On 1 June 2026, every HELP, VET Student Loan and other study-loan balance was indexed by 2.8%. On a typical $30,000 balance that added about $840. It's the lowest rate in four years.
Is HECS interest? No, it's indexation
HELP debts charge no interest. The "HECS interest rate" people search for is the indexation rate: a once-a-year adjustment on 1 June, set at the lower of CPI and wage growth. There is no daily interest and no lender margin. The 2026 rate was 2.8%; 2024 was 4.0% (cut from the originally applied 4.7%).
Every HELP indexation rate since 2013
| Applied 1 June | Rate | Added to a $10,000 balance | Note |
|---|---|---|---|
| 2026 | 2.8% | $280 | |
| 2025 | 3.2% | $320 | |
| 2024 | 4.0% | $400 | Reduced from 4.7% (lower of CPI or WPI, backdated) |
| 2023 | 3.2% | $320 | Reduced from 7.1% (lower of CPI or WPI, backdated) |
| 2022 | 3.9% | $390 | |
| 2021 | 0.6% | $60 | |
| 2020 | 1.8% | $180 | |
| 2019 | 1.8% | $180 | |
| 2018 | 1.9% | $190 | |
| 2017 | 1.5% | $150 | |
| 2016 | 1.5% | $150 | |
| 2015 | 2.1% | $210 | |
| 2014 | 2.6% | $260 | |
| 2013 | 2.0% | $200 |
The 2023 figure was originally 7.1%, the spike that made indexation a national talking point, and 2024's was 4.7%. In 2024 the government changed the formula (backdated to 2023) so the rate is now the lower of the Consumer Price Index and the Wage Price Index, and affected balances were recalculated. On a $10,000 balance, the two reductions together are worth $460. Your debt can no longer grow faster than wages, but it still grows.
Over the long run: a $10,000 balance left untouched from 2013 through the 2026 indexation would now be $13,835, an average of 2.3% a year (before the one-off 20% cut in 2025, and with no repayments). The lowest year on record here was 2021, at 0.6%.
How indexation is applied
Nothing accrues day to day. On 1 June each year, the portion of your debt that has been unpaid for more than 11 months is increased by the year's rate in one step. The rate is set from ABS figures published shortly beforehand, so it's announced only weeks before it applies.
The part that surprises people is the timing of repayment credits. The HECS amounts withheld from your pay through the year aren't paid onto your debt as they're withheld; they sit as tax withholding and are only credited when your return is assessed, after 30 June. So the 1 June indexation applies to your balance before that year's compulsory repayment reduces it. A year of payslip deductions doesn't shrink the amount that gets indexed.
The 20% cut: why balances dropped in 2025
Separately from indexation, every study-loan balance that existed on 1 June 2025 received a one-off 20% reduction, applied before the 2025 indexation was calculated, so that year's 3.2% indexation was charged on the reduced balance. The ATO completed processing the credits during 2026. If you haven't looked since, check your balance in ATO online services before assuming what you owe.
Reducing the indexation you pay
- Voluntary repayments before 1 June. The only direct option. A payment made before indexation day reduces the balance that gets indexed. At 2.8%, each $1,000 paid early avoids $28 of indexation that year. There's no discount for voluntary repayments any more, so this is a pure timing benefit.
- Know your compulsory repayment. Compulsory repayments are marginal from 2025-26: you repay only on income above the threshold. Whether your repayments are outrunning indexation depends on your income and balance together.
- Project the payoff date. Our HECS repayment calculator models the indexation-then-repayment sequence year by year and shows the total cost of indexation over the life of your debt, under assumptions you control.
Whether paying HECS down early beats investing the money or offsetting a mortgage is a personal-circumstances question. This page explains the mechanism, it doesn't recommend a strategy.
Sources
Figures on this page come from the following primary sources. The date is when we last checked the page against the source.
- Study and training support loans indexation rates (ATO), checked 5 October 2026.
- Study and training loans: what's new (ATO), checked 27 July 2026.
- HELP indexation and debt reduction (Department of Education), checked 28 July 2026.
Related
HECS/HELP repayment calculator: your 2026-27 repayment and a payoff projection with indexation included. Salary sacrifice calculator: why sacrificing super doesn't reduce your HECS repayment. Take-home pay calculator: what a raise does to your repayments.
Figures current as at 5 October 2026, verified against ATO published rates; see our methodology. General information only, not financial advice.