We often hear horror stories about crippling student debt (mostly from America, to be fair), where students spend their whole lives working their asses off and can only seem to chip away at the interest. Fortunately for us Aussies, we don’t pay any interest
on our student debts (however, your debt could alter slightly over time to reflect changes in inflation). And we don’t start paying off our student debt until we earn over the threshold, which, as mentioned, is currently $54,869 per year.
If your yearly taxable income is below that amount, you don’t pay any money back - at least not until you start earning a proper salary. So in theory, if you never make the big bucks, you never have to pay your student debt back, which certainly takes the pressure off if you’re only half sure about what you want to study.
I once heard a rumour that if you die still owing student debts then your family has to pay them back for you. While the thought is more than a little morbid, it’s also untrue
– in this case your accumulated HELP debt is cancelled.
Having said that, the more money you earn, the more of your HECS-HELP debt you have to pay back (which is probably fair enough).
If you’re still a little confused about it all, here’s an example:
You study a Bachelor of Arts and graduate with a head full of complex theories, a few good hangovers, the best memories and (ahem… cough) an $18,000 HECS-HELP debt. You soon get a rad job as a content writer for a hip new website and earn $60,000 a year in your first year out of uni.
In this case you’d be required to pay 4 per cent of your taxable income off your HECS-HELP debt, which is $2,400 a year.