Step by step guide to further
education
What you'll learn in this step: You have successfully put
your child through secondary school. If university is the next
step, it pays to be aware of the costs that will crop up.
If you think finding the money to put your child through high
school was difficult, it's not all over just because they are now
at university. Fine, if they're living at home, on a
low-maintenance course and able to take on part-time work. But if
they have to move from home, perhaps to an area where unemployment
is high and have a heavy academic workload, it can still cost you a
pretty penny.
While there are government allowances to help, these are means
tested. Unless your son or daughter has earned $14,500 over an
18-month period – not so easy for an 18- or 19-year-old who's
also trying to study – they are not deemed independent of you
and don't qualify for any payment unless you have passed the means
test.
As a result, it's a good idea to budget for tertiary education
– and the sooner, the better.
Use our budgeting tool to create a budget and manage your
finances
Accommodation
Starting university often also means moving from home, although
two in every five students live with their parents while studying.
If you do move out, what are your options?
Homestay – living with another family where meals
and other services may be provided.
Rented housing – you can often find rented
accommodation through campus noticeboards or a designated
accommodation office at the university, by visiting domain.com.au or checking your
local newspaper. Don't get carried away with cheap rent. You still
have to find the money for electricity, gas and telephone as well
as the rent bond.
Colleges/halls of residence – most universities
offer on-campus accommodation. They are usually fairly expensive
but provide food, accommodation, sporting and social facilities as
well as libraries.
Learn more: A roof
over your head, The Sydney Morning Herald, 29 Dec 2001
For many new university students the question of where to live
arises for the first time.
The Federal Government's youth website, The Source, provides
information about tenant's
rights.
Food
Most university campuses have a variety of food outlets,
generally all subsidised by the student union. Thai, vegetarian,
traditional, Italian – you name it, chances are your campus
serves it! Subsidies are usually around the 15 per cent mark.
Text books
With the average price of a textbook reaching the $90 mark and
the need for several each subject per semester, this can leave a
very deep hole in your pocket.
Where to buy
Co-op Bookshop
Most large book retailers will give 5-10% discounts if you flash
your student card.
One alternative to buying new textbooks is using the university
library. Most put a copy or two of compulsory texts aside for
reading in the library.
Most campuses also have a second-hand book exchange where
students sell used textbooks 40 to 70 per cent cheaper than they
cost new. There are also second-hand bookstores that specialise in
used texts and are worth checking out if on-campus stocks are
depleted. Also watch student notice boards for cheap old textbook
adverts.
Some textbooks can be found at St Vincent de Paul's for as
little as $1 each.
If you do need to buy new books be aware of the Educational
Textbook Subsidy Scheme (ETSS), introduced to help offset the
additional cost of the GST on books. The scheme only covers
prescribed textbook lists or recommended reading lists at
Australian educational institutions. Booksellers will give the
discount subsidy to the student at the point of sale and then claim
the subsidy back from the Department of Education, Training and
Youth Affairs, which administers the scheme.
See the Textbook subsidy website for more on the Educational
Textbook Subsidy Scheme.
What you'll learn in this step: Compare the fees for
different courses of study, as identified in the HECS three-band
structure. HECS fees do not apply to TAFE students.
Student union fees
University students are charged an annual fee. The sum can range
from $60 to $450, although $200 to $300 seems to be closer to the
mark. Sometimes called a general services charge, it is subject to
GST. If you have problems paying this fee, you can usually come to
some arrangement with the student council to defer payment or take
out a loan.
HECS fees
HECS stands for Higher Education Contribution Scheme. The amount
of HECS paid is based on individual units studied, not on the
overall course you are enrolled in. The units of study fall into
three different bands.
| Band 1 – Arts, humanities and nursing |
$3598 |
| Band 2 – Computing, engineering, economics and
mathematics |
$5125 |
| Band 3 – Medicine, law, dentistry and veterinary
science |
$5999 |
Prices for 2001. These fees are indexed and rise each year.
If you commenced or deferred, but did not complete, your course
before 1997, you may be eligible to pay a flat rate of HECS. In
2002, this rate is $2 702 for a full-time full year study load, or
$1 351 per semester.
Your institution will advise you of the exact amount of your
HECS contribution, which depends on your study load. Your
institution will also be able to advise whether you will be
required to pay HECS at the flat rate or at the differential
rates.
Paying HECS fees
If you pay your HECS fees upfront you can enjoy a 25 per cent
discount. Alternatively you can pay part of the fees (and still
enjoy the discount on the portion you pay) or defer repayment until
you are in the workforce and your income is greater than $22,436 a
year. At that point, 3 per cent of your salary will be siphoned to
repay your HECS fees, rising gradually to a maximum 6 per cent of
your salary when it hits $40,224. If you never exceed the
threshold, you never repay your debt. And if you die, your debt
dies with you – your estate does not have to pick up the tab.
