Undertaking further education is one of the most rewarding things a young person can do. But courses are often expensive and difficult to afford without government assistance like student loans and income support.
How do student loans work in Australia?
While it’s possible to fund your tuition fees with a private loan, a more common approach for domestic students is applying for a Commonwealth Supported Place (CSP) at a higher education institution. If you’re offered a CSP, the Australian government will subsidise some of your studies and provide a loan from its Higher Education Loan Program (HELP) to pay the rest of your fees.
HELP loans are interest-free but adjusted annually to keep up with cost-of-living changes.
If you’re not offered a CSP, perhaps because CSPs are limited for your chosen course, or you don’t meet the academic requirements to get one, you can enrol as a fee-paying student instead. This means you’ll pay the full tuition fees without government subsidies, but you could still be eligible for a HELP loan.
» MORE: What is a loan?
Find out what Government assistance you are eligible for
The government offers a range of loans and other financial support for students, but the assistance you get depends on factors such as your citizen status, your chosen course and course provider, and whether you’re an Aboriginal or Torres Strait Islander.
You can use the eligibility tool on the StudyAssist website to identify the support options available to you.
Types of student loans
Several schemes offer interest-free student loans, most of which are government funded.
The HELP program provides student loans to cover higher education tuition costs. There isn’t a loan repayment schedule or deadline because you’ll only make compulsory repayments through the tax system when you earn over a certain threshold. Repayment amounts are income-contingent so the more you earn, the more you pay back.
There are four types of HELP student loans:
- HECS-HELP are loans for Commonwealth-supported students to cover the portion of tuition fees not subsidised by the government.
- FEE-HELP loans are used to pay some or all of the tuition fees for eligible fee-paying students.
- OS-HELP are cash loans for Commonwealth-supported students who wish to study part of their course overseas.
- SA-HELP loans cover student services and amenities fees imposed by higher education providers.
There’s a limit on how much you can borrow from the government for your studies. The 2023 HELP loan limit is $113,028 for most students but the cap is higher for some approved courses.
VET Student Loans
VET Student Loans is a separate program for those undertaking approved vocational education and training (VET). Loans cover tuition fees for eligible higher-level VET courses, usually diploma or above. Similar to the HELP program, there’s a maximum borrowing limit, and you start paying the borrowed amount through the tax system once you earn above a repayment threshold.
VET Student Loans are also interest-free, but you may be charged a 20% fee when you take out the loan, depending on whether your enrolment is subsidised by your state or territory government.
You can search for training courses that are approved for VET Student Loans on the My Skills website.
Student Start-up Loans
Students who qualify for Centrelink income support payments such as Youth Allowance, Austudy or ABSTUDY Living Allowance may be eligible for a Student Start-up Loan.
These are cash loans for a set amount, currently $1,132 per loan period. You can get up to two Student Start-up Loans a year.
These loans are interest-free but indexed annually and repaid through the tax system like HELP and VET Student Loans. Consequently, it’s important to consider the long-term effects of accumulating even more student debt, like lower take-home pay, weaker cash flow and reduced ability to borrow.
Trade Support Loans
Trade Support Loans (TSLs) are designed to help eligible apprentices with everyday costs during their apprenticeship, up to a maximum cap, currently $22,890 throughout your apprenticeship.
TSLs are paid into your bank account in instalments, and you can opt in and out of them.
Repayments are collected through the tax system when you earn above the repayment threshold. They’re interest-free, but again, the outstanding balance is indexed annually. If you complete your apprenticeship successfully, you’ll get a 20% discount on your loan.
Examples of different types of support for students
Many higher education providers recognise the benefits of offering non-financial assistance. Below are common student services:
- Career guidance
- Medical, counselling and well-being support
- Childcare (for students who are parents)
- Flexible learning options
- Orientation activities
- Learning and academic support
- Social and cultural clubs.
It’s a good idea to familiarise yourself with what’s available from your prospective provider so you can make the most of their offerings.
Other financial support for students in Australia
In addition to low-cost loans, eligible students can get income support to meet everyday expenses. Payments are delivered by Centrelink, a government agency providing financial assistance to the community.
Centrelink offers several types of payment for people who are studying or training.
Youth Allowance for students and apprentices
Youth Allowance, an income support payment for people aged 24 or younger, is delivered fortnightly to those who need financial assistance while they’re studying or completing an apprenticeship full-time.
Your payment rate depends on your income and assets and potentially also your parents’ income and assets if you’re living at home.
Austudy also offers fortnightly payments, which are designed to help older students and apprentices.
You must be at least 25 and a full-time student or apprentice completing an approved course or apprenticeship to be eligible.
Additionally, you’ll need to meet residency requirements and income and assets tests.
ABSTUDY includes a group of payments for Aboriginal and Torres Strait Islander students or apprentices to help with school fees, boarding fees, living expenses, travel expenses and costs for books and stationery.
Students can apply for ABSTUDY when they start high school. Depending on their situation, payments may continue through undergraduate and even postgraduate studies.
Tertiary Access Payment
Tertiary Access Payment or TAP is a one-off $5,000 payment to help eligible students with the cost of moving for tertiary study. Tertiary education is the study you undertake after finishing year 12 or equivalent.
TAP is designed for young people living in regional or remote areas or places that aren’t in or near a major city. You can only claim this payment in your first year of tertiary study.
Annual payment for students who are eligible for ABSTUDY or Youth Allowance, relocation scholarships provide further assistance to those who need to relocate to or from a regional area for their studies.
You must enrol full-time in an approved scholarship course to be eligible.
Students who are renting while receiving ABSTUDY Living Allowance, Austudy or Youth Allowance may also qualify for regular rent assistance payments.
You don’t have to apply for rent assistance — Centrelink will check your eligibility when you submit a claim for the payments mentioned. You may be asked to provide a lease agreement or rent certificate as evidence of your living arrangements.
Claiming deductions for self-education expenses
If you’re working and studying simultaneously, you may be able to claim a deduction for self-education and study expenses.
As long as the expenses you incurred are sufficiently connected to your employment, you can offset them against your income on your tax return.
The self-education or study you’re undertaking is sufficiently connected to your employment if it’ll help you maintain or improve your job skills or knowledge or lead to a pay increase.
Generally, you can’t claim the first $250 you spend on self-education.
Frequently asked questions
International students are not eligible for government-funded HELP loans, but they may be able to borrow funds through universities and private banks.
What is a StepUp Loan? Are they still available?
StepUp Loans are small, low-interest loans that used to be available to low-income earners, including students. These loans were offered through the now-discontinued StepUp Loan program run by The Good Shepherd charity and the National Australia Bank.
Although StepUp Loans are unavailable, the Good Shepherd currently runs a community credit program offering no-interest loans to eligible borrowers.
How No Interest Loans (NILs) Work
The No Interest Loans Scheme (NILs) allows some Australians to borrow up to $2,000 for essential purchases with an interest-free loan.
What Is Credit and Why Do You Need It?
Credit allows you to borrow money with the promise that you’ll repay it. Find out how credit can give you financial flexibility.
What Is a Personal Loan?
A personal loan is money borrowed from a lender that you pay back in monthly instalments. Learn when — and how — to get one.
What to Know About the Higher Education Loan Program (HELP)
The Higher Education Loan Program (HELP) offers interest-free loans to students for tuition fees. Loans include FEE-HELP, SA-HELP, HECS-HELP, and OS-HELP.