How does HECS work? The ultimate guide
By Open Universities AustraliaPublished on
If you’re thinking about enrolling in a uni course, you’ve no doubt considered getting a HECS-HELP loan. But how the HECS does the scheme actually work? Here's everything you need to know.
If you’re considering a higher education course, how you pay for that course is a big consideration.
HECS-HELP is an Australian Government loan scheme that can turn a "maybe one day" dream of study into a "I could actually make it happen now" pursuit.
In this guide we look at the what, when and how of taking on a HECS-HELP loan so that you can achieve your study goals sooner. If you want to know more about how to repay it after you graduate, check out our other guide on paying off your HECS debt.
What is HECS-HELP?
HECS is an Australian government scheme that offers an interest-free loan to higher education students.
In very simple terms, you can think of it as borrowing money from the government to invest in your studies. The government pays for your tuition fees until you've graduated and are earning a certain amount of money, and then you will pay them back.
The scheme was introduced in the 80s by the Hawke government, with the goal of making tertiary education more accessible to more Australians. As is the case with government programs, it has evolved quite a bit since it was first introduced.
Even though it’s still often referred to simply by the acronym HECS (which stands for Higher Education Contribution Scheme), these days, the loan you will most likely receive is technically called HECS-HELP (for Higher Education Loan Program).
The amount you will borrow – and eventually pay back to the government – is based on the particular course you do, and how many subjects you complete.
How does HECS-HELP work?
HECS-HELP works alongside a Commonwealth supported place (CSP) to help cover the cost of your university studies. The government subsidises part of your course fees, and you can use a HECS-HELP loan to pay the remaining amount.
The government subsidy doesn't need to be repaid. The remaining fees, known as your 'student contribution amount', are what you can cover with a HECS-HELP loan.
You don't have to repay the government subsidy. If you're eligible for HECS-HELP, you can use the loan to cover all or part of your student contribution amount. You can also pay some or all of this amount upfront to reduce what you borrow.
Whatever you borrow through HECS-HELP is added to your overall HELP debt. You'll repay it through the Australian tax system once your income reaches the minimum repayment threshold. You can also make voluntary repayments to the Australian Taxation Office (ATO) at any time to reduce your debt.
Who is eligible for HECS-HELP?
While HECS-HELP is available to many higher education students in Australia, you do need to meet some criteria to qualify.
You need to:
- Be enrolled in a Commonwealth supported place (CSP)
- Meet citizenship and residency requirements
- Have enough HELP balance and Student Learning Entitlement available (these accrue the more you study).
You can learn more about the specific eligibility requirements on our student loans page.
HECS-HELP is more commonly available to those studying an undergraduate degree than a postgraduate degree (although some postgraduate CSPs do exist). Most postgraduate degrees will offer you the chance to apply for a FEE-HELP loan instead (more on this below).
Can you use HECS-HELP if you study online?
Yes, HECS-HELP is available for eligible online university degrees, provided you're enrolled in a Commonwealth supported place (CSP). The same eligibility requirements apply whether you study online or on campus.
If you're applying for a degree through Open Universities Australia, you can apply for a CSP as part of your degree application.
To check whether a degree offers Commonwealth supported places, visit its course page on our website and look for the 'CSP available' section. If it says 'Yes', you can apply for a CSP when you submit your degree application.
How do you apply for HECS-HELP?
You'll be given the option to apply for one when you enrol in your chosen course. All you need to do is submit an electronic Commonwealth Assistance Form (eCAF) to your education provider, by the census date.
If you’re studying through Open Universities Australia, we'll supply you with this form during your online enrolment and submit it to your university on your behalf. Otherwise, your university will be able to give you this form.
How much can you borrow with HECS-HELP?
According to the government's StudyAssist page, for 2027 the maximum amount of HECS-HELP loan that most students can borrow is $134,558.
However, for students studying medicine, dentistry, veterinary science courses leading to initial registration, or eligible aviation courses, that figure is $193,259.
When do you start paying HECS?
You start repaying your HECS-HELP loan through your tax once your annual income is over a certain amount. This threshold can change each year, so make sure you keep an ear out for any announcements from the government about this or check the Australian Taxation Office (ATO) website.
