The Higher Education Loan Program (HELP) and related loans: a chronology

28 March 2018

PDF version [679KB]

Carol Ey
Social Policy Section

Contents

Introduction
Basic features of the Higher Education Loan Program (HELP) and related loans schemes
Brief history of the HELP scheme

The origin of the Higher Education Contribution Scheme (HECS)—the Committee on Higher Education Funding Committee
Modification of HECS
Introduction of the Higher Education Loans Program (HELP)
HECS-HELP and national priority fields of study
Other changes and proposals

Key statistics

Table 1: Number of HELP loans by type of loan, 2005 to 2016
Table 2: Number of individuals with HELP debt and the total HELP debt balance, 2005–06 to 2015–16(a)

Chronology of changes to the Higher Education Loan Program
Appendices

Appendix A: HECS-HELP contribution rates, 1989 to 2017
Appendix B: Average Weekly Earnings (AWOTE), HELP repayment rates and thresholds : 1988–89 to 2016–17
Appendix C: Accumulated HELP debts and debt not expected to be repaid, 1989–90 to 2012–13

List of acronyms

All hyperlinks in this paper were correct as at March 2018.

Introduction

Since 1989, student contributions through the Higher Education Contribution Scheme (HECS) and its replacement, the Higher Education Loan Program (HELP), have been an integral part of the Australian higher education system.

This research paper contains a brief summary of the development of HELP and related schemes, including VET FEE-HELP, and includes some relevant statistics, as well as a detailed chronology of changes to the scheme. More detailed information on each of the types of loans available under HELP, and key statistics on their use, are available in the Parliamentary Library publication Higher Education Loan Program (HELP) and Other Student Loans: A Quick Guide.[1] This publication does not cover other income-contingent student loans, such as Trade Support Loans and Student Start-up Loans. For a chronology of changes to student income support arrangements, see the Parliamentary Library publication Student Income Support: A Chronology.[2]

Basic features of the Higher Education Loan Program (HELP) and related loans schemes

HELP provides loans to students studying approved higher education courses to assist in the costs of their study. The VET Student Loans scheme (and the former VET FEE-HELP) provides similar loans to students studying approved higher level vocational education and training (VET) courses. Eligibility is limited to students who are Australian citizens, New Zealand citizens who meet specific residency and other criteria, and permanent humanitarian visa holders provided they are resident in Australia for the duration of their study. Permanent residents holding non-humanitarian visas are generally not eligible for HELP loans, unless they are undertaking bridging study for overseas-trained professionals, when they are eligible for FEE-HELP.

The major category of loan under the HELP scheme, HECS-HELP, is available to students enrolled in Commonwealth supported places (CSPs), and covers most domestic undergraduate and some coursework postgraduate students studying at Australian universities. Students in CSPs are generally required by their institution to make a contribution to their course costs. Maximum contribution amounts vary according to the field of study band for each unit. The maximum student contribution for each year from 1989 to 2017 is shown in Appendix A. Students can elect to pay this contribution up-front, or can take out a HECS-HELP loan to cover the cost.

FEE-HELP is available to domestic full fee-paying higher education students to pay their tuition fees. These students are generally studying at private higher education institutions or are undertaking postgraduate coursework qualifications for which there is no CSP. Similarly VET Student Loans cover tuition costs for students undertaking approved VET courses.

SA-HELP provides a loan to pay all or part of the student services and amenities fee charged by most higher education providers.

Students enrolled in CSPs who undertake part of their studies overseas (typically on exchange or to undertake a work-based placement) are able to access OS-HELP. Unlike the other loans, which are paid to the provider by the Government on behalf of the student, OS-HELP loans are paid to the student. These loans are intended to cover costs such as airfares and accommodation, but there is no requirement for students to justify the loan amount (up to the maximum available).

All these loans are interest free, but the outstanding amount is indexed annually by the Consumer Price Index (CPI) to maintain the real value of the debt. An individual commences repaying their loan when their taxable income reaches a certain threshold. The rate at which the debt is repaid rises according to taxable income. The income thresholds and repayment rates for each tax year from 1989–90 to 2017–18 are shown in Appendix B.

Brief history of the HELP scheme

The origin of the Higher Education Contribution Scheme (HECS)—the Committee on Higher Education Funding Committee

In December 1987, the Australian Government announced its commitment to expanding the capacity and effectiveness of the higher education sector but that budgetary circumstances meant it would be necessary to consider sources of funding involving the direct beneficiaries of higher education.[3] It established the Committee on Higher Education Funding (Wran Committee) to develop options and make recommendations for possible funding schemes which could involve contributions from students, graduates, their parents and employers.

The Wran Committee reported in April 1988, recommending a contribution scheme whereby higher education students would pay through their income tax obligations an additional two per cent of taxable income until they met 20 per cent of the cost of their higher education.[4] The requirement to pay would arise only when the student's personal taxable income exceeded the average earnings of all working Australians.[5] The Committee also recommended three levels of contributions: $1,500, $2,500 and $3,000 per annum depending upon the cost of the course.[6] The report canvassed the possibility of allowing institutions to vary these charges by 15 per cent above and below the standard.[7] Both the charges and the level of income contingency were to be indexed to maintain their real value, rather than imposing any interest payments.[8] The report suggested that a discount be applied to 'up-front' payments, and that this discount would need to be around 40 per cent to be attractive in financial terms.[9]

In the August 1988 Budget, the Government announced that it had accepted most of the Wran Committee's recommendations, and that it would introduce the HECS on 1 January 1989.[10] However, the scheme would have only one rate of contribution ($1,800 in 1989) and an up-front discount of 15 per cent.[11] The legislative authority for the scheme was contained in the Higher Education Funding Act 1988.

