What You Need To Know About The Gov's Proposed Changes To HELP Repayments

Help: it’s not just a great Beatles tune.

Students across the country know it better as the all-caps HELP, from their HECS-HELP loan. This HELP is not nearly as much fun as the song/ movie.

Though the Higher Education Loan Program allows young Australians to take on tertiary studies without them having to pay in full upfront, it results in a hefty bit of student debt, to be paid off (in regular instalments) once you reach a certain repayment threshold.

For the 2015-16 income year, that figure is $54,126. So, if you’re working but not earning above that figure, you don’t have to start paying off your HELP debt. (You can, of course, offer voluntary repayments, if you feel like it and are able to do so.)

However, the Federal Government’s 2016 Budget suggests that may not always be the case.

According to Business Insider, the Coalition is proposing a “household means test” for students with a HELP debt. Meaning, it won’t just be your income that’s taken into account for the repayment threshold, but, potentially, those you live with, including parents and defacto partners.

While you catch your breath, here are some things to note:

This is just a proposal (and was only explained with a single sentence in the Budget, which is why it initially flew under the radar). No threshold figure for households has yet been suggested. We won’t hear official plans on changes to the sector until late 2016 or early 2017, with the changes expected to go into effect in 2018. (All of this, obviously, depends on the outcome of July's election.)

With Aussie student loans set to reach $70.4 billion by 2018, the Government no doubt wants to start clearing the debts from the books as soon as possible.

Other options floated for reducing the debt have included increasing HELP repayments for high-income earners and increasing the cost of certain popular courses. (The latter involves partial deregulation, allowing unis to set their own prices on selected courses and giving up public funding as a trade-off, saving the Government about $2.0 billion over five years.)

Another proposal: to reduce the individual’s HELP repayment threshold, from $54,126 to as low as $40,000.

Whether you’re starting uni in the near future, right in the middle of your degree, or just starting out in the work force and yet to pay off your loan, keep an eye on this story as it develops. No matter what happens next, young Aussies will be affected.

In the meantime, find out more about your HELP debt here.

Photo: Sony.