Discover the ins and outs of your education loan through the Higher Education Loan Program (HELP), including monitoring your balance and understanding debt repayment obligations.
What is HECS-HELP?
Higher Education Loan Program (HELP) is a two-fold program, functioning as both a financial loan and a student fee reduction. The Australian Government will cover your tuition fees through the HECS-HELP program if you qualify and send the funding directly to your academic institution to pay for your education.
When do I need to start repaying my HECS-HELP loan?
When you file your annual tax return and your Repayment Income (RI) reaches a certain minimum threshold, you will begin to repay your HECS-HELP loan through automatic repayments. This minimum limit may vary each year due to annual RI adjustments.
Starting from the financial year 2022-23, if your income exceeds $48,361, you will be required to make compulsory repayments. The minimum income level that triggers compulsory repayment will increase to $51,550 for the financial year 2023-24. Your tax assessment will include a mandatory repayment that begins at 1% of your income and increases as your earnings go up.
What is Repayment Income (RI)?
Your Repayment Income is not the same as your taxable income. It is calculated as:
your taxable income for an income year, +
your total net investment losses, +
any total reportable fringe benefit amounts shown on your Income Statement; +
reportable superannuation contributions; +
any exempt foreign employment earnings from the current income year
Determining Your Outstanding Balance - ATO
Checking your HECS-HELP debt balance can be done in two main ways:
Contact the ATO on 13 28 61, and provide them with your TFN. With this, they are able to verify your personal details and tell you your HECS-HELP balance or
View your HECS-HELP balance online via the myGov site. You will need to link your account to the ATO so they have all the details. From here, you view your balance online.
If you haven't registered on myGov yet, setup instructions can be found on the ATO website or by calling the myGov helpdesk at 13 23 07 (option 1).
Verifying Your Remaining HELP Funds
Limitations of the myHELPbalance Platform
The portal doesn't display your outstanding debt, any applied loan fees, or the inflation adjustment on what you owe. Additionally, it won't include any liabilities accumulated before the year 2005. To log into myHELPbalance, you'll need your Unique Student Identifier (USI) or Commonwealth Higher Education Student Support Number (CHESSN), identification from any educational institution you've attended, as well as your first and last name and birth date.
Tax tips for repaying your HELP debt
Keeping records of all expenses and claiming eligible deductions can lower your RI and minimise compulsory annual repayments. It is crucial to keep track of all work-related expenses and seek advice from a certified accountant to ensure you are claiming all eligible deductions and getting the maximum refund.
Having multiple jobs can be a great way to boost your income, but it's important to be aware of how it affects your HECS-HELP debt. Keep in mind that each employer will only withhold additional tax to cover your debt based on the income they pay you. If your combined income from all your jobs exceeds the minimum repayment threshold, you'll need to make a repayment towards your HECS-HELP debt when you file your tax return.
By staying informed about your debt and taking proactive steps to manage it, you can stay on top of your finances and work towards achieving your financial goals.
Understanding the intricacies of the HECS-HELP system can be a daunting task, but it's an important part of managing your financial future. Knowing the ins and outs of repayment thresholds, loan management, and the potential impacts on your credit can save you both time and money in the long run. While this article aims to offer a helpful overview, we strongly encourage you to stay informed and up to date with any changes to the system. The more you know, the better equipped you'll be to make wise financial decisions that can positively influence your educational journey and beyond.
*Disclaimer: Please note that the information provided in this communication is for general informational purposes only and should not be construed as professional advice. It is not intended to substitute for personalised financial, legal, or tax advice. Please consult a qualified professional before making any decisions based on the information provided.