HECS Debt

Hi Scott,

Mmmmm…good question. I’d like some light on this one too. So far I havn’t mentioned it because it doesn’t really qualify as a student loan, does it?

I have a hefty Austudy supplement loan that I plan to pay as soon as I can simply because I just don’t like the idea of having the thing growing like a cancer in the dark recesses of my financial history [}] so I’ll get rid of mine when I can.

I guess some people accomodate dead debt comfortably and others uncomfortably…which one are you?

Keep researching and best of luck,
Hungry[]
Chiba, Japan (until April 2004)

Hi Scott,

To tell the truth, mate, I really think it all revolves around how much debt you actuall have. Mine is almost 10K (nice deposit[xx(]) by now with the growing interest (which is higher for a supplement loan I believe). If yours is significant it will still compound at three percent. If it is a low amount it won’t be so onerous, but that means it would be easier to pay out. Also I think at some point you’ll have to pay it out anyway (particularly if you go home to a higher paying job, if this is the case the weekly salary deductions would not be too tough I wouldn’t think at only a few %). If you wait too long though you could be paying a lot of dead money out to the gov.(though it might be easier for you by then) If you pay sooner it will be less (and you’ll have to work harder now to replace that lost capital).

I know this is probably not the answer you were hoping for but it all depends on what you have planned for the future and it is a decission that you’ll have to make based on your context.

By the way, I’ve been here for 18 mths and am most recently from Bribie Island QLD[] (Brisbane). God, how I miss that place![|)] Been working for the English Factory (i.e. NOVA) for all of that time with my wife. The double income really helps to build up the savings even though it is pretty expensive to live here. We are currently waiting for a rejection or acceptance on a couple of offers we made earlier in the week. Finally, after years of study and research, we are in the game[^]. How about you?

Take it easy and keep your fire burnin’
Hungry[]

Hi again,

I’ve just been looking at the HECS deal on the net. You don’t actually incur any interest[]. It just creeps along with inflation. So, since that is the case, I wouldn’t worry too much about paying it off in a lump sum (any payment over $500 is still awarded a 15% reduction in the amount you are paying off…higher reductions if the amount is more significant). Do what Terry suggested and pay the loan through the tax system (see threshold chart below) when you have to and commit everything else to deposits for your financial freedom. I wish supplement loans worked the same way…damn the private college [!]!!

HECS repayment thresholds:

Below $24 365 nil
$24 365 – $25 694 3.0%
$25 695 – $27 688 3.5%
$27 689 – $32 118 4.0%
$32 119 – $38 763 4.5%
$38 764 – $40 801 5.0%
$40 802 – $43 858 5.5%
$43 859 and above 6.0%

So have you considered investing in Oz from Japan?

Hungry[]

Hi Scott,

I have done everything unseen from JP (solicitor, agent inquiries, valuations etc.)so far using the internet resources (ADSL is beautiful!!!)and the good old Brastel phone cards. I am due to call a builder today to organise an inspection. I’ll use the online yellow pages[].

I was a little wary at first, but as long as the offers are conditional, the numbers work and you’ve done some due diligence of your own you shouldn’t bump into too much trouble(though personal inspection is more comfortable[]. A lot of people on this forum do the same. The forum itself is often a great resource too, hey!

What are your goals for the moment with regard to your investment choices and criteria?

Hungry[]
PS: We might end up on the same plane!

Huey,
If she wants to teach English in Japan…too easy[]

Regards,
Hungry[]

Huey, I am also here in Japan but am an undergraduate student who is just working part time. The others are right about it being very easy to get an english job in Japan and the best way being to do it from oz. Try typing Japan in the search on careerone.com or seek.com and you’ll find that three quarters of the jobs there are english teaching and are very easy to get. In my area at least(Kobe), alot of the aussies come over with Nova with a visa and accomodation organised and after a while(few weeks or months) look for some other teaching jobs. It is very easy to pick up private teaching jobs in the evenings, which is what I do after my uni classes, and most in Kobe that I know of end up quitting Nova and going private or to other english schools which are everywhere and finding their own accomodation as I have heard from friends that Nova charges a fair bit more than fair market value in this area for rent. Comparing Japan to England, if her goal is to earn cash than I cant recommend Japan enough. I have two cousins who are 20,21 years old and in London they are working in bars and clubs. The pay there is nothing like teaching here in Japan. A good indication of this is the fact that they said they would never go to Japan for a holiday as they couldnt afford it but i was able to spend all of August in Europe with 3 weeks in England visiting them(ps the european heat wave would not have been a heat wave if the locals had actually heard of airconditioning!!!). So if her main aim is to earn money i have to say Japan is the best option but I imagine that she would have many other ideas to take into account as well. But living here would be an unforgettable experience that I highly recommend.

Thanks Hungry & David for the info. [] Huey

My bank manager asked to see my most recent payslip. He immediately spotted the HECS deduction printed on it as ‘extra tax.’ He wanted to know how much it was and i said (honestly i thought) ‘about $10,000. He asked to see my last tax return as this lists the amount of HECS owing.
When I saw the true amount was $14,000 I told him i couldn’t find it so he accepted the figure of $10,000. This debt was definetly part of the banks calculations.
Of course if you work overseas, HECS will not appear on your payslip.
[]

when i applied for a loan i asked the lender if they needed the details of my HECS payment because I pay about $60 a week through my wages and he said that they didn’t need that info because as far as they were concerned i’ve had that debt since working full time and I’ve still been able to show a history of savings and building up a deposit.