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How to manage student debt in Australia

Need help managing your student debt? Learn how your student debt works in this guide.

There’s no denying that studying is an expensive experience. From buying supplies and textbooks to paying tuition fees, the costs quickly pile up. Plus, if you’re only working casual or part time while studying, it’s easy to be overwhelmed by the costs. This is why student loans and lines of credit can be a useful way to free up your cash flow. However, it doesn’t come without its risks.

If you’re considering applying for a student loan such as HECs to help while you’re hitting’ the books, this guide will help you understand how they work and the mistakes to avoid to help you make smarter financial decisions and reach your financial goals sooner.

Did you know?

Types of student loans

Student debt in Australia can be categorised into two types of loans; HELP loans which consist of four loans schemes and VET Student Loans. Compare the different times of loans, how much they cost and their eligibility criteria below.

Higher Education Loan Program

HECS-HELP

HECS-HELP allows students studying at Commonwealth supported institutions to borrow the cost of their student contributions and repay it later with no interest.

Fees

You will have to pay the student services and amenities fee of your provider every semester.

Interest rate

There is no interest charged on HECS-HELP loans.

Requirements

Residency requirements. You will meet the residency requirements if you qualify in one of the following groups.

  • Australian citizens. You will meet the residency requirements if your university expects that you will undertake some of your course of study in Australia.
  • New Zealand Special Category Visa holder who meets the long-term residency requirements for HELP loans. You must be resident in Australia for the duration of your unit(s).
  • Permanent humanitarian visa holder. You must be resident in Australia for the duration of your unit(s).
  • If the residency requirements state that you must be resident in Australia for the duration of your unit(s), any period of residence outside of Australia will be exempt if:
      • ‘It cannot reasonably be regarded as indicating an intention to reside outside Australia for the duration of the unit; or
      • It is required for the purpose of completing a requirement of that unit.’

Academic requirements.

  • Be enrolled in each unit at your university by the census date;
  • Read the HECS-HELP and Commonwealth supported places information booklet; and

Submit a valid Request for Commonwealth support and HECS-HELP form by the census date to your university.


FEE-HELP

FEE-HELP refers to loans which are available to domestic fee paying students. FEE-HELP differs to HECS-HELP since FEE-HELP approved providers and loans are not subsidised by the government. To find out which providers are approved to offer FEE-HELP, refer to this page.

Fees

Only undergraduate loans attract a fee of 25%. This excludes postgraduate, enabling courses, units of study through Open Universities Australia or bridging study for overseas-trained professionals.

Benefits

FEE-HELP provides a high limit to help you complete your studies. It is important to note that the loan limit is a lifetime limit and does not reset, even when payments are made. Other loans that contribute towards your FEE-HELP balance include Vet Student Loans and VET FEE-HELP loans. The limits available are as follows:

      • 2016 FEE-HELP limit: $99,389 for most students. If you are undertaking medicine, dentistry, and veterinary science courses the limit is $124,238.
      • 2017 FEE-HELP limit: $100,879 for most students. If you are undertaking medicine, dentistry, and veterinary science courses the limit is $126,101.

Requirements

You can receive FEE-HELP if you are studying at an approved FEE-HELP provider or through Open Universities Australia (OUA).


SA-HELP

This type of student loan helps you pay for the entire amount or part of your student services and amenities fee. This fee is charged to students for services, features and facilities of a non-academic nature, including eateries, career advice, legal assistance, and recreational activities. Any SA-HELP loans will contribute towards your total FEE-HELP balance.

Student services and amenities fees will generally cost $294 per year for full-time students and $220 for part-time students per year. A full-time study load is usually defined as 18 units or more and a part-time study load is less than 18 units.

Student services and amenities fee

UniversityStudent services and amenities fee (2017) per semester
University of Sydney
  • Full time: $147.00
  • Part time: $110.25
University of New South Wales
  • Full time: $147.00
  • Part time: $110.25
University of Adelaide
  • Full time: $147.00
  • Part time: $110.00
University of Technology Sydney
  • Full time: $147.00
  • Part time: $73.50
Charles Sturt University
  • Per 8 point subject: $36.00
  • Maximum annual fee amount: $288.00

OS-HELP loans and overseas study

Is a loan available to students who are undertaking study overseas. This loan is only available to eligible students who are enrolled at a Commonwealth supported institution.

