Paying off your uni debt

You have to start repaying your HELP debt through the taxation system once you earn above a particular threshold amount, even if you are still studying. Here is some information about when you need to pay it off and how you can pay the debt faster.

When you'll have to pay

The compulsory repayment threshold for HELP debt is adjusted each year. Find out more about the annual thresholds and repayments at Study Assist: loan repayment.

While no real interest is charged on your HELP or HECS debt, it is indexed on 1 June each year, so the amount you owe increases to keep up with inflation.

Tell your employer

You must tell your employer you have a HELP debt so they can deduct it from your pay. You do this each time you start a new job, in your tax file number declaration form.

Case study: Lei makes an extra repayment

Lei had started working and had a HELP debt of $5,000. She wanted to repay the debt in a way that minimised her total repayment. A friend suggested that she visit the website of the Australian Taxation Office (ATO) and find out about her repayment options. She saw that she could reduce the total amount she had to pay back if she made a voluntary repayment that attracted a bonus.

She made a $1,000 voluntary repayment, and got a 5% bonus deduction of $50. So Lei's total debt was reduced to $3,950.

Making voluntary payments

Smart tip

A budget can help you work out how much extra you can afford to pay on your HELP debt.

You can make a voluntary repayment to the ATO at any time and for any amount. The government encourages you to pay off your HELP debt quicker by giving you a deduction for voluntary repayments over $500.

It could also be cheaper for you to make voluntary repayments before indexation is applied each 1 June. Be sure to leave enough time for your payment to be processed and credited to your account before 1 June. Read more about voluntary repayments on the ATO website.

Making extra voluntary repayments can be a good idea, but weigh up the pros and cons.

It can be a good idea if:

  • You have no other debts
  • You have some spare cash you can contribute
  • You want to reduce the pressure of having a HELP debt

It's probably not the best use of your money if:

  • You have a credit card debt or a personal loan
  • You're not earning enough to be paying off any HELP debt yet

If you have credit card debt or a personal loan, it's usually better to pay off those debts first because you pay interest on them.

Use the ATO: HELP voluntary repayment calculator to estimate how much debt is left after you make your voluntary repayment.

Related links

Last updated: 13 Jul 2016