Big problem with HECS-HELP debt

LMyone888 on 13/07/2018 - 10:23

Hi Ozbargainers, Good morning

I am stuck with HECS Debt I incurred for my Bachelor degree Course (2009-2012) in Monash University.

I am an Australian citizen and I have been incurring fees as a domestic paying student. As I am aware, domestic paying fees are no longer existing and all Australia Citizens are paying Commonwealth Supported Place (CSP) fees.

My income has reached the repayment income threshold and I have been paying off my debt through the income tax system for the last 4 years. But indexation has made it worse!

I was charged a 2011’ Combined HELP file – Higher Education -$17120 and
2012’ Combined HELP file – Higher Education -$17120
My total debt todate is $99,917.

Is there any avenue or appeal of reducing quantum of payment $100,134 that Ozbargainers might know of? With my lack of knowledge I have exhausted all my options.

Your feedback would be very much appreciated. Thanks.

Financial

Comments

  • Mikerobertsn on 13/07/2018 - 10:44
    +13

    It would depend on whether the place you got offered at uni was a government subsidised CSP place or a full fee paying place, you can't assume that all uni places are CSP because they aren't. If you have documentation stating you have a CSP place I would suggest you contact your uni asking why they charged you soo much, but if not, you probably didn't have a CSP place.

  • Gronk on 13/07/2018 - 10:49
    +21

    I'm a bit confused - have you been charged penalties or anything like that or are you just appealing to total amount?

    It is a lot of money, but I'm currently studying as well and had full knowledge of what I was getting myself into financially prior to enrolling.

  • trustnoone on 13/07/2018 - 10:51
    +9

    Agreed with above, are you sure its a CSP course? I have a feeling some are and some aren't? But I'm thinking either yours isn't or you haven't been placed under CSP because it seems a bit high? I have a 4 years bachelor degree at the exact same years (2009 to 2012) plus a Masters <CSP supported though> (2013 to 2015) and that only comes to about 50k together, so it seems unusually high?

  • tsunamisurfer on 13/07/2018 - 10:59
    +145

    Let me see if I have this right.

    You happily borrowed from taxpayers to fund your higher education.

    The taxpayers happily waited until you have reached the payment threshold before starting to claim some of it back.

    Whilst taxpayers waited, you were charged no interest, only indexation. So there is nothing in it for the government / taxpayer other than the hope one day you will earn more / pay more tax.

    Now…its a 'Big Problem'????

    How T F is paying back a debt you incurred a big problem when its merely indexed?

    Please note, I have no problem with people using HECS / HELP. Australians are very privileged to have this scheme in place to facilitate the endeavour of higher education regardless of their social / economic demographic.

    I abhor attitudes that paying it back is a problem.

      • HighAndDry on 13/07/2018 - 13:13
        +74

        Tip for new students, always avoid HELP, very easy to get, very hard and expensive to pay it off.

        Yes - please don't get an interest-free loan to receive a world class education.

        Seriously - there's no reason not to take advantage of HECS-HELP, unless you don't need the education because you're just that business-minded, or are lacking in ability to take advantage of that education.

        Even if you had the cash lying around - this is an inflation-indexed, interest-free loan. Go put that money into a long-term term deposit and you're likely still making money.

        • Shiny Mew on 16/07/2018 - 20:52
          -1

          Uni degrees are largely pointless in Australia, whereas the benefits of doing a trade are immense. Beguiles me why anyone who isn't gifted or pursuing medicine would bother with a tertiary education when the vast majority of graduates never get jobs which required their degree and that those who do earn less as a senior manager than a 24-year old plumber. With a trade, you can start earning income early (and thus reap the benefits of compound interest early), earn well over $100k pa and be able to put your children into good schools and buy a home within your lifetime, have much better job security, not incur any significant study debt, have time to have a partner and see your children, live much closer to work, not have to go to the gym or take up sports (and, no, you won't be 'worn out' if you lift things properly and it's far less physically and mentally destructive than sitting on a chair 8+ hours a day. If and when you are 'worn out', you'll have the expertise to undertake a more managerial, office-based role), be more respected (especially by older generations) and be generally more attractive to women (or at least Western women).

        • Telcius on 24/07/2018 - 12:19
          +3

          @Shiny Mew:

          I would strongly dispute that the "vast majority of graduates never get jobs which required their degree". Doctors, nurses, lawyers, engineers, accountants, teachers to name a few are occupations where its almost impossible to work without a tertiary education.

        • [Deactivated] on 24/07/2018 - 17:51

          @Shiny Mew: i think you’re speaking from bias rather than actual facts.

        • HighAndDry on 26/07/2018 - 14:23

          @Shiny Mew: Career prospects and job (and income) stability.

      • Gronk on 13/07/2018 - 13:34
        +41

        Tip for new students, always avoid HELP, very easy to get, very hard and expensive to pay it off.

        Worst advice ever, have a downvote.

