Legislation to reduce HECS debt balances by 20% has now officially passed Federal Parliament.
The discount will apply to the balance before indexation was applied on 1 June.
The compulsory repayment threshold will also increase to $67,000.
So, when will it come into effect? Will it apply to your degree?
Here are the answers to your burning HECS discount questions.
When will the discount come into effect?
The Government’s legislation has now passed. The Governor-General now needs to sign it into law, which should happen within the next two weeks.
Prime Minister Anthony Albanese has told TDA that the 20% reduction should come into effect by the end of the year.
Anyone with an existing student debt won’t have to do anything.
The Australian Tax Office (ATO) will apply the discount to individual accounts over the next few months.
Does the discount apply to all degrees?
Yes.
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If you are studying at a private college, university, or TAFE, and have a Higher Education Loan Program (HELP) debt, the 20% discount will apply to you.
The discount applies to individual HECS/HELP balances, not specific degrees.
The cost of any given degree won’t be reduced by 20% under this legislation, but your individual HECS balance will go down.
What if I have paid off my HECS/HELP balance since 1 June?
If you have already paid off your full student debt in the past two months, the ATO will provide a ‘credit’ to your HELP account.
The credit will compensate for the discount that would have applied to the HECS balance prior to indexation on 1 June.
If you don’t owe other debts to the ATO, the credit will be processed as a refund to your bank/financial institution.
Does it apply to previous or future debts?
No.
The HECS discount specifically applies to balances at 1 June 2025.
If you paid off your debt before then, the discount is effectively 20% x 0, which amounts to zero.
The Government hasn’t flagged whether it would introduce further discounts in future. This means if you’re planning to start TAFE or university in 2026, the discount won’t apply to you.
