Every wonder why you see young people with a frown on their face? It could be because they’re carrying a whacking great HECS or FEE HELP bill.
We write plenty of resumes for people in their 20s and 30s, who are studying part-time and working multiple low-paid casual jobs, while trying to pay back HELP debt that’s slowly growing.
Compulsory HELP repayments don’t kick in until you reach $48,361.
Once you hit that threshold, the amount of debt you have to pay back increases with your income — so the more you earn, the more you’ll repay that year.
It’s worth noting that the Babyboomer generation got their education free.
According to last month’s federal budget papers, inflation has piled more than $1.9 billion of extra debt onto students in 2022.
That’s expected to jump another $1.6 billion in 2023. Debts will continue to compound.
Melbourne man Ben Haber wasn’t thinking too much about his student debt until it scuppered his ability to borrow for a mortgage.
“I didn’t look at it (the debt) until I applied for a home loan and needed to produce those numbers for the bank.”
The now-lawyer spent six years in tertiary education and left with a HECS-HELP debt of about $140,000. Three years later, he’s only been able to get that down to about $130,000.
Looking for a mortgage, Mr Haber went to a broker. He was told lenders were worried his HELP repayments would affect his ability to also make mortgage payments.
He’s now close to being approved via a different bank. But he said it’d been difficult “shopping around” for a mortgage and he could have borrowed $50,000 more if he didn’t have a debt.