Modification of HECS

In the years following its introduction there were a number of minor changes to HECS which are detailed in the Chronology below including:

  • changes to the repayment rates and thresholds in 1990, 1992, 1994, 1996 and 1997
  • increased incentives for up-front payments, with discounts also introduced for voluntary repayment of debt and
  • the introduction of new schemes based on HECS repayment arrangements for specific groups of students, such as the Open Learning Deferred Payment Scheme (OLDPS) in 1994, and the Postgraduate Education Loans Scheme (PELS) and the Bridging for Overseas-Trained Professionals Loan Scheme (BORPLS) in 2002.

Introduction of the Higher Education Loans Program (HELP)

In the 2003–04 Budget, the Government announced major changes to the funding arrangements for higher education, which included the introduction of a new Higher Education Loans Program (HELP).[12] These changes were legislated in the Higher Education Support Act 2003 (HESA).

HECS was incorporated into the program as HECS-HELP, while FEE-HELP was introduced for full fee-paying courses, including those previously covered by OLDPS, PELS and BORPLS. Universities were given the flexibility to charge student contributions under HECS-HELP up to a maximum rate based on course funding clusters (fields of study bands), and repayment thresholds and rates were significantly revised. OS-HELP was introduced, enabling students studying overseas temporarily as part of their Australian qualification to take out a loan to cover costs such as airfares and accommodation.[13]

The HELP scheme was subsequently expanded, with the introduction of VET FEE-HELP in 2008, to provide loans on the same basis as FEE-HELP to students studying certain higher level VET qualifications.[14] Originally proposed in 2009, SA-HELP was introduced in 2012 to allow students to take out a HELP loan to cover their student services and amenities fees.[15] Following compliance issues with VET FEE-HELP, it was replaced by the VET Student Loans scheme in 2017.[16]

When they were established, both FEE-HELP (for undergraduate students) and OS-HELP attracted a 20 per cent loan fee. The initial proposed legislation did not include a loan fee, but incorporated an indexation cost of 3.5 per cent per annum in addition to the CPI on outstanding debts from these loans, presumably in recognition of the real costs of income-contingent loans. This was amended during debate to become a loan fee instead.[17] The OS-HELP loan fee was abolished in 2010, but in 2011 the FEE-HELP loan fee was increased to 25 per cent (although the VET FEE-HELP loan fee remained at 20 per cent).[18]

A limit of $50,000 was placed on the total amount of money which could be borrowed under FEE-HELP. This was increased in 2007 to $80,000, or $100,000 (indexed) for courses in medicine, dentistry or veterinary science.[19] When VET FEE-HELP was introduced, loans under this scheme were also included under the FEE-HELP loan cap.[20]

The 2003–04 Budget announced that as part of these changes students would only be entitled to a maximum of five years full-time (or equivalent) study in a CSP (and hence eligible for HECS-HELP).[21] This was later legislated for an entitlement of seven years.[22] The restriction was removed in 2012.[23]

Initially, there was a discount of 20 per cent for up-front payment of student contributions and a discount of 10 per cent for voluntary repayment of HELP debt. In the 2011–12 Budget these discounts were reduced to 10 per cent and 5 per cent respectively, and later in the 2013–14 Budget it was announced that that they would be abolished altogether, although this was not legislated until 2015.[24]

HECS-HELP and national priority fields of study

As part of the 2003–04 Budget announcements, one of the student contribution rates introduced was a ‘national priorities’ band, which provided for reduced student contributions for those studying in designated priority fields, initially education and nursing.[25]

In an attempt to encourage more students to study maths and science, the 2008–09 Budget included maths and science in the national priorities band, thus reducing the maximum student contribution for students in these areas.[26] In addition, students graduating from these fields were eligible for a 50 per cent reduction in their HECS-HELP repayments for up to five years (known as HECS-HELP benefit) if they worked in an occupation related to their studies, including teaching.[27] Early childhood education graduates also received HECS-HELP benefit if they worked in a relevant occupation and a designated location.[28]

The 2009–10 Budget extended the reduction on HECS-HELP repayments to education and nursing graduates who worked in these fields—although rather than a 50 per cent reduction they were entitled to a flat rate reduction. However, at the same time these fields were removed from the national priorities student contribution funding cluster, thus increasing the maximum contributions students in these areas were required to pay.[29]

The national priorities band for student contributions was discontinued in 2013, while removal of HECS-HELP benefit for all graduates was announced as part of the 2014–15 Budget changes, but not legislated until 2016.[30]

Other changes and proposals

The 2014–15 Budget proposed lowering the repayment threshold and introducing a new rate of two per cent for the initial repayment band, which was legislated in 2016.[31] It also proposed indexing HELP debt at the ten-year bond rate, rather than the CPI, but this has not been legislated.[32]

Changes to the maximum student contribution rates and to the loan repayment thresholds and rates were proposed in the 2017–8 Budget, but are yet to be legislated.[33]

Key statistics

Table 1 below shows the number of loans provided under each element of the HELP scheme, since it commenced in 2005. With the exception of FEE-HELP, where numbers have stabilised in the last five years, there has been substantial growth across all loan types throughout the period since their inception. In particular, VET FEE-HELP saw a dramatic increase in loan numbers after a slow uptake, with less than 3,500 loans provided in 2009 (a year after the scheme’s introduction) growing to over 196,000 loans in 2015, the year before the scheme was abolished.

