Help Debt 7

Published October 10, 2023

Introduction

Are you struggling with the burden of a HELP debt? If so, you're not alone. In Australia, millions of individuals are facing the same challenge. The Higher Education Loan Program (HELP) was introduced in 1989 to provide financial assistance to students pursuing higher education. While this program has helped many students achieve their academic goals, it has also left many graduates with a significant debt to repay. If you're feeling overwhelmed by your HELP debt, don't worry. In this post, we'll share seven tips to help you tackle your debt and achieve financial freedom.

What is a HELP Debt?

First, let's understand what a HELP debt is. A HELP debt is the amount of money that students who have taken out a loan through the HELP program owe to the Australian Government. This debt includes both the amount borrowed and any additional charges and indexation that may have been applied. It is important to note that this debt is not interest-bearing, and there are no set repayment deadlines. However, you are required to make repayments once you start earning above the minimum repayment threshold, which is currently set at $46,620 for the 2020-2021 financial year.

Tip 1: Understand Your Debt

The first step towards tackling your HELP debt is to understand it. This includes knowing your total debt amount, the repayment conditions and options available, and how indexation affects your debt. To access this information, you can log into your myGov account and access your loan information. Additionally, you can contact the Australian Taxation Office (ATO) for any further clarification or assistance.

Tip 2: Create a Budget

Having a budget is an essential financial tool, especially when it comes to managing debt. Take some time to review your income and expenses and create a budget that works for you. This will help you identify areas where you can cut back on spending and allocate more funds towards paying off your HELP debt. Ensure that your budget is realistic and that you stick to it to see significant progress in paying off your debt.

Tip 3: Make Extra Repayments

One of the most effective ways to tackle your HELP debt is to make additional repayments whenever possible. While there are no penalties for not paying off your debt early, making extra repayments can significantly reduce your debt and save you money on future indexation. You can make extra repayments through your employer via the PAYG withholding system or make voluntary repayments online through your myGov account.

Tip 4: Take Advantage of Discounts

If you're in a position to make a lump sum payment towards your HELP debt, you may be eligible for a discount. The ATO offers a discount of up to 10% for any voluntary repayments of $500 or more. Similarly, if you're planning to study a course while working, you may be eligible for a 10% discount on your debt for upfront payments of $500 or more. Take advantage of these opportunities to reduce your debt and save money.

Tip 5: Investigate Debt Consolidation

If you have other forms of debt with higher interest rates that you're struggling to manage, you may want to consider consolidating your debts into your HELP loan. This allows you to make a single repayment each month at a lower interest rate. However, this only works for some types of debt, so it's important to do your research and seek professional advice before making this decision.

Tip 6: Consider Career Choices

Your chosen career can have a significant impact on the rate at which you pay off your HELP debt. Some professions, such as doctors and lawyers, have higher earning potential than others, making it easier to pay off debt faster. Consider the employment opportunities and earning potential in your field when making career choices, and try to negotiate a higher salary to help you pay off your HELP debt sooner.

Tip 7: Seek Professional Assistance

If you're feeling overwhelmed and unsure about how to manage your HELP debt, seek professional assistance. Financial advisors or credit counselors can help you create a personalized debt management plan and offer valuable advice on budgeting, consolidating debt, and negotiating repayment plans. They can also help you understand the potential impact of your HELP debt on your credit score and future financial goals.

Conclusion

In conclusion, your HELP debt does not have to be a burden forever. It may take time and effort, but with the right strategies and mindset, you can tackle your debt and achieve financial freedom. Start by understanding your debt, creating a budget, and making extra repayments whenever possible. Take advantage of discounts, consider debt consolidation, and seek professional assistance when needed. With these tips, you'll be on your way to paying off your HELP debt and achieving financial stability.

Don’t Wait! Get Your Quote Today.

$15,000

$1,000

$100,000+

Get a Quote Today!