Money · HECS payoff
HECS Debt Payoff Timeline
When will my HECS debt be paid off? Projects repayments against ATO income thresholds and annual indexation, and names the indexation trap at lower incomes.
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Copyable takeaway
What this means
No waffle. Just the number and how it was worked out.
Formula used
Annual repayment = income × ATO threshold rate. Remaining debt = (prior balance × indexation) minus repayment. Repeat until zero.
Worked example
A$35,000 HECS, A$65,000 income, 3% income growth, 4% indexation: approximately 14 years. At A$45,000 income the debt grows faster than repayments for the first few years.
Common questions
What is HECS indexation and why does it matter?
The government increases your HECS debt each June by the Consumer Price Index. In high-inflation years this can exceed your annual repayment, meaning the debt grows despite making payments. This is the indexation trap.
Can I pay off HECS faster?
Yes, voluntary repayments can be made at any time and go straight to the balance before indexation is applied. Making a voluntary payment before 1 June each year avoids indexation on that amount.
Plain-English summary
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