The amount you pay will be based on the income you earn. Here are the repayment rates for the 2026-2027 financial year.
The income you earn in 2026-2027 | Your repayment on this income |
|---|---|
$0-$69,528 | Nil |
$69,529 – $129,717 | 15c for each $1 over $69,528 |
$129,718 – $186,050 | $9,028 plus 17c for each $1 over $129,717 |
$186,051 and over | 10% of your total repayment income |
You can use this HECS repayment calculator on the ATO website to get an estimate of your HECS repayment amount for the year.
Are you charged interest on your HECS-HELP debt?
No, you won’t have to pay any interest on your HECS-HELP loan in the way that you might with other kinds of loans, like many personal loans from the bank, for example.
The debt is indexed, though. This means the dollar amount you owe does tend to go up each year.
Learn more about making repayments in our other guide on paying off your HECS debt.
How does indexation work?
Indexation is when the amount of your loan is readjusted to keep pace with inflation in the economy. This is so the value of the loan stays the same over time. This happens on 1 June each year.
The HECS HELP debt indexation for 2026 is 2.8%. This rate was added to the current outstanding loan balances on June 1, 2026.
You can read more about indexation on the government website.
What if your course doesn't offer HECS-HELP?
If your course isn't eligible for HECS-HELP, you may be able to use a FEE-HELP loan instead.
FEE-HELP is another Australian Government loan scheme that helps eligible students pay their university tuition fees. Unlike HECS-HELP, which is available to students in Commonwealth supported places, FEE-HELP is designed for students in full fee-paying places. This is common for postgraduate degrees and individual university subjects.
Find out more about how FEE-HELP works and see the differences between HECS-HELP and FEE-HELP to understand which loan may apply to your studies.
Get help understanding your payment options
Want to ask someone about HECS-HELP and your specific circumstances? That's what we're here for.
Book a consultation with a dedicated student advisor and we'll help you make sense of it all over the phone, with prompt, personalised guidance that's tailored to your unique situation (and completely free).
We can give you clear and friendly advice about your eligibility for HECS-HELP, plus answer any questions you might have.
FAQs about HECS-HELP
Is HECS the same as HELP?
Not exactly. HECS is the common name for HECS-HELP, which is one type of loan under the Australian Government's Higher Education Loan Program (HELP). Other loans under the program include FEE-HELP, SA-HELP and OS-HELP.
Can you get HECS-HELP for postgraduate study?
Yes, but only if your postgraduate course offers a Commonwealth supported place (CSP) and you meet the eligibility requirements. CSPs are less common for postgraduate degrees, so you may be more likely to qualify for FEE-HELP instead.
Can you get HECS-HELP if you study online?
Yes. Online students can access HECS-HELP under the same eligibility rules as on-campus students. Your degree must offer a Commonwealth supported place, and you'll need to meet the other loan requirements.
Can you get HECS-HELP if you already have a degree?
Yes. Having an existing degree doesn't automatically prevent you from accessing HECS-HELP. You can apply for another loan if your new course offers a Commonwealth supported place and you meet the eligibility requirements, including having enough available HELP balance and Student Learning Entitlement.
Can you use HECS-HELP for individual university subjects?
Yes, in some circumstances. HECS-HELP can cover individual subjects if you're enrolled in them through a Commonwealth supported place. However, standalone subjects are usually full fee-paying, meaning FEE-HELP may be available instead.
Can you get HECS-HELP if you're a permanent resident?
Generally, no. Most Australian permanent residents aren't eligible for HECS-HELP, although they may qualify for a Commonwealth supported place. Exceptions apply to certain visa holders, including eligible current and former permanent humanitarian visa holders. You can check your eligibility on the government's StudyAssist website.
Is there a limit to how much you can borrow through HECS-HELP?
Yes. HECS-HELP is subject to the Australian Government's overall HELP loan limit, which also covers certain other student loans. The limit is adjusted annually, and your available borrowing balance can increase as you make repayments. Check the latest borrowing limits on the StudyAssist website.