        I can't help but wonder what sort of computer course would set a person back $70k, given that a Bachelor's Degree in Computer Science comes in around the $40k mark in today's money.

        • HighAndDry on 13/07/2018 - 14:23
          +36

          Depends how many years a person repeats…..

        • HighAndDry on 13/07/2018 - 16:03
          +3

          @boomramada:

          I will cry harder, create a river then build a bridge and get over it!.

          LOL.

          Kudos on being able to take the L though. And yeah, the loan you linked to is not great unless you're absolutely starving and actually need it.

        • [Deactivated] on 14/07/2018 - 06:56
          +1

          @boomramada: you may be thinking of FEE-HELP loans.

        • gyrex on 14/07/2018 - 18:40
          +1

          @boomramada:

          Let me get this straight… You claim to have a double degree and a masters but have the English literacy skills of an 8 year old? Shows how ineffective and/or how little value English has within our education system.

        • syousef on 14/07/2018 - 20:28
          +1

          @gyrex:

          Are you trying to make his point for him? Is that quality of education worth $100k?

        • boomramada on 15/07/2018 - 15:54
          +1

          @gyrex:
          At age of 8 I could read and write two languages but not Eglish )

        • boomramada on 15/07/2018 - 16:05

          @HighAndDry:
          Lol, at this rate I might need to build a dam not a bridge. Almost 200 negative votes soons, look like when one sheep negative, all the others follows. :)

        • [Deactivated] on 15/07/2018 - 18:57

          You're a [blank], he is trolling you, didn't you notice that when he mentioned coupon codes for HECS? I thought the comment was quite hilarious.

      • hotdish on 15/07/2018 - 14:54

        Explain to me a pay rise where you are net worse off 😂😂😂😊.

        Lets say you earned over 110k you would have paid 37c marginal tax for each additional dollar… And 8c (8%) in HECS… Where did the other 55cents in the dollar disappear?

    • BusMan247 on 13/07/2018 - 21:24
      +5

      Downvote me. IGAF. But this guy sounds like an absolute riot.

    • sardines on 14/07/2018 - 08:48
      +9

      this reply is no help - why get bogged down in the debate of free university - the previous generation had free University and Free TAFE now its all gone to shit - The first degree or TAFE course should be free as you will be paying back the costs in a better paying job (hopefully if the economy is going well)
      IT is crap this young person has 100K debt, skyrocketing house prices and proliferation of part-time work and stagnant wages - then you post self-righteous crap when someone is asking for advice

      • [Deactivated] on 14/07/2018 - 09:35
        +2

        OP may be asking for advice but his intentions and his actual scenario is unclear.

        The fact is that University is no longer free. OP has accrued a $100k debt in uni. Being a university graduate (which OP never mentioned. He may not be a graduate) doesn't guarantee a more productive citizen either.

        It's crap that people make decisions that land them in ridiculous debt but it is no different than decisions to do drugs.

      • [Deactivated] on 14/07/2018 - 19:47
        +5

        It is foolish to get into more debt than is warranted or than a person can repay. Outside of select medical degrees or aviation there is no course of study that runs up this amount of debt if completed in a reasonable course of time (e.g. not incessantly repeating). And these courses then generate the income to repay the debt easily post completion.

        The issue that has occurred here is that the person did far more study than is reasonable before entering employment, & rather than take additional part-time work, or cut back expenses on top of their university fees took additional government financed loans to supplement their income. That is, the fees above do not solely include tuition fees.

        This person then was exceedingly foolish, it would be exceedingly unfair to expect the public to foot the bill for this person or to fund this kind of foolishness in a widespread fashion with free tuition which isn't anything but.

        The real issue with university education is that the ACTUAL cost of delivering most courses per student is less than 50% of the fee charged. The remainder goes to building works, excessive management, diversity & executive salaries and research functions (& future funds) that have nothing to do with the education of the individual student paying the exorbitant fee.

        Think about one additional student in a class of 100 who studies wholly online, the cost of setting up a new student ID <$50. The cost of marking 1 assignment and 1 exam <$50. The additional marginal cost of that student (charged $3,000 for the unit) was ~$100. Massive online courses distributed online are the answer. Even taking traditional teaching means as a model, the above paragraph covers why they too are way overcharged.

      • XanderYuan on 15/07/2018 - 09:12

        Having a degree is an indication of efficiency, it’s an indicator to employers that the person is efficient. Since more efficient people can finish their degree with a lower opportunity cost. Having free uni education is going to ruin that.

    • matchabatcha on 14/07/2018 - 12:05
      +1

      Calm your t down.

      "I have been paying off my debt through the income tax system for the last 4 years"

      He has been paying it back for the last 4 years. There's gotta be more to his story than what's he's posted.

    • Pratty on 14/07/2018 - 18:18

      Exactly. Grinds my gears, comments like this.

      So your degree got you your job now? And you’re complaining about paying it back?

      Seriously.

