Hello Tom,

Hope you are well.

My son is at uni 1st year and on HECS-HELP loan circa 8k. With 7.1% interest on 1 June 23, I would like to pay it off for him. Is it possible to do that as he hasn't started working yet by voluntary contribution? From what I read, one can only pay it when one has started working?

Thanks. regards. Jay

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Hi Jay, I believe that indexation is not applied until the second year of having HECS-HELP debt. If this is your son's first year having HECS debt then indexation may not be applied until June 2024. It would be good to check this before making any repayments.

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Hi Tom,

How is the indexation of a HECS debt calculated? ie in your example is it just a flat rate of tax on your balance?

with each year having a different indexation. Can you pay say this years (7%) HECS component and leave the rest at historic rates?

I see the issue here if your debt interest is being calculated at a flat rate and being payed off at 1%-10% of you income once a year, it seems like its just a debt trap.

Thanks for the article as now it may be a better idea to take out a loan to pay it off.

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Other than reducing the principal with a voluntary payment do you know of any other government incentives?

I know if the government introduced these increases to super there would be a huge out cry. The spiralling increase to these hecs debts ,that were not originally part of the contract have the potential for some serious mental ramifications to our young adults

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Good morning I made voluntary repayments on my HEC loan all year and I managed to get it to zero now my ATO hec loan says in credit how do I get the money back it's in credit of a couple thousand dollars

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