There is never a bad time to educate yourself. You might want to improve your knowledge and skills to help secure a dream job, or be looking to improve the results of your business. Either way, the good news is that the FEE HELP system in Australia allows many people to study their chosen course without the constraint of having to pay up-front.
Did you know you can study a higher education or VET course now and pay for it later? If you are an Australian citizen, you are eligible to study nationally approved and accredited courses without paying upfront tuition fees! Your tuition fees are then repaid over time when your taxable income is above specified levels. There are currently five options of these HELP loan schemes – FEE-HELP, HESC-HELP, OS-HELP, SA-HELP and VET FEE-HELP. Each of these options covers specific areas and levels of education. Today we will look at the VET FEE-HELP to help you to better understand this HELP loan scheme before you enrol into any applicable course. Remember you are taking a loan from the Government which you need to repay later, so it is important to understand all the benefits and obligations.
What does VET FEE-HELP mean?
VET – Vocation Education and Training.
VET courses are generally designed to deliver workplace-specific skills and knowledge. Vocational education and training (VET) covers a wide range of careers and industries, including trade and office work, retail, hospitality and technology.
HELP – Higher Education Loan Programme
A suite of loans offered by the Australian Government that assists eligible students with paying their tuition fees (VET FEE-HELP or FEE-HELP), student contributions (HECS-HELP), overseas study expenses (OS-HELP) or the student services and amenities fee (SA-HELP). All HELP loans are repaid through the Australian personal tax system.
VET FEE-HELP – An Australian Government loan scheme that assists eligible students enrolled in certain higher-level VET courses at nationally accredited registered training organisations (RTO’s).
What does Study Now, Pay Later actually mean?
VET FEE-HELP and other FEE-HELP loan schemes are often promoted as Study Now, Pay Later but many students don’t know the process of how this will work for them. Here are some details:
Study Now – If you are eligible for VET FEE-HELP and want to study a course which is approved for VET FEE-HELP then you can usually start studying the course pretty much straight away (after meeting entry and enrolment requirements of the education provider and after being approved for the VET FEE-HELP) without needing to pay the tuition fee before you start studying.
Pay later – You can pay for your course tuition fee later as initially the course fee is covered by the Government loan scheme, in our case VET FEE-HELP and you don’t have to start repaying this loan until your taxable income is higher than a particular amount – compulsory repayment threshold (see the explanation below). You can choose to use VET FEE-HELP loan for all your tuition fees or you can pay some of your tuition fees upfront and use VET FEE-HELP loan for the rest.
Let’s take a look at the most important aspects of VET FEE-HELP which you should know before you decided to enrol into an approved VET FEE-HELP course.
1) You may be eligible for the VET FEE-HELP loan if…
There are three main criteria’s which you need to meet to be eligible for VET FEE-HELP
- You must be an Australian Citizen or permanent humanitarian visa holder
- You have not exceeded the FEE-HELP Limit which is the maximum lifetime amount of how much one person can borrow under either VET FEE-HELP or FEE-HELP. This means that any amount you borrow under either VET FEE HELP or FEE HELP will reduce your FEE HELP balance until you have reached the FEE HELP limit. Currently (as at August 2015) the FEE-HELP limit is $97,728 for most students. For students studying medicine, dentistry and veterinary science courses the FEE-HELP limit is $122,162. If you use either FEE-HELP or VET FEE-HELP it always reduces the FEE-HELP balance and it is not topped back up by your repayments. Example: You use the VET FEE-HELP to cover the costs of The Left Bank School Diploma of Business BSB50215 which costs $8.500. Then your balance available after finishing our course and repaying the loan will still be $88,928 which you can then use for your next studies.
- You must meet the course requirements. The most common requirement is that you need to be a full fee-paying / fee for service studying a diploma, advanced diploma, graduate certificate or graduate diploma level course at an approved VET FEE-HELP provider like The Left Bank.
VET FEE-HELP is subject to availability (i.e. spaces are limited).
2) The accredited educational provider will help you to process your VET FEE-HELP application
The approved educational provider will need to provide you with a form to apply for the VET FEE-HELP. It is called ‘Request for VET FEE-HELP loan’ and once you receive it from your educational institution at which you want to study, you need to complete the form, read the VET FEE-HELP Information Booklet, sign and send back to the educational provider. They will then process your application and will inform you whether you have been approved or not. It is very important that you receive this form only from the approved provider and not from someone else. You can also be invited to complete an electronic Request for VET FEE-HELP loan form but the educational provider must meet certain requirements to use the electronic form including providing you an access to details which you submitted via the form or meeting the electronic signature requirements.
3) Only nationally accredited providers can offer courses which can be covered by the VET FEE-HELP loan scheme
Taking a loan to cover your studies is an important decision which you will make in your life and even though the Government provides this assistance people should ensure that they study only high quality and accredited courses at approved educational and training providers under the Higher Education Support Act 2003.
4) There is no upfront cost for you and you will repay the loan through the Australian taxation system
When you decide to enrol into a VET FEE-HELP approved course, if you are eligible for the loan and if you decide to use VET FEE-HELP loan for all your tuition fees you can start studying without paying anything upfront. Your debt will be indexed and the HELP debts are indexed annually in accordance with the Higher Education Support Act 2003. Indexation rates are published on the ATO website, visit www.ato.gov.au. The loan fee is currently (2015) 20% and you will repay that together with the loan repayments. The fee does not count towards your FEE-HELP limit though.
You will be obliged to start repaying your HELP debt as soon as you repayment income is above the compulsory repayment threshold. This can be even if you are still studying. The repayment income is calculated from the amounts given on your income tax return (for more details check the ATO website). The amount you repay each year is calculated as a percentage of your repayment income and increases as your income increases, but is capped at 8% of your income (in 2015).
5) You have the right to withdraw from the course before a particular date (census date) and not incur any debt
This is very important and all VET FEE-HELP providers must inform their students before they enrol into a VET FEE-HELP approved course. As a student you have the right to actually withdraw from a VET FEE-HELP approved course even after you start studying and not incur any debt. But you must correctly withdraw (based on the education provider’s withdrawal requirements) from the course or a unit of study by a particular date which is called census date. Each provider is responsible for setting their own census dates but the census date must be at least 20% of the way through the study period for a unit of study.
6) You can study more than one course through VET FEE-HELP (as long as you don’t reach the cap)
You can fund as many courses as you like but within the FEE-HELP limit. The FEE-HELP limit is a lifetime amount so every time you study a VET FEE-HELP or FEE-HELP approved course and use the FEE-HELP loan, the total amount of how much you can borrow is reduced by the amount you “pay” for each course. You can even get a HELP-FEE loan for two courses at the same time. You just need to ensure that you have enough of your FEE-HELP balance remaining and you meet the main general requirements mentioned above.
7) You can study both full time or part time courses
There is no specific requirement around studying full time courses to be eligible for the VET FEE-HELP loan as long as you meet the eligibility criteria and you study an approved course at an approved provider.
8) HECS debt does not affect your eligibility for VET FEE-HELP
If you have incurred a debt under the HECS scheme it doesn’t affect your eligibility or does not decrease your FEE-HELP balance. The only two schemes related are the FEE-HELP and VET FEE-HELP. That means that you have one limit for both of these loan schemes. In other terms if you incur a debt under the FEE-HELP loan scheme and want to then use the VET FEE-HELP loan for another course then you need to make sure you have enough of your FEE-HELP balance left to cover the tuition fees of the next course.