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Understanding HECS debt: what you need to know
If you are finishing high school and feel worried about HECS-HELP repayments after university, you are not alone. The good news is that with a little planning and understanding, a HECS-HELP loan is something you can definitely manage.
If you are wondering if university is worth the cost or how to handle student debt, keep reading. We've got you covered on how the HECS-HELP system works and ways to get ahead of your student loan while studying.
Is uni worth it?
The question everyone is asking right now: Is uni worth it? Absolutely!
Attending university (especially at ANU, but we’re biased) is so much more than just getting a degree. Making friends, gaining life experience and developing your passions are what it's about. You will also learn great skills that will help you succeed in your career.
The opportunities you get at university are immensely valuable. Don’t let the fear of a HECS-HELP loan stop you from reaching your goals.
What is a HECS-HELP loan?
A HECS-HELP (Higher Education Loan Program) loan helps Australian students defer their uni tuition fees to the tax system until graduation. If you opt to pay for your tuition this way, you'll start repaying the loan when your earnings meet the income threshold after graduation.
Plan now to manage your HECS debt
Follow these tips to manage your student HECS debt confidently.
- Make HECS part of your going-to-uni savings plan
Start thinking of your HECS debt as part of your overall university financial plan. Set aside some savings to make voluntary repayments once you have a loan balance.
- Put yourself out there for a university scholarship
Scholarships are an excellent way to reduce your financial burden during uni, so look out for ANU scholarship opportunities.
Many universities and outside organisations offer scholarships for different courses and fields. Scholarships can help pay for your university tuition or living costs. This means you will have less debt later.
Top tip: If you apply to ANU for an early offer, we will automatically check you for a variety of scholarships.
A part-time job while studying is another excellent way to reduce student debt. Discover the best jobs in Canberra for students.
- Look for a job as soon as you arrive
You will need money for books, food, rent and going out. You can also start saving any extra money for voluntary repayments. A good plan is to set up a savings account specifically for this purpose.
- Check your HECS balance
You can track your HECS loan by logging into myGov, where you can see your balance, repayment schedule and other details. If you don't have a balance yet, you'll have to wait until you do before making voluntary repayments.
- Make voluntary student loan repayments
You can make voluntary repayments anytime, and they'll immediately reduce your accumulated student HECS debt. The more you contribute early, the less you'll owe when you graduate.
You can pay over the phone, at Australia Post, or use the online Government EasyPay service.
Visit the ATO's website to learn how to make a voluntary repayment.
Understanding how your HECS-HELP debt works can help you budget effectively.
Your questions answered
It's a hot issue right now, so we've answered a couple of the questions in the debate.
Will a HECS debt stop me from getting other loans?
A lender may consider your HECS debt, a government-backed loan, part of your expenses after graduation. It won’t affect your credit rating, however.
Should I worry about the indexation of my HECS debt?
On 1 June each year, the Australian Government adjusts HECS-HELP loans in line with inflation. This means your HECS debt will gradually increase over time based on the cost of living.
You cannot control changes in the cost of living or CPI. However, making voluntary student loan payments while studying can help lower the debt before graduation.
Don't let a student HECS debt hold you back
The thought of taking on any form of debt can be overwhelming but remember: the HECS-HELP loan system is designed to make it manageable. With flexible repayment options, including the ability to make voluntary contributions, you can keep your debt under control and focus on what matters most: getting the education, skills and experience you need to succeed.
Take it one step at a time. If you keep track of your HECS-HELP debt and repayments, plan ahead and use the available tools, your HECS debt won't feel like a burden—it'll be a part of the education and career journey that helps you succeed.
Remember, when you start making the compulsory repayments after graduation as a form of tax on your salary, you'll barely notice it.
A HECS debt doesn't have to hold you back from reaching your goals. So, take a deep breath, embrace the opportunities ahead and step into your uni experience knowing you've got this.
