-HELP is basically a loan for eligible Commonwealth-supported students studying at public (and some private) universities. In other words, the government will pay for your university tuition fees with the expectation that you’ll repay this loan back later when you’re working.

How Do I Know if I’m Eligible for HECS-HELP

There’s a certain criteria you must meet in order to be eligible for HECS-HELP. To get a HECS-HELP loan, you must:

  • be studying in a Commonwealth supported place;
  • be an Australian citizen; or
  • be a New Zealand Special Category Visa holder who meets the long-term residency requirements; or
  • be a permanent humanitarian visa holder;
  • be enrolled in each unit at your university by the census date;
  • meet the relevant HECS-HELP residency requirements; and
  • submit a valid Request for Commonwealth support and HECS-HELP form by the census date (or earlier administrative date) to your university.

When Do I Repay My HECS-HELP Debt? (recommend including table of pay brackets and payment % rates)

This is the $32,000 question – literally.

You’ll start automatically repaying your HECS-HELP debt once your Repayable Income (RI). In other words, you’ll start repaying your HECS-HELP debt when your taxable income reaches a certain level.

These RI thresholds are adjusted each year, so here’s the most recent table of repayment rates:

2021-2022 Repayment Threshold Repayment Rate (% of your taxable income)
Under $47,014 0
$47,014 – $54,282 1
$54,283 – $57,538 2
$57,539 – $60,991 2.5
$60,992 – $64,651 3
$64,652 – $68,529 3.5
$68,530 – $72,641 4
$72,642 – $77,001 4.5
$77,002 – $81,620 5
$81,621 – $86,518 5.5
$86,519 – $91,709 6
$91,710 – $97,212 6.5
$97,213 – $103,045 7
$103,046 – $109,227 7.5
$109,228 – $115,781 8
$115,782 – $122,728 8.5
$122,729 – $130,092 9
$130,093 – $137,897 9.5
$137,898 and above 10

How Do I Check My HECS-HELP Debt Balance?

There are 2 ways to check your HECS-HELP debt balance:

  • Call up the ATO on 13 28 61 and provide them with your Tax File Number (TFN); OR
  • Go online via the myGov website. You’ll have to link your myGov account to the Australian Tax Office (ATO) in order to view your balance online.

Is It Tax Deductible?

Generally speaking, the only tax deductible expenses you can claim as a student fall under self-education. However, your course must be directly linked to your current employment path – meaning whatever you’re studying has to be in relation to your work.

If this is you, then you have to meet 1 of 4 eligibility criteria as per the ATO:

  • You’re improving your qualifications for the full-time job you’re working at congruently;
  • You’re improving your skills or knowledge for your current job;
  • You’re a trainee and the self-education course is required; Or
  • You can prove that the course, degree or qualification can lead to more income with your current employer.

What are voluntary Repayments?

Voluntary repayments are pretty much what it says on the tin – it’s when you pay off the balance of your HECS-HELP debt at your own choosing.

These voluntary repayments are in addition to compulsory repayments and are not refundable. If you’ve decided to make a voluntary repayment, the ATO recommends that you do it before you lodge a tax return. That’s because you may benefit if a voluntary repayment is received before indexation applies, which happens on 1 June!