Anyone have HECS debt and what do they think about new budget rates?

[Hoffy]

It will be a perpetual debt at this rate unless you consistently earn over 100k/year. Only about 5-6% of the population makes this as their annual income. If you make less, the repayments won't even cover the interest.

I have a HECS debt of 50k and even with the current arrangement, it likely won't be paid off unless I make additional voluntary repayments.

Ok so it's not the interest rate that's the problem, it's the preparedness to repay that may make it perpetual. But no one says you can't pay more. Do you pay the minimum monthly repayment on a credit card too?

So yes, if you choose not to repay, there is potential of a perpetual debt. I suspect that such a person would have no qualms with this given the bizarre fact that such debts are not recoverable from the estate.

 

[Hoffy]

Exactly.

And why do that when I can use the money to invest in real estate. Seriously.

7 years of work half of it close to/over $100k, and I barely made a scratch on my HECS debt.

To get the higher positions you usually go and get a post-grad degree as well which keeps adding to the debt.

Sounds like you are saying the repayment terms are too generous. I think you are right. The potential of 6% isn't really the problem is it.

 

[nhg]

Sounds like you are saying the repayment terms are too generous. I think you are right. The potential of 6% isn't really the problem is it.

And that is where you get the inequality.

If mommy and daddy are paying your debts for you, then you will be at a great advantage over others who are forced to pay off... as above, perpetual debts.

(Amusingly non of my friends whose parents paid for them actually finished university).

The alternative will be to attend 'inferior' universities which charge less.

The whole tertiary education system is messed up. I was doing my masters and was confused as to why I was getting Distinctions for only 1 days work per subject. Then I realised my classmates couldn't speak a word of English and were paying through the nose in international fees. It was just watered 'business' masters for the uni to get extra cash and students to get visas.

An international student friend of mine caught on he was being overcharged. When he complained, they gave him his money back on the condition he didn't mention it to the other students.

Let them charge through the nose for what is already a flawed system. Perhaps it will encourage people to get into business.

 

[monalisa]

7 years of work half of it close to/over $100k, and I barely made a scratch on my HECS debt.

How does this work? I am curious to know.

We paid of our HECS a few years ago now.

 

[monalisa]

I have a $50k hecs debt left.

That is heaps!

Is that due to a 4 year degree. Did you complete masters?

I did a 3 year degree and had about 22-25K from memory.

 

[nhg]

That is heaps!

Is that due to a 4 year degree. Did you complete masters?

I did a 3 year degree and had about 22-25K from memory.

Engineering at UTS was 5 years and I failed like 4 subjects.

Also did a masters.

Did you make extra repayments? I haven't made any extra contributions (intentional).

But I did buy property and travel a fair bit so... pretty fair trade off in my mind.

 

[weg]

I didn't realize uni fees varied so much from state to state.

Adelaide Uni and UniSA's fees range from 6K to 10K per full year.

nhg... what was the fee charge per year?

50K is a significant amount to pay off btw - wouldn't say 'barely made a scratch' at all.

Just think... had you done 3-4 years of an average priced degree at that rate it would have been well and truly paid off long ago.

 

[Tim86]

My 4 year psychology degree cost about $23000

The government takes about $5000+ off of me per year to pay down my hecs so it should be paid off pretty soon. I think it's already probably half paid off.

 

[weg]

Engineering at UTS was 5 years and I failed like 4 subjects.

Also did a masters.

Just checked the fees because I thought they were outrageously expensive.

Student contribution (band 2) for Engineering at UTS is $8,613 per year in 2014.

The most expensive courses are band 3 at $10,085 per year and band 1 are $6,044 per year.- no different to here.

Now a 4 year degree too.

How is it you ended up with a debt of 100K??

 

[MsAli]

Did you make extra repayments? I haven't made any extra contributions (intentional).

But I did buy property and travel a fair bit so... pretty fair trade off in my mind.

No, never made extra repayments. Though would have been good if we did as we were in a position to do so during our course. Would have translated into MORE property purchases than now. But you learn through experience. Didn't know any better. It has paid off in the end. We now travel and purchase property..

 

[monalisa]

Did you make extra repayments? I haven't made any extra contributions (intentional).

No, never made extra repayments. Though would have been worthwhile if we did. We are pleased we are over and done with it.

My 4 year psychology degree cost about $23000

I had about 22 - 25K for a 3 year commerce degree.

Just checked the fees because I thought they were outrageously expensive.

Student contribution (band 2) for Engineering at UTS is $8,613 per year in 2014.

The most expensive courses are band 3 at $10,085 per year and band 1 are $6,044 per year.- no different to here.

Now a 4 year degree too.

How is it you ended up with a debt of 100K??

I think it also depends on when you started uni. I started the year before a whole bunch of changes came in place in 2005, I think they increased student contribution then.

