That is because it contains my HELP Loan Repayment Estimator.

In A Nutshell –  If you enter your current or estimated salary and your HELP debt – it will estimate how long it will take you to pay off the loan (estimate being the key word there are a number of variables that could change in the future).

In a few articles -I explain more about HELP-HECS, how it works, should you make voluntary repayments to repay your loan. Check out posts marked Uni http://nomoney.com.au/category/uni/.

I have spent hours and hours trying to get it to work in all situations, to make it simple (and look pretty!).

Not on the newsletter? You are missing out.  Sign up now and you’ll get access to the HELP Loan Repayment Estimator.  

I have attached a screen shot of the spreadsheet below (I posted it small – you can click to view the larger version)

This post is password protected. To view it please enter your password below:

Password:

This article is 2/2 of HELP-HECS. See http://nomoney.com.au/hecs101/ for part 1.

I have spent time to try to make this as simple as possible (with a few diagrams, etc.). But I find that doing calculations makes me understand how things work better. So for those who sign up to the no money newsletter I will send a link to download the HELP-HECS calculator – then you can look at what to do based on your own circumstances.

 A simple diagram of how HELP-HECS works (explained in part 1) is attached Are you Eligible for HELP diagram.

When you start uni you can either:

1. Get a 20% discount for fees paid upfront over $500 (up to the whole fees amount)

2. Defer your fees into a HELP-HECS loan (note you can still get 10% discount for voluntary repayments over $500 later)

The Big Question: Should I voluntarily repay my HELP loan?

The answer depends on your circumstances (of course!). But the discounts are appealing. 

Pay Upfront (20% discount): If you can afford to pay upfront you should consider it. A 20% return is a pretty good investment! (Scotts note: My parents paid my HECS upfront. although I paid them 10% of my salary in board. We worked out they paid $5,000 more in uni fees than I paid them in board.(thanks Mum!)

Make a $500+ Voluntary Payment (10% discount) An automatic 10% return on your money isn’t bad…but there might be better plans for your money. Instead of repaying a HELP loan that only charges 3% interest (13% better off) you might consider:

1. Save for a home – Buying a home means your deposit of 20% will control 100% of the house.If the home increases in value you can gain large percentage returns on your initial cash deposit.

If you don’t expect to own a home for 4-5 years – Start a First Home Saver Account – they pay 17%plus bank interest.

b. Leave a buffer: – If you are planning an overseas trip it might be cheaper to leave the money as savings – rather than repay HELP and put the trip on your credit card (its better to pay 3% HELP loan interest than 20% credit card interest).

Reasons FOR voluntary repayments to your HELP-HECS

-Getting a 20% or 10% discount

- You might probably end up blowing the money on junk anyway wouldn’t you?

Reasons not to repay HELP if:

 - If you have worked out a plan (maybe using one of the reasons above), where you think you might be better off at the end of the day.

If you are happy keep a buffer just in case. (this might not even cost you as you pay 3% HELP interest and earn 5% interest less tax)

Once you get a job

See the What does tax have to do with HELP diagram 

Tips on paying HELP back

1. If you have a job, consider whether or NOT to tell your employer about your HELP debt

If you tell your employer that you have a HELP debt (item 7 on the attached Tax File Declaration form that your employer gets you to fill out), then your employer will withhold extra from your salary to help cover the HELP repayment (so you don’t have tax to pay when you lodge your tax return.)

Benefits of telling:

+Forced savings towards your HELP debt

Benefits of not-telling:

+Interest on your savings for a year plus (especially if you have a tax agent)

+Could save cash to make voluntary payment (although note a voluntary payment doesn’t stop a payment due when your tax return is lodged)

Conclusion: So although the extra money that your employer would withhold is a good form of ‘forced saving’, you may choose not to tell your employer if you are disciplined enough to save the extra money yourself. If you set up a transfer to a high interest account – you may be better off.

2. Last Year Payment – Take advantage of the 10% discount

 As mentioned, voluntary payments over $500 will attract a 10% discount.  (Note that: When you lodge your tax return and have to pay HELP, this is NOT a voluntary repayment).

So one strategy, particularly if lodging this year’s tax return will bring HELP to $0, is to pay the amount BEFORE you lodge your tax return.  For example, if you owe $1 650 then you could pay $1 500 before lodging your tax return.  If you lodge your tax return, the full $1 650 will be added to your tax (and reduced from the loan.

Part 2 (to be posted Monday 8th March 2pm) will be about:

1.Whether you SHOULD repay your HELP-HECS loan and

2. The Best Ways to reduce your HELP-HECS loan

I have also almost finished a HELP  calculator (to work out how long it will take to repay your debt) I will be providing a free copy to those who are signed up to my newsletter (Sign up at www.nomoney.com.au/newsletter)

How HELP-HECS Works

 - A bit of information about university fees.

So you get a good UAI in your HSC and you are off to Uni. 

If you have gotten in to a course – you will have usually got into a Commonwealth Supported Place. Most students are in these places.   The government actually pays for part of your Uni degree by offering cheaper fees (i.e. full-fee paying pay a lot more than Commonwealth Supported students).

 The other option is a full-fee paying place. With full fee paying you pay the full amount. Unlike HELP students you don’t get Government cheaper fees or a HELP-HECS loan).

 So when you get a job and realise how much is taken out of your salary to pay tax – at least remember that the government has offered you cheaper fees at uni (which the Government pays to help fund Universities).