  • HighAndDry on 13/07/2018 - 10:59
    +15

    As I am aware, domestic paying fees are no longer existing and all Australia Citizens are paying Commonwealth Supported Place (CSP) fees.

    Your… awareness… is incorrect. Just because you're a citizen doesn't mean you're entitled to a CSP, especially after the fact. You incurred those fees as a domestic fee paying enrolment.

    Is there any avenue or appeal of reducing quantum of payment $100,134 that Ozbargainers might know of? With my lack of knowledge I have exhausted all my options.

    Why? You incurred those costs, you gained those benefits, you're earning high enough income so you're certainly reaping the rewards - I'm failing to see why you shouldn't pay back what you owe.

  • ronnknee on 13/07/2018 - 11:08
    +15

    With my lack of knowledge I have exhausted all my options.

    Not quite. Leave the country and never come back.

    • HighAndDry on 13/07/2018 - 11:19
      +6

      They phased out that loophole in theory. Now you still have to pay back HECS-HELP even if you're earning income overseas. Obviously enforcement is a whole other matter.

      • ronnknee on 13/07/2018 - 11:19
        +30

        Emphasis on "never come back".

      • jimbobaus on 13/07/2018 - 19:12
        +12

        The enforcement is pretty effective.
        Not sure about every country but my brother works for the English tax office and his job was implementing the system where uk income is declared to the Australian government for HELP. They deduct money from your uk tax return if you meet the income threshold and send it to the Australian gigenrnemnt.

        • jaxpylon on 13/07/2018 - 19:56
          +35

          Upvote for "gigenrnemnt"

        • jimbobaus on 13/07/2018 - 20:18

          @jaxpylon: lol I just noticed that. Auto correct for the win.

        • sageownz on 14/07/2018 - 01:00
          +1

          @jimbobaus: it's an accurate representation of our government. (profanity)

        • Typical16-bitEnjoyer on 14/07/2018 - 13:21

          Only if you need a Visa to work.

    • xuqi on 13/07/2018 - 23:30

      I have a friend who did this. Moved to Sweden and married there and has been there for 15+ years. His debt is still on the books here but I doubt he'll ever pay a cent back.

      • sien on 14/07/2018 - 15:15

        Me too!

        Someone who went to ANU?

        • xuqi on 14/07/2018 - 15:16

          Flinders Uni, Adelaide.

      • Antikythera on 16/07/2018 - 00:17

        if he finished his degree 15+ years ago he possibly didnt owe that much in the first place. iirc around 2000 my friends graduated 3 or 4 year degrees with 15k-20k hecs. i myself did 8 years over the course of 1991-2000 and because I was under the first version of HECS (introduced 1992) I paid about 1200 a semester with my first year free.

  • toniyellow on 13/07/2018 - 11:08
    +16

    It is not true that fee-paying for domestic students no longer exists. They exist at private universities like Bond, and at the postgraduate level.

    It is true that there haven’t been many or any for undergraduate degrees at public universities between 2012 - 2018. There used to be a cap on the number of CSP places for undergraduate degrees for domestic students, set by the government. The universities had room to enrol more students so there were also fee paying places available. The caps were phased out in stages between 2009 – 2012, and so fee-paying domestic places evaporated as there were unlimited numbers of CSP places. This year caps were reintroduced, set at the level of enrolments in 2017. They are much larger caps than they used to be so domestic fee-paying places have not yet made a resurgence, but the door is now open to them reappearing.

    You can’t argue that you were disadvantaged. It was your choice to enrol in a fee-paying place in 2009. If you did not get a high enough score for a CSP place in the course you wanted to study, you could have chosen another course then transferred six months later, you could just sat around and waited until 2010 to try your luck because stage 1 of the uncapping would have occurred, and there would have been more CSP places available. You could have waited until 2012 when they were fully uncapped and there were an unlimited number of CSP places available – the legislation was introduced in 2009, so it was known publicly that the caps were being phased out over a few years. There were many options available, and you chose fee-paying in 2009.

    It is frustrating to look back and realise that you missed out on an opportunity to study at a lower cost to you, but that happens to everyone. Should have bought Apple stocks in 2008. Should have bought Australian property in 2013. Everyone has a long list of missed opportunities. There are also likely many good decisions you have made, they just may not be as visible to you.

    • HighAndDry on 13/07/2018 - 11:10

      Should have bought Australian property in 2013.

      Too soon man, too soon…

      Also, OP is well aware they were incurring fees at a domestic fee paying rate:

      I am an Australian citizen and I have been incurring fees as a domestic paying student. As I am aware, domestic paying fees are no longer existing and all Australia Citizens are paying Commonwealth Supported Place (CSP) fees.

