A 20 per cent loan fee applies to some undergraduate FEE-HELP borrowing. HECS-HELP has no loan fee at all. That single line is the difference that costs real money, and it is the one most explainer pages either skip or quote at an out of date rate.
Everything else about the two loans is close to identical. Both sit in the same HELP account with the Australian Taxation Office, both were indexed at 2.8 per cent on 1 June 2026, and both are repaid through the same income based system, which starts at $69,528 of repayment income for 2026 to 27. The fork in the road is at the point of borrowing, not the point of repaying.
The catch for a lot of readers: neither loan is available on a student visa. If you are an international student, you are paying full fees upfront and your budgeting problem is rent, not indexation. Our Brisbane student cost of living breakdown is the more useful starting point in that case.
HECS-HELP vs FEE-HELP at a glance, 2026 figures
| * | HECS-HELP | FEE-HELP |
| Place type | Commonwealth supported place | Full fee paying place |
| Eligibility | Australian citizens meeting residency rules, eligible NZ SCV and permanent humanitarian visa holders | Same, plus Pacific Engagement visa holders from 1 February 2024 |
| Typical providers | Mostly public universities | Public universities, private and non university providers, Open Universities Australia |
| Loan fee | Nil | 20% on some undergraduate study, nil on postgraduate |
| Covers | Your student contribution, $4,738 to $17,399 per EFTSL in 2026 | Full tuition, uncapped per course |
| Full tuition, uncapped per course | $129,883, or $186,544 for approved medicine, dentistry, veterinary science and some aviation | Same shared limit |
| Indexation | 2.8% on 1 June 2026, lower of CPI or WPI | Identical |
| Repayment | From $69,528 in 2026 to 27, marginal rates through the ATO | Identical |
HECS-HELP: the loan attached to a Commonwealth supported place
HECS-HELP is not a course, and it is not a debt type you choose. It is the loan that becomes available to you because your seat is subsidised.
A Commonwealth supported place, or CSP, means the government pays part of the cost of your unit directly to your provider. You pay the rest, called the student contribution, and HECS-HELP lets you defer it instead of paying by census date.
Study Assist is blunt about the gate: "You can only get a HECS-HELP loan if you are enrolled in a Commonwealth supported place." No CSP, no HECS-HELP. That is why undergraduates at private providers rarely have one.
You also need a tax file number, and you must submit your electronic Commonwealth Assistance Form on or before the census date. Miss the census date and you owe the money upfront, which is the most common and most expensive administrative mistake students make.
The 2026 student contribution rates published by the Department of Education run from $4,738 per EFTSL for nursing, education, English and maths, through $9,537 for engineering, science and computing, up to $13,558 for medicine, dentistry and veterinary science and $17,399 for law, commerce and society and culture. If you are choosing between law and engineering, the gap is roughly $7,862 a year in deferred debt for the same teaching time.
FEE-HELP: the loan attached to a full fee place
FEE-HELP covers tuition in a full fee paying place. There is no government subsidy sitting underneath it. You are borrowing the whole sticker price.
That makes it the loan of choice for postgraduate coursework, for undergraduate study at private and non university providers, for Open Universities Australia study, and for anyone in a full fee seat at a public university.
Beyond the citizenship rules in the table, you must be enrolled in an eligible course at a FEE-HELP approved provider, hold or have applied for a TFN, lodge the eCAF by census date, and be assessed by your provider "as a genuine student and as academically suitable."
One warning worth stating plainly. Study Assist notes there is "no guarantee that the cost of a course will be under the HELP loan limit." A full fee program can exceed your available balance, and nobody stops you enrolling. Check the total cost against your remaining limit before you accept the offer, not in third year.
The 20 per cent loan fee, and exactly when it bites
This is the practical heart of the comparison, so here is the rule as the 2026 FEE-HELP fact sheet states it: "There is a 20% FEE-HELP loan fee applied to some undergraduate study."
The word doing the work is "some." It does not apply to:
- Postgraduate study or enabling courses
- Undergraduate study through Open Universities Australia
- Undergraduate study at Table B providers (Bond, Avondale, University of Divinity and Torrens) for census dates on or after 1 January 2019
- Bridging study for overseas trained professionals
So the group actually paying it is narrower than the headline suggests: undergraduates in full fee places at most providers.
What it costs in practice. On $30,000 of undergraduate FEE-HELP tuition you incur a $6,000 loan fee, giving a $36,000 debt for $30,000 of teaching. The fee is added to your debt rather than deducted from your loan, and it does not count towards your HELP loan limit. HECS-HELP has no equivalent charge, at any level, at any provider.
If you are weighing a full fee undergraduate offer at a private provider against a CSP, that 20 per cent belongs in the comparison next to your rent estimate. Our comparison of university halls and private PBSA covers the other half of that budget.
The HELP loan limit and how it refills
Two features of the limit are widely misunderstood. First, it is a renewable balance, not a lifetime cap in the old sense: repayments made through the ATO from 1 July 2019 onwards are re-credited to your available HELP balance, so paying down your debt restores your capacity to borrow again.
Second, not everything counts. SA-HELP does not form part of the limit, and neither does the FEE-HELP loan fee. HECS-HELP and FEE-HELP borrowing both do, against the same pool, which is why a student who used HECS-HELP for an undergraduate degree can find their balance uncomfortably thin by the time they reach a full fee master's.
Same account, same indexation, same repayments
Once the money is borrowed, the distinction largely disappears. Both debts are consolidated into a single HELP account administered by the ATO. Indexation is applied on 1 June each year to the portion of your debt that is 11 months and older, at the lower of the Consumer Price Index or the Wage Price Index. The rate was 3.2 per cent on 1 June 2025 and 2.8 per cent on 1 June 2026.
