Education Loans

Check the government schemes first

Before considering any commercial loan for study, work out whether a government scheme covers you. For most domestic students at Australian universities, HECS-HELP covers course fees and is repaid through the tax system only once your income passes a threshold. It is indexed rather than charged interest, and no repayment is required while you earn below the threshold.

FEE-HELP extends similar treatment to full fee places, and VET Student Loans cover a range of approved vocational courses. Nothing in the commercial market competes with these, so exhausting them first is simply good arithmetic.

The gaps are what a personal loan is for. Textbooks, equipment, a laptop, travel, relocation, professional registration, short courses that fall outside the approved lists, and living costs during a placement are all real expenses that the schemes do not cover.

The costs students most often underestimate

• Equipment for practical courses, which in trades, health and creative fields can be substantial
• Unpaid placements, where the real cost is the income you cannot earn while completing them
• Relocation, particularly where a course is only offered in one city
• Professional registration and association fees required before you can practise
• Short courses and certifications that fall outside the approved loan lists entirely

Unpaid placements deserve particular thought. Nursing, teaching, allied health and social work all require substantial placement hours, and for many students the difficulty is not the fees but the months of reduced income. Borrowing to cover a defined placement period is a legitimate use, provided you can name the date it ends.

Getting approved while studying

Lenders assess a student application the same way they assess any other, by looking at whether the repayment fits your income. That is the honest difficulty: part time work while studying often produces modest and irregular income, which limits capacity.

Several things help. A consistent part time job of twelve months or more reads far better than recent casual work. Declaring Centrelink payments such as Youth Allowance or Austudy is worthwhile, since many lenders will count them. Keeping the amount modest and the term realistic matters more than it would for a salaried applicant.

A guarantor is sometimes the practical answer, but it is a serious commitment. A guarantor is legally responsible for the whole debt if you cannot pay, not a character reference, and anyone considering it should understand that plainly before signing. Encourage them to get independent advice.

Structuring it around your circumstances

Match the term to when your income will actually improve. A two year course followed by employment suggests a loan that is comfortable on a student income now and can be paid down faster once you are working, so penalty free extra repayments matter more here than a marginally lower rate.

Keep the amount to what the schemes do not cover rather than borrowing for convenience. Debt taken on during study is repaid from a salary you do not yet have, and it is easy to be optimistic about how quickly that arrives.

Our repayment calculator will show what different terms cost in total, which is worth checking before committing to anything.

Retraining and mature age study

A large share of the enquiries we take are not from school leavers. They are from people in their thirties and forties retraining after redundancy or changing direction, and their position is different in useful ways.

They usually have an employment history, often a stronger credit file, and sometimes an asset that can secure borrowing at a better rate. Against that, they frequently have dependants and existing commitments that reduce capacity.

Where a course leads to a specific qualification with clear employment demand, the case for borrowing is much stronger than for open ended study. Employers will also sometimes contribute to training costs, and it is worth asking before assuming the whole amount must be financed.

Free help worth using

Most universities and TAFEs employ student support staff who administer hardship grants, emergency loans and equipment schemes that are not widely advertised. These are usually interest free and sometimes non repayable, and they are consistently underclaimed because students do not know to ask.

Ask before you borrow commercially. The same applies to scholarships and bursaries, which frequently go unclaimed simply because nobody applied.

Applying

Everything is handled by phone and email, so nothing interferes with class or placement schedules. Have identification, evidence of income including any Centrelink payments, and ninety days of bank statements ready.

A broker will compare across more than thirty lenders and tell you honestly if the amount is not serviceable on your current income, rather than writing a loan that becomes a problem. Call 1800 079 147 to discuss it. Enquiries leave no mark on your credit file.