Government Subsidies and Student Loans in Australia
This article provides a brief overview of the various Government subsidies and student loans offered to those undertaking vocational education and training (VET) or tertiary studies in Australia.
Study Place Types
There are two types of places at Australian universities and higher education institutions: Commonwealth supported places (CSPs) and full fee paying places (FFPs).
Commonwealth Supported Place
A CSP is a place at an approved university or higher education institution that is subsidised by the Australian Government. A student in a CSP does not pay the full cost of their course, but rather the student contribution amount set by their individual university (within ranges regulated by the Government).
All Australian citizens undertaking higher education in Australia are eligible for a CSP. Also eligible for a CSP are New Zealand citizens and permanent visa holders who will be a resident in Australian for the duration of their course or unit.
To apply for a CSP you need to be enrolled in an approved institution and submit a Request for a Commonwealth supported place and HECS-HELP loan form to your institution by the census date (set by individual institutions). A student in a CSP is entitled to Government subsidies for up to seven years of full-time study (or 16 years of part-time study).
Full Fee Paying Place
Those not eligible for a CSP (due to their residency status or their chosen education provider) are enrolled in a FFP. Full fee paying students pay the full cost of their course. Full fee paying students may be eligible for FEE–HELP.
Loans and Subsidies
Higher Education Loan Programme
The Higher Education Loan Programme (HELP) is the umbrella term for the loans offered by the Australian Government to eligible students studying at approved institutions. Most students enrolled in higher education in Australia will make use of HELP, in the form of HECS–HELP, FEE–HELP, OS–HELP, SA–HELP and/or VET Student Loans. All HELP debts are repaid through the Australian tax system, and thus require all applicants to have (or apply for) a Tax File Number from the Australian Taxation Office.
There is no interest charged on loans taken under HELP; however, HELP debts over 11 months old are indexed annually in line with the cost of living (as measured by the Consumer Price Index).
Note that individuals with a HELP debt have repayment obligations regardless of if they are living in Australia or overseas. Individuals with a HELP debt who intend to be overseas for longer than 6 months (183 days) in a 12-month period are required to notify the Australian Taxation Office. From 1 July 2017, anyone who earns above the minimum repayment threshold (above $54,869 as of the 2016–17 financial year) will have payments automatically deducted from their income regardless of if they are in Australia or overseas.
HECS–HELP is a loan scheme that assists eligible students to pay their student contributions. To be eligible for HECS–HELP you must be enrolled in a CSP, meet the Tax File Number requirements and submit a Request for a Commonwealth supported place and HECS-HELP loan form to your university by the census date of your institution. Students enrolled in a CSP can use a HECS–HELP loan to pay for all or part of their student contributions, or not apply at all and instead pay their student contributions upfront. (Note that while permanent residents are eligible for a CSP, they are not eligible for HECS–HELP.)
There is much confusion over the precise conditions of a HECS–HELP loan. A HECS–HELP loan is a loan taken from the Australian Government that the borrower has a legal obligation to repay. Payments are automatically deducted from a borrower’s income once they earn over a certain amount (above $54,869 as of the 2016–17 financial year). As with all HELP debts, a HECS–HELP loan is not charged interest but is indexed annually.
Prior to 1 January 2017, a discount was offered for voluntary repayments of HECS–HELP loans, but this has been discontinued.
FEE–HELP is a loan scheme that assists eligible higher education students enrolled in FFPs to pay their tuition fees. The eligibility requirements of FEE–HELP are slightly different to those of HECS–HELP.
A FEE–HELP loan has a cap ($100,879 in 2017, with a higher limit for medicine, dentistry and veterinary science courses) and incurs a 25% loan fee for undergraduate courses. This loan fee does not count towards the borrower’s FEE–HELP limit, but is included in the debt to be repaid. A borrower is legally obliged to repay a FEE–HELP loan, and payments are automatically deducted from a borrower’s income once they earn over a certain amount (above $54,869 as of the 2016–17 financial year). As with all HELP debts, a FEE–HELP loan is not charged interest but is indexed annually.
Overseas Loan (OS–HELP)
OS–HELP is a loan for CSP students to undertake study overseas. OS–HELP can be used for a range of expenses, including study costs, accommodation, air fares and other travel expenses. An OS–HELP loan and loan limit is coordinated through your university (however, the loan cannot exceed $6,567 for study outside Asia or $7,880 for study in Asia).
VET Student Loans Program
Student Amenities HELP (SA–HELP)
SA–HELP is a loan to assist eligible students to pay part or all of the student services and amenities fee charged by their university or higher education provider, including fees for sporting and recreation activities; financial, employment and career advice; and food services. An SA–HELP loan can be accessed on its own or in conjunction with any other HELP loan.
Availability of Loans and Subsidies by Qualification
The types of loans and subsidies for which you may be eligible change depending on the qualification for which you are studying. For example, while Bachelor’s programs commonly offer CSPs and HECS–HELP, CSPs are much more limited for those wishing to undertake graduate study, and the HECS–HELP scheme is replaced completely by the FEE–HELP scheme at the Doctoral level. Full details of the places and loans and subsidies available for the various qualification types can be found in Table 4 of the ‘Commonwealth Supported Places (CSP) and Higher Education Loan Programme (HELP) Handbook for 2016’.
This article has provided a brief summary of CSPs and the various Government loans available under HELP. For more information, you should consult your university or education provider and the Study Assist website (in particular their publications page). The Australian Taxation Office can also be contacted for matters relating to current HELP loans.