on 29 January 201912:40 PM - last edited on 7 February 201910:16 AM by JodieH
I have a HELP debt which, in theory, I am repaying fortnightly through deductions from my salary. However, those deductions are only applied against my HELP debt after I have lodged my annual tax return.
So essentially I am paying interest on the HELP debt throughout the year (which is applied annually before I am able to make the repayment), and I am being denied the opportunity to earn interest on the amounts that I am paying towards that debt throughout the year. A double penalty.
Will my employer be allowed to comply if I instruct them to stop deducting amounts for my HELP debt?
The only "interest" that applies is that the debt is increased marginally by the rate of inflation each year, just as wages are. Therefore HECS/HELP loans are never going to cost any more (provided the law doesn't change), and provided your interest exceeds inflation (which most savings accounts do), waiting to pay off your HECS/HELP will actually make it cheaper.
Don't make it a priority right to pay off your HECS/HELP loan now, especially if you have other debts to worry about. "Allow the extra tax to be taken out of your salary to simply be paid off over time.
You won't even notice it being taken out. You'll actually earn more on your savings and investments than you will benefit from paying off extra on the debt." That said, stay wary that things might change, and keep an eye on HECS/HELP debt changes announced in the annual federal budgets.