Financial
Roadmap
A clear, personalised path to your financial goals.
17 May, 2023
Should I repay my child’s HECS if I’m able?
First Financial Team
Some of the information in this article may be out of date. We are currently in the process of updating our content to reflect FY26 details.
With HECS indexation at 7.1% this year, you might be wondering if you should repay your child’s debt for them, if you have the means to do so.
At First Financial, we’ve had clients ask us about this, and it’s an excellent question.
But the answer isn’t black and white, it’s dependent on your family goals, values and priorities, and your finances.
You may have the 20, 30 or even 40 thousand to wipe out what’s owing, but is it the best use of your resources? Will it really be a catastrophe if the indexation hits your child, and they end up paying it off by themselves?
What is HECS and how does it work?
Once upon a time, gaining a degree in Australia was free. The Whitlam government abolished tertiary fees in 1974, with then Prime Minister Gough Whitlam famously stating:
“We believe that a student’s merit, rather than a parent’s wealth, should decide who should benefit from the community’s vast financial commitment to tertiary education.”
This system remained in place for 15 years until what we now know as HECS/HELP emerged as an alternative. HECS upheld the philosophy of ‘education for all,’ but would require graduates to pay back the funds once their income reached a certain threshold.
Despite HECS being an interest-free loan, the government indexes HECS each year in line with inflation. And in 2023, that rate is set to hit a record high of 7.1%. The indexing is applied to outstanding debts on 1 June of each year, prior to tax returns being lodged and compulsory annual repayments being credited to outstanding debts.
What does this mean for your child’s HECS debt?
According to the ATO, over 1.4 million Australians have a HECS/HELP debt of more than $20,000. While 7.1% is a major hike, adding another $1,400 to a $20,000 loan, we do expect that this to come back down.
Inflation will come back down again and, hopefully, 7.1% is as bad as it gets. Typically, mortgage rates are higher than HECS indexation, but not this year. That’s the major argument in favour of paying off HECS sooner.
For those unable to pay off HECS/HELP debts for their children, don’t despair. Over the next couple of years, we expect inflation to stabilise and mortgage rates will once again be higher than HECS indexation.
So, it’s not the end of the world, and there is hope for the future. But if you are considering paying off your child’s debt, whether in full or in part, make sure you do it before June 1st as that is when the ATO calculates indexation.
Can I save my children from indexation and still teach them responsibility?
Parents, if you have the means to spare your children from HECS indexation but would like to avoid giving them a free ride, propose a payment plan where they reimburse you the funds.
Many parents value self-reliance and encourage their children to work hard for their dreams. By paying off their debt and requesting compensation, you can continue to instil these values while saving them a considerable amount in indexation costs.
Need financial advice?
At First Financial, we offer financial advice that is centred on you. We know you’re concerned about current economic issues and that you want to do the best thing for your family and loved ones, always.
Our Financial Advisers are here to offer professional guidance on all financial matters throughout the journey.
Need help talking through your financial position or goals? Contact our team today. Read more Financial Industry Articles.
YOUR FINANCIAL JOUNEY
Building your financial future
Every client journey begins with a conversation. We look closely at where you are now, what matters to you, and what’s possible. Then we structure our advice to match.
Financial
Tax
Efficiency
Proactive strategies to maximise your tax savings.
Personalised
Investing
Tailored plans aligned with your goals and risk profile.
Ongoing
Support
Regular guidance to keep your plan on track.
CLIENT STORY
John
Life Stage:
Retired business owner
Background:
After decades of running a successful pharmacy, John sought financial guidance to simplify decision-making and support long-term planning.
- Navigated the sale of a long-held business
- Wanted simple, honest advice after burnout
- Needed a hands-on adviser he could talk to
- Desired financial guidance aligned with lifestyle goals
- Crafted a strategy that supports relaxed, post-work life
- Offered approachable, plain-English advice
- Maintained an ongoing, trustworthy relationship
- Provided flexibility with investments and cash flow
“I feel genuinely supported by First Financial. I can ask anything, and there’s no pressure, just clear advice and real care. The money’s growing, I’m not stressed about it, and I feel completely at ease for the first time. I don’t miss work, but I’d miss the support I get from First Financial.”
