HELP Debt Statements Will No Longer Be Mailed From June

After you've finished university, an annual statement telling you how much you still owe for your education becomes a familiar ritual for anyone who couldn't pay up front. However, that ritual will change for students who have taken advantage of the HELP (Higher Education Loan Program) scheme, with no more postal statements from June.

An update from the ATO last week notes that HELP statements showing how your debt has been indexed will no longer be automatically be sent out from June 2011. Former students who want to request an update (so they know what their compulsory repayments will be) can do so, but the process is said to take up to five days. Any amount you owe for HELP repayments will still appear on your tax assessment.

As we noted in our Budget roundup, HELP repayments greater than $500 will now attract a 5% bonus payment, which could help you reduce tertiary education debt earlier.

ATO


Comments

    Just a note that the FEE-HELP change appears to be a REDUCTION in the discount for voluntary repayments.

    As it stands the scheme offers a 10% discount for repayments over $500 (http://www.goingtouni.gov.au/main/feesloansandscholarships/loanrepayments/compulsory-voluntary.htm), the "Higher Education Contribution Scheme — reduction in discounts" section of the budget indicates that "Payments of $500 or more will now attract a 5 per cent bonus so that a payment of $500 would reduce an individual's outstanding HELP debt by $525".

    Anyone planning on making voluntary repayments of FEE-HELP would be best off doing so before the 1st of January 2012.

    interesting update: - I knew it was coming after hearing talks about the new budget.

    I made my payments a few days ago to get 10% bonus since I wasnt sure when they will change this rule.

    @Shaun: - the 1st of January day where does this date come from? Is this the date when the federal budget gets approved?

      I'm not 100% sure why they chose the 1st of January 2012, but it's specifically mentioned in the "Higher Education Contribution Scheme — reduction in discounts" section of the budget (at http://www.budget.gov.au/2011-12/content/bp2/html/bp2_expense-08.htm)

    It would be interesting to see how much money they save by ending the postage...

    @Jay: My guess would be that it would be in effect from July, being the start of the financial year. Or possibly from now?

    The efficiency dividend at work, and in this case it's an obvious saving that makes things... more efficient.
    Having said that, the idea of paying your HECS debt "early" seems crazy - in fact you should try and avoid paying it off for as long as possible.
    The debt is indexed at CPI, but chances are if you're a University grad your wage is rising faster than the CPI. Every year you avoid having to pay it, the smaller the debt becomes as a percentage of your take home pay and possibly in real terms, because the CPI doesn't always necessarily reflect the true rate of inflation.

    I never realised this was coming in as they decided not to mail statements any more just prior to this change coming in. How convenient for them. There go my plans for payment pre 1 June.

Join the discussion!