What are the proposed Budget Changes to HELP/HECS?
Almost four months after the government’s 2014/15 Budget they are still trying to get the legislation passed by both houses of parliament. On Thursday 28 August the government will try again to have the legislation passed.
The following are the proposed changes, if passed:
- From 1 January 2016, the maximum contribution paid by students will be removed and the government contribution will be reduced.
- HELP which is the loan program so that you only pay for your student uni fees when you earn more than currently $53,345 of income. When you earn more than $53,345, you pay 4% of your income to repay the debt. As you earn more the percentage increases to a maximum of 8% of your income.
- Students enrolled prior to 13 May 2014 will have the existing arrangement continued, that is still have a maximum student contribution to uni fees.
- The interest rate on HELP debts is expected to increase from the current rate which is based on CPI (currently 3%) to the new rate based on 10 year bond rate (currently 3.47%)