9 Jan 2020
Debt Management
Compulsory HELP debt repayments
BY EMILY MATTHEWS | FINANCIAL ADVISOR AT FUTURE KEY FINANCIAL

Compulsory HECs or HELP debt repayments are due to commence once your employable income exceeds $45,881 in a financial year. As your income increases, so does the compulsory repayment rate. A summary of the compulsory repayment rate for the 2019-2020 Financial Year below:

2019-2020 Repayment Threshold Repayment Rate (%) Minimum Repayment ($)
Below $45,881 Nil Nil
$45,881 – $52,973 1.0% $459
$52,974 – $56,151 2.0% $1,059
$56,152 – $59,521 2.5% $1,404
$59,522 – $ 63,092 3.0% $1,786
$63,093 – $66,877 3.5% $2,208
$66,878 – $70,890 4.0% $2,675
$70,891 – $75,144 4.5% $3,190
$75,145 – $79,652 5.0% $3,757
$79,653 – $84,432 5.5% $4,381
$84,433 – $89,498 6.0% $5,066
$89,499 – $94,868 6.5% $5,817
$94,869 – $100,560 7.0% $6,641
$100,561 – $106,593 7.5% $7,542
$106,594 – $112,989 8.0% $8,528
$112,990 – $119,769 8.5% $9,604
$119,770 – $126,955 9.0% $10,779
$126,956 – $134,572 9.5% $12,061
$134,573 and above 10% $13,457

 

The rate of repayment is calculated on your income earnings in a financial year. For example, if you earn $75,000 in the 2019-2020 financial year, 4.5% of your pre-tax income ($3,375) is payable to your Study Assistance (HEC’s or HELP) Loan. The compulsory repayments are automatically paid from pre-tax income which reduces your personal income tax liability. $1,000 of pre-tax money is just $655 of post-tax money (based on a 32.50% marginal tax rate, plus Medicare levy 2%).

Although your student debt does not have an interest rate or payment due date associated, the student debt does increase annually in line with CPI.

In addition, student debt can significantly impact your borrowing power. For advice in relation to reducing debt and purchase a home or property, contact Future Key Financial today for a free initial meeting.

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Daniel Mathers is an authorised representative (1238174) of Hunter Green Pty Ltd (AFSL 225962). Emily Matthews is an authorised representative (1261200) of Hunter Green Pty Ltd (AFSL 225962). Future Key Financial Pty Ltd ACN 608 953 840 is a Corporate Authorised Representative (1238170) of Hunter Green Pty Ltd (AFSL 225962). The information on this website contains general information and does not take into account your personal objectives, financial situation or needs. We recommend that you seek for specific financial advice if you require advice that takes into account your personal circumstances.