HECS-HELP is a unique loan program that has been made available by the Australian government to students in Australia so that they can manage their studying expenses and even lower such costs to some extent. Prior to the year 2005 this program was referred to as HECS, but it is now known as the Higher Education Loan Program (HELP). Under the HECS-HELP program, not only can eligible students get a loan for their studying expenses, but they can also benefit from considerable discounts that enable the students to reduce their loan burden.
Eligibility requirements for HECS-HELP
In order to be eligible for loan under the HECS-HELP program, you need to fulfil certain eligibility requirements that are as under:
- Should be enrolled in a Commonwealth supported place: Only those students who are studying in any commonwealth supported place can be eligible to receive assistance under the HECS-HELP program. Commonwealth supported places may be available to students at various private universities but are definitely available at all public universities in Australia. The Australian government designates which places of study are commonwealth supported places and if a student gets accepted for any course at such places, then they can be eligible for HECS-HELP benefits.
- Australian citizenship: As of now, the HECS-HELP program is only available to domestic students who are citizens of Australia. You may also be eligible if you hold a valid permanent humanitarian visa. Citizens of neighbouring New Zealand are not currently eligible to receive assistance under HECS-HELP, neither are students who hold any kind of permanent visa other than a humanitarian one.
- Enrolment should be done before census date: Only those students will be eligible for HECS-HELP who have enrolled with an education provider before the census date as specified for their unit. Applications completed after the census date has passed will not be considered eligible for HECS-HELP.
- Complete the required form properly: All students who wish to obtain help from the HECS-HELP program need to submit a valid request to the commonwealth for support under this program. There is a specific form for this purpose that has to be filled up and then submitted to the relevant education service providers.
How does HECS-HELP work?
If you have submitted the proper documents before the census date and if you are found to be eligible for HECS-HELP, you can then get student loan as well as a discount on your student contributions.
Let us assume that you are an Australian student who has applied at a commonwealth supported place and secured admission before the census date. The total student contributions for the courses you have opted for comes to $2000. Under the HECS-HELP program, you can get assistance in the following ways:
- Get a discount on full up-front payment: If you have the money to make the entire up-front payment of $2000 at one go, you stand to receive a discount on this payment under the HELP program. As of the beginning of the year 2012, the government is offering a 10% discount on up-front payments. Hence, if you wish to pay your entire student contributions and get rid of your student loan, you will be required to pay only 90% of the total contributions to your education provider. The balance 10% of the student contributions will be taken care of by the government and the money will be paid to your education provider on your behalf. This is the discount benefit available with HECS-HELP program.
- Make part up-front payment: There are many students who do not have the funds to pay the entire student contributions up-front. If you too are in a similar position, you can choose to make a part payment of your student contributions up-front and then take advantage of a HECS-HELP loan for the balance amount. Whatever amount you pay up-front, you will receive the HECS discount on that amount too. The remaining amount will be paid by the government to your education provider and this will be considered as a HECS-HELP loan against your name.
- Pay nothing up-front: There may be many students who cannot pay any part of their student contributions up-front. In such situations, these students can take a HECS-HELP loan for the entire amount of their student contributions. However, since there has been no up-front payment, they will not benefit from the HELP discount.
Students who have taken a loan under the HECS-HELP program need to start paying off their debt to the government once they start earning money. The debt will be paid off through the tax system and repayments begin only when the students start earning a minimum amount of money as specified for HECS-HELP repayments.
It does not matter if a student is still studying when they start to earn more money than the threshold limit. Once that limit has been reached, HECS-HELP repayments have to start. The threshold limit for HECS-HELP repayments changes every year and is set by the Australian Taxation Office.
Hence, students can request for information regarding their HECS-HELP loans from the ATO and begin repayments as and when they become eligible for the same.