Seven ways to minimise your HECS-HELP debt

A university degree can leave you with great qualifications, wonderful memories...and a lingering debt. We look at ways to keep a lid on HECS debt.

The academic year has just kicked off, and 2025 will see around 271,000 Australians head to university for the first time.

If that sounds like you, exciting times lie ahead.

But no matter what you study, you'll soon have something in common with 3 million other Australians - an outstanding student debt.

What is a HECS-HELP debt?

Most Australian uni students are enrolled in a Commonwealth-supported place. It sees the government pay part - though not all - of your uni tuition fees.

The balance is paid by the student, and while you can choose to pay the cost off in full each semester, common practice is to use a HECS-HELP (HECS) loan to cover the cost.

On one hand, HECS doesn't attract interest.

Instead, it is indexed (typically upwards) each year in line with the lower of inflation or wages growth. The indexation rate for 2024 was 4%.

Unlike normal debts, HECS only needs to be repaid when your income reaches a set threshold - currently $54,435, with the minimum repayment starting at 1% of the balance annually.

It sounds pretty harmless so far.

The catch is that a HECS debt can overshadow your finances, potentially for decades.

In particular, having a HECS debt can make it harder to get a first home loan.

The federal government is lobbying to change this. But Therese McCarthy Hockey of bank regulator APRA says any changes "may help make it a little easier" for borrowers with a student debt to buy a home at an earlier time.

Long story short, there are good reasons to keep a lid on your student debt.

Seven ways to save on HECS-HELP debt

1. Pay upfront if you can

Sadly, the days of getting a discount for voluntary HECS payments ended several years ago.

Even so, paying any amount early will reduce the impact of indexation.

If you make voluntary repayments be sure to pay early.

Allow at least four business days for the payment to be processed before 1 June (when the debt is indexed). The Tax Office says if you make a voluntary repayment too late, indexation will be applied to your HECS balance.

2. If you want to bail out, bail early

If you plan to quit a course or subject, do so before 'census' date.

This is typically the last day you can withdraw from a subject before HECS applies.

Each university sets its own census dates, so check your uni calendar for details.

3. If you plan to switch universities, check the cost

The first half of the academic year is typically a period of flux.

Teeming lecture halls can rapidly empty as students realise their nominated degree is not for them.

It's not a big deal to switch to a different course or university, but think carefully about where you study.

HECS fees vary widely between universities.

As a guide, in 2025, degrees offering a chance to become a doctor are the most expensive nationally.

Study medicine at the University of NSW, and the 2025 indicative full fee to complete the degree is $75,500.

At Charles Sturt University in regional NSW, the annual fee is about $13,232. Over the five-year degree that can total $66,160.

4. Avoid failing subjects

No one wants to fail a course. But apart from the dent to your pride, failing can also hit your hip pocket.

If you have to repeat the subject, you'll pay a second lot of HECS.

If you're struggling, speak to tutors, your course co-ordinator and student advisers.

It's not just about a HECS debt. Failed subjects are listed on your academic transcript.

5. Pay as you go

Let your employer know you have a HECS-HELP loan.

This typically applies when you graduate but it can also make sense if you're working long hours part-time or if you're lucky enough to have a high-paying job as a student.

Your employer is required to deduct a bit extra from your regular pay (once you pass the minimum income threshold) to go towards your HECS debt.

By the way, your employer won't automatically stop taking amounts out of your pay once you've paid off your HECS debt. You need to tell them. Something to bear in mind when you graduate.

6. Stay engaged with your HECS debt

Keeping track of your HECS debt helps you check repayments are being accurately recorded.

Head to myHELPbalance.gov.au to review your balance.

7. Know your HECS-HELP limit

There is an upper limit to the HECS debt students can accumulate.

For 2025, the loan limit for most students is $126,839.

Students studying medicine, dentistry, veterinary science and eligible aviation courses have a higher limit of $182,172.

Go over the limit and you may have to pay fees directly to your uni or risk having your Commonwealth-supported place cancelled, which can mean paying considerably more to complete a degree.

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