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Fact Sheet (for latest Fact Sheets please go to Fact Sheets 2004)

5. Higher Education Loan Programme – HECS-HELP

• Increased repayment threshold

• Repayment discounts

• Existing HECS students

• Contact Details

From 1 January 2005, all eligible Australian citizens, New Zealand citizens and holders of Australian permanent visas will receive a Learning Entitlement, giving them access to five years equivalent full-time study (to be extended on a pro-rata basis if studying part-time) in a Commonwealth supported place. Australian citizens and holders of Australian permanent humanitarian visas will also be eligible for a Commonwealth subsidised loan under HECS-HELP. The five year entitlement may be extended where a student is undertaking an initial undergraduate course or pathway in which the normal enrolment period is longer than five years (for example, medicine at undergraduate or graduate degree levels or double degrees with honours). Students undertaking enabling courses will not be required to use their Learning Entitlement. Learning Entitlement appeal mechanisms and associated remission of debts, where circumstances prevent students from completing studies, will be the responsibility of institutions.

From 2005, institutions in receipt of Commonwealth supported places will determine student contribution levels within ranges set by the Commonwealth (see Table A). There will be no minimum level. The Commonwealth will provide a contribution for each student holding a supported place. Institutions will be able to set student contributions as low as they wish.

HECS-HELP will remain the fundamental mechanism through which students in Commonwealth supported places can pay their contribution. HECS-HELP loans will continue to be indexed to the Consumer Price Index, with a deferred income contingent repayment arrangement. This will ensure that students are able to participate in higher education even if they are unable to pay their contribution up front. Each student’s contribution will depend on the individual subjects that he or she chooses. The range of student contributions for each field of education is set out in the table below.

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Table A: Student Contribution Levels

Current arrangements				New arrangements from 2005
	2003 HECS levels	Projected 2005 HECS levels (a)			New student contribution range (b) [Universities will set student fees]
Band 3 (law, dentistry, medicine, veterinary science)	$6,136	$6,427		Band 3 (law, dentistry, medicine, veterinary science)	$0 – $8,355
Band 2 (accounting, commerce, administration, economics, maths, statistics, computing, built environment, health, engineering, science, surveying, agriculture)	$5,242	$5,490		Band 2 (accounting, commerce, administration, economics, maths, statistics, computing, built environment, health, engineering, science, surveying, agriculture)	$0 – $7,137
Band 1 (humanities, arts, behavioural science, social studies, foreign languages, visual and performing arts, education, nursing)	$3,680	$3,854		Band 1 (humanities, arts, behavioural science, social studies, foreign languages, visual and performing arts)	$0 – $5,010
				National Priorities (National priorities – education, nursing)	$0 – $3,854

(a) Projected HECS rates for 2005 based on current indexation estimates.

(b) Maximum student contributions will be set at 30 per cent higher than estimated HECS contribution rates for 2005, except for teaching and nursing where the maximum will be set at the estimated HECS rates for that year. Universities will set student contribution levels.

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Increased repayment threshold

The financial position of many graduates on lower incomes will be improved through a change to the minimum repayment threshold from $24,365 (2002-03 financial year) to $30,000 (2005-06 financial year) and the removal of the two bottom repayment bands. The maximum repayment rate will increase to 8 per cent where income exceeds $64,999.

These new repayment thresholds will apply to both new HECS-HELP and existing HECS debts from 2005.

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Repayment discounts

Under HECS-HELP students who choose to pay some or all of their student contribution up front will receive a 20 per cent discount on the amount paid. People with HECS-HELP debts will receive a 10 per cent bonus for early repayments. These new discount rates will apply from 1 January 2005 to both new HECS-HELP and existing HECS debts.

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Existing HECS students

Current HECS students and HECS students commencing in 2004 (both fulltime and part-time) will be able to study under the current HECS student contribution levels until the end of 2008, unless they discontinue their enrolment. Students continuing study into 2009 will be required to study under the new HECS-HELP student contribution levels.

Most students will benefit from the new higher repayment threshold from 2005.

The reforms outlined in this Fact Sheet are subject to the passage of Commonwealth legislation. Full implementation details for the reforms will be provided over the coming months.

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Contact Details

Media inquiries:

Ross Hampton
Dr Nelson’s Office
Telephone: 0419 484 095

Jane Smith
Department of Education, Science and Training
Telephone: 0412 973 411

Other inquiries

Regina Camara
A/g Director, Student Financing and Scholarships Unit
Higher Education Group
Department of Education, Science and Training
Telephone: 02 6240 9695

Website: http://www.backingaustraliasfuture.gov.au
Email: highered@dest.gov.au

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Any comments or queries should be sent to: highered@dest.gov.au
This page was last updated on Monday, 04 August 2008

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