What is HECS funding Scheme?
The Higher Education Contribution Scheme – a policy implemented by John Dawkins in 1987 to promote the higher education sector in Australia. The policy at the time, considered radical, had proven to be quite effective in positively contributing to the country’s tertiary education Funding in Australia.
The success of HECS derives from the income-contingent loan (ICL) model for students. Its frameworks provided the students and government with flexibility. HECS has effectively assisted in keeping tertiary education affordable and accessible.
Since its adoption in Australia in 1989, the International community widely welcomed the ICL model. After successful implementation in Australia, it has been adopted by at least eight other countries, including New Zealand, England, South Africa, Hungary, South Korea, and Ethiopia.
The HECS loan system aims to provide students with options to secure loans to pay their tuition and cover living costs. Loans are interest-free, and repayment is contingent on earning a minimum threshold income.
STEPS to get a HECS-HELP loan in Australia
Step 1 – Must be an Australian Citizen
Step 2 – Must be studying in a CSP
Step 3 – Must have a valid TFN at the time of application
Step 4 – Apply before the census date for new enrollments
Now let us dive into some random terms you would encounter while looking for HELP loans on Google. I have broken them down into critical questions you might have and explained them in an easy-to-understand way.
What is HECS in Australia, and how does it work?
Widely speaking, the HECS can be broken down into two parts:
- The Australian government contributes to a portion of fees – by subsidising the fee.
- The student contribution – is the fee portion that students must pay themselves and can secure a HECS loan to contribute.
To be eligible for this, the course needs to be in Commonwealth Supported Places (CSPs)
The Australian government works in collaboration with the Australian Tax Office to ensure the effective implementation of the HECS.
What are CSPs?
The Commonwealth Supported Places (CSPs) are special allocations in the higher education institutes funded by the Commonwealth government. A place or allocation is to be understood as a seat in a particular course offered at a university.
Therefore, a student enrolled as a CSP would only need to pay part of the course’s total fee. A portion of it would be covered under the CSP scheme and paid for by the Australian government.
Tertiary Education Funding in Australia is provided to a limited number of allocations in undergraduate studies. And the contributions are made towards the costs of students’ education. HECS is an example of how grants are usually made by providing students with subsidies or HECS loans.
Where can I get CSPs?
The tertiary Education Funding in Australia admissions centers in each state, manage allocations for CSPs. Usually, these admission centers are based in public universities or higher education institutes. They take applications and set up allocation quotas for places in courses provided by higher educational institutes.
The primary admissions centres in different states and territories of Australia:
Queensland Tertiary Admission Centre in SA
South Australian Tertiary Admissions Centre in SA and NT
Universities Admissions Centre in NSW and ACT
University of Tasmania in Tasmania
Tertiary Institutions Service Centre in WA
To see which courses are available under CSPs, visit https://www.studyassist.gov.au/
How is a CSP determined?
CSPs’ allocation number and frequency hugely depend on each course’s earning potential. Higher the earning potential and demand for skill – the higher the allocation of CSPs.
For students, the allocation into a CSP is competitive and based on merit. Usually, factors like secondary school results, TAFE qualifications and previous university results affect a student’s eligibility to secure a place in CSPs.
You must be enrolled in a CSP course to avail yourself of the benefits of HECS loans.
Who is eligible to get a CSP allocation?
You must be an Australian citizen or permanent resident to get a CSP allocation.
Citizens of New Zealand are also eligible to get enrolled in CSPs. However, they may not be able to avail of HELP loans.
The same applies to Australian permanent residents who cannot get HECS-HELP loans unless approved under exceptional circumstances.
International students and residents on temporary visas in Australia are not eligible for CSPs, or HELP initiatives. They may have other options available to them for the pursuit of higher education, such as course or country-based scholarships by Tertiary Education Funding in Australia.
The types of HECS loans
By now, you would have understood what a CSP is and how it affects your eligibility for a HECS loan. Now let’s look at different loan options available to Australian students:
Higher Education Loan Program – available to students enrolled in a CSP. This loan can only be utilised to contribute towards the tuition fee.
Tertiary Education Funding in Australia Available to all Australian resident students pursuing a course with an approved higher education provider. FEE-HELP can be utilised to cover tuition fees at any fee-paying approved providers.
Finance options to pay for other study-related costs, such as accommodation, textbooks, laptops, transport etc.
Additional finance option for CSP students who wish to study overseas.
All of the loans above are provided interest-free. However, they are subjected to indexation.
You can calculate something like your HECS, FEE, PAY and GST etc. Buy using this efficient free HECS Calculator. Hope you like and enjoy it.
How many years of HECS do you get?
All HECS loans are provided independent of the study duration. They are subject to the max limit of the loan available to a student and their capacity to repay.
Does the HECS loan cover everything?
Yes and no. Tertiary Education Funding in Australia depends on what course you are studying. If you are enrolled in a course with high earning potential, you might get access to the HECS-HELP and SA-HELP to cover your tuition and living costs. As these loans are interest-free, allocations are competitive.
Are there any limits to HECS–HELP loans?
Yes the loans provided under the HECS are subject to a cap. The cap is dependent on the course being undertaken by the students. The limit will include all the prior study loans undertaken by the student. These may include any FEE-HELP and HECS-HELP loans.
Cap for the financial year 2023:
For students studying medicine, dentistry, and veterinary science courses, the cap for 2023 is set at maximum lending of $162,336.
The loan limit would be $113,028 for students studying most other courses.
The same cap as medicine students may be applicable for students studying specific aviation courses. To read further on revised limits on loans please visit studyassist.gov.au
How can I check my HELP balance?
If you plan on getting a HELP loan or already have a loan payable and intend to take additional finance. You can visit www.myhelpbalance.gov.au to get a sneak peek into your current entitlement and future borrowing limit.
You must ensure you have sufficient HELP balance available before undertaking a course. Also, you can make compulsory or voluntary repayments towards your HELP debt, to increase your current HELP borrowing capacity.