8 questions to ask yourself about HELP loans
The contents provided on this page are for informational purposes only and do not constitute financial advice. You should consider your personal circumstances and objectives, as well as obtaining independent advice, before making any financial decisions.
Did you know that only 63% of students in 2022 were aged between 15 and 24? (Australian Bureau of Statistics 2022)
Learning is a fulfilling and lifelong experience that can take various forms, from short courses and micro-credentials for those seeking to boost their resume and learn new skills, to a certificate, diploma, or university degree for someone looking to change or advance careers. However, many courses - and in particular, university degrees - can be a large financial investment.
In this article we’ll look at how you can access financial support for education, including what you need to know about HELP loans as well as alternative loan and study options to help you determine what’s right for you.
1. What is a HELP loan?
The Higher Education Loan Program (HELP) provides university students with loans from the Australian government to allow them to delay payment for part or all of their degree until their income meets a salary threshold.
Taking out a HELP loan not only allows you to access education upfront, but also ensures you won’t have to make a repayment you can’t afford. We’ll talk in more depth about how this works later!
Most students accessing HELP loans can be subsidised for up to a maximum of $113,28 in loans, or $162,336 in loans for eligible medicine, dentistry, veterinary and aviation students. These limits are current as of January 2023 and change annually. Check StudyAssist for the most up-to-date information.
2. Am I eligible for a HELP loan?
HELP loans are available to all Australian and select New Zealand citizens of any age, as well as permanent humanitarian visa holders.
As long as you study an eligible course with an approved higher education provider you are likely to be eligible for a HELP loan, whether you have just graduated from high school or are a working professional considering further studies or a career change. You can find out more details about HELP loan eligibility here.
For courses starting after 1 January 2022, you can only be enrolled in a Commonwealth Supported Place (CSP) for 7 years of full-time equivalent study. This may replenish under certain circumstances, and over time.
Here are some examples of when you might take out a HELP loan.
- Ravi is in this thirties. He got a Bachelor of Arts straight out of high school, but he decided he'd like to go back to uni to become a teacher. He applies and is accepted to study a Bachelor of Primary Education, which will take four years. Even though he's already taken out a HECS-HELP loan for his Bachelor of Arts, he can still access more financial support through HELP loans based on the maximum HELP loan limit. He takes out an additional $16,496 HELP loan, which covers the full cost of his Bachelor of Primary Education degree.
- Lily is in her twenties. She left school after Year 10 and has a Certificate IV in Industrial Electronics and Control, and now would like to get a university degree to help her establish her electronics business. She's accepted into a Bachelor of Business, a three year full-time degree, but decides to study it part-time over six years so she can keep working while she studies. She takes out a $45,426 HECS-HELP loan to cover the full cost of her degree.
3. What type of HELP loan will I need?
In most cases, students take out a HECS-HELP loan, which is the loan type for undergraduate students in Commonwealth Supported Places (CSPs). Other types of loans include:
- FEE-HELP for full-fee paying (FFP) course fees
- OS-HELP for overseas exchange costs (CSP students only)
- SA-HELP for student amenities fees
- VET Student Loans similar to HELP loans, offered for certain vocational educational and training courses.
The maximum dollar limit mentioned earlier only includes HECS- and FEE-HELP debts. OS- and SA-HELP loans do not count towards your total loan limit, nor do any loan fees or debts with census dates prior to 1 Jan 2020. However, VET Student Loans and the previously issued VET FEE HELP loans are included in your total loan amount.
4. How do I apply for a HELP loan?
To take out a HECS-HELP loan, you’ll need to submit the ‘Request for Commonwealth support and HECS-HELP’ form, available through your course provider. In practice – from personal experience! – this is usually completed as part of enrolment to streamline the process. You’ll need a Unique Student Identifier and Tax File Number (or evidence of a pending TFN application) to complete the form.
Similarly, FEE-, OS-, and SA-HELP loans are requested with a form available through your course provider but are often completed, if applicable, while enrolling.
When enrolling in your course for the first time, you should indicate that you intend to apply for a HELP loan, and your course provider will guide you through the process. If you choose not to take out a HELP loan, you’ll have to pay your full tuition amount, known as your Student Contribution Amount (SCA), by the cut-off date published by your university. This is known as the census date and is usually close to the beginning of your semester.
Once your loan is approved, it will be paid directly to the university on your behalf.
5. How much will my loan cost me?
The actual cost of your loan will depend on whether you have a CSP , as well as the course type. For example, the fees for nursing degrees are much lower than law degrees.
To maintain your HELP loan, you need to pass at least half of your course units.
While you hold the loan, you will not be charged any interest. However, indexation will be added to your debt on the 1st of June every year. Indexation is a fee that accounts for the fact that the value of money changes year to year, typically due to inflation, and updates your loan accordingly. Though the dollar value of your loan will increase, this is not the same as interest.
Most FFP undergraduate courses will also incur a 20% loan fee in addition to your initial loan amount.
6. How and when will I pay my loan back?
In addition to being interest-free, HELP loans are unique because of the way they’re repaid.
Repayments are made through the income tax system so, if you’re working, you will need to let your employer know you have a HELP debt. However, you don’t need to start making compulsory repayments until you meet the repayment income (RI) threshold. This changes every year, and for 2022-2023 the threshold is a taxable income of $48,361 per year. How much you need to pay depends on your income – like tax brackets. Specific repayment rates for each bracket can be found here.
