episode 4

HECS is a loan for Australian uni students to defer payments until they have a salary above the repayment threshold. To be eligible, they need to go to a CSP provider. CSP stands for Commonwealth Supported Place, where the government pays part of the fees. Australian citizens, New Zealand SCV holders, and permanent humanitarian visa holders can be eligible. You need to submit a form and be enrolled by the census date. There is a loan limit and a requirement for a USI. There are also conditions and processes for HECS help and repayment rates. Other types of loans include FEES HELP, OS HELP, SA HELP, and VET student loans. Welcome to episode 4. This is Yui, your host, and in this episode I will be talking about hacks. So, this is something that I wish to knew myself when I was in my final year of high school. And especially now, as like a uni student, I still wish to know this. So I really hope this helps for many students in Australia. Okay, so let's get to it. So, let's discover what is HECS and how does it work. So, HECS stands for Higher Education Contribution Scheme. And it is a type of loan that uni students can take out to defer their uni payments with the government funding and they have to contribute, they have to make a contribution later when they have a salary that reaches the threshold repayment. And for 2023-2024 the threshold repayment is $51,550. And to be eligible for HECS you need to have, you need to go to a CSP provider. So, basically what is a CSP? So, CSP stands for Commonwealth Supported Place where the government pay parts of your fees for your university or higher education after subsidised, not a loan. So, basically you do not have to do anything. You do not have to pay the government back this amount of money. And CSPs are available for most undergrad students, undergrad studies courses and some for postgraduates. So, who can be eligible for HECS? Who can be eligible for HECS? So, Australian citizens must be study in Australia. New Zealand special category visa which is known as SCV holder or eligible former New Zealand SCV holder who meet the long term residency requirement and who studied the entire units while living in Australia. A permanent humanitarian visa holder or a eligible former permanent humanitarian visa holder who will be resident in Australia for the duration of their studies. A persistent engagement visa which is known as PEV holder who will be resident in Australia for the duration of their studies. And before you can be eligible you need to submit a request for Commonwealth support and HECS help form to your provider. So, basically your provider mean like the uni that you're going to or like the higher education institution that you will be going to by the census date. So, the census date mean basically it's like a due date. You have to submit it by this date to be considered. If you're late you might not even get a place or get the help you need. And you have to be enrolled in each subject or unit at your provider by the census date. So, this is similar to the first thing that I had before. So, before you can be even eligible for anything you have to be enrolled. You have to submit a form by the dates, the due dates. And you also have to be, you also have, you also need available help balance. So, for 2024 the help loan limit is $121,844 for most students. And for students studying medicine, dentistry and veterinarian science the loan limit is $174,998. So, this is all in 2024. And you need a USI and you need to provide it to them as well. So, what is a USI? USI is a unique student identifier. So, this basically you need a USI for everything. If you want to study at like a high education, like a tertiary studies. So, you need it at a uni, you need it probably for high school as well. Some stuff require USI. That course or even a short course after you basically finish high school you need that. It's basically a lifelong thing that you hold on to your dear life. If you forget anything about it you can like, you know, reset it. But you can only have one per lifetime. And you also need to have sufficient student learning entitlement. So, the student learning entitlement will be available to students is seven years of full-time subsidised study in current well support place. So, and you also So, the full-time study is known as the EFTSL. So, equivalent full-time study load. So, EFTSL means equivalent full-time study load. So, you have seven years of that which is known as the ordinary SLE. But you also can get more as like the additional SLE or a lifelong SLE. So, additional SLE is available to students enrolled in a long undergraduate course. So, for example, if you're doing medicine, if you want to study in medicine for, especially in the state I lived in, is six years. Yeah. So, this is a long undergraduate course. So, so the medicine course is a long undergraduate course. So, that probably need more than six A F T S L. So, undertaking an hour or it's also available to students undertaking an honour course that is one EF. So, that is one equivalent full-time study load or less than