Help pay back student loans Birmingham

July 11, 2013
SAIL program helps Birmingham

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3. Is says: “to improve repayments from [low-income students who live in high-income households], it has been suggested that a household income test be introduced”.

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5. So, what’s a household income test?

It’s a measurement of how much money your family makes each year.

Family in this instance, means either your parents (if you live with them) or your de-facto.

So your income + your family’s income = total household income.

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6. For a case study, let’s look at how the proposed changes would affect “Malcolm”.

Stefan Postles / Getty Images

He’s 25 and is studying a three year Commerce degree.

Malcolm has a casual job but doesn’t earn anywhere near enough to meet the $54, 126 per annum threshold to start paying back his student loan.

But Malcolm also can’t afford to pay rent in Sydney, so he lives with his parents (who can’t afford to buy him a house).

That means their income gets included in the overall “household income test”.

Both Malcolm’s dad, who is a cleaner, and his mum, who stacks shelves at a supermarket, earn the minimum wage of $656.90 per week, or $34, 158.80 a year.

Their combined income is $68, 317.60, which pushes Malcolm over the HELP repayment threshold.

Bad news, Malcolm. You’ll have to start paying back your student loan while you are studying. That sounds a lot like up-front fees.

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7. Why does the government want to make changes to higher education contributions? Because it estimates unpaid student debts will hit more than $70 billion by 2018, so it wants to make grads start paying back what they owe sooner.

Life tip: Don't look at your HECS debt before bed

— stephanie (@stef_a_nee__t)

The government has also proposed lowering the repayments threshold to $50, 000.

At this stage, both the household income test, and the lower threshold, are just government proposals.

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8. Don’t expect to get a clear higher education policy from the government anytime soon.

Dan Himbrechts / AAPIMAGE

Education minister Simon Birmingham has confirmed the Turnbull government won’t be taking a higher education policy to the federal election.

Instead, the government will consult with the sector and wait until late 2016 or early 2017 to announce its reforms. It plans to make its higher education changes in 2018.

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