HELP Debt help is about to run out

The Australian Government plans to put a stop to the financial incentives on offer to help people with a University debt pay it off faster.

At the moment a 10% discount is offered if fees are paid upfront and a 5% discount is offered for voluntary repayments over $500.

From January 1, 2014 the Federal Government will scrap these bonuses in the hope the change will save $230 million over the next four years.

Latest figures from the Australian Taxation Office show between 1989 and 2011 more than 35 per cent of individuals with HELP debts had failed to make any repayments and 21 per cent were still paying their debt off.

About 43 per cent have paid all their debt off.

However National Union of Students president Jade Tyrrell said the people who take advantage of these incentives are usually wealthy families and not those who are struggling to afford tertiary education.

“About 84 per cent of students do allow their HELP debt to accumulate without paying it off (beforehand) and taking advantage of those discounts.” she said.

According to government figures, only 16% of students pay their university fees up front and it is expected 10% will continue to do so once the incentives have been removed.

The average HELP debt is $15,200 and annual course fees can range from $5000 to $10,000 a year.

Students are not liable to pay off their debts until their income is above $49,095 a year.

 

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