one equivalent full-time study loads. And also, this, the additional SLE can also be added for students who are undertaking graduate coursework or graduate entry bachelor courses, which the Commonwealth place supported is not offered. So, there's another choices that you can add on to your SLE after the seven years. So, which is a lifelong SLE. So, in the lifelong SLE, you get three additional years. Yeah. So, you get three equivalent full-time study loads. So, yeah. So, SLE allocation is available if completed a course that has been restructured or it will take longer, like completing a course that will take longer as it has been restructured. A lifelong SLE can be used when your initial seven ordinary SLE entitlement. So, basically, you can use your lifelong SLE once your initial ordinary equivalent full-time study loads finishes. And then, you also have to be assessed as a genuine student and as an academically suitable for your new unit. So, basically, they just want to know, can you do it? Can you complete your degree if you're enrolled in that course that you do? Yeah. And then, you also need a completion rate. So, good news is, it is not important anymore. This is because from the studies that I did, there is an amendment act for the Higher Education Support Act 2003, which has been amended, which has removed the requirement that students must pass 50% to be eligible, like to still be eligible, to remain eligible for Commonwealth support, like Commonwealth assistance. Yeah. And then, you also need another condition to be eligible for HECS. So, not undertaking more than two years worth of higher education study in 12 months. So, these are the conditions to be eligible for a HECS helpline. Okay. And now, you need to know Now, you need to know the application process of a HECS helpline. Okay. So, you need a text file number, TFN. So, basically, you need it for your lifetime as well. That's also grade one, and you need to keep it for the rest of your life and do not share it with anyone else. This basically helps with the tax side of it, tax side of your income, your studies and everything. And then, you need a USI, as I told you, and you need a request for Commonwealth support and HECS help form, and that's also said, and you need to fill it in and submit it by census date. So, let me share another opening HECS site that I didn't know. So, as I said, HECS is a type of loan that has interest-free. However, it is an indexation. So, it's basically by the 1st of June, you will get index. So, the repayment income threshold and the rates of 2023 and 2024. So, for below $51,550, you don't have any repayment rates. But then, after you have reached the repayment threshold income, you need to pay. So, especially from $51,550 to $59,518, you need to pay 1% of the repayment rates. And after you reach down to the very bottom, that's when you make a lot of money. So, from $151,000 to $101,000 or anything above, you need to pay 10% of your income. So, that's just to repayment rates. So, this is something that I do not know about when I was in my year 12, because no one was talking about it. They literally, you know what they say? Oh, okay. If you want to study at uni, don't worry about this stuff. HECS will cover it. That's what they say. But you don't know this time, which I wish I knew it sooner, which I can even help like, help me or even other students make like a wiser choice on what they should get involved, like themselves involved in. Like, it's absolutely fucking shocking to me. And now, let me cover like the other scheme of the loan, like the HELP loans. So, we have a lot more that I didn't even know about. So, we've got like HECS. So, that's what I talk about. We've got FEES HELPS. We've got OS HELPS. We've got SA HELPS. We've got VET student loans. So, these are all different stuff. Okay. So, HECS HELPS, as I mentioned, is available for Commonwealth supported players at an approved higher education provider or uni. And FEES HELPS is different from HECS. So, FEES HELPS is not, so FEES HELPS is basically doesn't have CSP, Commonwealth supported players. So, these are available for private providers or postgraduate courses. This is a type of HELPS loan as well that people can take out to pay for their tuition fee. And then, you've got the OS HELP. So, this is also another HELP, but for overseas study. So, imagine if you are a Commonwealth supported student and you want to study overseas, this is the type of HELP you'll be needing. And then, you've got the SA HELPS. So, this is just a little bullshit, but we'll look at it anyway. It provides for eligible student with a loan to pay for all parts of their student services and amenity fees. So, you basically pay uni for your student services and amenity fees. That's just bullshit to me, but anyway, we still have to pay those. And then, we've got VET student loans. So, VET student loan education training. So, yeah. So, it's just a loan to help eligible student to enroll in their courses to pay for their fees. These are all the types of HELPS that you can get from the Commonwealth. And these, if