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Anyone else who was blind-sided by the HECS/HELP interest rate changes? (aussie.zone)
submitted 1 year ago by Emu_Warrior@aussie.zone to c/australia@aussie.zone
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I guess I'm stupid. I didn't realise they changes the interest rates on HECS. Is it true, you basically should pay it off ASAP because the interest now is massive (I think it says 7% on mygov). I always understood HECS was almost interest fee so I just left it for a long time. Now I'm desperately trying to pay it off quickly so I don't have the compounding debt.

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[-] Emu_Warrior@aussie.zone 2 points 1 year ago

Thanks yeah, I haven't been in Aus in many many years, so haven't been following it. Do they release next years rate before it goes into effect? Like, would it be best to wait to see if the ~7% goes down and therefore it is better to pay back if it's predicted to go down the following year? Or does each year compound and can only go up in what I'll owe? And yes, I really don't understand how these things work very well.

[-] cccc@lemmy.world 3 points 1 year ago

Each year it compounds. They announce it in March and apply it in June.

So you have balance +7% now Next year you will have balance +7% - any payments taken from your tax return this year + new rate

Hope that makes sense.

I had a debt for over ten years and do remember seeing it index down near the start of it so it is possible, but very improbable.

[-] Emu_Warrior@aussie.zone 1 points 1 year ago

Thank you!

this post was submitted on 21 Jul 2023
18 points (95.0% liked)

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