Table 1: Number of HELP loans by type of loan, 2005 to 2016

Year Number of Commonwealth
supported places for which
HECS-HELP loans paid
Number of places
for which FEE-HELP
loans paid
OS-HELP VET FEE-HELP SA-HELP
2005 (a)344 509 (b)n.a.    
2006 (a)356 960 1 916    
2007 (a)371 654 2 454    
2008 (a)385 598 2 626 (b)n. a.  
2009 368 679 55 369 2 651 3 498  
2010 395 177 64 766 4 086 20 108  
2011 414 709 70 849 5 035 28 570  
2012 450 314 75 388 5 675 37 700 307 339
2013 484 681 76 106 6 373 65 838 414 197
2014 507 629 76 613 10 986 131 344 444 344
2015 520 606 77 850 12 818 196 108 463 872
2016 601 054 77 778 14 861 (b)n.a. 483 803

(a) Includes FEE-HELP loans. HECS-HELP and FEE-HELP numbers were not separately reported until 2009.

(b) Although the OS-HELP scheme operated in 2005, and VET FEE-HELP operated in 2008 and 2016, information about the number of loans under these schemes for these years is not available.

Source: Relevant education department (names vary) annual reports.

Table 2 shows the total number and amount of HELP debts outstanding in each financial year since HELP was introduced. While the number of outstanding debts has slightly more than doubled over the period, the total amount of debt outstanding has increased almost four-fold, meaning the average outstanding debt has increased from $10,400 to $19,400.

Table 2: Number of individuals with HELP debt and the total HELP debt balance, 2005–06 to 2015–16(a)

Year Number of individuals Total balance ($m)
2005–06 1 188 337 12 399
2006–07 1 248 637 14 011
2007–08 1 314 370 15 807
2008–09 1 371 914 17 820
2009–10 1 461 772 19 903
2010–11 1 567 100 22 573
2011–12 1 680 700 25 531
2012–13 1 823 288 28 986
2013–14 1 997 973 33 816
2014–15 2 223 041 40 182
2015–16 2 468 939 47 887

(a) Includes HECS-HELP, FEE-HELP, OS-HELP, SA-HELP and VET FEE-HELP debts, but not debts from other student income-contingent loans such as Trade Support Loans and Student Start-up Loans.

Source: Australian Taxation Office, Taxation statistics 2014–15 [sic], Individuals, Table 21: Outstanding HELP debt, by size of outstanding balance, 2005–06 to 2015–16 financial years.

Appendix C provides further details on HELP debt, including the proportion of this debt which is not expected to be repaid, for the period 1988–89 to 2012–13 (the latest data available). Over this period the amount of debt not expected to be repaid rose from a low of 13.5 per cent in 1996–97 to a high of 23.4 per cent in 2011–2. Some 25.0% of new debt in 2016–17 is not expected to be repaid.[34] The projected fall to 17.0% for 2017–18 is due to the cessation of VET FEE-HELP (VET Student Loans are not part of the HELP scheme) rather than any increase in repayment of other HELP loans.[35]

Chronology of changes to the Higher Education Loan Program

Milestones(a) Details Source documents

January 1989

Higher Education Contributions Scheme (HECS) introduced. Key features included:

  • contribution level of $1,800 per annum (pa) indexed by the Higher Education Operations Grant (HEOG) index which was based on the changes in costs incurred by institutions
  • postgraduate research scholarship holders  exempt
  • 15.0% discount for up-front payment of contributions
  • repayment threshold of $22,000 at a rate of 1.0% of income, rising to 3.0% for incomes above $35,000
  • debts and repayment thresholds indexed by the Consumer Price Index (CPI) and
  • debt written off at death.
Higher Education Funding Act 1988
July 1990 Repayment rates increased from 1.0%, 2.0% and 3.0% to 2.0%, 3.0% and 4.0%.

Measures introduced to facilitate the reduction and remission of HECS debts in certain circumstances.

Higher Education Funding Amendment Act (No. 2) 1990
January 1992 HECS contribution rate increased from $1,800 pa to $2,250 pa which was $144 higher than the specified indexation increase. Higher Education Funding Amendment Act (No. 2) 1991
January 1993 Discount for up-front payments increased from 15.0% to 25.0%.

New Zealand citizens resident continuously in Australia for less than two years, or studying outside Australia, and permanent residents whose term address was overseas, required to pay HECS up-front. Such students still entitled to the 25.0% reduction for up-front payments.

Higher Education Funding Amendment Act (No. 2) 1992
January 1994 Repayment rates increased from 2.0%, 3.0% and 4.0% to 3.0%, 4.0% and 5.0%.

Repayment threshold rebased to $26,402 to reflect increases in Average Weekly Earnings (AWE), which had risen faster than the CPI.