      • toniyellow on 13/07/2018 - 14:51
        +3

        yeah. he clearly agreed to accept a fee-paying place at the time.

        i think he was under the mistaken impression some kind of promise had been made that no Australian citizen will ever have to pay full fees ever again, and perhaps that he could get that backdated to his own studies. but that has never been the case.

        i would have a touch more sympathy if he studied prior to 2009, but as it was 2009 it was widely known that it was uncapping, so he could have easily just waited a year or so. it was a silly choice to enrol in a full-fee place just to start quicker.

        • HighAndDry on 13/07/2018 - 15:43

          I'd have no sympathy either way - this is a privilege the government provides, funded by taxpayers, that's nothing but a benefit for students. At the time they agreed to it, OP knew what they were getting, at what price, on what terms. A tertiary education isn't a necessity, not even today. You can go into the trades, TAFE, dozens of other options other than spending 3+ years at a university getting a degree.

          To take the money upfront, get all the benefits of that money - being the degree, obviously be benefiting as OP is now making enough money to put them over the threshold, and now want to renege on paying it back? That just smacks of lack of integrity and morals. I'm sorry, I have just zero sympathy for OP.

    • GourmetFoodie on 14/07/2018 - 12:27

      Best answer

    • [Deactivated] on 15/07/2018 - 07:46

      Good to see someone knows what they're talking about.

  • Changskies on 13/07/2018 - 11:12
    +24

    goodness. forums are turning into an entitlement posts.

  • vinni9284 on 13/07/2018 - 11:20
    +6

    I think you have to appreciate the Government support you are receiving to obtain an Education and as a result a professional job.

    It is obviously clear that you are under the FULL-FEE threshold and not CSP.

    The monies owed will be withdrawn for your pay so you wont see it much and you will gradually pay it off.

    Many have been through this and so have I.

    Trust me, the money owing will be nothing compared to the rising costs in education for the future.

    Cheers

    • Ghost47 on 14/07/2018 - 08:25

      Nvm, misread OP.

    • HighAndDry on 13/07/2018 - 12:04
      +14

      Indexation is not compounding interest, it's just inflation.

      • c0balt on 13/07/2018 - 12:24
        -2

        Indexation is a form of compounding interest (at the rate of inflation), makes no difference to your bank account what it's being called. It would be the exact same if you took a loan from a bank and had them lock the interest rate to the inflation rate.

        In any other industry it would be considered a predatory practice to tell people it's not compounding interest, because it just compounds at the rate of indexation. It has the exact same effect.

        • HighAndDry on 13/07/2018 - 13:09
          +2

          It's a bit far to compare a loss-making effectively-welfare scheme funded by the government to any kind of industry. The only parallels I can think of would be in the case of "interest free" payment plans, but those induce people to buy goods or services, whereas HECS-HELP induces people to…. get a world class education.

        • mskeggs on 13/07/2018 - 13:16
          +10

          If inflation (CPI) becomes negative, the debt will reduce. It is locked to the value of purchases. Historically, this has risen slower than wages, so it was a much better deal to take the loan with indexation, then pay it back in future dollars.
          Wage growth has been low the last few years, so that benefit is reduced.

          Because the debt is locked to CPI, the time value of money is negated. This means even if you had the full fee in your bank, you would benefit from taking the loan and leaving the money in the bank (assuming an after tax return over inflation).
          The index rate for the past few years has been very low (1.5% in 2016 & 17, 1.9% in 2018 https://www.ato.gov.au/rates/help,-ssl,-abstudy-ssl,-tsl-and…) so this is not just theoretical, but quite achievable.

          I don't agree with having a loan accruing interest hanging over my head at all.

          I don't either, but if you can get a better, equally risk free return, take it. So only pay back HECS/FEE HELP if you have no other debt incurring interest whatsoever (including a mortgage).

        • c0balt on 14/07/2018 - 10:32
          +3

          @mskeggs:

          Thing is, CPI is not locked into peoples wage increases. They can stagnate on wages and have their indexation on their HECs loan accure the same interest as a variable bank loan would.

          I never said that it's not called indexation. I wrote indexation = compound interest, because it is doing just that. Just that in reality calling it indexation is a formality when in practice it has the effect of interest on a bank loan designed to profit from people if they all paid it back - or it's a safety net to profit off the people that do pay it pay to pay for the people that don't.

          HECs is a huge money making scheme. It's driven the prices of university courses through the roof since I studied not even 10 years ago. People even with useless degrees are leaving with 100k+ loans accruing 2k+ interest per year even when they don't have a job. No bank would have approved a loan like that, and if they did they would be in trouble for doing it. So why does the government get to profit off those who do the right thing?

        • josho9 on 14/07/2018 - 11:00

          @HighandDry It is compounding, but it's compounding annually at a pretty low rate.

        • larndis on 14/07/2018 - 11:15
          +1

          @c0balt:

          The Unis may be making money out of the HECS/HELP system, but I assure you the Federal Government is not. It is a very costly program and the indexation would cover only a small proportion of the total cost, as many loans are never repaid. This is accepted as a worthwhile cost to the Government to make higher education accessible without requiring upfront fees. We are indeed very fortunate to have this.

