What you need to know about study loans
Accounting & Tax

What you need to know about study loans

Whether you’ve just started out studying, or finished a university or TAFE course years ago, it’s important to understand different types of study loans and how to repay them. To help, we’ve put together the answers to your most common questions.

Study loans are often called HECS or HELP loans, but there are many different ones known by different names, including:

  • Higher Education Loan Program (HELP) – some people call this by the old name ‘HECS’
  • Vet Student Loans (VSL)
  • Student Financial Supplement Scheme (SFSS)
  • Student Start-up Loan (SSL)
  • ABSTUDY Student Start-up Loan (ABSTUDY SSL)
  • Trade Support Loan (TSL).


How do I repay my study loan to the ATO?

You can make voluntary repayments at any time directly to us to pay off your study loans.Remember, these are separate to the amount due to be paid as a compulsory payment based off your assessable income. Voluntary payments won’t lower your compulsory obligation.

For compulsory repayments, when you start a new job, be sure to tick the box on your tax declaration form to let your employer know you have a HECS-HELP debt. Once you earn above the compulsory repayment threshold, your employer will automatically withhold extra tax from your salary. We’ll calculate your repayment amount at the end of the financial year when you do your annual income tax return.

You may be asked to make compulsory repayments even if you live and work overseas.

To let your employer know about your loan, fill out a pre-filled tax file number declaration form online.

This is to help avoid any nasty surprises (tax bill)  at year end when we process your tax return.


How do I know if my income reaches the compulsory repayment threshold?

There’s a tool for that! You can use our study and training loan repayment calculator to work out how much your compulsory repayment might be.You can also check out study and training loan repayment thresholds and rates for the 2022-23 financial year.


My loan is paid off.  How do I stop my employer taking contributions?

Once you’ve paid off your loan in full, you’ll need to complete a new withholding declaration to advise your employer that you no longer have a loan. 

I’ve overpaid my HECS debt! How do I get it back?

Did you voluntarily pay your entire HECS debt, but your employer still withheld extra tax throughout the year to cover your compulsory repayment? Any extra withheld by your employer will be taken into account when you lodge your tax return. If you’ve overpaid, don’t worry – it’ll be refunded to you. The amount for HECS will not be shown separately on your Notice of Assessment. It will be included in your total tax withheld amount. 

Why does my payslip not show my HECS repayments?

Can’t see your HECS repayments on your payslip? It’s normal for employers not to record your HECS repayments on your payslip. As long as you’ve ticked the box stating you have a study loan on your withholding declaration form, your employer will be withholding extra tax to cover your HECS repayments. If you are still unsure, contact your payroll department. 

How can I check my loan balance?

You can check how much you have left to pay by logging in to your account on our online services via myGov. Remember when looking at your account, the amounts your employer withhold throughout the year won’t appear there until you’ve done your tax return. 

Why aren’t my HECS repayments showing up in myGov?

If you have logged in to myGov and noticed your loan balance hasn’t reduced – there’s no need to worry! Once you’ve lodged your income tax return, you’ll be able to see your payments online.The extra amounts your employer withholds throughout the year are kept with your regular tax withheld amounts. These appear on your payment summary as one lump sum. When you do your taxes, your study loan repayment amount will be calculated, just like your tax liability. The amounts that your employer have withheld will then be used to cover that liability will be used. If you’ve paid too much, the excess will be refunded to you. If you haven’t paid enough, you may be asked to pay more.


What is indexation and how is it calculated?

Indexation isn’t interest. It maintains the real value of your loan by adjusting it in line with cost-of-living changes. The rate is worked out after the March Consumer Price Index (CPI) is released.We usually publish the latest indexation rate in mid-May each year. We then add indexation to the part of your loan that’s older than 11 months on 1 June.

Can I avoid indexation?

If your loan balance is $0 on 1 June, we won’t apply indexation to your loan. This means you can choose to pay off your total loan balance with a voluntary payment before 1 June to avoid indexation.Make sure you allow enough time for the payment to be received and processed before 1 June. Indexation will be applied if your voluntary payment isn’t processed in time.




Back to all Articles