Loan benefit

OS-HELP loans let you borrow up to the following amounts for a six-month study period.

OS-HELP loan benefit limits

20162017
$6,470 (if you will not be studying in Australia).$6,567 (if you will not be studying in Australia).
$7,763 (if you will be studying in Asia) and an additional $1,035 if you will be committing to study an Asian language in preparation for study in Asia.$7,880 (if you will be studying in Asia) and an additional $1,050 if you will be committing to study an Asian language in preparation for study in Asia.

VET Student Loans

VET Student Loans are available to individuals who apply for higher level VET qualifications and approved courses. VET Student Loans replaced VET FEE-HELP loans on 31 December 2016.Eligible courses must be at Diploma level or above. This loan structure provides three loan cap bands of $5,000, $10,000 and $15,000. If your desired course costs more than the applicable loan cap then you will need to pay the difference upfront. The list of accepted VET Student Loan courses is updated twice a year and is available through the Federal Register of Legislation website.

VET Student Loans also include the following debts incurred before 2005:

  • Higher Education Contribution Scheme (HECS)
  • Postgraduate Education Loan Scheme (PELS)
  • Open Learning Deferred Payment Scheme (OLDPS)
  • Bridging for Overseas-Trained Professionals Loan Scheme (BOTPLS) debts

Popular questions about managing student debt

Can Tafe students apply for FEE-HELP loans?

Yes. Tafe students are able to apply for VET Student Loans if they are undertaking full-time, part-time or online study. If the course price exceeds the maximum loan cap then other payment arrangements may be available. The list of eligible courses is available on the ‘TAFE NSW VET Student Loan Approved Course List’.

How do I find out my student loan balance?

Whilst you are studying your educational provider will send you a Commonwealth Assistance Notice (CAN) after the census date. Your CAN will contain important information including:

  • Units of study for which you have received Commonwealth assistance and the student contribution amounts you have been charged for each unit.
  • Any up-front payments you have made.
  • HELP debt and loan fees you may have incurred.

For FEE-HELP, VET Student Loans or VET FEE-HELP students your CAN will include these details:

  • The tuition fees for your units of study;
  • The units which you have received FEE-HELP, Vet Student Loans or VET FEE-HELP.
  • Any up-front payments made towards your degree.
  • Any loan fees incurred.

To keep track of your HELP debt balance you can call the ATO or check your balance online:

  • Call: Contact the ATO on 13 28 61 and have your tax file number (TFN) handy.
  • Online:
  1. Log into ‘myGov’: my.gov.au
  2. Create a myGov account
  3. Link your account to the ATO
  4. Go to ‘member services’ and select ‘Australian Taxation Office’.
  5. View your HELP balance by going to ‘Loan accounts’.

How much interest will I be charged on my debt?

On 1 June each year, indexation is applied to the part of an accumulated Higher Education Loan Program (HELP), Trade Support Loan (TSL) and Student Financial Supplement Scheme (SFSS) debt that has remained unpaid for more than 11 months.

YearIndexation rate
20161.5%
20152.1%
20142.6%
20132.0%
20122.9%
20113.0%
20101.9%

How do I repay my student debt?

You will start repaying your student debt once your income reaches the compulsory repayment threshold.

Compulsory repayment threshold

Income yearRepayment threshold
2015-2016$54,126
2016-2017$54,869

Does the HECS repayment discount still apply?

The HECS-HELP discount of 10 percent and voluntary HELP repayment bonus of five per cent has been removed from 1 January 2017.

Should I make voluntary repayments upfront to clear my debt sooner?

If you have the means to, paying your student contribution upfront will reduce your debt balance. Reducing your outstanding student debt balance will result in less indexation charges, saving you more money in the longer term.


Checking your student debt balance regularly will enable you to manage your debt and make better financial decisions. Save the websites that let you check your debt balance and subscribe to our email list for the latest news on managing your student debt.

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