At the beginning of 2017, the VET FEE HELP system was reformed and its name changed to VET Student Loans. It was all a bit confusing and controversial, so let’s start at the beginning.
VET refers to the courses that provide practical training in industries such as trades, hospitality and retail. The most obvious ones are the courses you might do at TAFE or a Registered Training Organisation (RTO) (but not a university), such as carpentry, mechanics, hairdressing, plumbing, cooking and so many others.
FEE = The money you have to pay to study.
That’s pretty straight forward – studying costs money.
HELP = Higher Education Loan Program
HELP is a loan system that the Australian Government offers to eligible students. It’s similar to a university HECS-HELP loan in that you don’t have to pay any money up front. Rather you pay the money back to the government once you’ve started working and earning money.
So let’s solve this riddle…
VET + FEE + HELP = Getting a government loan to pay the fees for your chosen path of study.
The VET-FEE HELP system was reformed at the end of 2016, and was renamed VET Student Loans.
The reason for the reform is that in 2016, there were a lot of training providers who were accused of rorting the system, and many of the courses covered by VET-FEE HELP were found to have low enrolments and low prospects for employment afterwards. Basically, the government decided to stop loaning students money for certain courses and areas of study.
There were about 800 different courses that were covered by VET-FEE HELP, but as part of the reforms, the government changed the requirements for a VET Student Loan, cutting 478 of the courses that were previously available. This came into effect on January 1 2017, so there are a few less options for what you’re able to get a loan for.
If you’re wondering whether your prospective course is still covered by a government loan, check directly with the TAFE or Registered Training Organisation (RTO).
Apart from that, a VET Student Loan is pretty much the same as VET FEE HELP. So the moral of the story is that most of the reforms affect Registered Training Organisations, rather than individual students. So as long as your course is still covered by the loan system, then you’re all good.
When you apply for a course in any TAFE or Registered Training Organisation, you’re applying for a Commonwealth Supported place, which means you’re covered upfront by the VET Student Loans scheme. The best part is that you don’t have to pay back any of your VET Student Loan until you’re earning over the threshold income, which is adjusted annually and is currently an annual salary of $54,849 (this figure is correct as at August 2017) So future you can pay back the loan, and rn you can just focus on getting some training.
If your yearly taxable income is below the threshold amount, you don’t pay any money back - at least not until you start earning a higher salary.
We once heard a rumour that if you die still owing money on your student loan then your family has to pay it back for you. While the thought is pretty morbid, it’s also untrue – in this case your outstanding loan is cancelled.