Indexation is applied to study and training loan balances on 1 June. It isn't interest — it's an adjustment that keeps the debt's real value steady, set at the lower of CPI and WPI. For 2026 that rate was 2.8%.
Only the part of your debt that has been unpaid for 11 months or more is indexed. Amounts added more recently sit out this year's round.
If you're planning to pay extra, the date is the whole game. A voluntary payment that reaches your balance before 1 June reduces the amount that gets indexed, so you save the indexation on it. The same payment made on 2 June reduces your debt just as much, but misses the saving by a full year.
Don't cut it fine — payments take time to be received and applied. Aim for well before the end of May rather than 31 May.
A voluntary payment does not reduce the compulsory repayment assessed in your tax return. It only lowers the balance and future indexation.
This is what confuses most people. Two things happen months apart:
So between June and whenever you lodge, your balance genuinely goes up even though you've been repaying all year through your pay. Nothing is wrong — the credit just hasn't landed yet. More on that in why your HECS debt isn't going down.
| Year (1 June) | Indexation rate |
|---|---|
| 2026 | 2.8% |
| 2025 | 3.2% |
| 2024 | 4.0% |
| 2023 | 3.2% |
| 2022 | 3.9% |
| 2021 | 0.6% |
Since 1 June 2023 the rate has been the lower of CPI and WPI, applied retrospectively — which is why the 2023 and 2024 figures were revised down from what was originally charged.
→ See what indexation does to your balance — the payoff planner projects it year by year, and separates debt indexation from threshold indexation.
HECS indexation 2026 — the 2.8% rate explained