The Higher Education Contribution Scheme (HECS) is a student loan program that has enabled numerous Australians to pursue the career of their dreams. However, the prospect of repaying this debt can often seem overwhelming.

To help you manage this, we’ve put together a list of seven strategies that can expedite your HECS debt repayment. One of these includes using a tax calculator designed for Australian residents to understand your financial obligations and plan your repayments effectively. By incorporating this and the other crucial tips into your financial planning, you can make informed decisions and devise a repayment strategy that suits your individual circumstances. So, let’s waste no more time in getting started!

1. Understand Your Debt

Student debt is interest-free but indexed each year to track with changes in the economy. During years with minimal inflation, this may barely affect your outstanding balance. However in 2023, when inflation was high, HECS-HELP debts grew by 7.1%. That was a significant increase for many people, so keep indexing in mind when setting a plan for paying off your student debt.

You generally only have to start repaying your HECS-HELP loan when your income reaches the minimum threshold amount. As of 2024, that’s $51,550 per annum. However, it can change from year to year, so always double check with the ATO.

2. Make Voluntary Repayments

One of the most effective ways to accelerate your HECS debt repayment is to make voluntary repayments. These can be made at any time through the myGov portal. Making a voluntary payment before June 1st can help you avoid paying the index increases discussed in the section above.

3. Increase Your Overall Income

Increasing your income boosts your ability to make voluntary payments. So consider taking on extra hours at work or exploring side hustles. Investing in your skills through further education can lead to higher-paying job opportunities in the future, and as of 2024, you won’t necessarily have to incur more debt. For example, there are institutions offering fee-free nursing degrees to both new high school graduates and older Australians seeking a career change.

4. Claim All Deductions

To reduce your assessable income, you should claim as many deductions as possible. You can achieve this by consulting a skilled accountant or using a tax calculator designed for Australian residents. The result will be a larger tax refund, which you can use to shave a chunk off your HECS debt.

5. Check Your HECS Balance Regularly

Regularly checking your HECS balance will help you keep track of your debt and plan your repayments accordingly. Seeing that big number drop down every month should also keep you motivated to keep pursuing your goal.

6. Speak to a Financial Advisor

A financial advisor or accountant can provide valuable insights and practical tips to help you minimise your HECS-HELP debt more effectively.

7. Ask Family to Help With Early Repayment

This doesn’t have to be in the form of asking family members for a loan. For example, your parents could help you make early repayments by simply letting you live at home rent-free for a while. Every family is different, and this may not be an option for you. However, if it is, know that there’s no shame in asking for help, and you can always find ways to pay your loved ones back in the future.

With these strategies, you can fast-track your freedom from HECS debt and move towards a financially secure future.

Disclaimer: This blog post is for informational purposes only and should not be taken as financial advice. Always consult a professional before making any major financial decisions.