 

[weg]

I think it also depends on when you started uni. I started the year before a whole bunch of changes came in place in 2005, I think they increased student contribution then.

The figures I gave were for 2014 so if anything Commerce appears to have gone up in line with inflation only.

http://www.uts.edu.au/future-students/find-a-course/courses/c10067

Area of study and

student contribution

band


Student contribution

(per EFTSL or 48 cp)
3
Law, dentistry, medicine, veterinary science, accounting, administration, economics, commerce $10,085
2
Mathematics, statistics, science, computing, built environment, health, engineering, surveying, agriculture $8,613
1
Humanities, behavioural science, social studies, foreign languages, visual and performing arts, education, nursing $6,044



If you are enrolled in less (or more) than 48 credit points in a year, you can calculate your student contribution as a percentage of the above.

eg. If you are enrolled in a 6 credit point Mathematics subject, your contribution would be
6/48 x $8,613 = $1,076

100K for a 4 year Engineering degree + masters still appears excessive to me.

 

[monalisa]

100K for a 4 year Engineering degree + masters still appears excessive to me.

I think nhg was referring to his salary of $100K.

I am surprised that kind of salary didn't make a difference to HELP debt of $50K.

At 100K salary (net of super), one would be paying around 8% per annum

Even if you assume that $100K includes superannuation, then you would be making 7% pa repayments.

Assuming 90K excl super, one would make $6,300 repayments per annum - over a seven year period, repayments of approx $44,000

 

[weg]

I think nhg was referring to his salary of $100K.

I am surprised that kind of salary didn't make a difference to HELP debt of $50K.

At 100K salary (net of super), one would be paying around 7% per annum

Even if you assume that $100K includes superannuation, then you would be making 8% pa repayments.

Assuming 90K excl super, one would make $6,300 repayments per annum - over a seven year period, repayments of approx $44,000

You're right I did think that.

Still... if he has an almost 'perpetual debt' he must owe a hell of a lot or he doesn't have a 'perpetual debt' and has paid off a fair bit and is left with 50K.

Not that I care... but if he's going to put forward an argument it has to add up... and as your calcs show something is not right.

It's certainly not a typical scenario for most HECS debt students who are earning that sort of income.

 

[HotRod]

Check this out:

http://www.whatwillmydegreecost.com.au/

So nice for the Greens to help out.

One flaw, they did not increase the $33K by CPI each year, effectively keeping it interest free. Where can one take a loan out at a "real interest rate" of 3.8%????? Still just a touch above the current CPI rate of 2.9%.

 

[cimbom]

You're right I did think that.

Still... if he has an almost 'perpetual debt' he must owe a hell of a lot or he doesn't have a 'perpetual debt' and has paid off a fair bit and is left with 50K.

Not that I care... but if he's going to put forward an argument it has to add up... and as your calcs show something is not right.

It's certainly not a typical scenario for most HECS debt students who are earning that sort of income.

Of that 44k, at least 15k would be the CPI indexation amount. It's not like it all comes off the principal

 

[D_One]

I think nhg was referring to his salary of $100K.

I am surprised that kind of salary didn't make a difference to HELP debt of $50K.

At 100K salary (net of super), one would be paying around 8% per annum

Even if you assume that $100K includes superannuation, then you would be making 7% pa repayments.

Assuming 90K excl super, one would make $6,300 repayments per annum - over a seven year period, repayments of approx $44,000

He mentioned that he was earning close to 100k for half of the 7 years, therefore, 3.5years. Then taking indexation into account, CPI had been roughly between 2.6 and 3.1 in the last 7 years.

Subtracting indexation, he would have only paid off $17,500 in the last 3.5 years.

 

[nhg]

Love you mathematicians.

Yeah probably have paid off something like that.

So how long before I pay it off? 35-40 years old?

May as well double it, by the time I no longer have HECS deducted I'll be retired.

 

[Hoffy]

Love you mathematicians.


So how long before I pay it off?.

Completely up to you.

 

[weg]

Love you mathematicians.

Yeah probably have paid off something like that.

So how long before I pay it off? 35-40 years old?

May as well double it, by the time I no longer have HECS deducted I'll be retired.

Why not give us figures to work off so we don't have to guess?

What we do know is that you're 27yo and you did 7 years full time uni (even though UTS's engineering degree is 4 years ft)but at the same time worked for nearly 8 years with you earning 100Kpa for 3 1/2 years of the 7 - 8 years you worked.

Without figures I might not be able to do the sums but can assume that being 2 years out of uni and already having earned 100Kpa for all those years prior to age 27 says to me you're doing better than most (why I'm trying to make sense of your claims inc. that of hardly paying anything off your debt - which you now claim differently)... because most pay their debt off reasonably quickly with less income than that.

Are you anticipating not earning much over future years? If so why?