Legislative changes to the Higher Education Loan Program (HELP) were agreed by the Australian Parliament on 14 August 2018. These changes will affect the amount students can borrow under the HELP loan scheme, and the way loans provided for Commonwealth supported students places are repaid across the working life of their recipients.
New HELP repayment thresholds
The changes will affect the income thresholds and percentage repayment rates for HELP debts. From 1 July 2019, income earners with student debts will be subject to:
- A new minimum repayment threshold set at an annual income level of $45,881.
- A rate of repayment commencing at 1% and increasing in 0.5% increments up to 10% for annual incomes over $134,573.
Income thresholds are to be indexed at the Consumer Price Index (CPI) rate annually.
New HELP limits
From 1 January 2020, there will be a uniform HELP loan scheme which will be subject to borrowing limits. From then, all new borrowing under HECS-HELP will count towards a student’s lifetime HELP loan limit.
The total amount a student can borrow to cover their tuition fees under HELP will be capped but renewable.
The combined HELP limit for students undertaking medicine, dentistry and veterinary science courses has been set at $150,000 for 2019. A limit of $104,440 applies to students in other programs. The limits will be indexed at CPI annually.
A person having reached their cap may be eligible for future support under the scheme depending on the level of repayment.
HECS-HELP debts will not be included in the lifetime limit prior to 1 January 2020. Debt already incurred under FEE-HELP, VET-HELP or Vet Student Loans is counted in the combined HELP debt.
The Commonwealth Government estimates that the HELP caps applied will allow almost 9 years of full-time study as a Commonwealth supported student and is an amount that can reasonably be repaid within a borrower’s lifetime.
The Higher Education Support Legislation Amendment (Student Loan Sustainability) Act 2018 amends the Higher Education Support Act 2003 (HESA) (Cth).