you study like undergraduate, most courses have Commonwealth support place in them. So, you don't really have to worry much about other fees, just like HECS. But if you want to look at the SA HELPS for the amenity fees and the student service, you can. And for most postgraduate courses, you'd probably be looking at FEES HELP instead of HECS HELP because most postgraduate doesn't have Commonwealth support place in place or it doesn't even offer it. So, you'd be looking at FEES HELP instead. And if you want to study overseas, you'd be looking at OS HELP. And now, we'll also be looking at the student experience. So, I'm just going to just look at my own because I'm also studying at uni. I just had my final year of high school last year. So, this is still fresh and kind of new to me. So, I probably could talk about my own experience on this. So, I'm just going to say that in high school, they don't tell you enough about this stuff. What you'd be looking at a lot is your ATAR number that you will be looking to achieve once you finish high school to get in to a course that you wanted to do. So, I'll just give you a rough example of what I'm doing. So, now I'm doing nursing. So, my ATAR was 80 and then I got like some bonus points. So, it was adjusted to 90, okay. But then, right now, I'm doing nursing. I only need 70. The uni student that come down to like high school, many high school in Australia will be telling them about ATARs, like the number that needs for you to get in a course. That is what you'd be needing. They don't tell you enough about the other sides of the hex debt, which I will be talking about more today, okay. So, there's so many impacts of this. There's probably, you know, be an eye-opening and help you make a decision for your own, you know. Okay, if you get yourself in the debt this year, it's okay. If you decided that the debt will help you rather than, you know, posting barriers to yourself later, that's okay too. But personally, for me, I do make payment upfront because I've been working since I was 14. I've been saving money. So, those are just like, I think it's enough for me to pay for my own education for now because it's only three years and I only pay about 3.5k. Yeah, 3.5k per semester. So, in a semester that I'm doing now has four units and so basically I have eight units per year that I'm doing and I'm doing three years, okay. You know what I wish they told me about? Like, how this could impact your financial outlook later in life because if you want to borrow money from a bank, for like example, home loans, if you have a lot of money borrowed from the government, you will have less power borrowing power to put like a down payment in your home loan. So, this is what I wish I knew about and I wish to know more about like, you know, how at the first of June of every year, you will get like an indexation that could jump really, really high. So, from what I've done before, I did look at the indexation rates. So, I believe that the indexation this year for 2024 is 4.7 for 2024 but then when I looked at, I think it was 2021, the indexation rate was 0.6, I believe. It was so low that when you look at 2021 compared to 2023 or 2024, that is a whopping increase. It is unbelievably crazy to look at. I don't know more about like, the tuition fee. They don't talk about this stuff but I'm going to talk about it. You know why? Because I'm just comparing the 2023 student contribution bands. So, that's just the tuition cost. Okay. So, we've got four bands. So, I'm just going to do a comparison between 2023 and 2024 student contribution bands. So, in band one, so the student contribution amount per equivalent full-time student load is $4,124. So, this is 2023. So, the areas of study will be focused on like agriculture, English, language, mathematics, nursing, postgraduate, clinical psychology and teaching and then you've got band two for 2023 and the student contribution is $8,301. So, the area of study includes allied health, architecture, engineering, environment, environmental studies, IT, performing arts, professional pathway, psychology and science and then you've got band three. So, band three, the student contribution amount is $11,800. This is all for 2023. Okay. The areas of study focus on dentistry, medicines, veterinary science. Okay. Now, we're moving up to the expensive band four and the student contribution is $15,142. So, this is accountable in areas of study such as accounting, administration, behavioural science, not even including professional pathway, psychology, economics, humanities, law, media and social studies. That is all for 2023. So, right now, I'm going to look at 2024 student contribution band. So, band one, the student contribution is $4,445. That is higher compared to 2023. So, for 2023, the band one is $4,124 compared to $4,445 for 2024. So, let me show you the band four, the expensive band. Okay. So, band four in 2023, it was a whopping $15,142. Okay. In 2023 and for band four in 2024, it's a whopping $16,323. That's about okay, something different. That's going to make a lot of difference to