Pay-as-you-earn (now pay-as-you-go (PAYG)) tax arrangements introduced for loan repayments, rather than a single large repayment bill at the end of the tax year.

HECS exemptions for postgraduate research scholarship holders integrated into Australian Postgraduate Awards.

Open Learning Deferred Payment Scheme (OLDPS) introduced, extending HECS arrangements to Open Learning students.

Higher Education Funding Legislation Amendment Act 1993
January 1996

Voluntary repayment rate of 2.0% at income level of $20,000 introduced, which attracted a discount of 10.0% on the total HECS debt.

Discount of 15.0% on voluntary lump sum repayments of $500 or more introduced.

Non-citizens (including New Zealanders) who became permanent residents and commenced their courses after 1 January 1996 were required to pay their HECS up-front, and the 25.0% discount was removed for these cases.

Higher Education Funding Amendment Act (No. 2) 1995
July 1996 Repayment rates of 3.5%, 4.5%, 5.5% and 6.0% introduced in addition to the existing 3.0%, 4.0% and 5.0% rates. Higher Education Funding Amendment Act (No. 2) 1995
January 1997

Three differential contribution rates were introduced for different course funding clusters (fields of study bands), based on the cost of tuition and expected earning capacity. Students who commenced prior to 1997 remained under the previous arrangements.

Compulsory repayment income thresholds lowered from $28,494 for the 1996–97 tax year to $20,700 for 1997–98.

Voluntary 2.0% repayment option removed.

Repayment exemption introduced for those with incomes low enough to qualify for a full or partial Medicare Levy exemption.

Merit-based equity scholarships introduced, providing 1,000 undergraduate students with an exemption from paying HECS.

Higher Education Legislation Amendment Act 1996
January 1998

25.0% discount for partial up-front payments of $500 or more introduced.

Administrative processes related to the remission of HECS debts streamlined.

Higher Education Funding Amendment Act (No. 1) 1997
July 1999 HECS repayment income amended to include total reportable fringe benefits. A New Tax System (Fringe Benefits Reporting) Act 1999
January 2000 Merit-based equity scholarships abolished with no new awards, although existing recipients continued to receive HECS exemption. Budget paper No. 2: Budget Measures: 1999–2000
January 2002

Postgraduate Education Loans Scheme (PELS) introduced, providing HECS-style loans for postgraduate coursework study.

Provision made for the Minister to determine a maximum permitted HECS debt level.

Innovation and Education Legislation Amendment Act (No. 2) 2001
July 2001 Legislation amended to ensure that a person’s HECS debt was not discharged on bankruptcy. Higher Education Funding Amendment Act 2001
April 2002

Bridging for Overseas-Trained Professionals Loan Scheme (BORPLS) introduced, providing HECS-style loans for permanent resident professionals who were required to undertake bridging courses to have their qualifications recognised.

Higher Education Legislation Amendment Act (No. 1) 2002

October 2002

Eligibility for PELS extended to students attending a number of private institutions, including Bond University. Higher Education Funding Amendment Act 2002
January 2005

Additional loans provided under an expanded HELP scheme:

  • HECS became HECS-HELP
  • FEE-HELP for full fee-paying students introduced (replacing PELS, OLDPS and BORPLS), with a total loan limit of $50,000 and
  • OS-HELP for students studying overseas for one or two semesters introduced.

Loan fee of 20.0% applied to FEE-HELP loans for undergraduate study, and to OS-HELP loans.

Concept of Commonwealth Supported Places (CSPs) introduced.

Student Learning Entitlement (SLE) introduced, limiting access to CSPs to seven years of full-time or equivalent study.

Institutions able to determine their own student contribution levels within ranges set by the Government. For each of the existing course bands the range was set from $0 to 30.0% higher than the existing contribution level.

A new course band of National Priorities for teaching and nursing courses was introduced. The contribution range for this band was set from $0 to the existing field of study Band 1 level.

Repayment income threshold raised from $25,347 for the 2003–04 tax year to $35,000 for 2004–05.

Lowest two repayment rates removed—the lowest repayment rate became 4.0%.

Maximum repayment rate of 8.0% introduced for those with incomes of $65,000 or more.

Definition of repayment income extended to include exempt foreign income.

Discount for up-front payment of contributions reduced from25.0% to 20.0%.

Discount for voluntary repayments reduced from 15.0% to 10.0%.

Higher Education Support Act 2003 (HESA)

Higher Education Support (Transitional Provisions and Consequential Amendments) Act 2003

January 2005 HESA amended to ensure Open Learning Australia (OLA) was subject to the necessary quality and accountability provisions so that the FEE-HELP scheme could be appropriately administered for OLA students. Higher Education Legislation Amendment Act (No. 2) 2004
May 2005 SLE and FEE-HELP balances automatically re-credited when a private provider unable to deliver higher education units. Higher Education Legislation Amendment (2005 Measures No. 1) Act 2005
January 2007 FEE-HELP total loan limit increased from $50,000 to $80,000 ($100,000 for courses in medicine, dentistry and veterinary science). Higher Education Legislation Amendment (2006 Budget and Other Measures) Act 2006
May 2007 Eligibility for OS-HELP clarified, including that the student could apply while overseas, but could not apply if they had returned to Australia. Higher Education Legislation Amendment (2007 Measures No. 1) Act 2007
January 2008 VET-FEE HELP introduced for students studying higher level vocational education and training courses. Arrangements mirrored those for FEE-HELP, including a loan fee of 20.0%. Higher Education Support Amendment (Extending FEE-HELP for VET Diploma, Advanced Diploma, Graduate Diploma and Graduate Certificate Courses) Act 2007
January 2008 Business and administration courses were moved from Band 2 to Band 3, increasing maximum student contribution levels for HECS-HELP from $7,118 in 2007 to $8,499 in 2008. Higher Education Legislation Amendment (2007 Budget Measures) Act 2007
January 2009

HECS student contributions reduced for maths and science students.

