The HECS Repayment Threshold Has Changed, Here’s How That Impacts You

There have been a few changes to HECS-HELP loans this year. Following a record-high indexation rate in June, the government has also announced a shift in the repayment threshold for those with a HECS debt.

Here’s a breakdown of how everything stands now.

What are the new HECS repayment rates?

The government has bumped up the compulsory repayment threshold for student debts.

As a reminder, the repayment threshold dictates the point at which your annual taxable income is automatically docked to help pay off your loan.

For the 2023-24 financial year, the HECS repayment threshold has been raised to $51,550. So if your annual income is lower than that amount, you won’t need to make any compulsory repayments. Prior to this year, the threshold was $48,361.

If you’re wondering exactly how much of your income is taken away to pay off your loan, the repayment rates for 2023-24 as defined by the Australian Taxation Office (ATO) are:

• $51,550-$59,518 = 1.0%
• $59,519 – $63,089 = 2.0%
• $63,090 – $66,875 = 2.5%
• $66,876 – $70,888 = 3.0%
• $70,889 – $75,140 = 3.5%
• $75,141 – $79,649 = 4.0%
• $79,650 – $84,429 = 4.5%
• $84,430 – $89,494 = 5.0%
• $89,495 – $94,865 = 5.5%
• $94,866 – $100,557 = 6.0%
• $100,558 – $106,590 = 6.5%
• $106,591 – $112,985 = 7.0%
• $112,986 – $119,764 = 7.5%
• $119,765 – $126,950 = 8.0%
• $126,951 – $134,568 = 8.5%
• $134,569 – $142, 642 = 9.0%
• $142,643 – $151,200 = 9.5%
• $151,201 and above = 10%

These thresholds impact all study and training loans, including HELP, VSL, SFSS, SSL, ABSTUDY SSL and TSL.

If you want to find out exactly how much of your income will be taken to go towards your loan, you can use the ATO’s repayment calculator.

Via the ATO you can also make voluntary repayments towards your HECS debt if you find yourself with the funds to do so. Also, remember to alert your employer to the fact that you have a HECS loan to pay off so they can adjust the amount of tax that is withheld in your pay.

While it’s just a small shift, this change in repayment rates should provide relief for many low-income earners, who will no longer have to make repayments during these difficult economic times. Just remember though, your student loan indexes every year which raises the overall amount of the loan, so it really is best to pay that thing off as soon as you feasibly can.

We’ve pulled together some answers to the most common HECS questions for you here.