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October 20, 2019, 04:50:33 am

Author Topic: Best way to pay off uni fees?  (Read 1070 times)  Share 

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Kekemato_BAP

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Best way to pay off uni fees?
« on: June 16, 2017, 01:51:54 pm »
+1
Hey, how does the whole HECS thing work?

Is it best to pay the fees upront with like little spare money left?
Or
Is it better to take out some sort of loan and invest money in like the ASX or something?
Is there interest for HECS or similar schemes?
Thanks.
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K888

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Re: Best way to pay off uni fees?
« Reply #1 on: June 16, 2017, 02:11:22 pm »
+4
Probably need a uni graduate to give the best insight, but if you're eligible for HECS, then use it. Wouldn't recommend a third party loan.
If your parents are willing to pay your uni fees, then I guess you could consider that? Really it's quite unrealistic to expect to be able to pay the several thousand dollars per semester over the duration of your degree by yourself (without placing significant financial strain on you), or even expect your parents to do it (unless they're willing, of course).

It means you get to delay the payments for your course until you earn over the threshold, so basically until you have a full-time job.
It's essentially interest free (iirc), but is indexed against the CPI so that it maintains its "real value" - so you pay a sort of interest that isn't technically interest. You pay back your HECS debt at a determined rate depending on your income - people who earn more, pay off a higher percentage of their debt. I'm not 100% certain, but I believe your compulsory repayments are deducted from your pre-tax pay, so you don't even have to make conscious payments to the ATO - it's done for you (someone please correct me if I'm wrong) And you can also make voluntary payments so that your debt is paid off sooner.

Probably worth having a read of this website:
http://studyassist.gov.au/sites/studyassist/helppayingmyfees/hecs-help/pages/hecs-help-welcome

But don't stress too much! Really, most people just HECS their degree and forget about it. It's a scheme that allows people to get a higher education degree when costs may be otherwise prohibitive, and is in my opinion, the best method to pay your uni fees unless you've got tonnes of cash at your disposal.
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keltingmeith

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Re: Best way to pay off uni fees?
« Reply #2 on: June 16, 2017, 02:47:30 pm »
+4
HECS has no interest, whereas a lone will - worth reading this site here to learn all about the payment scheme. :) I actually remember talking to some people about this (on these forums lol), who said if you have the money to pay-off HECS, it's financially more sound to put it into a long-term savings account, don't touch it until you have to start paying it back, then pay it all back at once - and this was when you got 10% off your loan if you paid upfront.

Tbh, I feel it's better to go HECS if you can, but I'm not a budding economist. Certainly, though, if you read the above site, and are still confused about some things, happy to help after that!
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Aaron

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Re: Best way to pay off uni fees?
« Reply #3 on: June 16, 2017, 02:51:42 pm »
+4
I've recently finished my Masters so it's something i've been considering for a while. In my opinion, I don't think its worth voluntarily contributing anymore to pay off your HECS. Any discount they once offered doesn't exist anymore (to my knowledge).

The current way it works is that a bit of your pay is removed for that purpose once you earn over the threshold. If you go here: taxcalc, it gives you a somewhat accurate figure (dont quote me, make sure you tick the right boxes).

While HECS has no interest, it does get indexed. On 1 June 2017, 1.5% was added which means that an extra $448 was added to my HECS debt just for the debt being there. However, my current debt is around $36k so that may be why. lol :P

It also depends on the discipline you are studying as to how much debt you'll get (each discipline is categorised into a different band). I'd go with HECS and a CSP place as a priority.
« Last Edit: June 16, 2017, 02:55:29 pm by Aaron »
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brenden

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Re: Best way to pay off uni fees?
« Reply #4 on: June 16, 2017, 02:54:44 pm »
+2
Meith hit the nail on the head.

Take HECS.
Let your automatic tax deductions pay it off.
Take money you earn and put it in a savings account at the very least, or into stocks.

HECS is the best loan you'll ever get in your life, and there's no real interest on the loan. I think grows by 1.5% or something like that to adjust for inflation - but you can make your money grow more than 1.5% easily. Guaranteed 2.8% in a high interest account, more with stocks over the long term.
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Joseph41

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Re: Best way to pay off uni fees?
« Reply #5 on: June 16, 2017, 04:14:58 pm »
+1
I'm fucking shit when it comes to finances, but I don't see why you wouldn't utilise HECS. :) Seems a pretty good system to me.
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