your HECS theft. I'm just saying. But like, I am so shocked. How is this so expensive? Like, why is band four so expensive? Accounting? Why is it so expensive? Administration? Why? I probably understand law, like law and like economics, business and all that. I think I understand why it's expensive. But accounting? Are you serious? Because there's so many people been doing like accounting, like accounting course and not even enough people have proper jobs. That's what I'm just saying. Why is it so expensive when you finish a degree, you get a piece of paper and you're in debt? I'm just saying like 8k in debt, 80k in debt. I'm like, what the hell? You don't even have the ability to pay it afterwards. Because I'm just going to look at like some employment, unemployment rates, because I think it's going to like help relate it back to the rising cost of education. This is not okay. So for unemployment rate, May 2023, it's 3.6%. Okay, when the cost of education is lower. But for 2024, April 2024, the unemployment rate is 4%. Okay, so if you study, you get a piece of paper, you're in debt, about like, okay, say for law, you're in debt, like about 80k. How are you going to pay for it? If the employment, unemployment rate increase? How are you going to pay? Shouldn't it be free instead? Because the unemployment rate is quite high. Probably not high, but I'm just comparing between the years. It's still higher than last year. And the cost of education even rises up. How is that making sense? I think now, if you wanted to talk about like, the choosing career wise, so would you choose a career that you love? Or would you choose a career that pay your bills? Because I'm assuming someone who love, who would like to do law, or, you know, pursues a business or economics, probably like their job. Okay, I'm just saying in my own opinion, okay, that's probably they like their job, they do want to, you know, make a difference in people's life, want to be entrepreneurships, or want to be a lawyer. Those help change many people's lives. But then it's not always an easy path to get where they get to, because lawyers take many years to become good, to become like an experienced one that gets high pay, a good pay, it's going to take them very long time. So before you can get to that, you need a lot of years that you would be working at a lot of paying jobs, okay, a shitty job that you need to survive, you know, pay all your expenses, and your tuition fees, your living, all that. And I think you study, you get a piece of paper, and you're 80k in debt, that is a crazy amount to be in debt. And I would like to choose a job that helped me pay bills more than a job that I like, because that does not sound good. And that affects your borrowing capability. So how I'm just going to say this, how can HECS impact on the borrowers? So HECS can be considered as a regular debt, like personal car payments, or personal loans, credit card payments, and all that, regular loans. So before you can borrow money, the lender, or probably the bank, will do a calculation of debt to ratio, which known as DTI, a ratio to like understand the full exposure of your debt conditions, your debt. Yeah. The calculation is done by like the total debt and any liabilities. So just think of that, yeah, divided by the gross income. So gross income is the income you earn before any tax gets taken. So if you have a high DTI ratio, you have less borrowing power, less money that you can put for your down payment for a home loan. This means you either can't get a lot of houses that are available on the market, because right now house prices are on the rise. And if you can't get a house that you can't, like you're not satisfied with it, it's just, you would consider it as a place to live, not a home you come to, like your safe place, probably not, because you'd probably get a shitty house. So that's another thing to consider. We also look at repayment strategies, okay. So there's a few strategies that you could probably get some understanding to repay your debt, your HEC debts, okay. So we got the compulsory repayment. So that is when your income threshold is above $51,550. So that's from 2023 to 2024. So when you reach that threshold, you need to pay the repayment. So that's known as the compulsory repayment. And then you got a voluntary repayment. So basically, voluntary repayment is more payment that you make towards your student contribution to your HEC debt after you pay for your compulsory repayments. Those could be like taking out of a salary package. You could save up some money, like a big sum of money to pay for it, probably paying loans, any debts, any loans, paying them off is a pretty good choice. Don't let it accumulate, because this is not even interest, but however it is in taxation, and it has increased for the past years, okay. Even though it fell down a little bit overhaul, but there's still an increase every year. So make any repayment before the 1st of June, before you lodge the tax. And then you could potentially defer your repayment. So that fall under a serious financial hardship. So