HECS-HELP Budget Impact Calculator
Calculate your 20% debt reduction, new repayment amount, and years to pay off under the 2026-27 changes.
Rates updated 2 May 2026| Before | After Budget | |
|---|---|---|
| HECS Balance | — | — |
| Debt Wiped | — | — |
| Annual Repayment | — | — |
| Repayment Change | — | — |
| Years to Repay | — | — |
What Changed for HECS-HELP in 2026-27
Three major changes to HECS-HELP debt were legislated for 2026-27, making this the most significant reform to student debt in Australia's history.
1. 20% Debt Reduction (Already Applied)
The federal government wiped 20% from every HELP debt balance — a total of around $19 billion across approximately 3 million Australians. The reduction was applied automatically; you didn't need to apply for it. If you had $40,000 owing, you now owe $32,000. This is a one-time reduction, not an ongoing benefit.
2. Higher Repayment Threshold ($67,000)
The minimum income before compulsory HECS repayments apply was raised from $54,435 to $67,000. If your income is below $67,000, you make no compulsory HECS repayments in 2026-27. Any indexation on your debt still applies, but no repayments are withheld from your pay.
3. Marginal Repayment System
Previously, your compulsory HECS repayment was calculated as a percentage of your total income. Now it's calculated as a percentage of income above the threshold — similar to how income tax works. This significantly reduces repayments for most debtors, particularly those in the $67,000–$90,000 range.
Example: Sarah earns $75,000. Under the old system, she paid about $2,625/year (3.5% of $75,000). Under the new marginal system, she pays on $8,000 (income above $67,000) — approximately $800/year.
What About Indexation?
HECS indexation (based on CPI) still applies annually on 1 June. The 2025 indexation rate was 3.5%. Always check your balance on the ATO portal as your debt can grow through indexation even if you're not required to make repayments.
Frequently Asked Questions
Yes. The 20% reduction was legislated and applied automatically before 1 July 2026. You did not need to apply. Log into MyGov and check the ATO portal to see your updated balance. If you made a voluntary repayment before the reduction was applied, you may be entitled to a partial refund — check with the ATO.
The compulsory repayment threshold was raised to $67,000 for 2026-27. If your income is below this, no compulsory repayments are required. Note that if your income fluctuates, this is assessed annually when you lodge your tax return — not on a pay-period basis.
Under the new system, your repayment is a percentage of income above $67,000, not your total income. This means someone on $75,000 pays on $8,000 (not $75,000). The percentage rate increases as your income rises, similar to marginal income tax rates. The exact rate bands will be confirmed from ATO tables post-Budget.
Yes. You can make voluntary repayments at any time via MyGov. There is no longer a 5% bonus for voluntary repayments (that incentive was removed in 2022). There's no minimum voluntary payment. Whether voluntary repayments make financial sense depends on your interest rate expectations vs the HECS indexation rate — use our voluntary repayment calculator to model the decision.