          VET FEE-HELP is another matter entirely and is the cause of the Government losing vast amounts of money for no material benefit to the community, other than those defrauding it.

        • Scrooge McDuck on 14/07/2018 - 11:40

          @c0balt:

          Interest not paid is equivalent to interest earnt. Whenever one has a risk-free investment (eg savings account) with a rate of return more than the rate of interest on their loan, it is optimal to only minimally pay down the loan.

          For example, if you have a loan at 2 % pa and a savings account paying 3 % pa, any amounts you can deposit into the savings account earn 1 % pa in net.

        • c0balt on 14/07/2018 - 13:09
          +1

          @Scrooge McDuck:

          Not everyone is scrooge. They might not get loans from the bank as easily as a lot of people in this thread seem to think it is, especially a university student a few years out of finishing their course - or people that haven't found high paying work yet as the loan is accruing compounding interest regardless if they have other investments.

          The current base interest rate offered by banks on savings accounts is less than 2%, with few going as high as 3% when hoops are jumped through (I jump through hoops to get 3% interest on my savings).

          Have a look at the rate of indexation from HECs the last 10 years. You'll find that it's around the same as what the banks offered. I'm not talking about taking a loan from a bank and making 5% yields on an investment, most people don't have that luxury, assurances or built credit to get that a few years after leaving university. They have a wage, a lot of bills to be paid and a HECs loan compounding thousands of dollars a year in 'indexation'.

          Now if you are the kind of person that has a big outstanding HECs bill, and don't get a high paying job (say 60k/pa) then the 2% compulsory payments out of your salary is just covering your interest. Fast forward 10 years you still have that 100k loan outstanding, but you have paid 20k in interest for it.

          There are those who would be fine with paying that kind of interest over 10 years and still have the full outstanding principal, they may have other investments getting 5-7% that would be a much better idea than paying off the HECs bill.

          But OP isn't those people, not many people have that kind of silver spoon to the point that they can make more interest from a bank than the ATO can make off their HECs repayments. How easy life would be for everyone if that would be the case.

        • Scrooge McDuck on 14/07/2018 - 13:18
          +1

          @c0balt:

          Anyone who can save $200 per month can open a RAMS account and earn 3 % pa.

        • c0balt on 14/07/2018 - 13:41

          @Scrooge McDuck:

          Unlike scrooge, most people need access to the money they earn and suggesting an account that doesn't allow withdrawals isn't a great option.

          Would have been better to go with ING at 2.8% and can take money in/out.

          Then there's also the effective rate of indexation being higher than the stated figures as it's a compounding loan. To find the effective rate you would need to have a crystal ball though to decide how long the loan period will be and what future indexation will be.

          HECs is a compounding interest loan. It's not an interest free loan tied to inflation, the amount compounds on the principal. That's the point I made in my first post which was downvoted, and many people upvoted highanddry incorrectly saying it's not compounding. Pay it off or don't pay it off that's your call with your risk assessment, but it's a compounding interest loan regardless of semantics, with an additional point that CPI doesn't mean anything to most people as their wages and costs of living are not tied to CPI.

        • Scrooge McDuck on 15/07/2018 - 00:10

          @c0balt:

          Then there's also the effective rate of indexation being higher than the stated figures as it's a compounding loan. To find the effective rate you would need to have a crystal ball though to decide how long the loan period will be and what future indexation will be.

          This is simply how compound interest at a variable rate (inflation) works. There's no need to find the total interest over the life of the loan, that wouldn't be useful to compare like interest pa is.

          HECs is a compounding interest loan. It's not an interest free loan tied to inflation,

          These loans accrue interest equal to inflation. That simply preserves the value of the principal over time just as intended, it doesn't cost any more or less.

          You've advocated for people to pay down their loans simply because they accrue interest. That's what others and I disagree with.

          The interest rate of the loan is important to consider, not just the fact that it's non-zero. In this case the interest rate is only the inflation rate. Given that bank deposits offer risk-free investment with a greater return than inflation (and assuming the return after tax is still greater), it isn't optimal to pay down these loans voluntarily. Any amount which could be used to pay down the loan, would be more profitably invested in a savings account.

          That point holds true regardless of how much someone earns, can save, etc. It simply compares the returns of handling the same flows of cash.

        • gromit on 15/07/2018 - 11:56

          @c0balt: profit? you think the government PROFITS from loans that only incur indexation and have a reasonable percentage of defaults? obviously your degress did not involve any maths or economics.

        • c0balt on 15/07/2018 - 12:50
          +1

          @gromit:

          Ummm I wrote: "HECs is a huge money making scheme. It's driven the prices of university courses through the roof since I studied not even 10 years ago. People even with useless degrees are leaving with 100k+ loans accruing 2k+ interest per year even when they don't have a job."

