Affording university can be a challenge for many students. While Australia’s universities and upper-education programs are relatively affordable compared to other nations, there’s an endless list of expenses that are associated with studying full-time or even part-time. Many students today rely on the Student Financial Supplement Schemes (SFSS) to help cover their expenses.
There are a number of programs under the SFSS, and they’re all voluntary, income-based loans designed for students. That means students will need to pay them back once they reach a certain income. This can be a large burden to carry after graduation, and it has led many to struggle with repayments.
How do you handle these financial supplement schemes? In this guide, we’ll explain the best ways to handle SFSS programs such as HELP, TSL, HECS, and more.
What Are the Most Common Financial Supplement Schemes?
You might be surprised by just how many student financial supplement schemes exist under the current Higher Education Loan Program (HELP). This program was introduced to replace the Higher Education Contribution Scheme (HECS), and it can be a challenge to keep track of all the terms.
Here’s a breakdown of the current HELP programs available in Australia:
- HECS-HELP – This is for eligible students enrolled in Commonwealth supported institutions. This loan will cover all or part of the student contribution depending on a number of factors.
- FEE-HELP – For fee-paying students at an approved higher education provider or Open Universities Australia, this loan helps students cover all or part of their tuition fees within limits.
- OS-HELP – Australian students who wish to study overseas can use OS-HELP which provides a cash loan to cover accommodation and travel.
- VET FEE-HELP – This type of loan is for students undertaking any training or vocational education as well as graduate certificate courses.
- SA-HELP – Finally, SA-HELP provides students with a loan designed for non-academic fees from higher education institutions like career services, child care, and food.
You can learn more about your particular loans as well as how much you currently owe on the Australian Taxation Office website.
When Do Students Repay Their Loans?
There’s a lot of confusion over when and how to start repaying your student aid. Luckily, students don’t need to begin paying while they’re studying. Better yet, repayment is based on income. That means you won’t begin to repay your financial assistance loans until you’ve reached what’s known as the income threshold.
From there, the amount you pay will be dependant on how much you earn. These keeps students and recent grads from feeling unnecessarily burdened by their student loans. The income and repayment thresholds change frequently, so keep an eye on the loan repayment thresholds to make sure you know how much will be deducted from your pay.
How to Begin Paying Student Debt
No matter what stage of your education you’re at, it’s important to have a plan when it comes to paying down your student debt. The most effective way to pay off your loans is to begin early and to make more than the minimum payment.
The first thing to realise is that you don’t have to wait until you reach the income threshold to begin payments. If you can afford to start paying before then, this is a great way to get a head start on your payments. The sooner you’re able to pay the principal balance, the less you’ll pay in interest over the life of your loan.
Here are some tips for paying down your student assistance loans faster:
- Pay more than the minimum – Under the income threshold, you’re only required to pay a small percentage based on your income. However, this is in no way the maximum you can pay. You can (and should) make larger payments when you can afford to.
- Refine your budget – Looking for ways to cut spending in your monthly budget could free up more income to dedicate towards your loan repayment. Whether it’s just $50 a month or less, every little bit counts.
- Watch Your Debt – It’s a good idea to keep an eye on your other debts while working towards student debt repayment. It’s easy to carry a balance on your credit cards or let other parts of your finances slide, but these are all important factors when determining your credit rating.
- Track your payments – Make sure you’re keeping a close eye on your payments to avoid falling behind. You can even set up automatic payments so you don’t have to worry about it!
Paying your student financial support loans doesn’t need to be stressful. As long as you create a budget you can stick with and you have a long-term plan, you’re taking a big step in the right direction.
Achieve Your Debt Payoff Goals
Reaching your goals of debt payoff doesn’t have to be a pipe dream. With the right understanding of the HELP system and a smart plan, you can make strides towards a brighter, debt-free future.
No matter how much you have in student debt, it’s possible to pay this down quickly and effectively. Now that you know how the repayment system works and how to get started, the next step is up to you.
For help with your student loans and creating a debt payoff plan that works for you, contact the pros at Debt Busters today. We have over 15 years of experience helping Aussies overcome their student debt, and we’re ready to create a strategy designed for you.
If you want a second opinion on the plan you’ve made or need help in making a debt repayment plan, call us today on 1300 368 322.