From 1 January 2017, eligible students will no longer receive a HECS-HELP discount of 10 per cent for paying their student contributions upfront. The Federal Government is also scrapping the voluntary HELP repayment bonus of five per cent. If you're a current or past student, make sure you make your voluntary repayments this year to minimise your debt.
Under the HECS-HELP rules, eligible students can opt to defer their student contribution and repay it later through the taxation system. Currently, students who elect to pay $500 or more of their fees upfront receive a discount of 10 per cent which is paid by the Government to the student’s higher education provider. People who have a HELP debt and make a voluntary repayment of $500 or more towards that debt also receive a bonus credit of 5 per cent.
The removal of the upfront discount only affects students who can afford to pay upfront, but the bonus for voluntary repayments impacts all past and present students who want to minimise their HELP debt. In short, you will no longer be rewarded for making voluntary repayments above the minimum requirement dictated by your annual salary.
Here's the Government's excuse for removing the discount as it appears on the StudyAssist website:
"The amount of the bonus is an additional credit against the student’s outstanding HELP debt. It is an amount never recovered by the Government."
If you have some savings in your bank account that you can afford to part with, it might be a good idea to make a voluntary repayment to your HELP debt before January. Likewise, if you're planning to study in 2017 and can afford to pay upfront, try to settle your fees in advance this year.