          You might want to have a look at what universities have been doing with that money.

          http://theconversation.com/reform-australian-universities-by…

          HECS has been ridiculous money making scheme for universities and as the link shows, most of the money has not been to increase education but to increase admin and non-academic parts of the university.

          I bet you thought you were being cute with that quip about my degree not containing maths, lol. While it did it primarily focused on the scientific method which includes doing research.. you know this thing which involves how pricing for university courses have ballooned in the last 10 years and how most of the money is going towards admin/HR/buildings and amenities for those admin people and not students.

    • watwatwat on 14/07/2018 - 07:53
      +2

      You are pretty bad at maths. It's really not hard to beat 3% interest in various asset classes and in these situations, if you can get more than 3% return, then every cent you make over this is free money you don't get by paying off your HECS.

      The money I could have put towards my HECS debt has been earning me over 10% per year with capital gain and dividends in index funds and this is compounding. This free money can eventually help pay off the debt itself, over time.

      • Ghost47 on 14/07/2018 - 08:26

        Yep, it is generally advised that paying off HECS is a bad idea since it is only indexed at CPI.

        • josho9 on 14/07/2018 - 17:55

          It used to be a good idea due to the 20% discount (at least, if you anticipated that your graduate salary would be a bit above the repayment threshold).

      • c0balt on 14/07/2018 - 10:24
        -3

        You know what's easier to beat than 3% interest?

        Not getting anymore interest on a HECs loan and paying it off so it doesn't accrue interest at a rate faster than your wage increases.

        Indexation has the exact same effect as interest, it doesn't matter if the semantics mean it's called 'indexation at the rate of CPI' I addressed this in my first post. It has never been negative. It has always been around 2-3% the last decade.

        If CPI the same effect on people's earnings that their indexation was rising then that would be fine, but it isn't. They are not locked in and are independent. Wages are not indexed at CPI. If everyone's wage was indexed at the exact rate of HECS indexation, then maybe that point could be argued that it is an interest free loan indexed at CPI and not interest designed to get the government more money than if someone was to pay upfront.

        But as is, with people not getting an automatic wage increase to CPI, but instead accruing interest at the rate of CPI, it has the exact same effect as bank interest on a loan. Just without a deadline to pay it off.

        • toomuchdogfur on 14/07/2018 - 17:19
          +3

          Your argument makes no sense…

          Let's say I have $1,000 to put towards either HECS or invest.

          If I put that 1k towards reducing HECS debt, at 3% indexation I would reduce the increase in debt by 1k x 3% = $30 in one year.

          If I invest that 1k and get a return of 5% per year, I will have gained $50. So I'm still $20 better off even after accounting for the increase in HECS debt due to indexation.

          My wages and any increases I get (or not) don't factor into this equation at all. The fact remains that any discretionary money I have would be better used to invest into something with a higher return than indexation (such as a high yield savings account or index fund).

  • lolz112 on 13/07/2018 - 11:30
    +6

    I would say you have very little chance of reducing your debt levels. I went to the same University during a similar period and remember getting statements every semester stating how much I was getting charged and possibly even an option to elect to put it on my HECs debt. I find it very surprising you don't even have a general idea of your HECs debt and would suggest there would be multiple pieces of evidence to suggest that you have signed saying you knew you are FULL-FEE paying student.

    In saying that maybe there was an admin error. Maybe it would be best to contact Monash and find out exactly what happened (whether you were offered a CSP or a FULL-FEE position).

  • MrRobot on 13/07/2018 - 12:03
    +63

    I may get down voted for this, but I feel like I have to say my piece. The fact that you have to put up zero dollars of your own money in order to attend University is an incredible gift. As an American, if you don't have the cash (whether through loans from private lenders like banks, your own savings, or scholarships), you simply cannot go to school.
    I was lucky in the sense that I had parents with decent enough credit that they could co-sign a loan for me (which, if I defaulted on the bank would go after them), because as a 17 year old with no credit score to speak of, I couldn't land one myself.
    Since my loans were issued by a private institution, I was responsible for paying them back 6 months after I graduated. If I could not start paying the minimum, then they would simply penalise you with higher interest rates. Speaking of interest rates, the interest on my loans began to accumulate as soon as I took them, meaning interest on my loans started to build all while I was going to school. The interest rate on my loan was 6-8%.
    At the end of my University education I had a massive debt. I scrimped and saved for years in order to pay my loans off in full. At the end of it all it took me eight years and I paid back almost double what I initially borrowed.
    Now I'm sure we can all agree that the American system is a travesty, and that the Australian HECS/HELP system is by far better for individuals and society in general. But what I'm saying is to try and have a bit of perspective. Instead of complaining or trying to look for a loop hole, consider yourself lucky that you were able to go to school at all, and that the taxpayer footed the bill so that you could get an education. I understand that indexation is frustrating, but considering that it costs more to send the students who have come after you to school, you have to accept that it comes with the territory. If you have a problem with it, consider making some slight lifestyle changes and start paying more of it back sooner.

