Reduce your Study Loan Balance before 1 June

Don't let rising indexation on study and training loans catch you unaware this year.

HECS-HELP debt doesn't attract interest, but is indexed to inflation.  

On 1 June each year, indexation is applied to accumulated HECS-HELP debt that has remained unpaid for more than 11 months.  On 1 June each year, all HECS-HELP debt increases by the amount of indexation. Subject to the March quarter inflation outcome, we are expecting the 2023 annual indexation to be over 7%.

A voluntary repayment prior to this date will reduce the balance that indexation is applied to. Indexation doesn't apply to your study or training loan on 1 June if the balance is $0.

If you have other debts with high interest rates – credit cards, personal loans or car loans – you'd repay those other debts as a priority rather than your HECS-HELP debt.

If you don't have other debts, and have some surplus cash, you could weigh up repaying your HECS-HELP with other options, like saving for a house deposit or retirement savings.

If you decide to make an early repayment. How do you do it?

Log into your MyGov account, click into the ATO box under your linked services and you will see your HECS-HELP balance under loan accounts. Click into the account and at the bottom you will see a button for voluntary repayment.

It does take the ATO up to four business days process the payment, so if you are going to make a voluntary payment, you must do it the week prior to 1 June.  

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GENERAL ADVICE WARNING | The information contained in this article is general and is not intended to serve as advice. No warranty is given in relation to the accuracy or reliability of any information. Readers should not act or fail to act based on information contained herein. Readers are encouraged to contact a professional advisor for advice concerning specific matters before making any decision.