Uni Fees...HEC's/HELP

[weeds]

Had a bit of a search in the web.....but figured i might get better answers from somebody currently exposed to it.

My oldest is just finishing year 12 and will be going to university.

His grandparents are going to offer a sum of money to assist him with the costs of UNI.

Let's work on $10k......

Is it better for him to pay for subjects up front?? Does this save money in the long run.

Or

put the money into a term deposit so it earns some interest and pay his debt off once he finishes or earns the minimal wage.....buggered if I could find reference to this, not sure of this system is still operating.

[Young Angus]

I've just recently paid off my HECS about 12 years after completing uni. As far as I know HECS fees don't get bigger with interest, however they are "indexed" which is probably just a roundabout way of them getting bigger with interest but in a loophole'y kind of way. Either way, HECS never get in the way of getting home loans or anything like that, they just sit there and a little bit comes out each week to contribute towards them when you start earning enough money. It's very manageable, and I'm sure a good sum of money would be much more useful in putting towards a house deposit or paying off other debt or something like that. If I had a bunch of money at the start of my degree my uni fees would have been last on the list.

[weeds]

Thanks.

Grandparents said the $$$'s are specifically for subjects studied. They are old school and changing there minds.

[Disco-tastic]

Gday weeds.

I just paid off mine. When i was studying you could pay for courses up front for a 20% discount. Im not sure if thats changed recently with the tertiary education changes but i used it to save a grand or so.

As said tho, its not really noticed once working. I ended up getting $77 a week more once paid off, or around $4k a year.

[p38arover]

When our daughter was going to Uni (finished 2 years ago), paying in advance got quite a good discount. I don't know if that still applies.

[weeds]

When our daughter was going to Uni (finished 2 years ago), paying in advance got quite a good discount. I don't know if that still applies.

That's what I thought as well but I see there has been some changes from Jan 2017

[l00kin4]

I'm in the same boat exactly. This article pretty well covers it: Paying uni fees upfront v taking a HECS loan (http://www.smh.com.au/money/paying-uni-fees-upfront-v-taking-a-hecs-loan-20160128-gmfrrp.html)

David

[weeds]

I'm in the same boat exactly. This article pretty well covers it: Paying uni fees upfront v taking a HECS loan (http://www.smh.com.au/money/paying-uni-fees-upfront-v-taking-a-hecs-loan-20160128-gmfrrp.html)

David

Awesome, thanks I will have a decent read tonight.

[101RRS]

Don't forget to factor in the text book rip-off - can be very expensive.

[p38arover]

Don't forget to factor in the text book rip-off - can be very expensive.

Do they buy textbooks any more? Everything seems to be on line.

[101RRS]

You don't think lecturers are going to give up that cash cow.

[weeds]

Thanks all......The offer from grandparents is for course/subject fees only. The boys will have to sort text books

[Disco-tastic]

Don't forget to factor in the text book rip-off - can be very expensive.One guy i went to uni with would just borrow the textbook from the library and renew it all year until someone else wanted it, then keep it until after the semester and return it. The late fee was about $25, 1/4 of the cost of most of our textbooks at the time. :D

[101RRS]

I went to 4 different universities and the libraries in all were not permitted to carry the listed text books to stop exactly what talked about. Carried old editions but as we know new editions come out each year to stop students using older editions, so forcing them to buy new stuff.

Really needs to be looked at as part of the next review into the tertiary education system.

[Toxic_Avenger]

I lost count of how many textbooks I had to buy which were authored or co-authored by the lecturer.
The most dodgy of the lot was a really B-grade program for neurology which was a simulated lab exercise- with a character called 'professor neuron'. It was a graded assessment.

The program was that poorly done, that all the sound files were in .wav format on the $25 CD ROM (which all 800 students were required to buy). So I extracted them all, cut down the files and rearranged it into a diatribe of sexual innuendo for teh lulz, using the lecturer's voice.
[biggrin][thumbsupbig]

Can and will PM if you want a good laugh!

[DiscoMick]

Been there and done that. Recommend against paying upfront as you are better off to pay later when earning income.
Try to explain to the grandparents that the best way they can help is to help the student to graduate and become self-supporting.
There are better ways they can help.
For example, the student will need a laptop, which will need replacing every couple of years. Textbooks will be needed. There will be workshops, tutorials and various other study costs and associated expenses, including clothing and meals.
I recommend a special bank account be established for study costs. The grandparents could give the student a debit card to use to draw on the account when needed for study costs. That way the grandparents can monitor the spending and object to anything they don't like.

