How a HECS-HELP debt affects your borrowing power

How compulsory repayments work

The ATO says its minimum repayment income and rates are updated each year and apply to HELP and other study and training loans. Your repayment income is your taxable income plus reportable fringe benefits, total net investment loss (including net rental losses), reportable super contributions and exempt foreign employment income. The ATO says compulsory repayments are made through the income tax system, and its page describes how they are made. Telling your employer about the loan is part of that process.

The ATO's 2026 to 27 table:

Before the 2025 to 26 year, repayments were a percentage of total repayment income. The Department of Education says the repayment system changed so that HELP repayments are calculated only on income above the threshold, which was $67,000 in 2025 to 26. Confirm current figures on the ATO page before relying on them.

A worked example

RateSonar's arithmetic using the ATO table, for a repayment income of $90,000 in 2026 to 27 (an illustrative round number):

• $90,000 minus $69,528 is $20,472.
• 15% of $20,472 is $3,070.80 for the year.
• That is about $255.90 a month taken from your pay over the year.

A lender sees pay after that deduction. How it counts the repayment, whether as reduced take-home pay or as a commitment, is its own policy.

What lenders do

ASIC's responsible lending guidance says a credit licensee must make reasonable inquiries about your financial situation, take reasonable steps to verify it and assess that the loan is "not unsuitable" for you. A HELP debt is part of your financial situation. Lenders each set their own method, so ask how yours treats it. For how assessment generally works see how lenders assess serviceability and the household expenditure measure. We have not found an official source on a single rule for HELP debt across lenders, so we do not state one.

Indexation and the 20% reduction

Study Assist says the ATO applies indexation each year on 1 June to the part of your accumulated HELP debt unpaid for more than 11 months. Indexation in 2026 was applied at 2.8%, the lowest rate since 2021 (Study Assist, 7 May 2026). The Department of Education says indexation is based on the lower of the Consumer Price Index or the Wage Price Index.

The Department of Education also says the Universities Accord (Cutting Student Debt by 20 per cent) Bill 2025 passed Parliament in July 2025, reduced student loan debt by 20%, and that the ATO has completed processing the reductions (page last modified 16 June 2026). Check your own balance in ATO online services via myGov, because your balance is what lenders and you can verify.

What to ask a lender or broker

• How do you treat my HELP repayments in my assessment?
• Do you use my current balance, my compulsory repayment, or both?
• Will paying off the debt, or making a voluntary repayment, change the outcome? Ask before paying, and think about whether your money is better used elsewhere.
• Which documents do you need to show the debt, for example the ATO account?
• Does the way I am assessed change if my income rises or I start a new job?

Our guide to pre-approval covers getting an indicative answer from a lender. Rates for owner-occupier loans are on the home loan board, and the middle advertised standard variable rate is 6.74% as at 2 Nov 2026, though that is an advertised figure, not your rate.

Mistakes to avoid

• Assuming the debt does not matter because it has no interest. Indexation applies, and repayments still reduce take-home pay.
• Using old thresholds. They are updated each year.
• Paying off the debt without asking. Whether it helps depends on the lender and your wider finances.
• Leaving your ATO details out of date. Make sure your employer has the right withholding.