Should I pay HECS early in 2026?

Short answer for the 2026 indexation cycle: probably not. The 1 June 2026 indexation rate is locked in at 2.80% — the lowest in five years. Most Australian high-interest savings accounts pay 5.00–5.50% on at least the first $100,000 of your balance. After tax, the savings account still beats the HECS repayment for the average earner.

The simple test is one comparison:

• Indexation rate (2.80% in 2026) — what every dollar of debt costs you if you do nothing.
• Savings rate after tax — your headline savings rate × (1 − your marginal tax rate including Medicare). At 5.50% gross and the 32% middle bracket, that's 3.74%.

Whichever number is higher wins. At 2.80% vs 3.74%, savings wins by nearly a full percentage point.

When the answer flips to "repay"

Three situations meaningfully change the math:

1. Savings rates fall. If the RBA cuts and your account drops to 3% gross, after-tax becomes 2.04%. Indexation now beats it. Time to make a voluntary payment.
2. Indexation jumps. The 2.80% rate is the lower of CPI and WPI under post-2024 legislation. If wage growth accelerates above ~3.5%, indexation goes with it. Future years may be higher.
3. You're in the top tax bracket. At a 47% marginal rate, 5.50% gross savings only nets 2.92% after tax — barely ahead of 2.80% indexation. A small fall in savings rates flips the answer.

What the average Australian should actually do

Run the numbers. The trap most online HECS guides fall into is recommending the same answer to everyone. The right move depends on your specific balance, income, savings rate, and tax bracket.

Open the calculator, plug in your numbers, and get a personalised recommendation in 30 seconds. Nothing is stored — your inputs live in the URL so you can share or revisit the result.

One more nuance: compulsory repayments will eat the debt anyway

If you earn over $67,000, the ATO already takes a slice of your HECS-HELP balance via compulsory repayments at tax time. For most debtors, that means the balance will be paid off in 5–15 years regardless of whether you make voluntary payments. The decision isn't whether you pay — it's where your spare cash earns more in the meantime.