What is HECS and how does it work?

Understanding HECS and how it assists with the payment of tuition fees is important for all domestic Australian students starting university.

HECS-HELP is a loan from the Australian Government that helps hundreds of thousands of people access higher education every year. But there are several things commencing students should understand about this loan before enrolling. We break down the facts and address common questions to help shed light on the ins and outs of HECS-HELP.

What is HECS?

HECS-HELP is a loan from the Australian Government that can help cover a university student’s tuition fees. It assists students to defer the payment of their tuition fees so they don’t have to pay it up front and can instead repay it when they start earning a stable income, typically after graduation.

What is HECS debt?

HECS is sometimes referred to as HECS debt, because it’s on loan from the government, which means it eventually needs to be paid back. The ‘debt’ is the amount of money a student owes the government and will grow as they progress through their studies.

Who is eligible for a HECS loan?

All students accessing a HECS loan must be enrolled in a Commonwealth Supported Place (CSP) in their university program of choice.

A CSP is where the government pays part of a student’s fees directly to the university. This is a subsidy rather than a loan, so it doesn’t need to be paid back. Most undergraduate university programs (and some postgraduate university programs) have Commonwealth Supported Places, and most domestic Australian students are eligible for these places. However, students are encouraged to double-check their eligibility.

Confirm eligibility for a Commonwealth Supported Place

The tuition fees left over once the government has paid the CSP are called the ‘student contribution amount’ and this is the part that students can have covered by a HECS-HELP loan, if they’re eligible.

While securing a Commonwealth Supported Place and meeting citizenship and residency requirements are arguably the 2 key eligibility criteria for a HECS loan, there are also other criteria. Students should check to ensure they meet all eligibility requirements.

Confirm eligibility for HECS-HELP

How to apply for HECS

Students apply for HECS through their chosen university. Once they have accepted their university offer, the university will communicate next steps for enrolment directly. An integral part of this process is submitting an electronic Commonwealth Assistance Form (eCAF), which must be done by the census date (this is the final date to meet Commonwealth Supported Place and HECS-HELP eligibility requirements). In the eCAF, students can accept their offer to study in a Commonwealth Supported Place and indicate whether they’d like to access a HECS-HELP loan to assist with paying fees or make their payments upfront.

To apply for HECS-HELP, students need a Unique Student Identifier (USI) and a Tax File Number (TFN).

How does HECS work?

Now we’ve stepped through the basics of HECS-HELP, you may be wondering how much can be borrowed and how the debt is accrued over time.

How much HECS can I borrow?

A HECS loan is not infinite. Each student has a HELP loan limit, which they can use across a range of the Australian Government student loans (not just HECS) over an extended period of time.

How much HECS a student can borrow depends on what they are studying. The 2026 HELP loan limit for most students is $129,883. It is slightly higher for students studying medicine, dentistry and veterinary science ($186,544), as these programs tend to cost more.

It is unlikely that a student would reach their HELP loan limit studying a standard full-time 3-year bachelor’s program. As an indication, the yearly student contribution amount (the amount that can be covered by HECS) of UQ’s Bachelor of Agribusiness is approximately $13,135 (based on 2026 fee information). The duration of this program is 3 years full time, bringing it to an approximate total sum of $39,405 that the student can put on HECS. This student would have around $90,478 left on their HELP loan balance, which they could use to help cover postgraduate study fees later.

Does HECS have interest?

HECS debt changes over the years, which is called ‘indexation’ and works similarly to interest. Indexation reflects changes in the cost of living and means a student’s debt will likely grow on 1 June every year, once it’s older than 11 months. So, what a student repays in total will be more than the original amount of the loan.

As an indication, here’s what students with HECS-HELP have been indexed in previous years, on the part of their debt that was over 11 months old:

• 2020: 1.8% indexation
• 2021: 0.6% indexation
• 2022: 3.9% indexation
• 2023: 3.2% indexation*
• 2024: 4.0% indexation*
• 2025: 3.2%indexation

*The original indexation rate in 2023 and 2024 was 7.1% and 4.7%, respectively. In 2024, legislation was passed to cap the indexation rate and this change was backdated, resulting in students indexed in 2023 and 2024 receiving an indexation credit.

When do you start paying HECS?

A student can make voluntary repayments towards their HECS loan at any time, but it’s compulsory to make repayments when their annual income is above the compulsory repayment threshold amount.

How does HECS repayment work?

If a person has a HECS loan and has a job, they need to tell their employer, even if they’re still studying. This is so the employer can withhold a portion of their pay to cover their compulsory HECS repayments, should their annual income end up over the minimum repayment threshold. This helps ensure people don’t end up with an unexpected bill when they lodge their tax return.

At tax time, if a person with a HECS debt’s annual income is below the compulsory repayment threshold, the Australian Taxation Office (ATO) will return the money that the person’s employer deducted from their salary. If their annual income is above the compulsory repayment threshold, the ATO will process these deductions and the person’s HECS debt will go down accordingly.

How to pay off HECS debt early

As we mentioned previously, a person can make voluntary repayments to their HECS loan at any time.

How to make voluntary HECS payments

Voluntary HECS repayments can be made to the ATO by logging into MyGov and navigating to the ATO section. There are a few options for payment, including BPAY and credit card.

Find out more about how to make voluntary HECS payments to the ATO

Is it worth paying off HECS early?

There are a few advantages to making voluntary HECS repayments, if you’re able to do so. Firstly, it can minimise the impact indexation has on a student’s loan.

“HELP debts have indexation applied annually. If you make voluntary repayments before 1 June to reduce your HELP debt, indexation will be calculated against this lower amount, so less indexation is added to your HELP debt.”

Study Assist, Australian Government 14 July 2025

The second benefit of repaying HECS early is that it can ‘top up’ a student’s HELP balance, which is particularly appealing to those who wish to pursue postgraduate education and take out another student loan while avoiding reaching the HELP loan limit.

So, if a student makes a voluntary repayment of $2,000 on their HECS debt, for example, once the ATO has processed this repayment, $2,000 will be added back onto their HELP balance, so they can borrow that amount again in the future if needed.

In short, voluntary HECS repayments can help a person:

1. Pay less in indexation in the long run.
2. Access more student loans in the future, should they wish to undertake further study.

We hope this article has helped you better understand what HECS-HELP is and how it works. If you want to know more about HECS, visit the Study Assist website. If you’d like to chat to someone about HECS in relation to becoming a UQ student, contact our friendly Future Students Contact Centre.