I was chatting to a few friends who had just recently graduated from university and the one thing that surprised me was their staggering level of education debt.

Higher Education Contribution Scheme (HECS) was introduced in 1989 shifting a significant portion of the cost of higher education from the Commonwealth to students. It meant that higher education was no longer free, but effectively deferred until the student could afford to pay it back.

Higher Education Loan Programme (HELP) was then introduced in 2005 to replace the HECS system. However, it is commonly referred to now as HECS-HELP. This is a loan scheme to assist eligible supported students pay their contribution through a loan or upfront discounts.

If the student is not able to make any payments upfront, it is simply a loan to pay back the debt when the student commences working and begins to earn over the thresholds. Where the student can pay an upfront payment of $500 or more, they can receive a 10% discount on the amount paid and defer the balance on a loan scheme.

It was proposed that this voluntary repayment bonus could have been removed from 1 January 2015 however the legislation did not get passed. Therefore, this could still be removed effective from 1 January 2016.

The HECS-HELP Benefit is one of a number of initiatives the Australian Government introduced to implement its ‘education revolution’ policy which links education to productivity growth and Australia’s long term prosperity. If you graduated in one of the following fields and fit the criteria, you may be eligible for this benefit:

·      Mathematics, statistics or science – graduated after 30 June 2008

·      Education, nursing or midwifery – graduated after 30 June 2009

·      Early childhood education

The HECS-HELP Benefit can effectively reduce the amount of the HELP debt repayment and is dependent on the number of weeks you worked and that your repayment income requires you to make a repayment. You’ve also got to be employed in an eligible occupation from your field of study.

The benefits start from $1,500 for those graduated back in 30 June 2009 and for those graduating this financial year, the benefits have risen to $1,798.48, but would be prorated of course in the first year. These thresholds are slightly higher for those who have completed Early Childhood education.

There is a lifetime limit of 260 weeks which is basically 5 years of eligible employment.

Considering an average four year bachelor degree costs between $18,000 and $30,000 these days and in addition to rising costs of living, student debt is becoming a burden for our recent graduates entering the workforce. So any help can be good help.

To apply for the HECS-HELP benefit, applications must be made to the Australian Taxation office from 1 July 2010, upon submission of your income tax return.  

There are time limits to access your benefit being two years from the end of the income year for which you are applying. This means if you missed out last financial year, you can still backdate your application should you be eligible.  

For more information and whether this may apply to you, please contact (07) 55282000 or emailing southport@quillgroup.com.au.