July 31, 2025 • 10 mins
During the federal election, Labor said one of their first duties if elected, would be to implement a cut to HECS and HELP debts by 20%.
And as of yesterday, legislation has passed both houses of Parliament to discount those debts.
We asked you what questions you had about this bill, and in today's podcast we unpack them all.
Hosts: Harry Sekulich and Billi FitzSimons
Producer: Orla Maher
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Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Already and this this is the Daily This is the
Daily OS.
Speaker 2 (00:05):
Oh, now it makes sense.
Speaker 1 (00:14):
Good morning and welcome to the Daily OS. It's Friday,
the first of August. I'm Harry Seculch, I'm Billiefit Simon's.
Your HEX balance is about to go down by twenty percent.
In Parliament yesterday the government passed its bill to reduce
all student debts. So when will this actually apply to
your HEX account? And what if you already paid off
(00:35):
your HEX debt. We asked what you wanted to know
about this new development, and today we're here to answer
all your questions.
Speaker 2 (00:42):
We'll get to those questions in a moment, but first,
here is a quick message from today's sponsor. Okay, Harry,
So we are talking about the Hex's discount. Now, this
is one of the key promises from the Labor government
at the last election and it has now gone through Parliament.
(01:04):
For anyone who miss this, do you want to just
explain what exactly it is, because my understanding is this
is just a one off discount. It's not a long
term overall reduction on the price of Uni degrees.
Speaker 1 (01:17):
Yeah, that's right, Billy. So it's the reduction in the
value of a debt. It doesn't necessarily translate to anything
beyond that. So the price of a UNI degree, the
price of a tape course or private college, that's not
changing necessarily. But what this does apply to is the
value of a debt balance at a particular time. And
(01:38):
as far as we know, there's no plans to discount
future debts. If you don't already have one, or if
you paid off a debt last year, that this doesn't
necessarily apply to you. So I suppose it's important to
put those guardrails in place. That this is a one
off twenty percent discount on a debt balance on the
first of June twenty twenty five.
Speaker 2 (01:57):
So just to be clear there, this apply to the
dollar figure that was attached to your hex debt as
of the first of June this year.
Speaker 1 (02:06):
That's right just before the indexation kicked in. Got it.
So that's when the value of your debt goes up
to slightly and it's based on one of two measurements.
It's either the wage price index or the consumer price index.
Without going too deep into what that means, it's just
basically increasing in line with the value of money over time. Yes,
(02:27):
got it? Okay?
Speaker 2 (02:28):
So let's go to the questions that we got from
the audience yesterday. The first one we got was does
it apply to private unis and all degrees?
Speaker 1 (02:38):
Yeah, effectively, it does, because the federal government oversees and
administers all things relating to student debts at a higher
education level. So when you want to start studying at
an accredited institution, so at universities or private colleges, you
can get what's known as a higher education loan program
or help. And it doesn't really matter which institution and
(03:00):
you get this hex debt or help debt from. It'll
all be processed in the exact same way when it
comes to this discount. So, like I said, this is
a discount on the value of a debt. That debt
is pretty much the same across the board in the
sense that it all comes from the same place, which
is the federal government. So it will apply to you
(03:22):
if you have a help debt sitting there.
Speaker 2 (03:24):
I'm one of those people who always gets confused between
help debt and hex debt, But for the purposes of
this conversation, it really doesn't matter. It literally just applies
to all student debts.
Speaker 1 (03:34):
Student debt. I think that's like the more I guess
inclusive term, but I mean I always just tend to
say hext I think everyone.
Speaker 2 (03:43):
Yeah, okay, next question that we got, what happens if
I have already lodged my tax return and paid off
my hex will I be refunded? And just another one
that kind of relates to that, someone asked if I
pay mine off in full, now will I get a
twenty percent refund when it comes in?
Speaker 1 (04:02):
So these two questions kind of touch on the same thing,
which is how far back does the discount apply? And
I will go back to that date of the first
of June, because that's the all important date for this
hex stet discount. If you want to pay off your
full debt, make some further voluntary repayments in the next
few months, but you haven't seen that hex discount come
(04:23):
into place, that doesn't matter. And this is why it's
a little bit technical, So I might just walk you
through some of these stages. The way it will work
is if you had a hextet on the first of June,
but you've since paid it off you plan to pay
it off before the discount, you'll get a credit to
what's known as your help account. And then if you've
(04:44):
got no further debts to the tax office, then that
will be processed to you as a refund. Right. So
the government's official advice is, don't wait if you want
to pay off your full debt, if you've made some
voluntary repayments. If you you had a debt at the
first of June, then you will be compensated in one
(05:05):
way or another, and the actual discount amount only applies
to that particular date. You will see it flow through
to you in some form. Got it.