    • HighAndDry on 13/07/2018 - 13:00
      +12

      I think you're spot on. People in Australia have it pretty good, and OP could definitely be more appreciative of the fact that tax-paying Australians effectively paid upfront for them to be able to attend university at all and allowed them to be as successful as they seem to be.

    • tsunamisurfer on 13/07/2018 - 13:07
      +9

      I understand that indexation is frustrating

      It's not frustrating, it's a bloody gift.

      There 2 alternatives to indexation of debt :

      A) No indexation at all and the Australian Taxpayer slowly has the debt eroded by CPI and passage of time.

      B) Float the indexation to a market interest rate (I propose Personal Loan rates as HECS is unsecured).

      Neither of which are desirable.

    • aspirepranesh on 13/07/2018 - 13:45
      +1

      Similar to my situation when I moved here in 2008 to study(Masters)! Had to get my dad to sign a bank loan(back in my home country) for me to pay for my 2 years of Uni (~$50,000) and I had to start paying it off 6 months after I graduated irrespective of whether I had a full time job or not!

      And as some of you may know, International students can work only 20 hours a week while studying, which was just about enough to manage the expenses while I was studying!Even though I managed to find a role just before I graduated, the first 3 years were a struggle trying to pay off the loan which by the time I paid off had totalled to $65,000! I could have easily still be paying for it now if not for the tough lifestyle choices!!

      Unfortunately you cant have it all your way! Before someone says it was my choice to come here to study (which is absolutely true), it was also my conscious choice to make the life style changes to pay off the debt as soon as I can so that I didnt have to stress about interest rates and the economy and stuff!

    • syousef on 14/07/2018 - 20:36
      -3

      The slaves are being made to work themselves to death and arguing about which of them they perceive as having it easier.

      If you put in the effort to study and better yourself there should be some reward other than perpetual debt. Society benefits and so should the person putting in that effort. If he spends 20 years paying off his education what chance does he have of supporting a family or saving for a house? Are you nutjobs proposing getting an education should preclude you from having a family or buying property? Get real!

      Most of the politicians that put you in this situation got free university.

      Downvote all you want. I have no respect for some of the drivel I'm reading. No wonder the clever country has turned into a mindless mob of TV reality watching science denying yokels. ZERO respect for knowledge and learning. NONE. And you're looking to emulate that cesspool that America has become? Where people die because they can't get basic medical care?

      I don't want to live in a country of working poor. You know where you can stick your "gift" don't you!

  • teacherer on 13/07/2018 - 12:16
    +16

    I'm confused, how does $17,000 turn into $99, 000 with indexation alone?

    • boomramada on 13/07/2018 - 12:28
      +1

      I was charged a 2011’ Combined HELP file – Higher Education -$17120

      Bit off there, unless OP's income is around 200k

      • Ugly on 13/07/2018 - 13:36
        +17

        Yep - if OP's repayment was $17,120 for 2012, then OP's gross income for 2012 has to be over $200k. (Maximum repayment rate is 8%)
        A bit hard to feel sorry for them.

        • Ugly on 16/07/2018 - 08:49
          +7

          @syousef:
          Working hard has nothing to do with it. Are you saying because OP "works hard" they can walk away from their debts?

          How about I buy your house & after I move in I then NOT pay you for it because I "work hard"? Sound fair?

        • syousef on 16/07/2018 - 10:05
          -5

          @Ugly:

          Working hard has nothing to do with it. Are you saying because OP "works hard" they can walk away from their debts?

          I'm saying you shouldn't have to get into debt in the first place and that studying should be rewarded not punished with a huge debt.

          How about I buy your house & after I move in I then NOT pay you for it because I "work hard"? Sound fair?

          How about I make you work hard then have you pay off my house instead of your own, because I'll charge you for my supervision and instruction?

          People like yourself are why this country is turning into a backwater.

        • HighAndDry on 16/07/2018 - 10:09
          +4

          @syousef:

          SO because someone works hard enough and has expertise enough that someone else is willing to pay them $200k/yr it's fine that he's in debt $100k?

          He's in debt $100k because he received that education. He's earning $200k because of that education. They're just paying back what they owe their success to. I think that's fair.

        • syousef on 16/07/2018 - 10:16
          -2

          @HighAndDry:

          He's in debt $100k because he received that education. He's earning $200k because of that education. They're just paying back what they owe their success to. I think that's fair.

          An education should not cost $100k. The people who set that price tag got theirs for free.

          If you're paying off $100k in through your 20s when are you going to be able to afford to save for a deposit for a home?

          It's getting so people can work their ass off and all they have to show for it is debt. The fact that you and others think that's fair is why the great Aussie dream is dead.

          Most of that time that $100k is to admin a few computer accounts, let a student sit in a theatre or watch a video while a uni professor rattles on for a couple of hundred hours, a few dozen hours of tutorial classes, and sit some exams.

