The impact of changes to HELP design on students

4 Jun 2014

The 2014-15 Budget announced the following changes to Higher Education Loan Program (HELP):

  • The minimum income threshold will be reduced to $50,638 for HELP repayment and will apply to graduates commencing repayments from 1 July 2016.  A two per cent repayment rate will apply for those with incomes above this new threshold, but below the existing indexed threshold, estimated at $56,264 for the 2016-17 income year.
  • The repayment arrangements applying to students with incomes above the existing repayment threshold will not change.
  • The annual indexation applied to HELP debts will increase from the existing rate (CPI) to a rate equivalent to the yield on the Treasury 10-year bond rate, capped at 6.0 per cent per annum, from 1 June 2016. 
  • These changes are estimated to achieve savings of $3.2 billion over four years from 2014–15.

Universities Australia (UA) has modelled the impact of the above changes on engineering and nursing university graduates. Engineering and nursing were selected as samples as they are both occupations in demand but graduate salaries vary.

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