the payment time limit is two years. You could ask for defer for your payments through the Australian Taxation Office. So you need to make any payment to the Australian Taxation Office. Help debts or HEC debts cannot be cancelled. Once you're in it, you're in it. You cannot be cancelled unless you fall under a serious circumstance. Like you need a documentation that says, that proof to you that, like that proof to the ATO that, I don't know, maybe like there's a specific situation that happened in your life that make it impossible for you to complete the degree. Another eye-shocking is when you want to go overseas, and you have HEC debt, you still have to repay it. Like the time you're still in Australia, because it's not going to be cancelled. But you know when it's going to be cancelled? When you're dead. So when you're dead, the debt is cancelled. That's probably a good news. But I'm not saying, oh, you should go die. No. But that's another good news that, you know, it won't be a pressure for any of your families, your relatives. Because like, where I come from, or like probably like loan shark or anything like that, if you die, someone will come to your family, your relatives, and probably abuse the shit out of them to get that money back. Yeah. But this is not the case. If you die, it will be cancelled. So your families, your relatives, your friends, your close one basically has no impact on it. And that's what I say about HECS. So I hope this episode really helps clear some eyes, some ears up about HECS debt, okay? And I hope that you as a person, you can make your own choice, a wise choice, how you should go on about what you should do for your higher education. Is it even worth it? Because sometimes, when you pay for such an expensive degree, and you work at such a lower, like you work at such a lower paid job, would it be worth it in the long run? You need to consider all the possibilities. It's not easy as it sounds. It's not. I'm telling you, it's not. When I do this research, I discover so many things. But also, when you study in university, try not to have such a lavish life because it's going to have like an impact later in life. When you have such a lavish life, even though you work a part-time job, even a full-time job, you can't sustain that. Much more money than it should be saving. You should be budgeting. I would probably think budget is a good choice. You know, 50% on spending, like 50, 30, 20. So that means 50% all the essential, like rent, food, all the compulsories. And then 30% your ones, or whatever you want to buy, like the unnecessary stuff. And then 20% saving. That's probably like one of the best budget rules I follow. I'd probably save more than that, but that's another way I would, you know, try to restrain myself from like spending unnecessary money and try to save as much as possible to pay off those student loans first. Because it will have impact on your financial outlook later in life. And when you have less borrowing capability, it is not fun to deal with it later in life. So make it easier for you now. And I hope that you can consider all aspects of the help loans. And when you do take out the help loans, think of how you're going to repay them. Like when you take out a cause, I don't want to stress people about this, but like try to think about what you're going to do after. Don't just get into a cause because your friend get into a cause. You don't need a cause, you don't need a piece of paper to have a good living. You don't need it. I don't think you do. But if you want to pursue a higher education, you can. You just need to think of what's going to be the consequences and what's going to happen after. And I hope you do make advice for yourself. Because this can be serious later in life. And it can affect how you see your financial. And it can also impact on like your, I don't know, your settling down time. Especially when you have a kid, you have repayments to pay. You have a kid and you could be like single parents. Those are tough decisions to make. So think about it before you do get into a cause. And if you decided to opt out, or if you decide to, okay, I don't like this cause. I want to get out. Do it before the census date. That's when you will get into a head start if you don't pay the fees upfront. And you know, another serious question. Should Australian make, like should the Australian government make higher education be free? Because like in a country like Germany, they make their education, higher education system to be free. And I think there's like a surge of enrolment from what I read. And I think it could be potentially be a better opportunity for many. Like it's probably good opportunity to promote more students to get into higher education because it's free. People don't have to worry about this stuff. And I'm sure it's probably be a wiser choice if you want to promote a higher education. Don't you think? Well, let me know in the comments and please give me a follow or even subscribe. Give me a follow on Spotify or subscribe on YouTube and I will see you on the next episode.