I Have Got A HECS/HELP Payment And Want To Pay This Off Faster. Are There Any Benefits In Doing So?

I Have Got A HECS/HELP Payment And Want To Pay This Off Faster. Are There Any Benefits In Doing So?

What is HECS/ HELPS?

HECS/ HELP is a student loan program that grants loan to those students who are enrolled in commonwealth-supported places. The loan aims to pay for the student contribution amounts, which means this program is both a loan and a discount for the student body. There is a specific criterion, which must be fulfilled for its eligibility. This student loan does not cover for the accommodation or textbooks of the student.

What are the eligibility criteria?

In order to avail this loan, certain conditions must be fulfilled. First, you must be an Australian citizen and should be studying in a commonwealth-supported place. You must be a permanent humanitarian visa holder. It is also essential that you meet all the relevant requirements of this loan without any problems.

How does it work?

The mechanism of a HECS/ HELP loan is simple. Once you qualify for the loan, the Australian government has to pay all your tuition fees. This means the government does your job while you just focus on learning and maintaining a good CGPA. Once your taxable income is higher than the minimum repayment mark, only then you start repaying the amount of money that was spent by the government on your education.

The Australian Taxation Office calculates the total amount due and informs the individual accordingly. It is to be noted that you can always make voluntary payments to the ATO so that the loan is given off as soon as possible.

Benefits of Repaying on Time

Among the numerous benefits of a HECS/HELP loan, is the fact that it is a relatively interest free scheme though a small amount of interest is always added but it is much less as compared to the other student loans. So when you pay your dues on time, you save yourself from extra interest rates. This helps in lowering down your loan, which means wages are no longer deducted. You no longer have to worry about your money constantly.

Let’s say you are gaining $65,000 a year. You have a HECS obligation of $12,000.Your manager ought to deduct 4.5% of your pay (at 2015-16 rates) which is $2,925 per annum as an extra ‘assessment’; that is coordinated towards your HECS obligation. Along these same lines, it will take you no less than 4 years to pay off your HECS. The more focused you are about your repayments the better it is for you in the long run, in the bigger picture.

Related Consequences

You cannot just escape from the reality of paying back for your education loan, which the government once invested in you. Failure to pay back results in the imposition of numerous penalties and punishments, which not only take a large amount of your time and energy but also make you stand out in the eyes of the authorities, being in their bad books is certainly not a good idea. Therefore, repay our dues on time to avoid the consequences attached to it.

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