Student guide: Paying for your education

Australia has a variety of programs to help students manage the cost of education and, depending on your chosen studies, there might be different types of help available.

This guide explains the options, and the differences between them.

Australia’s student loan and FEE-HELP program

For government assistance with tuition fees, there are two main types of student aid you may be able to use, depending on what you’re studying:

• VET – Vocational Education and Training. Student loans for vocational study at Technical and Further Education (TAFE) institutions and other approved training programs.
• Other HELP – Higher Education Loan Program: HECS, to Help Eligible Commonwealth Supported students, and other student loans for higher education study at universities.

These can only be used to help with tuition costs. They cannot be claimed for any other expenses, such as textbooks or accommodation. However, there may be other student loans for those.

Who can get tuition help?

In all cases you must be an eligible student, be studying at an eligible institution and need to be undertaking an eligible unit of study.

Who are eligible students?

You can only get government student loans if you are either:

• An Australian citizen or New Zealand Special Category Visa holder who meets long term residency requirements
• A permanent humanitarian visa holder who will be living in Australia for the duration of the study unit
• A permanent visa holder who’s taking a bridging course for overseas-trained professionals.
• Studying eligible courses at eligible institutions, and are enrolled properly

What are the eligible institutions?

You will have different types of assistance available depending on where you’re studying. All of the following are eligible in different ways:

• Public universities, and a few private universities
• Some specially approved private higher education institutions, that offer courses in certain areas
• Open Universities Australia courses
• Approved VET providers

What are eligible units of study?

These are courses which specifically lead to distinctive qualifications or awards that can help you find employment, or are being completed in order to access those courses. Eligible units of study include:

• Part of a domestic fee-paying course that leads to a higher education award, such as a Bachelor Degree, Graduate Diploma, Doctorate.
• A unit in a bridging course for overseas-trained professionals
• A special enabling course

The other requirements depend on what kind of study you’ll be undertaking, and whether it’s eligible for VET Student Loans, or other FEE-HELP assistance. Here are some questions that we can help you to answer.

How do I get a vocational education and training VET Student Loan?

Discontinued in 2017

VET FEE-HELP: This program was cancelled and replaced by VET Student Loans on 1 January 2017.

These are vocational training loans for TAFE courses and other vocational training, in areas that specifically meet industry needs to address existing skills shortages.

VET qualifications include:

• Certificates I - IV
• Diplomas
• Advanced diplomas
• Graduate certificates
• Graduate diplomas

Generally, you’ll need to be undertaking an eligible course at an eligible institution. Depending on the course you’ll be able to borrow up to $5,000, $10,000 or $15,000. These are known as Loan Cap Band 1, 2 and 3 respectively.

• You can find a list of the eligible VET Student Loan courses and their loan cap bands here.
• You can find a list of eligible Vet Student Loan institutions here.

Special exceptions might be made for certain institutions or industries. For example, some aviation training courses have a loan cap of $75,000.

You’ll generally need to meet the residency requirements, and will also need to be assessed as academically suitable for the course, such as by providing a Year 12 completion certificate.

To apply for a VET Student Loan, eligible applicants can enroll with an eligible institution and then notify that institution that they’ll be applying for a VET Student Loan.

Note that an institution’s eligibility is not necessarily any indication of its quality, and just because it’s allowed to give VET Student Loans, that does not necessarily mean it’s been effectively vetted for program quality.

How do I get university study FEE-HELP

This is the student loan program for undergraduate or postgraduate study at Australian higher education institutions, including public universities and some others.

There are two types of university placements available:

• Commonwealth Supported Placements (CSPs): These are places at public universities that are offered to applicants. Here, a substantial portion of the tuition fees are subsidised by the government while the remainder is paid by the student.
• Full Fee-Paying: These are positions where the students pay all the fees themselves, such as at all private universities, and for many spots at public universities.

Most undergraduate students at Australian universities are in CSPs, while most post-graduate positions like doctorates, and all private university studies, are full fee-paying.

If you’re in a CSP you can get HECS-HELP, while full fee-paying positions may still entitle you to general FEE-HELP.

In all cases you must be attending an institution that’s accredited, and must be undertaking an eligible course.

• You can find a list of approved providers here.
• An eligible course is one that works towards a specific undergraduate or postgraduate degree. Bridging courses for overseas-trained professionals are exempt from this rule.

Generally, you are not able to claim FEE-HELP for any units of study that are not required for your degree.

There are two other types of expenses in this category that you may be able to claim as student loans:

• SA-HELP - Student Amenities. The most a university can charge a full-time student per year for amenities in 2017 is $294. The amount you pay for these may be claimed as an SA-HELP student loan.
• OS-HELP - Overseas Study. If you’ll be undertaking eligible study overseas, as part of a formal exchange program run by your university, you may be able to claim the cost of necessary flight, travel, accommodation and study expenses against OS-HELP student loans.

What fees apply and when do student loans need to be repaid?

These programs are a loan scheme, and will need to be repaid.

All the money borrowed for any type of government tuition loan counts towards a lifetime limit which cannot be topped up, reduced or reset. In 2017, this limit is $100,879 for most students, or $126,879 for medicine, dentistry or veterinary science.

You won’t need to pay any interest on your FEE-HELP student loans, but the loans will increase over time to keep up with inflation. You will also generally need to pay a loan fee of 20% to 25%. This is added to your total loan amount, and will need to be repaid along with the rest of it.

As of 1 June 2017:

• A 20% loan fee applies for most VET Student Loans
• A 25% loan fee applies for undergraduate FEE-HELP and HECS loans.
• No loan fee applies for postgraduate study, enabling courses, units of study done through Open Universities Australia, or bridging study for overseas-trained professionals.

Once your income reaches a certain level, you’ll need to start paying back the loan, and the more you earn the more you’ll need to repay. This is known as the repayment threshold.

In the 2017-2018 year, the repayment thresholds which apply to HECS debt, VET Student Loans, FEE-HELP and other student loans are as follows.

FEE-HELP repayment threshold table, 2017-2018

Annual income refers to taxable income, including investment loss, reportable fringe benefits and others, and the repayment rate is the percentage of the loan that needs to be repaid that year, at a minimum, including the fees.

If you want to learn how long it takes on average for Australians to pay off their higher education debt or other ways you can pay off student debt check out our guide below.

Are there other student benefit payments I might be able to get?

There are also some means-tested payments available for full-time students and apprentices. Unlike the above, most of these are not loans and will not need to be repaid.

However, they are subject to means and assets tests, so generally only those who need them most will be eligible for these.

The following are not all the benefits you may be able to claim, but are instead all the benefits which are available exclusively for full-time students and apprentices.

Are there any important upcoming changes to student loans?

Student loans and benefits in Australia are currently under reform, and changes are ongoing. Some of the most important to know about are:

• Subsidies withdrawn for Australian/NZ resident CSPs: Starting 1 January 2018, subsidies for most Australian permanent residents and NZ special category visa holders in CSPs will be withdrawn. Generally, this means such students will either have to pay their student contributions up front, rather than getting HECS-HELP, or become full fee paying students and get a FEE-HELP loan.
• CSP fee increases from 1 January 2018: From 1 January 2018 the maximum student contributions in CSPs will increase. Generally, this means that most students at public universities, or CSPs elsewhere, will see their tuition fees go up.
• HECS-HELP and FEE-HELP repayment changes from 1 July 2018: HECS and FEE-HELP repayment thresholds will drop, so student loans will need to be repaid sooner.