CLIENT STORY
Lyn
Life Stage:
Retired widow
Background:
Lyn stepped into financial management for the first time after her husband's passing. With patience and care, First Financial supported her through grief, learning, and empowerment.
- Had never managed finances before
- Was overwhelmed after her husband’s passing
- Needed plain-English explanations and patience
- Sought emotional support and practical clarity
- Offered caring, respectful advice at her pace
- Rebuilt confidence with diagrams, stories, and reassurance
- Supported gradual decision-making around retirement
- Remained a trusted constant through major transitions
“After my husband passed, I was completely unsure where to start. First Financial gave me the space to learn, to ask questions, to grow confident. They drew a diagram that I still have. And now, I sleep well at night knowing I’ve got someone in my corner.”
CLIENT STORY
Jan
Life Stage:
Retired
Background:
Jan's husband managed the finances until entering aged care. Jan gradually stepped into the financial picture with First Financial’s support.
- Needed financial guidance after business sale
- Lacked experience managing complex finances
- Sought consistent income and long-term structure
- Wanted a familiar, reliable relationship
- Provided long-term support through several transitions
- Helped structure income reliably for retirement
- Empowered Jan through education and reassurance
- Delivered calm advice through both grief and growth
“The money just comes in. I don’t have to think about it. And I know they’re always there. They’ve always been there in the background, just quietly making things work.”
CLIENT STORY
Tim and Adam
Life Stage:
Early retirement and working professional
Background:
When Tim received an overseas medical settlement, he and Adam had just 14 days left in a 90-day window. They needed clear guidance, fast. A referral led them to First Financial.
- Only two weeks left to meet urgent legal and financial deadlines
- Wanted to preserve capital while setting up income for the future
- Needed a plan that supported both retirement and ongoing work
- Hoped to find advice that felt personal, not transactional
- Managed every moving piece, from legal documents to super rollovers
- Designed a strategy that supported both Tim’s retirement and Adam’s career
- Offered clear guidance with steady follow-through, with no stress or pressure
- Built in ethical investing and flexibility, without sacrificing performance
“We’re in totally different life stages, but First Financial built a strategy that supports us both. From urgent legal steps to ethical investing, they handled every detail with calm, care, and real expertise. It’s financial freedom without compromise, and we couldn’t have done it without them.”
CLIENT STORY
Graeme and Craig
Life Stage:
Retired and semi-retired
Background:
Referred by friends helped through aged care, Craig sought secure financial guidance after inheriting funds.
- Invest inheritance securely without high risk
- Maintain a modest lifestyle with confidence
- Building trust for someone new to advice
- Accessible, personalised advice
- Provided a low-risk strategy with regular income
- Reassured with steady, market-aware updates
- Established trust through responsiveness and warmth
- Delivered calm, expert support through all transitions
“We feel very secure with First Financial, the income just comes in, and we know everything is being looked after. It’s not just safe, it’s smart. We’ve recommended them to others because we genuinely believe in the team.”
CLIENT STORY
Larry and Virginia
Life Stage:
Newly retired
Background:
As retirement neared, Larry and Virginia were ready to enjoy travel, family, and freedom, without uncertainty. A friend recommended First Financial, and from the first meeting, they had a clear plan, a safety net, and people they trusted.
- Wanted to travel and enjoy retirement without second-guessing finances
- Needed a structured income plan with buffers for the unexpected
- Valued guidance that felt honest and human, not overcomplicated
- Needed people they could call and count on
- Created a reliable income stream with a set-aside safety net for the unexpected
- Gave them the freedom to travel and spend meaningfully with family
- Kept advice simple, thoughtful, and tailored to what mattered to them
- Built a lasting partnership based on trust
“We’ve travelled the world, Europe, Sri Lanka, Vietnam, without once stressing about the money. They made everything feel simple and gave us the confidence to live well. We feel secure because we know exactly where we stand, and that peace of mind means everything.”
Meet our advisers