        • StrongerTogether on 16/07/2018 - 18:43

          @HighAndDry:

          Yeah but hes paying 70k a year in taxes like me. Meaning in 1 and half years he would of more then paid off that compared to someone on 50k a year paying hardly any taxes in comparison. Typical small minded right wing thinking.

        • HighAndDry on 16/07/2018 - 18:49

          @StrongerTogether: You're agreeing with me right? He's going to be able to pay off in 2 years an education that took 3 years and that'll last him a life time. Seems like a pretty good deal to me too.

        • StrongerTogether on 18/07/2018 - 13:49

          @HighAndDry:

          No, I think TAFE and University should be tuition free. Germany can do it, most of the EU can do it and it having a highly educated well skilled population means higher paying jobs = more taxes in the long run = better public services for everyone. I don't understand why so many people here want an american style system of education and healthcare so badly.

          https://www.student.com/articles/14-countries-where-you-can-…

          FYI: I work in construction and never went to university, but believe people who have ability to do so should be able to do it without having to pay 120k or so to do it. Stop giving like 15 billion a year in tax subsidies to the mining and energy sector and actually tax them and we can easily fully fund free uni/tafe and hospitals… priorities people.

        • whooah1979 on 19/07/2018 - 07:59
          +1

          @StrongerTogether:

          most of the EU can do it and it having a highly educated well skilled population means higher paying jobs = more taxes in the long run = better public services for everyone.

          one would think so, but statistics says otherwise.
          https://en.wikipedia.org/wiki/Median_income
          only 3 of the top ten and 8 (exc the uk) of the top 20 are members of the eu.

          Germany can do it

          germany is #16 on the list which is very low for a g8. australia tops germany on every income list published online.

          actually tax them and we can easily fully fund free uni/tafe and hospitals… priorities people.

          these taxpayers pay ~$90k in taxes which goes to the federal government. their net income is then spent on goods and services that the states get back from gst.

        • HighAndDry on 19/07/2018 - 10:09

          @StrongerTogether:

          having a highly educated well skilled population means higher paying jobs

          This is the opposite of how it works. Jobs don't materialize out of thin air just because there are people looking for jobs. Jobs are created by businesses and companies who decide to invest in the country, and conversely, the more skilled people fighting for jobs, the lower paying the same job would be.

          That's also why the government gives tax breaks, even if I don't agree with all of them - to attract companies and businesses to do business in Australia and therefore bring jobs to Australia.

    • trongy on 13/07/2018 - 12:49
      +14

      It doesn't.

      The indexation rates applied are listed here:HELP, SSL, ABSTUDY SSL, TSL and Financial Supplement indexation rates

      The compound indexation since 2012 is about 12.2%

      If the debt is $100,134 today, then it was $89,269 in 2012. The numbers provided don't make sense.

    • [Deactivated] on 13/07/2018 - 14:17
      +9

      This confused me too - we need more info. I think the ~$17k in 2011 and 2012 were the yearly fees OP incurred. ie: the actual cost to study.

      Bearing in mind OP studied between 2009-2012 I think the overall costs would be something in the order of $17k per year, for 4 years ($68k). This still doesn't add up and this seems like a super expensive course…

      • josho9 on 14/07/2018 - 11:03
        +1

        But that's an extremely high fee level for a CSP - generally caps out at about $10k pa

        • peterpeterpumpkin on 15/07/2018 - 11:15

          The post was hard to understand, but I'm pretty sure OP was a domestic full-tuition paying student (not CSP).

    • matrix83 on 14/07/2018 - 08:33
      +3

      Agree. My ~$30K debt went up by $573 last financial year.

      Need more info from OP.

    • peterpeterpumpkin on 15/07/2018 - 11:13

      Do you know what's worse than trying to understand what OP wrote? All the OzBargainers giving an answer to the question as if they understood the information.

      Assuming the first 2 years were also around 17k for a full-tuition-fee course, maybe there was an existing debt from a partially completed course?

      I'm so happy I didn't pay full tuition fees for that toilet paper up on my wall. The stories I hear from Americans about their debt is seriously frightening.

      • HighAndDry on 16/07/2018 - 10:11
        +1

        I'm so happy I didn't pay full tuition fees for that toilet paper up on my wall.

        No one forced you to waste resources getting that "toilet paper". You people spend other people's money, time, resources to receive an education and have zero gratitude or appreciation for it. It's almost disgusting how entitled you are.

  • Gareth on 13/07/2018 - 13:07

    I guess I'm confused, my understanding is that;

    You essentially accepted a contract of Education provision for $X almost 10 years ago. You put this $X on credit, and now are being asked to repay it. But you find that could get a better deal now….

    Is that it? You'd like someone here to tell you how to make (some of) the debt go away?

  • Catsfan070911 on 13/07/2018 - 14:16
    +2

    The indexation rate is excellent as far as personal loans go, no complaints from me there. Additionally, not all courses equate to commonwealth supported places (CSP).

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