HECS-HELP benefit introduced. The benefit halved the HECS repayments for five years for maths, science and early childhood education graduates who worked as teachers or in other occupations relevant to their qualifications. Early childhood education graduates received additional benefit if they worked in designated locations.
Higher Education Support Amendment (2008 Budget Measures) Act 2008
July 2009 Some provisions regarding VET FEE-HELP were moved to the VET FEE-HELP Guidelines to increase flexibility; in particular, extending VET FEE-HELP to cover government-funded Diploma and Advanced Diploma courses. Higher Education Support Amendment (VET FEE-HELP and Tertiary Admission Centres) Act 2009
July 2009 HELP repayment income definition revised to exclude net investment losses as a deduction. Tax Laws Amendment (2009 Measures No. 1) Act 2009
July 2009 HECS-HELP benefit extended to education and nursing graduates who worked in relevant occupations. HECS-HELP Benefit Guidelines No. 1, 3 March 2010.
January 2010 Changes to maximum student contribution levels and course funding clusters.

Nursing and education removed from the National Priorities Band, meaning maximum student contributions under HECS-HELP increased from $4,162 in 2009 to $5,310 in 2010.

Loan fee for OS-HELP abolished.

Higher Education Support Amendment (2009 Budget Measures) Act 2009
January 2011 Indexation of HECS-HELP contribution levels, FEE-HELP limits and OS-HELP maximum loan amounts changed from the HEOG index to a combination of the CPI and the movement in the Professional, Scientific and Technical Services Labour Price Index. Higher Education Support Amendment (Indexation) Act 2010
January 2011 FEE-HELP loan fee for undergraduate study increased from 20.0% to 25.0%, but VET FEE-HELP loan fee remained at 20.0%. Higher Education Support Amendment (FEE-HELP Loan Fee) Act 2010
January 2012 SA-HELP introduced to assist students to pay student services and amenities fees. Higher Education Legislation Amendment (Student Services and Amenities) Act 2011

January 2012

Discount for up-front payment of contributions reduced from20.0% to 10.0%.

Discount for voluntary repayments reduced from 10.0% to 5.0%.

Higher Education Support Amendment Act (No. 2) 2011
January 2012 SLE limit removed, meaning students could continue to access CSPs for more than seven years full-time study or equivalent. Higher Education Support Amendment (Demand Driven Funding System and Other Measures) Act 2011
May 2012 Changes to the specified locations for HECS-HELP benefit for early childhood education graduates working as preschool or childcare teachers.  HECS-HELP Benefit Guidelines No. 1: Amendment No. 1
January 2013 The National Priority Band was discontinued and HECS-HELP student contributions for maths and science courses increased from $4,520 in 2012 to $8,363 in 2013. Higher Education Support Amendment (Student Contribution Amounts and Other Measures) Act 2012
June 2013 Higher OS-HELP loans made available to students studying in Asia. Higher Education Support Amendment (Asian Century) Act 2013

December 2015

Discounts for up-front payment of contributions and voluntary repayment of debt removed.

Labor 2013–14 Budget Savings (Measures No. 2) Act 2015
January 2016 New Zealand citizens who had come to Australia as minors and resided in Australia for most of the previous ten years were given access to HECS-HELP. Higher Education Legislation Amendment (Miscellaneous Measures) Act 2015
January 2016 Non-residents for tax purposes with a HELP debt required to repay their debt at same income levels and rates as residents.

Education Legislation Amendment (Overseas Debt Recovery) Act 2015

Student Loans (Overseas Debtors Repayment Levy) Act 2015

January 2017 VET Student Loans replaced VET FEE-HELP.

VET Student Loans Act 2016

VET Student Loans (Consequential Amendments and Transitional Provisions) Act 2016

July 2017 HECS-HELP benefit abolished. Budget Savings (Omnibus) Act 2016
January 2018 Indexation of HECS-HELP contribution levels, FEE-HELP limits and OS-HELP and SA-HELP maximum loan amounts changed to CPI only. Budget Savings (Omnibus) Act 2016
July 2018 Repayment threshold reduced from $55,874 for the 2017–18 tax year to $51,596 for 2018–19, and a new repayment rate of 2.0% introduced. Budget Savings (Omnibus) Act 2016

(a) Dates reflect implementation date.

Appendices

Appendix A: HECS-HELP contribution rates, 1989 to 2017

HECS contributions for students who commenced before 1 January 1997

Year $ pa
1989 1 800
1990 1 882
1991 1 993
1992 2 250
1993 2 328
1994 2 355
1995 2 409
1996 2 442
1997 2 478
1998 2 520
1999 2 560
2000 2 600
2001 2 644
2002 2 702
2003 2 764
2004 2 830

Source: Deloitte Access Economics, The impact of changes to student contribution levels and repayment thresholds on the demand for higher education, report prepared for the Department of Education, Employment and Workplace Relations (DEEWR), DEEWR, August 2011, p. 10.