[Discovered 1 2]

Tell the grandparents to save it for post grad study.. that'll ensure the lads grind through undergrad to get it.. And I don't think there's interest payable on a post grad HELP debt... but check.

And yep courses appear to be going away from fixed texts. The last one I read talked about Lance Armstrong as the high water mark of resilience and character [emoji846]. Doing my 8 course of post grad now and that's the only text we've been forced to buy, now it's been scratched too

[weeds]

Thanks for the suggestions......my parents are old school from the county, when they offer something it doesn't change, we will honor there generous offer....they don't mind when it is spent. They will transfer the $$'s as soon as he had a spot.

It appears investing the money and paying off the debt after study gets best bang for the $.

Cheers

[Toxic_Avenger]

HECS/HELP debt is not a bad debt per se. It's CPI indexed and paid before tax. It's on a sliding scale, where the repayment threshold beigns at an income over $55k p.a. I've been stung for a few years now, as the yearly percentage of the HECS/HELP debt you need to repay increases with income. Info here: Loan Repayment - Study Assist (http://studyassist.gov.au/sites/studyassist/payingbackmyloan/loan-repayment/pages/loan-repayment)
IIRC the voluntary repayment bonus was dropped - It used to be rather generous, and I made a few contributions over my years, but leave it to its own devices now.

As for your options, if the cash can't be used for education related expenses, then any investment which is greater than the CPI rate at which the loan is increasing by, is a good investment.
A quick google shows a 3 year term deposit on 10K, interest calculated monthly is 2.35% p.a. CPI is around 2%.
You could probably work some magic with a Net Present value calculation, but see point 1- HECS is a cheap debt to have!

[Toxic_Avenger]

Keep in mind whatever voluntary repayment are made after he finishes, the >$55K income will still attract a minimum 4% repayment on the balance.

What does he want to do at uni?
As long as it's not a bachelors of sandwich artistry, then you'd need to also calculate the estimated income he'll make into the repayment percentage of the loan total.

[101RRS]

where the repayment threshold beigns at an income over $55k p.a.

That is what they say, but in fact you begin to repay when your weekly income is goes above $1057 (the equivalent og $55k p.a.) An unemployed friend of mine (who is not on the dole) managed to get a months contract work at about $1500 per week, so only earned about $6K for the entire year as that was his only income - he had Hecs repayments taken out of his pay.

Garry

[Toxic_Avenger]

Might have worded that a bit odd, but for your mate, Yes that sucks.
But the other side of the coin is the person who makes under the threshold, and receives a large, annual bonus or similar which bumps them right over the threshold- no payments were taken thru the year, and it equates to a bigger tax bill at the EOFY. $1 earnings above the threshold could equate to a lump sum repayment of 4% on a $50K loan ($2K) without any provisions up until the time you hit 'go' on your tax return.

[Draco Australis]

Hi weeds, I have a hecs-help debt and it costs me about $4k a year in repayments. It's the accommodation and food while you can't work full time the screws you over. That's where assistance is best used in my opinion. As for getting a hecs loan for all or part of it, I'd go all. I used to think I'd want to pay it off as soon as possible for the sake of the taxpayer and even voluntarily paid $5k off in my first year of work outside uni when I was earning well below the threshold. The next time I got my tax return back with that great little sheet that shows where the federal government wastes our money on bludgers and ungrateful aid recipients, I decided to pay back only what they demand.

Sent from my F8331 using AULRO mobile app (http://r.tapatalk.com/byo?rid=78345)

[PAT303]

I'm at uni now,I'd rather have the money to spend on a new laptop, fuel, food etc. I don't buy books anymore, like others have posted it's a rip. Pat

[weeds]

Thanks guys......unfortunately the money is only for course fees so have to focus on that.

[CraigE]

Just as an side, when buying text books look at somewhere like The Book Depository, many of my books were a third of the cost here and included free delivery.

[Draco Australis]

Just as an side, when buying text books look at somewhere like The Book Depository, many of my books were a third of the cost here and included free delivery.
I bought most of mine from there and will second that