2018 Sustainability Bill
The Australian government recently announced a number of changes to the Higher Education Loan Program (HELP). These include a new lower minimum repayment threshold, an increase to the FEE-HELP loan limit, a combined, renewable loan limit, and removal of a loan fee for some students.
The following changes will apply to HELP loans:
A new set of repayment thresholds
From 1 July 2019, the new minimum HELP repayment threshold will be $45,881 with a one per cent repayment rate.
At a repayment rate of just one per cent, an employee earning $45,000 per annum will pay less than $9 per week.
The top threshold of $134,573 will have a ten per cent repayment rate.
These changes will ensure the long term sustainability of Australia's loan system, so that all Australians can continue to access higher education without the burden of upfront fees.
For information on the new repayment thresholds, please see Paying Back My Loan on the Study Assist website.
Increase to the FEE-HELP loan limit for 2019
From 1 January 2019, there will be a substantial increase in the FEE-HELP loan limit.
The loan limit will increase from $127,992 to $150,000 for students studying medicine, dentistry and veterinary science courses. The loan limit for all other students will be increased to $104,440.
Combined, renewable HELP loan limit
Combined HELP loan limit
From 1 January 2020, a combined HELP loan limit will replace the FEE-HELP limit and will include FEE-HELP, VET Student Loans, VET FEE-HELP and HECS-HELP.
Only new HECS-HELP loans incurred from 1 January 2020 will be counted towards the limit.
Any existing FEE-HELP, VET FEE-HELP or VET Student Loans taken out prior to 2020 will count towards your new HELP balance.
Renewable HELP balance
From 1 January 2020, you can top up your HELP loan balance by making repayments on your debt.
Repayments starting from the 2019-20 income year will top up a person's HELP balance.
Any compulsory or voluntary repayments can be re-borrowed in the future, up to the current HELP loan limit.
From 1 January 2020, the FEE-HELP loan limit will become the combined HELP loan limit and a person's FEE-HELP balance will become their HELP balance.
Removal of FEE-HELP loan fee for Table B providers
From 1 January 2019, students studying an undergraduate course at Bond University, the University of Notre Dame Australia, Torrens University or the University of Divinity will no longer be charged the 25 per cent FEE-HELP loan fee.
This only applies to units of study with a census date on or after 1 January 2019.
Other updates include changes to the way repayment thresholds are indexed, and the repayment order of HELP debts.
For more information on indexation and debt repayments, please visit the Australian Taxation Office website at https://www.ato.gov.au/