Maximum HECS-HELP contributions for students who commenced after 1 January 1997

Year National priorities(a) Band 1
($ pa)(b)
Band 2
($ pa)(c)
Band 3
($ pa)(d)
1997   3 300 4 700 5 500
1998   3 356 4 779 5 593
1999   3 409 4 855 5 682
2000   3 463 4 932 5 772
2001   3 521 5 015 5 870
2002   3 598 5 125 5 999
2003   3 680 5 242 6 136
2004   3 768 5 367 6 283
2005 3 847 4 808 6 849 8 018
2006 3 920 4 899 6 979 8 170
2007 3 998 4 996 7 118 8 333
2008 4 077  5 095 7 260 8 499
2009 4 162 5 201 7 412 8 677
2010 4 249 5 310 7 567 8 859
2011 4 355 5 442 7 756 9 080
2012 4 520 5 648 8 050 9 425
2013

 

5 868 8 363 9 792
2014   6 044 8 613 10 085
2015

 

6 152 8 768 10 266
2016

 

6 256 8 917 10 440
2017   6 349 9 050 10 596

(a) National priorities: 2005 to 2009— education and nursing; 2009 to 2012 - mathematics, statistics and science.

(b) Band 1: arts and humanities; justice, legal studies; social science and behavioural science; visual and performing arts; and until 2005 and from 2010: education and nursing.

(c) Band 2: other health sciences; agriculture and renewable resources; built environment and architecture; science; engineering and processing; and until 2008: business and economics courses; and until 2009 and from 2013: mathematics, statistics and science.

(d) Band 3: law; medicine and medical science; dentistry and dental services; veterinary science; and from 2008: business and economics.

Sources: Deloitte Access Economics, The impact of changes to student contribution levels and repayment thresholds on the demand for higher education, report prepared for the Department of Education, Employment and Workplace Relations (DEEWR), DEEWR, August 2011, p. 10 (to 2011); relevant Australian Government archived Study Assist websites (for 2012 to 2015); Australian Government, ‘Study Assist’ website (for 2016 and 2017).

Appendix B: Average Weekly Earnings (AWOTE), HELP repayment rates and thresholds : 1988–89 to 2016–17

1988–89 to 2003–04

Income year AWOTE
($ pa)(a)
Repayment rate and repayment threshold ($ pa)(b)
    Nil 1% 2% 3% 3.5% 4% 4.5% 5% 5.5% 6%
1988–89(c) 26 057 21 999 24 999 34 999 35 000+            
1989–90 27 318 23 582 26 798 37 518 37 519+            
1990–91 29 026 25 468   28 941 40 519   40 520+        
1991–92 30 319 27 097   30 793 43 112   43 113+        
1992–93 30 800 27 747   31 532 44 146   44 147+        
1993–94 31 764 26 402     30 004   42 005   42 006+    
1994–95 33 236 26 852     30 516   42 722   42 723+    
1995–96 34 710 (d)19 999   27 674 31 449   44 029   44 030+    
1996–97(e) 35 942 (d)20 593   28 494 30 049 32 381 37 563 43 335 47 718 51 293 51 294
1997–98(e) 37 344 20 700     21 830 23 524 27 288 32 934 34 665 37 262 37 263
1998–99(e) 38 922 21 333     22 498 24 244 28 123 33 942 35 726 38 402 38 403
1999–00(f) 40 037 21 983     23 183 24 982 28 980 34 976 36 814 39 572 39 573
2000–01(f) 42 039 22 345     23 565 25 393 29 456 35 551 37 420 40 223 40 224
2001–02(f) 44 270 23 241     24 510 26 412 30 638 36 977 38 921 41 837 41 838
2002–03(f) 46 667 24 364     25 694 27 688 32 118 38 763 40 801 43 858 43 859
2003–04(f) 48 571 25 347     26 731 28 805 33 414 40 328 42 447 45 628 45 629

2004–05 to 2016–17

Income year AWOTE
($pa)(a)
Repayment rate and repayment threshold ($ pa)(b)
 

 

