04/01/2012. Welcome to 2012 and with the turn of a new-year come a new set of rules for voluntary repayment of HECS-HELP Loans.

Since the 2006 HECS Reforms students have received a 20% discount on up front full, or partial (more than $500) payments towards their annual student contribution fees. As at 1 January 2012 this discount has been substantially lessened to a 10% discount. Furthermore the previous 10% discount for voluntary payments at any time towards a HECS-HELP debt has been reduced to 5%.

Students should also make themselves aware that every 1 June their accrued HECS-HELP debt is adjusted by a CPI interest only to any debt existing for a period of 11 months or more.

The question then arises when do I start making non-voluntary contributions to my HECS-HELP Loan and how much do I pay? Once your annual income is more than the minimum threshold $47,195 you will have a further 4-8% (depending on your income) taxed to repay your debt.

Lastly, do I pay interest on this debt? In short no, the only interest you will incur is a CPI interest that adjusts your debt to reflect its true value in the economy yearly.

Whilst your HECS-HELP Loan is not a tax deduction those postgraduate, JD students and PLT Students may be eligible to claim a tax deduction for any FEE HELP and VET FEE HELP Loans payments made under these loans as a self education tax deduction.

For more information see http://www.ato.gov.au/content/downloads/cas00291063.pdf

We remind students that this year also sees the revival of the student contribution fee at $267 annually. This fee similarly attracts the abovementioned discounts if paid up front, and similar to your course fees can be deferred to your HELP loan.

Aimee Riley

Vice President (Education)

Australian Law Students’ Association 2011-2012