Since 2025 to 26 the ATO calculates compulsory repayments on a marginal basis: only income above the threshold attracts a repayment. For 2026 to 27 that means nothing below $69,528, then 15 per cent of income above it up to $129,717, then $9,028 plus 17 per cent above that.
Repayment income is broader than taxable income. It includes reportable fringe benefits, net investment losses, reportable super contributions and exempt foreign employment income, which catches out heavy salary sacrificers.
One recent event worth knowing about, because it changed most balances: legislation reduced all student and training support debts that existed on 1 June 2025 by 20 per cent, and the ATO recorded that processing as complete by 30 June 2026. If your balance looks smaller than you remember, that is why.
Is HECS tax deductible? No, and here is the trap
Compulsory HELP repayments are not deductible. The ATO states you cannot claim a deduction for "repayments of study and training support loans such as Higher Education Loan Program (HELP), including FEE-HELP and HECS-HELP." Voluntary repayments are not deductible either.
The confusion comes from a genuinely different rule, self education expenses.
If your course has a sufficient connection to your current paid employment, you may be able to claim the course fees themselves. Here the two loans finally diverge on the tax side. The ATO allows a deduction for tuition fees "paid with the assistance of a FEE-HELP loan," incurred when the debt becomes a legal obligation, usually at census date. It specifically disallows tuition fees "paid upfront or with the assistance of a HECS-HELP loan for Commonwealth supported places."
So a FEE-HELP funded MBA that relates directly to your current job can produce a deduction. A HECS-HELP funded unit in a CSP cannot, no matter how relevant it is to your work.
Do not read that as a reason to prefer FEE-HELP. A 20 per cent loan fee is a certain cost, while a self education deduction depends on your employment, your marginal rate and the ATO's connection test. Get advice on your own situation.
The other HELP loans, so you can identify yours
If your Commonwealth Assistance Notice shows a loan type you do not recognise, it is probably one of these.
OS-HELP funds overseas study for students in a CSP, covering airfares and accommodation rather than tuition. For 2026 the maximums are $8,442 for a six month period outside Asia, $10,130 in Asia, plus $1,354 for approved Asian language study.
SA-HELP defers the student services and amenities fee, capped at $373 for full time students in 2026, and does not count towards your HELP loan limit.
STARTUP-HELP covers accredited entrepreneurship courses. VET Student Loans sit outside HELP but are indexed on the same date and repaid through the same thresholds.
Work out which one you have in two minutes
Open your Commonwealth Assistance Notice first. Your provider issues a CAN for each study period, naming the assistance type, the census date and the amount in plain words: HECS-HELP, FEE-HELP or SA-HELP. If it shows a student contribution amount, you are in a CSP with a HECS-HELP loan. If it shows tuition fees and a loan fee line, you are on FEE-HELP.
Then check the total. Sign in to myGov, go to the ATO service, and look under Loan accounts. Your HELP account shows the accumulated balance, indexation applied and compulsory repayments to date. It shows one HELP total, not a split by loan type, which is exactly why the CAN matters. If the two do not reconcile, the usual cause is timing: debts move from your provider to the ATO after census date and can take weeks to appear.
Frequently asked questions
What is the difference between FEE-HELP and HECS?
HECS-HELP covers the student contribution in a Commonwealth supported place, where the government already subsidises your seat, and it carries no loan fee. FEE-HELP covers tuition in a full fee paying place with no subsidy, and a 20 per cent loan fee applies to some undergraduate study. Both are repaid identically through the ATO.
What does HECS debt mean?
It is the amount you have deferred under HECS-HELP for your student contributions in a Commonwealth supported place, held as part of your HELP account with the ATO. Most people use "HECS debt" loosely to mean their whole HELP balance, including FEE-HELP and SA-HELP amounts.
Is HECS tax deductible?
No. Compulsory and voluntary HELP repayments cannot be claimed. Separately, tuition fees for a CSP paid upfront or with HECS-HELP are explicitly excluded from self education deductions, while FEE-HELP funded fees can qualify if the course relates to your current employment.
Does FEE-HELP always have a 20 per cent loan fee?
No. It does not apply to postgraduate study, enabling courses, undergraduate study through Open Universities Australia, undergraduate study at Table B providers, or bridging study for overseas trained professionals. It mainly hits undergraduates in full fee places.
Can I have both HECS-HELP and FEE-HELP?
Yes, and it is common. A Commonwealth supported undergraduate degree followed by a full fee master's produces both. They accumulate in the same HELP account and draw on the same loan limit.
Do international students get HECS-HELP or FEE-HELP?
No. Both require Australian citizenship or a specific eligible visa status. Student visa holders pay full fees and cannot defer them through HELP.
Bottom line
If you have a choice between a Commonwealth supported place and a full fee undergraduate place, the CSP wins on cost almost every time. You pay a subsidised contribution instead of the full price, and you avoid a 20 per cent loan fee on top. The exception is a full fee course at a Table B provider or through Open Universities Australia, where no loan fee applies and the comparison comes down to tuition alone.
At postgraduate level the loan fee argument disappears entirely and FEE-HELP is simply a deferral mechanism. There the questions worth asking are whether the program cost fits inside your remaining HELP balance, and whether the course is close enough to your current job to make the fees deductible.
The honest caveat: none of this changes what you pay each week while you study. Indexation at 2.8 per cent on a deferred debt is a slower problem than rent in Carlton or Ultimo, and students routinely obsess over the first while underestimating the second. Work out your accommodation cost first, then your loan. If you are still choosing a city, our Sydney versus Melbourne cost comparison puts real numbers on that gap.
