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I just realised that my HECS interest is like $100 a year. HUGE.
I've never worked full time, so never had any compulsary payments taken out.
Someone told me I never have to pay it off if I never work full time? Is this true?
If it's not true, should I just start paying it off?
What do all you SAHM's do with this debt?
At this stage, the rule is that once you start earning over I think its *about* $40,000 a year they take a small percentage out. If you aren't earning that much each year then no, you don't have to pay it. Your HECS debt it also wiped, if it is still there, when you die.
ETA: http://www.ato.gov.au/individuals/co...ntent/8356.htm Seems it almost $45,000 now!
Yep, that's pretty much right, and you don't have to pay anything off it if you're not earning over the threshold. Also, while the yearly amount sounds like a lot, it's the lowest interest you'll probably get on a debt, as it's tied to CPI. Many financial advisers and economists suggest that it be the last debt you consider paying off - money put into your mortgage or other debts that have higher interest is a better choice.
Blissfully ignore it ;) I'm adding to it again with a second degree so I really don't bother looking at how much it is. It'll get paid off one day when I'm working again I guess. I have no plans to ever make voluntary payments.:
i never make payments on mine.. i have never earned enough. i don't think i will ever be earning $45000 tbh. im not practicing my "studied profession" so i don't get much money. and i hope to be a mum soon anyways and then i really won't be paying it off. good to know that it gets wiped if i die. i don't want my dh to have to pay that off.
I'm a bit of an ostrich about mine. Head in the sand kind of thing. I figure when i start working i'll start paying it. In the mean time i don't bother looking at the interest too much. Not sure if that's the smartest option though?!
$45000 HECS debt and counting....
Will worry about it when I earn enough to have to pay it.
I paid the last of mine last year when my tax was done. Of course it will start building up next year when I'm back at uni & I'll be paying it because I will be earning over the threshhold, or I might just utilise the fee help they have and pay the subjects off during the semester so I have no debt.
Its the best kind of debt you can have IMO, it has no due date and is one of the lowest interest rates out there! Unless you have money to throw around, i wouldn't bother making payments too it either.
Honestly, just ignore it. The payments when they are made are so low that you don't even notice them. Fact of the matter for me is that once I was working and paying off my HECS debt, the money just went out of my pay before I got it so it wasn't like I ever missed the money anyway - I didn't have it before I started working and I didn't have it afterwards.
It took nine and a half years of working before mine was paid off - just in time for me to quit working and become a SAHM permanently. Oh well, at least I've paid the country back for educating me!
BW
ergh I owe just over 3 grand. I hope I havent earned enough to start paying it off yet, I need the tax money this year :/
I didn't realise it had interest....
The interest on your HECS/HELP debt is only cpi, so very small.
BW
Yeah I got mine in the mail it was 1. something percent
Haha all your replies made me laugh! I'm glad I can blissfully ignore it, probably for the rest of my life! Cheers for taking the weight off my shoulders ladies!
If you have any other debt, ignore this one, its the "cheapest" debt (in terms of the rate at which the interest compounds) you will ever have. Pay the other debt off first.
BUT (and I'm bucking the trend here) if you have no other debt, pay this off NOW while you have no other encumbrances because a) If you make voluntary payments you get a 10% discount and b) you can't predict how your circumstances will change. My sis has landed herself in a really tight position after she left her husband & started work, discovered she was really really good and got 3 promotions over 14 months, suddenly after paying little HECS the previous year she suddenly finds she is required to pay 10K on top of her regular tax...she has in that time bought a property and will not be able to make the payment. She is facing selling her home to fund the HELP debt because the ATO will show no mercy on the grounds of being a single parent. Even if you only pay off $500 a year then you reduce the likelihood of it coming back to bite you later.
That doesn't make sense Marydean- was her employer not taking out the right amount of tax? With pay increases her tax should have increased (including her HECS payments) and she shouldn'tbe so far out at the end of the year. What an awful situation for your sister!
No she got dudded because she had a package and when you have reportable fringe benefits they gross it the fringe benefits amount with some weird calculation that blows it right out...because it was the first year she'd had a package PLUS the increase in income (different tax bracket I think) she had no idea and it wasn't apparent until after tax time and the sickening reality was revealed.
Also be careful if you salary sacrifice with a hecs debt it can add to your reportable income and take you over the threshold. I learnt the hard way!
I hate having debt hanging over my head so when my parents gave us $10,000 as a wedding gift we used it to pay off my hecs debt, dh also had a $15,000 hecs debt and we have paid that off this year also... neither of us ever even worked in those professions and it bugs me that we even went to uni to build up such a huge amount of debt which wasn't paid off until we were in our 30's! The money would have been better spent on a house deposit 15 years ago :rolleyes: