How can I start getting square with my HECS debt?

September 19, 2008 5:05 PM

Hey, Australians who have dealt with (or are) HECS bureaucrats! How can I start getting square with my HECS debt?

I went to university in Australia in the 90s, receiving some money from the HECS scheme. I worked for a few years in Australia but without reaching the minimum wage requirement to pay back HECS. Then I left the country and got a job that does meet the requirement... but since I don't pay any Australian taxes, no HECS. Now I'm building up to the house-and-family thing and want to deal with this thing once and for all.

What I want to be able to do is:
1) Contact HECS and find out how much money I owe
2) Work out a payment plan that's as convenient for me as possible (for ex, taking advantage of 'If you pay more than $1000 at once' bonuses, if they have them.)

But I am afraid to take step 1 until I know how they're going to react. If they're just going to want to persuade me to pay them back, and offer me incentives to do so, great. If they're going to be threatening me and making demands, I want to be prepared to respond.

BTW, I am definitely looking for closure here. I won't ever live in Australia again but since who knows what will happen in the future (for ex: my government and Australian government reach an agreement about wage-garnishing in 2050, I get hit with 60 years of compound interest just before retirement)... I want to get to a situation where the Aus. government and I both agree that we are 100% square, end of story.

I am however open to fancy tricks that achieve this goal, legally, but minimizing the amount I pay back.

Throwaway gmail: [e-mail]. Thanks in advance for your advice.

posted by anonymous to law & government (7 comments total)

This article here implies that there isn't (at least, as of the end of last year) any mechanism in place where you can be forced to pay HECS if you aren't filing taxes (e.g., if you're not earning money in Australia). Even if they do close the loophole as suggested by making new HECS (or HELP as it seems to be known now) debtors sign an agreement to repay their debt even if they move overseas, I'd be rather surprised if they could make it retroactively apply to you. It seems that, technically, you haven't done anything wrong at all, and there's no reason to fear threats or demands. If you were really concerned, you could just elect to not reveal your identity while initially talking with staff on the HECS/HELP hotline, but my understanding is that you haven't done anything naughty at all. In fact, I think they'll be a little amused and thankful that you're trying to do the right thing, and would be more than happy to help you out!

Given that there's not actually any requirement for you to pay anything, you won't have to establish any payment plan. Currently, there's a 10% bonus for voluntary repayments over $500 and, lucky for you, that should apply to all of your payments. So, if you want to do the right thing (and yeah, I think it's a pretty good idea!), it looks like it's just up to you to pay up whenever it's convenient. It's anyone's guess as to whether the 10% bonus is going to go up, down, or disappear entirely (doubtful, really) but I guess that'd be the main thing I'd be thinking about in terms of rushing into repayments or holding off. The bonus was actually 15% until 2005 (I think?), so it's already dropped. I have no idea whether the Labor government will push it up again, but I see little reason why they would (though I am by no means a keen observer!).
posted by bunyip at 6:21 PM on September 19, 2008 [1 favorite]

You won't be in any trouble. You are not behind on your obligation at all, because compulsory repayments are calculated on your Australian taxable income. There is also no interest charged on HECS, it is annually indexed (using the CPI). You get a 10% bonus on any voluntary payment over $500.

The ATO manages HECS payments. I have my most recent HECS statement here ,and the contact details given for HECS payments are
www.ato.gov.au (where you can find the publication "Repaying your HELP debt in 2008-09 (NAT 3913)" )
phone [phone]am to 6pm AEST
(I assume you will need your Australian Tax File Number for them to check your records).

You sound a little confused about the whole HECS deal, so you might also benefit from the site www.goingtouni.gov.au which I think contains some information. You may not be aware that the system is now called HELP, so people may talk about your HELP debt - it's the same thing.
posted by jacalata at 6:26 PM on September 19, 2008 [1 favorite]

If you are working outside Australia, you do not need to repay your HECS. They won't be angry with you at all, no matter how long you are away.

Since there is no interest being charged on the debt (just CPI) it actually makes more sense to take as long as possible to repay the debt. Your money is worth more elsewhere.
posted by robcorr at 10:50 PM on September 19, 2008

If it helps, I didn't pay HECS for ages and ages, I was working but earning a pitiful wage, and nobody ever said anything, just once a year, I'd get a notification that my HECS went up by this much. They won't threaten you. Seriously. Here's the other thing I do when I'm worried about this stuff. I email the government department concerned (or phone) and say, "here's what I want to know. If I was X, Y & Z, which I'm not saying I am, and I'm not telling you who I am, but what would be the consequences? Big guys with cello cases knocking on my door?" and they generally tell you what you need to know. But yeah, not too big a deal.
posted by b33j at 1:33 AM on September 20, 2008

Urgh... I feel your pain. I realised when I started earning much more money I realised that I had only been paying the interest on the debt for years. I borrowed money (personal loan) and paid the debt off quicker under friendlier terms. The difficulty I encountered trying to make the final payment, including the HECS folks only accepting very strange and convoluted payment methods made me suspect that they secretly hope most people will be paying only the interest for all of their lives. I have no proof of this, but I can't help but feel they weren't particularly conducive to me finishing the debt.

Long way of saying, I would borrow if that's what it took to settle the debt. The endless garnashing of wages and complicated percentage business is a recipe for over-spend.
posted by lottie at 3:43 AM on September 20, 2008

I hope interest is the right term, after reading an account above.
posted by lottie at 3:45 AM on September 20, 2008

Just felt that I should respond to Lottie's comment above: I've never heard anyone able to mathematically justify borrowing to pay off a HECS debt. It may well be slightly complicated to pay it back, but no more difficult than paying taxes in general. If you have money to pay off a personal loan, put it aside, save up and then pay the HECS off as a lump sum in cash, rather than on credit.
posted by jacalata at 5:36 AM on September 25, 2008 [1 favorite]