Student Loans? Discover Your Hidden Debt (2026 Guide)

Are you uncertain about the status of your student loans? Whether you're a recent graduate or have been out of university for a while, it's crucial to understand your student loan obligations to manage your finances effectively. With numerous changes to student loan policies and repayment thresholds, staying informed can save you from unexpected financial burdens.

Understanding Student Loans in Australia

In Australia, student loans primarily fall under the Higher Education Loan Program (HELP), which includes various types of loans such as HECS-HELP, FEE-HELP, and VET Student Loans. These loans are designed to assist students in covering tuition fees, allowing them to focus on their studies without immediate financial strain. However, these loans are not free money; they need to be repaid once your income reaches a certain threshold.

As of 2026, the repayment threshold for HELP debts starts at $48,361. This means once your income exceeds this amount, you'll begin repaying your loan through the tax system. The repayment rates range from 1% to 10% of your income, depending on how much you earn.

Current Rates and Requirements

Understanding the interest rates and requirements associated with student loans is essential for effective financial planning. HELP debts are indexed annually with the Consumer Price Index (CPI) to maintain their real value.

It’s important to note that while the real interest is 0%, the indexing can still increase the total amount owed over time. In 2026, the CPI indexation rate is approximately 3.5%, which means your debt will increase by this percentage annually until it's repaid.

How to Check Your Student Loan Balance

Keeping track of your student loan balance is crucial. Here’s a step-by-step process to check your balance:

1. Access MyGov: Log into your MyGov account and link it to the Australian Taxation Office (ATO) online services if you haven't already.
2. Navigate to Loan Balances: Once logged in, click on 'Tax' and then 'Loan Accounts' to view your current loan balance.
3. Review Your Statement: Your statement will reflect the outstanding balance, any recent indexation, and repayments made.
4. Set Reminders: Consider setting calendar reminders to check your balance quarterly, especially if you expect changes in your income.

By regularly monitoring your loan, you can plan for repayments and avoid surprises come tax time.

Expert Tips and Considerations

Here are some expert tips to manage your student loans effectively:

• Budget for Repayments: If your income is approaching the repayment threshold, start budgeting for loan repayments. This will help you avoid financial strain when the ATO starts deducting repayments from your income.
• Consider Voluntary Repayments: If financially feasible, make voluntary repayments to reduce your debt faster and potentially save on indexation costs. Note that voluntary repayments can no longer be claimed as a tax deduction.
• Stay Informed: Policies and thresholds can change. Regularly check government websites or consult with financial advisors to stay updated.
• Explore Repayment Options: If your income fluctuates or you experience financial hardship, explore alternative repayment plans or deferment options.
• Consult Professionals: With access to 83+ lenders, Esteb and Co can provide insights into refinancing options or consolidate debts if you have multiple loans.

Frequently Asked Questions

1. How do I know if I have a student loan?
Check your MyGov account linked to the ATO for any outstanding HELP debt or contact your educational institution for information.

2. What is the current repayment threshold for HELP debts?
As of 2026, the repayment threshold begins at $48,361.

3. Are there any interest rates on HELP loans?
HELP loans have a 0% real interest rate but are indexed annually to the CPI.

4. Can I make voluntary repayments?
Yes, you can make voluntary repayments at any time, which may help reduce the overall debt faster.

5. What happens if I move overseas?
If you move overseas, you are still required to repay your student loans if your income exceeds the threshold, and you must report your worldwide income to the ATO.

6. How does indexation affect my loan?
Indexation adjusts your loan balance to keep it in line with the cost of living, which can increase the total debt over time.

7. Can Esteb and Co help with student loan management?
Yes, Esteb and Co can provide advice on managing your student loans and explore refinancing options with their panel of 83+ lenders.