The ATO will calculate your compulsory repayments for you and include it on your notice of assessment that is issued at tax time and tells you how much tax you owe. Your payment is made as part of your income tax. However, you can also make voluntary repayments at any time, which decreases your overall debt. You can do this directly to the ATO or via salary packaging arrangements with your employer. If you make voluntary repayments, your HELP balance will be topped up accordingly, so you can re-borrow in the future!
Whether or not you should be making voluntary repayments depends on your personal circumstances. Note that these payments are non-refundable, so you should never make a payment you can’t afford.
On average, HELP loans can take around 9 years to be fully repaid.
7. What other types of study expenses should I keep in mind?
HELP loans provide a safe, sustainable way to pay for your education, but they won’t be the only thing you need to support yourself throughout your studies.
Before enrolling in a degree, you should consider your plan for managing your living expenses, as well as the purchases you’ll need to make for your studies, such as textbooks and other course equipment.
If your living expenses are likely to cause financial hardship, it’s a good idea to look into payments such as Youth Allowance, Austudy, ABSTUDY, and more. You can check your eligibility here.
If you are currently working and have a regular income of more than $300 a week after tax (note that government benefits cannot make up more than 50% of your income) you could also consider accessing extra funds through Beforepay to help manage some of these additional expenses as they arise, like helping you pay for textbooks.
8. What if a HELP loan isn't right for me?
If you’re not eligible for a HELP loan, or it’s just not the right option for you, fear not! University isn’t the only way to access education, and HELP loans aren’t the only way to pay. Here are some other options.
Low Student Contribution Amounts (SCA)
There are also degrees with lower payable SCAs (that often also offer a number of scholarships and subsidies). In 2023 these include courses in:
- Indigenous and Foreign Languages
- Mathematics and Statistics
- Postgraduate Clinical Psychology
In Victoria specifically, for 2023-2024, undergraduate nursing and midwifery degrees, training and upskilling will be free through a scheme that offers government scholarships to all newly enrolled students.
VET Student Loan (VETSL)
It’s possible to get a VET Student Loan (VETSL) for certain vocational qualifications at diploma level and above. This type of loan includes a 20% loan fee in addition to the price of your qualification. You can apply for a VETSL if you meet the eligibility criteria through the electronic Commonwealth Assistance Form (eCAF) system. Access to this system is emailed to you after you’re accepted into the course and your course provider enters your details into the eCAF system.
To prevent false VET loan claims, you’ll need to regularly complete a Progression Form which will be sent to you. Your repayments will be through the tax system, just like HELP loans, and your VETSL (but not your loan fee) will contribute to your HELP loan limit.
There are also platforms that offer a variety of short courses online if you’re looking to upskill within your current role or workplace. You can find out more in our blog article here.
Many different providers, as well as external organisations, offer scholarships for course fees and expenses. Broad classes of scholarships include those awarded for financial need, for hardship and/or disadvantage in one’s background or life experiences, for merit (in various different fields), by interview or written application, or for meeting a specific set of personal criteria. It’s best to check with your provider to see what scholarships are available to you, as well as checking your eligibility for government scholarships here.
If you’re looking for a study option that won’t require high fees, institutions across Australia are offering fee-free TAFE courses and apprenticeships to eligible students in 2023. Courses included under this scheme range from short courses to diplomas and eligibility prioritises certain groups such as those who are out of work, those who hold certain visa types, and young people. In addition to this national program, at the state level many TAFEs have their own additional fee-free programs or subsidies.
There’s no shortage of options when it comes to furthering your education. No matter what you want to study, there’s something for you! Make sure to investigate your options in depth and you’re sure to find something that excites you.
HELP: Higher Education Loan Plan. A category of government student loans.
Student amenities fee: A semesterly fee paid by students to help finance university programs other than classes. Also known as a student services and amenities fee and often abbreviated to ‘SAF’, ‘SSAF’, or ‘SSA’.
Commonwealth Supported Place (CSP): A type of university fee in which students’ university study is partially funded by the government, so students only pay the Student Contribution Amount (rather than the Full Fee cost, which is higher). Commonly accessed by domestic undergraduate students.
Full Fee Place (FFP): A type of university fee in which students pay the entire course cost themselves. Commonly accessed by international or postgraduate students, as well as those studying at private universities.
Student Contribution Amount (SCA): The amount of money that a student enrolled in a CSP must pay. Varies by degree type and length.
Compulsory repayment: A mandatory HELP debt repayment made through the tax system, dependent on your income.
Voluntary repayment: A HELP repayment you make by choice using BPAY, online, or by phone. This decreases your overall debt and increases your HELP total limit (although cannot increase it above the loan cap).
Salary packaging: An arrangement that allows your employer to pay certain benefits (including loan repayments) by deducting them from your income, so you’re taxed on the income minus the cost of the benefits.
VETSL: Vocational Education and Training Student Loans. A class of loan offered to students undertaking VET courses, similar to (but not the same as) HELP loans. Sometimes abbreviated to ‘VSL’.
VET FEE-HELP: A type of loan for VET students that is no longer available, although some people may have existing debts from previous VET FEE-HELP loans.
All figures and statistics are current as of January 2023.
Sources: Australian Taxation Office, StudyAssist (Australian Government), Australian Bureau of Statistics, Australian Department of Employment and Workplace Relations, YourCareer (Australian Government), Victorian Department of Health
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