Speaker 2 (05:15):
But let's say that if you paid off your hex
deet in full, let's say at the start of this year,
then unfortunately this doesn't apply to you because you didn't
have a debt as of the first of June this year.
Speaker 1 (05:27):
That's right, So it doesn't backdate beyond the first of June,
got it. And it also doesn't apply to any future debts.
Like I said, there's no plans, at least that we
know about, for the government to make unied degrees cheaper
or to discount the value of debts over time. It's
just this one particular date.
Speaker 2 (05:46):
Yeap, All right, Next question, which I think is the
number one question that we got from our audio.
Speaker 1 (05:52):
Can I take a bit of a guess, Yeah, what
it is? When will the hex sebt discount actually take place?
Speaker 2 (05:58):
I think that is the question we got maybe thousands
of times yesterday understandably, and so that is when will
we actually see this in our hex debt accounts?
Speaker 1 (06:07):
Yeah, so I needed a bit of help in answering
this as well, because based on some of the messages
that the government was putting out there, they were saying
that it will take a little bit of time once
the legislation becomes law, which it has now, well it
needs role as sent from the Governor General, but that's
just a very form procee drill thing, tick of the
box thing that will happen. But basically what happens now
(06:31):
is that the Australian Tax Office also known as the ATO,
they will be the ones processing this hex debt and
that will apply automatically to hundreds thousands of different accounts.
The government has said that it can take a bit
of time based on people's individual circumstances. It's a little
bit case by case. The twenty percent might seem like
(06:51):
a really straightforward formula, but it actually does take a
little bit of working out because of the smaller factors
like the indexation value that was applied, So it can
just take a little bit of time. That I asked
the Prime Minister st when people can actually expect to
see the value of their student debts reduced. And here's
a bit of what he had to say.
Speaker 2 (07:12):
Most people should see the benefit by the end of
the year, and it will be backdated importantly to the
first of June.
Speaker 1 (07:20):
So I can't say with absolute confidence that overnight on
this particular date you are going to see your HEX
debt reduced. But in the Prime Minister's words, it should
be done by twenty twenty six.
Speaker 2 (07:31):
Got it, So it will happen by the end of
this year. Now, the other thing that has changed as
part of this bill, which I think has got a
little bit less airtime but is still important, is the
change to the minimum repayment threshold. Now, this is the
minimum salary you need to have in order to start
paying off your HEX debt. What is the change there.
Speaker 1 (07:54):
The way that HEX was conceived as an idea when
it first came into being was you you start paying
off this debt once you can afford to. So in
that way, it doesn't really work like other debts, where
say you take out a loan from the bank, you
have to start paying it off despite your circumstances that
you are indebted to the bank, so you have to
(08:15):
start giving them some money. The way that hex stets
work is that you need to earn a minimum amount
before you start paying it off, and the more you earn,
the more you pay off. Right now, the minimum repayment
threshold is fifty six, one hundred and fifty six dollars,
and that minimum threshold is now going to increase to
(08:35):
sixty seven thousand dollars. And that's all under the same
piece of legislation that we saw the hex debt discount
fall under as well, which is just about to become law.
And what this means is that over the next year
or so, if you are earning, say between seventy and
eighty thousand dollars, you'll actually find that over time you're
paying off a little bit less than you were last
(08:58):
year because the minimum payment threshold has increased. And basically
there's a pay as you go system, so there's a
bit that's withheld from your pay each week, and then
that all sort of comes together at the end at
tax time. So July next year, and since the payment
threshold is higher, you don't end up paying as much.
(09:20):
Does that make sense?
Speaker 2 (09:21):
That makes sense. So what you're saying is that with
the minimum repayment threshold changing, so too does all of
the thresholds change.
Speaker 1 (09:30):
They're all scaling up, if you're so, it's going from
people at fifty six thousand dollars and above paying it
off to sixty seven thousand and above paying off. And
like I said, the more you earn, so if you
get up to one hundred, one hundred and fifty thousand dollars,
you end up having more pay with held from your
pay slip. And then people who are on slightly lower
(09:51):
incomes but just meeting that threshold won't pay as much
over the next financial year.
Speaker 2 (09:56):
Got it, Harry. I think that's all of the questions
that we've got. Thank you so much for taking us through.
Speaker 1 (10:01):
That, No problem, Billy, there were some great questions.
Speaker 2 (10:04):
And thank you so much for listening to this episode
of the Daily OS. We'll be back this afternoon with
your evening headlines, but until then, have a great Friday.
Speaker 1 (10:17):
My name is Lily Maddon and I'm a proud Arunda
Bungelung Kalkutin woman from Gadighl country. The Daily oz acknowledges
that this podcast is recorded on the lands of the
Gadighl people and pays respect to all Aboriginal and Torres
Strait island and nations.
