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Fact Sheet

Update March 2004

5. Higher Education Loan Programme – HECS-HELP

From 1 January 2005, all eligible Australian citizens, New Zealand citizens and holders of permanent visas will receive a Student Learning Entitlement (SLE), giving them access to seven 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 permanent humanitarian visas will also be eligible for an Australian Government subsidised loan under HECS-HELP. The seven year entitlement may be extended where a student is undertaking an undergraduate course in which the normal enrolment period is longer than six years or an honours course, a graduate entry bachelor degree or a postgraduate course. Students undertaking enabling courses will not be required to use their SLE. SLE appeal mechanisms and associated remission of debts, where circumstances prevent students from completing studies, will be the responsibility of higher education providers.

From 2005, providers in receipt of Commonwealth supported places will determine student contribution levels within ranges set by the Australian Government (see Table A). There will be no minimum level. The Australian Government will provide a contribution for each student holding a supported place. Higher education providers 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.

Table A: Student Contribution Levels

Current arrangements New arrangements from 2005
  2004 HECS
 levels		 Projected 2005 HECS
levels (a)		     New student contribution range (b) [Higher education providers will set student contributions levels]
Band 3
(law, dentistry, medicine, veterinary science)		 $6,283 $6,402   Band 3
(law, dentistry, medicine, veterinary science)

$0 – $8,004
Band 2
(accounting, commerce, administration, economics, maths, statistics, computing, built environment, health, engineering, science, surveying, agriculture)		 $5,367 $5,469   Band 2
(accounting, commerce, administration, economics, maths, statistics, computing, built environment, health, engineering, science, surveying, agriculture)		 $0 – $6,837
Band 1
(humanities, arts, behavioural science, social studies, foreign languages, visual and performing arts, education, nursing)		 $3,768 $3,840 Band 1
(humanities, arts, behavioural science, social studies, foreign languages, visual and performing arts)		 $0 – $4,800
National Priorities
(education, nursing)		 $0 – $3,840

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

(b) Maximum student contributions will be set at 25 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. Higher education providers 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 $25,348 (2003-04 financial year) to $35,000 (2004-05 financial year) and $36,184 (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 (in 2004-05).

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

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Discounts

Under HECS-HELP students who choose to pay some (at least $500) 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 of $500 or more or for voluntary repayment of total debt. 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 full-time 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 without formally deferring; or

  • complete their current course; or

  • transfer into a course (which must be at the same level as their current course) and then complete that course; or

  • choose to study under the new system.

    •

    Students commencing in 2004 must also incur a HECS liability in 2004 to be eligible to remain on the current HECS rates. 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 2004-05.

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    Contact Details

    Media inquiries:

    Virginia Cook
    Department of Education, Science and Training
    Telephone: 0412 971 323

    Other inquiries

    Laura Santini
    Director, Commonwealth Supported Students Unit
    Higher Education Group
    Department of Education, Science and Training
    Telephone: 02 6240 9607

    Email: Backing Australia's Future

     

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