What I wish I knew earlier about my student HELP debt
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I was a bit cocky and I didn’t always work as hard as I should. Soon enough, I was on track to fail some of my classes – so I decided to pull the pin.
What I failed to recognise was how much it would cost me. As I withdrew after the census date, I had to pay for the courses I never completed.
It’s just one of the many mistakes you can make when you don’t understand how the student loan system works.
If you’re starting at university or TAFE, or wondering about your student debt, here are some important things to keep in mind.
What is HELP debt and how does it work?
The Higher Education Loan Program (HELP) is a loan provided by the Australian Government to help cover the cost of your university fees. You might know the scheme by its former name, HECS.
Compared to student loan programs overseas, the HELP scheme is one of the best available, says financial educator and author Lacey Filipich.
”There’s a lot of media coverage in the US about people getting into huge amounts of debt after going to school and then really struggling to pay that off,” Ms Filipich explains.
”The scheme in Australia is designed to be one of the most accessible and one of the most reasonable loans you can get.
”If students are thinking about studying, and HELP is the only way they could do that, it’s a great option to consider.”
How does HELP debt get repaid?
When you start university, paying for your student loan may seem like a distant problem. But you do need to pay it back – and the repayments are automatically deducted from your income.
”There is a certain amount of income you have to earn per year and once that happens, you have to start paying that debt back. It’s around $47,000 a year at the moment,” Ms Filipich says.
”And that goes up to a maximum of 10 per cent of your income [for people earning $137,898 and above], which will just keep paying it off automatically through your pay.”
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