Nil 4% 4.5% 5% 5.5% 6% 6.5%

7%

7.5% 8%
2004–05(f) 50 929 35 000 38 987 42 972 45 232 48 621 52 657 55 429 60 971 64 999 65 000
2005–06(g) 52 978 36 184 40 306 44 427  46 762 50 266 54 439 57 304 63 062 67 199 67 200
2006–07(g) 55 143 38 148 42 494 46 838 49 300 52 994 57 394 60 414 66 485 70 846 70 847
2007–08(g) 57 673 39 824 44 360 48 896 51 466 55 322 59 915 63 068 69 405 73 959 73 960
2008–09(g) 60 991 41 598 46 333 51 070 53 754 57 782 62 579 65 873 72 492 77 247 77 248
2009–10(h) 64 399 43 151 48 066 52 980 55 764 59 943 64 919 68 336 75 203 80 136 80 137
2010–11(h) 67 077 44 911 50 028 55 143 58 041 62 390 67 750 71 126 78 273 83 407 83 408
2011–12(h) 69 662 47 195 52 572 57 947 60 993 65 563 71 006 74 743 82 253 87 649 87 650
2012–13(h) 73 239 49 095 54 688 60 279 63 448 68 202 73 864 77 751 85 564 91 177 91 178
2013–14(h) 75 169 51 308 57 173 62 997 66 308 71 277 77 194 81 256 89 421 95 287 95 288
2014–15(h) 76 963 53 345 59 421 65 497 68 939 74 105 80 257 84 481 92 970 99 069 99 070
2015–16(h) 78 429 54 125 60 292 66 456 69 949 75 190 81 432 85 718 94 331 100 519 100 520
2016–17(h)   54 868 61 119 67 368 70 909 76 222 82 550 86 894 95 626 101 899 101 900
2017–18(h)   55 873 62 238 68 602 72 207 77 618 84 062 88 486 97 377 103 765 103 766

(a)    Average weekly ordinary time earnings for adults working full time (calculated as average weekly ordinary time earnings for the two quarterly survey estimates multiplied by 52 weeks).

(b)    Highest income level at which rate is payable, except for top repayment rate, which commences at income level specified.

(c)    As HECS was only introduced on 1 January 1989, repayment rates for 1988–89 were at half the level of later years (that is, 0.5%, 1.0% and 1.5%).

(d)    Repayment at 2% rate was voluntary.

(e)    Taxable income plus net rental losses.

(f)     As per (e) plus total reportable fringe benefits amounts.

(g)    As per (f) plus exempt foreign employment income.

(h)    As per (g) plus any total investment loss (which includes net rental losses), and reportable super contributions.

Sources: Australian Taxation Office (ATO), ‘HELP, SSL, ABSTUDY SSL, TSL and SFSS repayment thresholds and rates’, ATO website. Earlier years sourced from ATO websites now archived at National Library of Australia, Australian Government web archive; and Australian Bureau of Statistics (ABS), Average weekly earnings, Australia, Nov 2016, cat. no. 6302.0, ABS, Canberra, 23 February 2017, Table 3.

Appendix C: Accumulated HELP debts and debt not expected to be repaid, 1989–90 to 2012–13

Year Voluntary repayment ($m) Compulsory repayment(a) ($m) Accumulated HELP debt(b) ($m) Fair value of accumulated HELP debt(c) ($m) Debt expected not to be repaid (DNER)(d)
($m)
Proportion of DNER against accumulated HELP debt (%)(e)
1988–1989 0 9 216 n.a. n.a. n.a.
1989–1990 2 28 673 n.a. n.a. n.a.
1990–1991 6 50 1 190 n.a. n.a. n.a.
1991–1992 12 58 1 749 n.a. n.a. n.a.
1992–1993 11 73 2 321 n.a. 386 16.6
1993–1994 19 133 2 932 n.a. 438 14.9
1994–1995 16 169 3 354 n.a. 541 16.1
1995–1996 32 218 3 958 n.a. 687 17.4
1996–1997 58 262 4 504 n.a. 607 13.5
1997–1998 67 427 4 922 n.a. 700 14.2
1998–1999 72 497 5 526 n.a. 953 17.3
1999–2000 80 532 6 229 4 812 1 124 18.0
2000–2001 97 586 7 162 5 323 1 397 19.5
2001–2002 134 612 8 104 5 661 1 723 21.3
2002–2003 137 638 9 164 5 918 2 019 22.0
2003–2004 156 701 10 185 6 891 2 055 20.2
2004–2005(f) 193 666 11 371 7 580 2 166 19.1
2005–2006 137 800 12 779 8 830 2 496 19.5
2006–2007 158 921 14 425 9 603 2 964 20.6
2007–2008 184 1 158 16 113 10 517 3 698 23.0
2008–2009 196 1 163 18 278 12 499 3 934 21.5
2009–2010 202 1 251 20 497 14 018 4 495 21.9
2010–2011 230 1 438 23 062 15 511 5 228 22.7
2011–2012 260 1 557 26 385 19 771 6 170 23.4
2012–2013 185 1 650 30 299 21 566 7 051 23.3

n.a.     Not available.

(a)    Compulsory repayments (PAYG withholdings) made through the tax system are in relation to the income year.

(b)    The actual outstanding HELP debt for a particular year may be different to that published in the relevant education department (names vary) annual report for that year because the annual report is based on estimated compulsory repayments and estimated first half year debt.

(c)    Fair value is defined as the as the price that would be received if the asset was sold in the market at current prices.

(d)    'Debt not expected to be repaid' arises from the income-contingent nature of HELP repayments and debt being written off upon death of a debtor. The estimated amount of HELP debt not expected to be repaid is determined by a preliminary actuarial assessment accounting for compulsory (PAYG) repayments when they are credited against individuals' outstanding debts. The actual amount is determined once a full dataset is available for the financial year.

(e)    Debt not expected to be repaid as a percentage of estimated net outstanding debt taking account of PAYG receipts over the course of the financial year that have not yet been allocated against individual debtors' obligations.

