Background

On 1 May 2017, the Education Minister announced a suite of reforms for the higher education sector, introducing a range of measures including an increase in student course fee contribution and changes to the minimum repayment threshold.

These changes will not impact all students in the same way, as they are dependent on course choice and study duration. Indeed, the field of study or “Band” a certain course is categorised under determines the HECS contribution that a student will need to make.

Band 1 courses include Behavioral Science, Clinical Psychology, Education, Foreign Languages, the Humanities, Social Studies, and Visual and Performing Arts. Band 2 courses include Agriculture, Allied Health, the Built Environment, Computing, Engineering, Mathematics, Science, Surveying, and Statistics. Band 3 courses include Accounting, Administration, Commerce, Dentistry, Economics, Law, Medicine, Nursing, Veterinary Science, and Visual and Performing Arts.

Current student contributions and, as a result, total graduation debt, depends on the Band category: $6349 for Band 1, $9050 for Band 2 and $10596 for Band 3. (see http://studyassist.gov.au/sites/studyassist/helppayingmyfees/csps/pages/student-contribution-amounts).

 

BUDGET 2017 CHANGES

The government proposes an increase to the student contribution to the tuition fee by up to 7.5% and will lower the first income threshold for repayment to $42,000 (Note this has not been formally announced at the time of writing, the current model assumes changes to the first threshold only). The repayment threshold will also be indexed by inflation, rather than the faster growing average weekly earnings.

Table: The repayment rate in financial year 2017-18 (current system)

2017-2018 Repayment threshold

Repayment % rate

Below $55,874

Nil

$55,874 – $62,238

4.0%

$62,239 – $68,602

4.5%

$68,603 – $72,207

5.0%

$72,208 – $77,618

5.5%

$77,619 – $84,062

6.0%

$84,063 – $88,486

6.5%

$88,487 – $97,377

7.0%

$97,378 – $103,765

7.5%

$103,766 and above

8.0%

source: http://studyassist.gov.au/sites/studyassist/payingbackmyloan/loan-repayment/pages/loan-repayment

Table: The repayment rate in financial year 2018-19 (new system)

2018-2019 Repayment threshold

Repayment % rate

Below $42000

Nil

$42000 – $44520

1.00%

$44520 – $47191

1.50%

$47191 – $50022

2.00%

$50022 – $53024

2.50%

$53024 – $56205

3.00%

$56205 – $59577

3.50%

$59577 – $63152

4.00%

$63152 – $66941

4.50%

$66941 – $70958

5.00%

$70958 – $75215

5.50%

$75215 – $79728

6.00%

$79728 – $84512

6.50%

$84512 – $89582

7.00%

$89582 – $94957

7.50%

$94957 – $100655

8.00%

$100655 – $106694

8.50%

$106694 – $113096

9.00%

$113096 – $119882

9.50%

$119882 and above

10.00%

Source: Budget 2017