Speaker 2 (10:31):
We pay our respects to the first peoples of these countries,
both past and present.
Already and this this is the Daily This is the
Daily OS.
Speaker 2 (00:05):
Oh, now it makes sense.
Speaker 1 (00:14):
Good morning and welcome to the Daily OS. It's Friday,
the first of August. I'm Harry Seculch, I'm Billiefit Simon's.
Your HEX balance is about to go down by twenty percent.
In Parliament yesterday the government passed its bill to reduce
all student debts. So when will this actually apply to
your HEX account? And what if you already paid off
(00:35):
your HEX debt. We asked what you wanted to know
about this new development, and today we're here to answer
all your questions.
Speaker 2 (00:42):
We'll get to those questions in a moment, but first,
here is a quick message from today's sponsor. Okay, Harry,
So we are talking about the Hex's discount. Now, this
is one of the key promises from the Labor government
at the last election and it has now gone through Parliament.
(01:04):
For anyone who miss this, do you want to just
explain what exactly it is, because my understanding is this
is just a one off discount. It's not a long
term overall reduction on the price of Uni degrees.
Speaker 1 (01:17):
Yeah, that's right, Billy. So it's the reduction in the
value of a debt. It doesn't necessarily translate to anything
beyond that. So the price of a UNI degree, the
price of a tape course or private college, that's not
changing necessarily. But what this does apply to is the
value of a debt balance at a particular time. And
(01:38):
as far as we know, there's no plans to discount
future debts. If you don't already have one, or if
you paid off a debt last year, that this doesn't
necessarily apply to you. So I suppose it's important to
put those guardrails in place. That this is a one
off twenty percent discount on a debt balance on the
first of June twenty twenty five.
Speaker 2 (01:57):
So just to be clear there, this apply to the
dollar figure that was attached to your hex debt as
of the first of June this year.
Speaker 1 (02:06):
That's right just before the indexation kicked in. Got it.
So that's when the value of your debt goes up
to slightly and it's based on one of two measurements.
It's either the wage price index or the consumer price index.
Without going too deep into what that means, it's just
basically increasing in line with the value of money over time. Yes,
(02:27):
got it? Okay?
Speaker 2 (02:28):
So let's go to the questions that we got from
the audience yesterday. The first one we got was does
it apply to private unis and all degrees?
Speaker 1 (02:38):
Yeah, effectively, it does, because the federal government oversees and
administers all things relating to student debts at a higher
education level. So when you want to start studying at
an accredited institution, so at universities or private colleges, you
can get what's known as a higher education loan program
or help. And it doesn't really matter which institution and
(03:00):
you get this hex debt or help debt from. It'll
all be processed in the exact same way when it
comes to this discount. So, like I said, this is
a discount on the value of a debt. That debt
is pretty much the same across the board in the
sense that it all comes from the same place, which
is the federal government. So it will apply to you
(03:22):
if you have a help debt sitting there.
Speaker 2 (03:24):
I'm one of those people who always gets confused between
help debt and hex debt, But for the purposes of
this conversation, it really doesn't matter. It literally just applies
to all student debts.
Speaker 1 (03:34):
Student debt. I think that's like the more I guess
inclusive term, but I mean I always just tend to
say hext I think everyone.
Speaker 2 (03:43):
Yeah, okay, next question that we got, what happens if
I have already lodged my tax return and paid off
my hex will I be refunded? And just another one
that kind of relates to that, someone asked if I
pay mine off in full, now will I get a
twenty percent refund when it comes in?
Speaker 1 (04:02):
So these two questions kind of touch on the same thing,
which is how far back does the discount apply? And
I will go back to that date of the first
of June, because that's the all important date for this
hex stet discount. If you want to pay off your
full debt, make some further voluntary repayments in the next
few months, but you haven't seen that hex discount come
(04:23):
into place, that doesn't matter. And this is why it's
a little bit technical, So I might just walk you
through some of these stages. The way it will work
is if you had a hextet on the first of June,
but you've since paid it off you plan to pay
it off before the discount, you'll get a credit to
what's known as your help account. And then if you've
(04:44):
got no further debts to the tax office, then that
will be processed to you as a refund. Right. So
the government's official advice is, don't wait if you want
to pay off your full debt, if you've made some
voluntary repayments. If you you had a debt at the
first of June, then you will be compensated in one
(05:05):
way or another, and the actual discount amount only applies
to that particular date. You will see it flow through
to you in some form. Got it.
Speaker 2 (05:15):
But let's say that if you paid off your hex
deet in full, let's say at the start of this year,
then unfortunately this doesn't apply to you because you didn't
have a debt as of the first of June this year.
