Managing Study Loans
When you attend university or an approved higher education provider, you can get a HECS-HELP loan to pay for your studies if you are enrolled in a Commonwealth supported place (CSP). Whether you’re an employee with a study loan or an employer it’s worth understanding a little bit about the student loan repayment process to make the most of it.
Starting study or have an existing study loan?
If you’ve started studying it’s worth checking in with your employer to keep them informed if you have started studying recently or if there’s a study loan that they’re not aware of.
Check withholding amount
Is there enough being withheld to cover the compulsory repayment? By paying the correct amounts during the year this is more likely to decrease the chance of getting a tax bill at the end of the year. The compulsory repayment threshold for the 2023-24 financial year is $51,550. If your employees earn over this amount, they will be subject to a compulsory repayment. This is automatically calculated once they lodge their tax return.
Calculate the correct amount withheld
The ATO has a HECS-HELP repayments calculator, or visit the repayments, thresholds and rates webpage.
Voluntary repayment of loan
You can make voluntary repayments at any time to reduce the balance of your loan. Voluntary repayments are in addition to compulsory repayments and are not refundable.
If you plan to pay off your total loan balance with a voluntary repayment, it’s best to make your repayment before you lodge your tax return. If you lodge your tax return before your voluntary repayment is credited to your account, a compulsory repayment may be included on your notice of assessment. You may also benefit if you make a voluntary repayment (which will reduce the loan amount), before indexation is applied on 1 June. If you intend to make a voluntary repayment before indexation is applied, it is important to allow enough time for the payment to be received and processed by us before 1 June.
Check the loan balance
Log onto the ATO online services through myGov and check that the loan balance looks correct.
If you have any questions or queries regarding HECS-HELPS loan repayments don’t hesitate to get in contact us at STS Accounting.
