Changes to the HECS-HELP discount and voluntary repayment bonus
Subject to the passage of legislation, from 1 January 2014, the Australian Government will remove the upfront HECS-HELP discount of 10 per cent for eligible students that pay their student contributions upfront and the voluntary HELP repayment bonus of five per cent.
What are the current arrangements?
- The HECS-HELP program allows eligible Commonwealth supported students to defer their student contribution and repay it later through the taxation system.
- Commonwealth supported students who are eligible for HECS-HELP and elect to fully pay, or part pay $500 or more of, their student contribution amount upfront to their higher education provider currently receive a discount of 10 per cent. The amount of the discount is paid by the Government to the student’s higher education provider.
- People who have a HELP debt and make a voluntary repayment of $500 or more towards that debt currently receive a bonus of 5 per cent. The amount of the bonus is an additional credit against the student’s outstanding HELP debt. It is an amount never recovered by the Government.
Which HELP schemes are affected?
- The change to the upfront discount will only affect HECS-HELP.
- The change to the voluntary repayment bonus will apply to all HELP debts.
When will the changes take effect?
The changes are subject amendments being made to the Higher Education Support Act 2003 and are proposed to take effect from 1 January 2014.
Who will be affected?
- The removal of the upfront discount will affect students who can afford to pay upfront and choose to do so. It will not affect students who fund their university studies through a HECS-HELP deferred loan.
- The bonus for voluntary repayments will only affect people who can afford to make voluntary repayments above what are required when annual tax returns are assessed.
What assistance will be provided to students to understand the changes?
The Department of Education will update the HELP booklets and the Commonwealth Assistance Form for Commonwealth supported places and HECS HELP.