Would You Pay Your Child’s HECS Debt?

Thursday, October 21, 2021 1:08 pm
Reading Time: 2 minutes

Would you pay your child’s HECS debt?HECS Debt

The push continues for Australians to receive higher education. But there is not much discussion about funding. While government subsidies and loans are available, Australia is the 6th country in terms of average tuition fees for domestic students. More students are working while studying and swapping their course of study halfway. So the time taken to complete their degrees have extended. Should families save for their kids higher education, or utilise the government’s HECS-HELP loan? Elson Goh, from EG Financial Services, joined Mike to tell us more about HECS.

What do the statistics show?

Today, universities today charge per unit, not by course. The more units you take and courses you swap, the more you pay. As an Australian citizen you can expect to pay between $12,000 to $45,000 for an undergraduate degree. Compulsory repayment threshold is $45,881 but the more you earn, the more you have to pay back.

Would you pay your child’s HECS debt?

Parents who pay:

  • Give their kids a debt free kick-start in life
  • Tend to be more proactive in choice of degree and involved.

Parents who do not:

  • Flexibility of education pathway and time for completion
  • Cultivate independence and responsibility
  • The expense can cause fatigue

What are the options?

  • Take time to understand the implications
  • Carefully decide on the course of study as fees vary significantly
  • ¬†Offset or redraw facility on your home mortgage is the easiest and hassle free
  • Consider paying part of the fees or introduce incentives such as payment upon successful completion of each unit
  • Non-restrictive education bonds or savings programs
  • Avoid shares or cryptocurrencies

“I think when your child is in high school you would have a rough idea of where your child will head towards. I think that early conversation/preparation would probably help you out as you are nearing the completion of their year 12.”

Would you pay your child’s HECS debt? Let us know by texting or messaging us on socials. Listen to the full chat below!

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