HECS v mortgage

[justinbrett]

Yes so as I said if they are financially disciplined then it makes sense to pay now. id salary is being paid directly into the offset account that $4k is going to be returned to the account within 7 months. I’d suggest anyone with $50k in their offset account has a degree of financial discipline.

That's an assumption though - need to make the risk clear of not doing that.

 

[Lynda2475]

Do they still give discounts for paying early?

I never had a HECS debt as I had a part time job whilst I studied and paid my fees upfront each semester to get the 25% discount.

But I seem to remember my best friend from Uni getting a 10% discount on the amount owing when she paid off the balance of her HECS before moving overseas permanently (she was able to withdraw her super and that funded it).

 

[siberry]

Pay it off.

1. Your child's employer will already withhold $7,000 this financial year but that will not be applied until after he does his tax return. So they'll be refunded that money if you choose to pay it off now. However if he chooses not to pay it off, it'll be ~$800 added to the balance.
2. It'll give your child an extra ~$600 a month in their pay going forward when they notify their employer that they don't have a HECS anymore. They can choose to add that extra $600 to the offset and replace the delta of $4,000 in 6-7 months. This extra $600 will also free up additional borrowing capacity for your child as that $600 is now serviceable for a mortgage.
3. If you have a points-earning credit card (Visa or Mastercard) you can get the full points earn rate with no fees by using Beem (formerly Beem it) and making BPAY payments through the app. The reason this gives you points is because it shows "BEEM IT" on your statement instead of "ATO PAYMENTS".

Post automatically merged: May 16, 2023

I've been trying to make a similar decision, with a $5k balance remaining. The frustration being that an amount for the last financial year has already been taken from my pay, but wont be reconciled until after indexation.

Are you earning more than $89,000? If so it'll be paid off when you do your tax return anyway, so you might as well avoid indexation.

 

[blackcat20]

Are you earning more than $89,000? If so it'll be paid off when you do your tax return anyway, so you might as well avoid indexation.

I'm 0.8FTE at the moment so I'll just be short of clearing it. But probably sensible to get it out the way anyway.

 

[Cruiser Elite]

I cannot believe you even created this thread Duffa - tell Risotto that Uncle Cruiser told her to ignore anything you get from here and get her cough out of that surgery and get it into a decent Financial Consultant’s office - if she hasn’t already - and get professional advice from someone who knows and understands her entire circumstances.

Risotto like all young Australians need to set up a financial plan of some sorts immediately they enter the work force.

Furthermore tell Risotto if she doesn’t follow Uncle Cruiser’s advice and has sufficient funds to throw away then next time we break bread she pays

 

[jezn]

Pay it off! Don't let the sneaky ATO scam an extra $781 from you. HECS indexation really stings you by charging you on the full balance before the payments that you've already made during the year!
Get your tax return in early and you'll get the $7k that you've already paid back in no time.
If you have a credit card that can handle the balance, pop it on there at the end of the month and you might even have your refund back in time to pay it off without the offset account taking too much damage.
Then you can also tell your employer to stop making HECS payments and see a nice little bump in pay each month.

 

[Risotto93]

I cannot believe you even created this thread Duffa - tell Risotto that Uncle Cruiser told her to ignore anything you get from here and get her cough out of that surgery and get it into a decent Financial Consultant’s office - if she hasn’t already - and get professional advice from someone who knows and understands her entire circumstances.

Risotto like all young Australians need to set up a financial plan of some sorts immediately they enter the work force.

Furthermore tell Risotto if she doesn’t follow Uncle Cruiser’s advice and has sufficient funds to throw away then next time we break bread she pays

Wow everyone thank you for all of the advice!

Looks like I’ll be paying off the HELP debt. You’re very right though Cruiser Elite - I need to see a financial consultant in future. No more asking dad even though it seems like his sounding board on here is a very smart bunch!

For everyone following along - I do thankfully have financial discipline when it comes to the mortgage and will definitely be depositing the extra money per month into the offset.

Now to work out a way to pay it and get some points flying Jetstar economy to Hawaii in a month… grim! I need to get into the points game !!

Post automatically merged: May 16, 2023

Wow everyone thank you for all of the advice!

Looks like I’ll be paying off the HELP debt. You’re very right though Cruiser Elite - I need to see a financial consultant in future. No more asking dad even though it seems like his sounding board on here is a very smart bunch!

For everyone following along - I do thankfully have financial discipline when it comes to the mortgage and will definitely be depositing the extra money per month into the offset.

