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HELP! Changes to the student loan scheme – Proposal 2.0

The Commonwealth Government has introduced a new Bill seeking to change features of the student loan scheme – HELP (Higher Education Loan Program).

An earlier proposal, along similar lines, was included as a part of the 2017 Higher Education Reform Package (see our previous blog post). The Government has indicated that it will not proceed with the legislative proposals from the 2017-18 budget.

The new approach is similar to the 2017 Reform Package in that it accelerates the commencement of loan repayments. In addition, the new proposal sets a limit on the amount students can borrow over their lifetime.

The key changes include:

New Proposal 2018 Comparison 2017
Student Loan Sustainability Bill 2018 Higher Education Reform 2017
HELP loan limit*:

  • $150,000 for medicine, dentistry and veterinary students
  • $104,440 for all other students
Not proposed
Reduce minimum HELP repayment threshold:

  • To $45,000, from $55,874
Reduced minimum HELP repayment threshold:

  • To $41,999, from $55,874
Loan repayments commence at rate of:

  • 1% at $45,000, to
  • 10% for those earning $131,989 or more
Loan repayments commence at rate of:

  • 1% at $41K to
  • 10% at $120K
Indexation of repayments aligned to

Indexation of repayments aligned to

*The Senate Education and Employment Committee recommended that rather than a lifetime limit on HELP loans, there be a cap on outstanding debt instead. The Student Loan Sustainability Bill passed through the House of Representatives on 27 March 2018 with amendments. The bill will now need to be passed by the Senate.

If passed through both houses of Parliament, there will be changes to:

  • Loan repayment thresholds from July 2018
  • Loan limits from 1 January 2018, and
  • Student Financial Supplement Scheme (SFSS) – managed by the Social Services portfolio – will be aligned with the HELP repayment thresholds from 2019–20.

When introducing the Bill to the House of Representatives, the Assistant Minister for Vocational Education and Skills observed the outstanding HELP debt was $55.4 billion.

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