Speaker 1 (05:27):
That's right, So it doesn't backdate beyond the first of June,
got it. And it also doesn't apply to any future debts.
Like I said, there's no plans, at least that we
know about, for the government to make unied degrees cheaper
or to discount the value of debts over time. It's
just this one particular date.
Speaker 2 (05:46):
Yeap, All right, Next question, which I think is the
number one question that we got from our audio.
Speaker 1 (05:52):
Can I take a bit of a guess, Yeah, what
it is? When will the hex sebt discount actually take place?
Speaker 2 (05:58):
I think that is the question we got maybe thousands
of times yesterday understandably, and so that is when will
we actually see this in our hex debt accounts?
Speaker 1 (06:07):
Yeah, so I needed a bit of help in answering
this as well, because based on some of the messages
that the government was putting out there, they were saying
that it will take a little bit of time once
the legislation becomes law, which it has now, well it
needs role as sent from the Governor General, but that's
just a very form procee drill thing, tick of the
box thing that will happen. But basically what happens now
(06:31):
is that the Australian Tax Office also known as the ATO,
they will be the ones processing this hex debt and
that will apply automatically to hundreds thousands of different accounts.
The government has said that it can take a bit
of time based on people's individual circumstances. It's a little
bit case by case. The twenty percent might seem like
(06:51):
a really straightforward formula, but it actually does take a
little bit of working out because of the smaller factors
like the indexation value that was applied, So it can
just take a little bit of time. That I asked
the Prime Minister st when people can actually expect to
see the value of their student debts reduced. And here's
a bit of what he had to say.
Speaker 2 (07:12):
Most people should see the benefit by the end of
the year, and it will be backdated importantly to the
first of June.
Speaker 1 (07:20):
So I can't say with absolute confidence that overnight on
this particular date you are going to see your HEX
debt reduced. But in the Prime Minister's words, it should
be done by twenty twenty six.
Speaker 2 (07:31):
Got it, So it will happen by the end of
this year. Now, the other thing that has changed as
part of this bill, which I think has got a
little bit less airtime but is still important, is the
change to the minimum repayment threshold. Now, this is the
minimum salary you need to have in order to start
paying off your HEX debt. What is the change there.
Speaker 1 (07:54):
The way that HEX was conceived as an idea when
it first came into being was you you start paying
off this debt once you can afford to. So in
that way, it doesn't really work like other debts, where
say you take out a loan from the bank, you
have to start paying it off despite your circumstances that
you are indebted to the bank, so you have to
(08:15):
start giving them some money. The way that hex stets
work is that you need to earn a minimum amount
before you start paying it off, and the more you earn,
the more you pay off. Right now, the minimum repayment
threshold is fifty six, one hundred and fifty six dollars,
and that minimum threshold is now going to increase to
(08:35):
sixty seven thousand dollars. And that's all under the same
piece of legislation that we saw the hex debt discount
fall under as well, which is just about to become law.
And what this means is that over the next year
or so, if you are earning, say between seventy and
eighty thousand dollars, you'll actually find that over time you're
paying off a little bit less than you were last
(08:58):
year because the minimum payment threshold has increased. And basically
there's a pay as you go system, so there's a
bit that's withheld from your pay each week, and then
that all sort of comes together at the end at
tax time. So July next year, and since the payment
threshold is higher, you don't end up paying as much.
(09:20):
Does that make sense?
Speaker 2 (09:21):
That makes sense. So what you're saying is that with
the minimum repayment threshold changing, so too does all of
the thresholds change.
Speaker 1 (09:30):
They're all scaling up, if you're so, it's going from
people at fifty six thousand dollars and above paying it
off to sixty seven thousand and above paying off. And
like I said, the more you earn, so if you
get up to one hundred, one hundred and fifty thousand dollars,
you end up having more pay with held from your
pay slip. And then people who are on slightly lower
(09:51):
incomes but just meeting that threshold won't pay as much
over the next financial year.
Speaker 2 (09:56):
Got it, Harry. I think that's all of the questions
that we've got. Thank you so much for taking us through.
Speaker 1 (10:01):
That, No problem, Billy, there were some great questions.
Speaker 2 (10:04):
And thank you so much for listening to this episode
of the Daily OS. We'll be back this afternoon with
your evening headlines, but until then, have a great Friday.
Speaker 1 (10:17):
My name is Lily Maddon and I'm a proud Arunda
Bungelung Kalkutin woman from Gadighl country. The Daily oz acknowledges
that this podcast is recorded on the lands of the
Gadighl people and pays respect to all Aboriginal and Torres
Strait island and nations.
Speaker 2 (10:31):
We pay our respects to the first peoples of these countries,
both past and present.
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