 If you’re one of the roughly 3 million Australians with an outstanding Higher Education Contribution Scheme (HECS) debt, you may be wondering how the new financial year will impact your repayments and loan balance. While it has not officially been passed into law, the government is set to pass the legislation once it’s back in parliament in late July. This will reduce all student debt by 20%.
This reduction will apply to:
I was planning on making a lump sum payment. Should I do it now, or after the 20% reduction? Whether it will be beneficial for you to make a payment will depend on your individual circumstances, and you should discuss with your financial advisor if you have any questions. However, there is no benefit to waiting for the reduction to be applied before you contribute. Once the legislation has been passed, it will be retrospectively applied to your account as of 1 June 2025. Therefore, if you contribute now, you’ll essentially be paying off your reduced loan (80%), rather than the entire balance as of today (100%). Do I need to do anything to apply it? No, the 20% reduction will automatically be applied to the balance of your debt. Can I find out how much my reduced repayments will be? The Government has a calculator which allows you to estimate the current and new repayment amounts for your debt. For example, if you have an income of $80,000 in 2025:
You can find out more about why the changes are being made here or view some frequently asked questions here. If you have any questions about how this will impact your HECS-HELP repayments, please feel free to contact us on 07 4766 9688 or admin@evergreenadvisers.com.au Comments are closed.
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