Paying off your uni debt

You have to start repaying your HELP debt through the tax system once you earn above a certain amount, even if you are still studying. Here is some information about when you need to start paying off your HELP debt and how you can repay the debt faster.

When you'll have to pay your HELP debt

You'll need to start repaying your HELP debt as soon as your employment income reaches the compulsory repayment threshold. The repayment amount is between 4% and 8% of your income, depending on how much you earn. Find out more about the annual thresholds and repayments at Study Assist: loan repayment.

While no interest is charged on your HELP or HECS debt, it is indexed on 1 June each year, so the amount you owe increases to keep up with inflation.

A budget can help you work out how much you can afford to pay on your HELP debt.

Budget planner

Video: What you need to know before applying for a HELP loan

Video about HELP loans

What should you be aware of when it comes to applying for and repaying a HELP loan?

Tell your employer about your debt

You must tell your employer you have a HELP debt so they can deduct it from your pay. You do this by completing a new tax file number declaration form. You will also need to complete this form each time you start a new job.

When you have finished repaying your HELP debt, you'll need to complete another tax file declaration form to let your employer know to stop deducting HELP repayments from your pay.

Making voluntary payments

You can make a voluntary repayment to the ATO at any time and for any amount.

It could also be cheaper for you to make voluntary repayments before indexation is applied on 1 June each year. Be sure to leave enough time for your payment to be processed and credited to your account before 1 June. Read more about voluntary repayments on the ATO website.

Case study: Lei makes an extra repayment

When Lei started working she had a HELP debt of $15,000. She wanted to repay the debt fairly quickly to get it out of the way and minimise her total repayment. She visited the Australian Taxation Office (ATO) website and found out that HELP debts were indexed to inflation on 1 June each year.

Lei made a $1,000 voluntary repayment in May to reduce the amount of debt that was indexed in June.

Making extra voluntary repayments can be a good idea, but weigh up the pros and cons.

It can be a good idea if you:

  • have no other debts
  • have some spare cash you're willing to put towards the debt
  • want to reduce the pressure of having a HELP debt

It's probably not the best use of your money if:

  • You have a credit card debt or a personal loan
  • You're not earning enough to be paying off any HELP debt yet

If you have credit card debt or a personal loan, it's usually better to pay off those debts first because you pay interest on them.

The HELP system has made a tertiary education possible for many. When your income reaches a certain level you'll need to start paying back your HELP debt or you can make voluntary repayments at any time.

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Last updated: 25 Oct 2018