Now to work out a way to pay it and get some points flying Jetstar economy to Hawaii in a month… grim! I need to get into the points game !!

Sorry I should clarify - the fact I’m going to Hawaii at all is awesome!! (Honeymoon trip!) BUT will be ‘grim’ in comparison considering the last overseas trip we took was Singapore business (points courtesy of Duffa) and we were drinking Krug from first class!!!!

 

[Cruiser Elite]

Risotto congratulations he is a very lucky guy - I know how clever you are as you take after Mum so getting the financial advice going forward will be pedestrian for you.

And Shylock didn’t spring for business class tix for your honeymoon? Nah not surprised

Have a wonderful time and keep safe - it’s dad’s shout next time remember

 

[Risotto93]

Risotto congratulations he is a very lucky guy - I know how clever you are as you take after Mum so getting the financial advice going forward will be pedestrian for you.

And Shylock didn’t spring for business class tix for your honeymoon? Nah not surprised

Have a wonderful time and keep safe - it’s dad’s shout next time remember

Thank you!!! We’re flying to Hawaii then to SF and a road trip around California. Will be amazing!

Nope no honeymoon flights bit rough right?!

 

[Cruiser Elite]

Nope no honeymoon flights bit rough right?!

Yes sounds like an amazing trip - enjoy every minute and keep each other safe

BUT

I’d still be putting myself in the mid season draft - gotta be some teams out there looking to pick up a potential MVP and reward them accordingly - just sayin’

 

[siberry]

Now to work out a way to pay it and get some points

refer to my post in this thread earlier today

If you have a points-earning credit card (Visa or Mastercard) you can get the full points earn rate with no fees by using Beem (formerly Beem it) and making BPAY payments through the app. The reason this gives you points is because it shows "BEEM IT" on your statement instead of "ATO PAYMENTS".

 

[Risotto93]

refer to my post in this thread earlier today

Awesome I’ll look into this. Thanks again everyone for your insight

 

[CaptJCool]

Med Student Who Just Got On The Orthopaedics Program Not Too Concerned About This Massive HECS Indexation Coming

More to come.

www.betootaadvocate.com

this issue has only arisen this year because HECs debt is indexed against CPI and we've had a bumper year. Leading upto here have been some very low uplifts

Indexation is tipped to be higher this year. So is HECS still a 'good debt'?

Student debts are expected to go up by 7 per cent on June 1. If you've got a higher education debt, here's what you need to know.

www.abc.net.au

as for the involuntary payroll deductions, i'd suggest the ATO is either caught by the legislation or not updated the accounts system since it began back in 1989... as the idea cash sits on the sidelines and is only added after the annual adjustment does appear to be an an(nu)al choice

Help! Should Australians rush to pay down student loans before indexation?

While general financial wisdom once suggested Help-Hecs debt was fine to pay down slowly, the current economic climate may rewrite the rules for some

www.theguardian.com

on there, the suggestion is if in the last two years of debt, it may be prudent to pay it off in full

and yes, voluntary payment at any time but ZERO discounts offered/

Voluntary repayments

You can make voluntary repayments at any time to help reduce your balance.

www.ato.gov.au

the compulsory repayment is only triggered if on 1 June, there is an outstanding amount remaining

• When you pay off your loan in full, complete a new Withholding declaration (NAT 3093) to advise you no longer have a debt. Update your loan type when asked to do so. Compulsory repayments

 

[cove]

I thought pay off HECS before charge hits. Mortgage rates may get closer to 7.0% later this year if the NAB forecast of 4.35% cash rate proves correct but that is a maybe.
Of course this is not financial advice…..
Doing a drive around California is a favourite.

 

[MooTime]

On our recent home loan rejig, the new bank wanted / insisted we pay off Mrs Moo's $20k HECS debt.

1st I've come across that, as it's not even on every company payslip, but mentioned on current pay slip.

Anyway paid it no sweat and now little fatter pay Mrs Moo gets. Plus looking forward to her tax return (well she is, moooo) as I know we paid more cos couldn't get an exact total. It seemed a little all over the place deal, call ato, call the Uni blah blah.

All fine in the end.

 

[cove]

Modern day banking @MooTime. I hadn’t heard that they were so demanding.

 

[Forg]

Modern day banking @MooTime. I hadn’t heard that they were so demanding.

They seem to have become a little antsy, dunno if that’s due to having been burned by borrowers or if they’re worried about the various smacks over the nose they’ve been given by rolled-up newspaper wielding governments. But an amount you owe does seem to be considered a very much greater risk/cost than the amount of the repayment.