Hecs ... Help!

Sydney Morning Herald

Friday February 10, 2006

Melanie Andreazza

HECS-HELP is a loan scheme. It means that if you are an Australian citizen enrolled in a government-subsidised place at university - as distinct from a full-fee-place - you can defer paying for your degree until your earnings reach a certain level.

The amount you repay is set according to your course and it is up to your university to decide how much you will have to contribute.

Law, medicine and veterinary science degrees could cost up to $8170 a year, while arts can cost up to $4899. Aspiring nurses and teachers have the best deal: their degrees have been deemed "national priorities" and cost no more than $3920 a year.

Students have three options under HECS-HELP: to defer the entire cost of their course, make partial repayments or pay everything up-front.

The decision may seem simple: defer now and you'll save a lot of money. At least until you start earning more than the income repayment threshold, which is currently $36,184.

When you reach the income threshold, you repay your debt as a percentage rate of what you earn. As your income increases so does your rate of repayment.

However, students who can afford it should consider paying up-front, says Christine Mason, the HECS-HELP officer at the University of Wollongong.

"Students who pay up-front are not left with a debt later in life and for students who make partial repayments their debt is reduced substantially."

If you decide to pay up-front, you receive a 20 per cent discount on any amount over $500. "This makes paying up-front a good option," Mason says. "Yet the reality is, it isn't always a viable one."

For students starting university, Mason has three tips. "Stay informed, consider your options and look at your financial status before making your choice."

© 2006 Sydney Morning Herald

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