There are many considerations that come into play when making the decision to pursue tertiary education. From figuring out how to balance it with your work and personal commitments, to navigating the realities and demands of study life, university is no small undertaking. For most, one of the most major factors to consider is the financial commitment. Along with university study comes numerous costs, with tuition fees often being the most significant. These fees can vary widely depending on your chosen degree, whether you are pursuing an undergraduate or postgraduate qualification, the tertiary provider you choose to study with, and if you are a domestic or international student.
Fortunately, as daunting as these tuition fees may seem, we’re lucky in Australia to have access to government-supported loan options to help ease the financial burden of higher education. Read on as we unpack this further.
What is HECS-HELP?
The Higher Education Contribution Scheme, more commonly known as HECS, is a type of loan that falls under the Higher Education Loan Program (HELP). There are a few different types of HELP loans available – including the HECS-HELP loan, FEE-HELP loan and SA-HELP loan – however for the purposes of this blog, let's narrow in on the ins and outs of HECS-HELP.
How does HECS work?
Introduced as a measure to make higher education more accessible, the HECS-HELP loan enables eligible students to defer payment of course fees. This loan does not need to be repaid until after a certain income threshold is met – we'll go into this in more detail below.
Eligibility Criteria
To be eligible to apply for HECS-HELP you need to be enrolled in a Commonwealth Supported Place (CSP). A CSP is a type of enrolment in a higher education program where the Australian Government subsidises a portion of your fees, paying it directly to the University. CSP students then pay a reduced fee called a student contribution – and it is this student contribution amount that can be deferred to a HELP loan.
To be eligible for a Commonwealth Supported Place, you must be a domestic student who meets the citizenship and residency requirements. You must be:
- an Australian citizen who will undertake at least one unit of study in Australia
- a New Zealand citizen who will be resident in Australia for the duration of your program of study
- an Australian Permanent Resident or Humanitarian Visa holder who will be resident in Australia for the duration of your program of study
So, who can apply for HECS-HELP? Along with being enrolled in a Commonwealth Supported Place, you will be eligible to apply for HECS-HELP if you:
- are an Australian citizen who will undertake at least one unit of study in Australia in a Commonwealth supported place
- are a Permanent Humanitarian Visa holder who will be resident in Australia for the duration of your unit of study
- are a New Zealand citizen who holds a Special Category Visa and meets the long-term residency requirements
- meet the genuine student and completion rate requirements
Have questions about eligibility? View our Domestic Student Fee page for more detailed information.
Maintaining your eligibility
To maintain your eligibility for assistance, you’ll need to meet a number of conditions throughout the duration of your degree. You must:
- be a genuine student and actively engage in your studies
- be assessed as academically suited to your chosen program of study and the courses you enrol in each Teaching Period
- maintain a reasonable study load of no more than 2.0 EFTSL (16 units) in an academic year
It’s important to note that there is a maximum amount you can borrow under the Higher Education Loan Program – this is called a HELP loan limit, an amount that is set in legislation each year. If you need to top up this amount, you can make repayments to your loan – these repayments are credited towards your HELP limit which then increases your available balance.
For more detailed information, view our Higher Education Loan Program page.
Applying for HECS-HELP
To apply for a HECS-HELP loan you will need to complete an online request for Commonwealth Assistance and HECS-HELP called an eCAF (electronic Commonwealth Assistance Form) by census date. As part of this process, you will have to have your Unique Student Identifyer (USI) and also your Tax File Number handy.
More specific details about the application process can be viewed on our Higher Education Loan Program page.
How to pay HECS debt
A common question when it comes to HECS-HELP loans is ‘how do I pay my HECS debt?’ The great thing about HECS repayments is that the whole process is super simple! Read on as we launch into the specifics.
How much HECS do I pay?
Your HELP debt repayment will only commence when you have entered the workforce and your income reaches a certain threshold, which is a figure that is set annually by the Australian Government. Above this threshold there are different income tiers that determine your HECS repayment rate. As your income increases above these tiers, your repayment rate will also increase.
Repayments are deducted from your salary and are consolidated at tax time. So if you happen to overpay your HECS loan during the financial year, you will receive a refund for that overpaid amount. Alternatively, if you have not paid enough, you’ll owe the difference after lodging your tax return.
Although repayments are relative to your income, you also have the option of making voluntary payments at any time. If you choose to make extra payments, an important thing to be aware of is the annual indexation date, which we will look into next.
HECS interest rates
As we delved into above, your HECS debt repayment amount is determined by several factors. But another important aspect of your loan to be aware of is indexation. Unlike other loans, which accrue interest, a HECS-HELP loan balance will only be adjusted annually in in line with any changes to the Consumer Price Index (CPI) or Wage Price Index (WPI), whichever is lower. The calculated indexation amount is applied every year on 1st June and is determined by your balance at that date. Looping back to above where we discussed voluntary repayments, this date is a particularly important thing to remember if you are planning on paying off your loan balance. If you intend to repay your loan, aim to do so before 1st June to avoid indexation.
How much HECS do I owe?
For many reasons, it's always good to keep an eye on how your HECS debt is tracking. The average HECS debt can vary from person to person, so knowing your specific balance amount is key, especially if your debt may impact any future financial decisions, like taking out a home loan or personal finance loan etc. Thankfully, you can check your balance online at any time. You will just need to have your CHESSN or USI as well as your Student ID handy to login to the portal and view your balance.
Wrapping up – 3 benefits of HECS-HELP
- Making higher education affordable and accessible. HECS-HELP allows people from all backgrounds to access higher education by reducing financial barriers and supporting wider participation.
- No-upfront costs. Deferred payments help alleviate a significant amount of financial stress, allowing you the freedom to focus on study without the immediate pressure of covering tuition costs.
- Repayments are income contingent. Your repayment amount is determined by your income after graduating, making it more manageable and aligned with your financial capacity at any given time.
So there you have it! Your comprehensive guide to HECS-HELP loans. Understanding the financial side of university study is an important part of the decision-making process – and taking on a HECS-HELP loan is a significant commitment – so being informed before you apply to study is an important step! Still have questions? Feel free to reach out to our friendly team to discuss your unique situation further.