(f)     Before 2005, debts were incurred under the Higher Education Funding Act 1988 (HEFA). Debts incurred under HEFA included HECS, Postgraduate Education Loans Scheme (PELS), Bridging for Overseas-Trained Professionals Loan Scheme (BOTPLS) and Open Learning Deferred Payment Scheme (OLDPS) debts. All debts under these schemes became HELP debts on 1 June 2006. From 1 January 2005, debts are incurred under Higher Education Support Act 2003  and are known as HELP debts.

Source: Department of Education and Training, Higher education report 2011–2013, 2014, pp. 120-1.

List of acronyms

ABS Australian Bureau of Statistics
AWE Average weekly earnings
AWOTE Average weekly ordinary time earnings
BORPLS Bridging for Overseas-Trained Professionals Loan Scheme
CPI Consumer Price Index
CSP Commonwealth Supported Place
DNER Debt not expected to be repaid
HECS Higher Education Contribution Scheme
HELP Higher Education Loan Program
HEOG Higher Education Operating Grant
HESA Higher Education Support Act 2003
OLA Open Learning Australia
OLDPS Open Learning Deferred Payment Scheme
PAYG Pay-as-you-go
PELS Postgraduate Education Loans Scheme
SLE Student Learning Entitlement
VET Vocational education and training


[1].     C Ey, Higher Education Loan Program (HELP) and other student loans: a quick guide, Research paper series, 2016–17, Parliamentary Library, Canberra, 2017.

[2].     D Daniels, Student income support: a chronology, Research paper series, 2017-18, Parliamentary Library, Canberra, 2017.

[3].     J Dawkins (Minister for Employment, Education and Training), ‘Government proposes new higher education system’, media release, 9 December 1987.

[4].     Committee on Higher Education Funding (Wran Committee), Report of the Committee on Higher Education Funding, Department of Employment, Education and Training, [Canberra], April 1988, p. v.

[5].     Ibid.

[6].     Ibid., p. vii.

[7].     Ibid., pp. 64–5.

[8].     Ibid., p. 62.

[9].     Ibid., p. 80.

[10].    J Dawkins, ‘Second reading speech: Higher Education Funding Bill 1988’, House of Representatives, Debates.

[11].    Ibid.

[12].    P Costello (Treasurer), Budget speech 2003–04, p. 6.

[13].  For more details see: K Jackson, Higher Education Support Bill 2003, Bills digest, 56, 2003–04, Department of the Parliamentary Library, Canberra, 2003.

[14].    Australian Government, ‘Part 2: expense measures’, Budget measures: budget paper no. 2: 2007–08, p. 120.

[15].    C Dow and C Kempner, Higher Education Legislation Amendment (Student Services and Amenities, and Other Measures) Bill 2009, Bills digest, 107, 2008–09, Parliamentary Library, Canberra, 2009.

[16].    J Griffiths, VET Student Loans Bill 2016 [and] VET Student Loans (Charges) Bill 2016 [and] VET Student Loans (Consequential Amendments and Transitional Provisions) Bill 2016, Bills digest, 41, 2016–17, Parliamentary Library, Canberra, 2016.

[17].    For details see: Parliament of Australia, ‘Higher Education Support Bill 2003 homepage’, Australian Parliament website.

[18].    Australian Government, ‘Part 2: expense measures’, Budget measures: budget paper no. 2: 2009–10, p. 152 (OS-HELP loan fee abolition), and W Swan (Treasurer) and L Tanner, Mid-year economic and fiscal outlook 2009–10, p. 173 (FEE-HELP loan fee increase).

[19].    Australian Government, ‘Part 2: expense measures’, Budget measures: budget paper no. 2: 2006–07, p. 158.

[20].    Australian Government, ‘Part 2: expense measures’, Budget measures: budget paper no. 2: 2007–08, p. 120.

[21].    K Jackson, op. cit., p. 3.

[22].    Higher Education Support Act 2003, Part 3–1— Student Learning Entitlement.

[23].    Australian Government, ‘Part 2: expense measures’, Budget measures: budget paper no. 2: 2009–10, p. 144.

[24].    Australian Government, ‘Part 2: expense measures’, Budget measures: budget paper no. 2: 2011–12, p. 163, and Australian Government, ‘Part 2: expense measures’, Budget measures: budget paper no. 2: 2013–14, p. 216.

[25].    K Jackson, op. cit., p. 2.

[26].    Australian Government, ‘Part 2: expense measures’, Budget measures: budget paper no. 2: 2008–09, p. 133.

[27].    Ibid., p. 134.

[28].    Ibid.

[29].    Australian Government, ‘Part 2: expense measures’, Budget measures: budget paper no. 2: 2009–10, pp. 149-50.

[30].    Australian Government, ‘Part 2: expense measures’, Budget measures: budget paper no. 2: 2012–13, p.227, and Australian Government, ‘Part 2: expense measures’, Budget measures: budget paper no. 2: 2014–15, p.77.

[31].    Ibid.

[32].    Ibid., p. 78.

[33].    For more detail on these proposed changes see C Ey, Higher Education Support Legislation Amendment (A More Sustainable, Responsive and Transparent Higher Education System) Bill 2017, Bills digest, 121, 2016-17, Parliamentary Library, Canberra, 2017.

[34].    Department of Education and Training, Annual Report 2016-17, October 2017, p. 53.

[35].    Australian Government, Portfolio budget statements 2017–18: budget related paper no. 1.5: Education and Training Portfolio, p. 55.

 

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