A bit about HELP

 HELP or Higher Education Loan Programme is where the government pays your uni fees (and then you pay them back).  I think it is a pretty good deal – cheap interest, only have to repay the loan if you earn over a certain amount (more on this below).

So there are 3 options to ensure the Uni gets paid for the subjects you are doing:

 1. HELP Loan –  Defer all the course fees into a HELP loan  (Note you will still have to pay a few hundred dollars in other items like Student Levies to cover sporting/association funding). So the Government will pay the fees to your Uni.

2. Pay cash -  Pay 100% of your course fees (you get a 20% discount for paying upfront – so instead of $5,000 fees added to HELP debt – you can pay $4,000 cash to the Uni)

3. Part Cash, Part HELP Loan – Pay a part of the amount (note if you pay over $500 you get a 20% discount)

 HELP Debt – How does the debt work?

 So just an example of how it usually works

 1^st Semester Comes up – You elect to defer (and get a HELP loan). You have 4 subjects @ $750 – you have a HELP debt of $3,000.

 You do this for the 3 or 4 years you are at uni. You then have 3 years x 2 semesters = 6 semesters of $3,000 = $18,000 HELP debt.

 The government charge interest on the debt of a few percent 2-3%. This amount is usually added to your balance in May (note this for the ideas about HECS later).

 Your HELP account is administered by the Australian Taxation Office (ATO for short).You will get a statement from the ATO about once a year – however you can call them to check your balance or work out how much you have to pay to pay off your debt (As payments over $500 attract a 10% discount – e.g. $500 reduces your HELP debt by $550)

When do I have to pay the HELP debt back?

When you lodge your tax return over the HELP repayment income (see below) a percentage of your taxable income gets added to your tax bill (to repay part of the HELP debt).

For example, after uni you get a job earning $45,000 a year. Based on the table below when you lodge your tax return you are required to pay 4% of your HELP repayment income – or about $2,000.

(HELP Repayment Income is similar to taxable income but designed to add back rental property losses + salary sacrificed super + fringe benefits + and a few other things so that you can’t buy a negatively geared rental property to  your income to avoid paying HELP).

Tune in next week to see whether you SHOULD repay your HELP debt and the best ways to repay your HELP loan

   Don’t forget to sign up for the newsletter (click here)

Send us an email at nomoneyau@gmail.com if there is any more stuff you would like to see on the site (or if you have any questions).

 without further ado… Things to Do when Uni Semester Starts

Textbooks                                                                

The first week of term EVERYONE is getting their books at the Co-op book stores.  

Also the Co-op is usually packed the first Saturday  as well.

So my idea is NOT to get your textbooks in the first week. (unless you are worried you will get behind with your studies).

By buying in the second/third week you can work out:

1. Whether you need the book at all (There are subjects like into computing and marketing that I didn’t even open one of the two required textbooks. If you know anyone who has done the course ask which book(s) you need and which you don’t.
2. Whether the Old Edition is still OK -Whether you can buy from a friend or 2^nd hand (maybe from a website).

Unfortunately the publishers usually publish new textbook editions so you have to buy new textbooks. However – you might be able to get by with an old edition –

The lecturer will usually tell you if you ask if you can use the old edition.

Orientation Week

First week at uni all the clubs/organisations come out. They can be good fun, a great way to meet people and really get involved in the uni life.

Everyone seems to disappear in the 3^rd week (after all the hard work starts!). 

Plan Ahead

In the first week you usually have minimal homework. This is your chance to plan ahead. If you plan ahead and start assignments early, etc. – you will be streets ahead of everyone else who don’t start working until week 3.

One way of doing this is planning your homework time. While it seems a bit geeky – working out where you do your homework will help you not feel guilty when not hitting the books.

What I mean is –

The hour before a tutorial may not be the best time for starting last weeks’ homework – but it is better than getting picked on in class because you did nothing!

For example you have

BoringLecturer201 Monday 2-4pm and Thurs 1pm,

HeapsHomework102 Tues and Thurs mornings 9-11am,

HardInteresting201 Monday 5-9pm and

BludgeElective105 Tues 2-5pm.

Monday morning you probably wake up at 10am and do HeapsHomework til 1pm, have lunch and go to uni.

You look at your answers for HardInteresting and BoringLecturer 30 mins before class.  Monday night – relax after a long day!

Tuesday 11-2pm free time – have lunch with friends – push them back to 1pm so you can finish HeapsHomework (and scan the Bludge elective questions so you don’t get caught out in tutorial)

 Wednesday – free day – work, etc

Thursday – After HeapsHomework finishes at 11am – hit the books til 1pm.

You might choose to work extra on Thursday afternoon to avoid any time Fri or Sat but that is up to you.

So what you have given yourself above is a plan.

Things often don’t go to plan – the Monday morning or Thursday afternoon you don’t get the homework required – fine – do it on Sunday morning.

Write important dates in your calendar

Knowing dates when assignments are due is very important. If 3 assignments are due the same day you can’t simply do one late night the night before to finish 3 assignments.

Working full time while at uni made me a little bit more disciplined with this (because I didn’t feel like doing an assignment until 4am and then going to work). However I did stay up later finishing a lot of assignments.

Listen in class & Do the homework

Since you are sitting in the lecture anyway – you might as well listen!

For more in-depth tips I like Steve Pavlina’s article 10-tips-for-college-students/ - while ‘College’ students shows Steve is American – I think most of this stuff is great for Uni students.

HELP (formerly known as HECS)

In the next few days I will be posting an article on exactly how HELP (formerly HECS) works (and when and how you will/should pay it off).