You do not pay any interest on the HECS loan but the repayments
rise annually in line with the cost of living. You can make
voluntary lump sum repayments at any time and will enjoy a 15 per
cent bonus if the sum is greater than $500. If you want to find out
your outstanding balance at any time, contact the Australian
Taxation Office on 132 861.
Learn more: The joy
of HECS, The Sydney Morning Herald, 30 Jan 2002
The strategy: To work out the best way to pay my HECS.
The HECS
Voluntary Repayment Advice form is available from the Tax
Office's website. Or phone 13 28 60.
Pay upfront or defer?
This depends on whether you already have the funds to pay the
fees so you can enjoy the 25 per cent discount. There's no point
borrowing the money to qualify for the 25 per cent discount as you
will have to pay commercial interest rates on your loan and the
interest is not tax deductible. You might also need to consider if
the funds could be better invested elsewhere.
For more information, see the Federal Government's HECS website or phone 1800 020
108
Costs of TAFE
TAFE courses are much cheaper than university courses since
there are no HECS fees. In NSW for example, a diploma course will
cost $630 for a year. Some states charge for courses by the hour
– usually about $1.50 an hour.
What you'll learn in this step: Assess your child's
eligibility for one of the Federal Government's financial
assistance schemes available to students.
Help with money
The Federal Government offers numerous types of financial help to
students through its Centrelink offices including:
- Youth Allowance
- Austudy
- Abstudy
- Pensioner Education Supplement
- Student Financial Supplement Scheme
- Assistance for Isolated Children
Youth Allowance
This is money paid to 16- to 24-year-olds who are studying
fulltime. You qualify for Youth Allowance if you are:
- aged 16-24 and studying full-time
- aged over 25 and studying full-time (if you were receiving
Youth Allowance immediately before turning 25 and are still doing
the same course); or
- aged 16-20 and looking for work full-time, undertaking a
combination of approved activities, or have a temporary exemption
from activity test requirement (for example, because you are
ill).
This allowance is subject to a parental means test. If your
parents earn more than $57,750, you must prove your independence.
This can be done in a number of ways including earning at least
$14,586 in an 18-month period since leaving school, working for at
least 18 months to support yourself or by living in a de facto
relationship for at least 12 months. Once you qualify, you receive
an allowance of $301.70 a fortnight if you are living away from
home or $198.60 if you are still at home. You then may also be
entitled to a rent allowance as well as pharmaceutical benefits and
a fares allowance between your place of study and your permanent
home at the start and end of each academic year, plus one trip in
between.
Austudy
Austudy provides assistance for over 25-year-olds who are
studying full time. There is no parental means test as you are
deemed to be independent. The rate in 2002 is $301.70 a fortnight
for a single adult. You may also qualify for rent allowance,
pharmaceutical benefits and a fares allowance.
Abstudy
Abstudy helps indigenous students. The allowance for living away
from home in 2002 is $301.70 a fortnight, and you can qualify for
rent allowance, pharmaceutical benefits and a fares allowance.
Student Financial Supplement Scheme
The Student Financial Supplement Scheme is a voluntary loan
scheme which allows tertiary students to borrow money to increase
their income while studying. For every $2 of a loan you give up $1
in Centrelink payments. Repayment is voluntary until 31 May of the
fifth year after the year you received the loan. You get a bonus on
repayments during this period. After five years, repayments are
compulsory once your taxable income reaches the level of average
weekly earnings ($31,639 for 2000-2001) and are paid through the
taxation system. Repayment levels increase when your income
increases above the level of average weekly earnings.
Army Reserve
It's not for everyone, but the best-paid scholarships are those
for students at the Australian Defence Force Academy. People
heading for a career as an officer in the army, navy or air force
can expect to earn $17,000 to $25,000 a year and have all their
fees and HECS bills paid. You'll be expected to serve a number of
years in the armed forces on graduation.
Typically, scholarships are for a full course of study up to
four years. But they have restrictive conditions, such as not being
able to change course.
Learn more: Ups, down
pay, Sydney Morning Herald, 25 Oct 2000
The Army Reserve can make friendships for life and helps fund your
education.
What you'll learn in this step: There are other ways to
subsidise further studies. Two of these include scholarships and
student loans.
Scholarships
Universities offer a myriad of scholarships, usually valued
between $500 and $5,000 a year. Check with your individual
university what scholarships are available and application closing
dates.
See the Department of Education, Training and Youth Affairs
website for a list of university
scholarships.
Part-time jobs
Finding part-time work at university is almost par for the
course. It's easier to find work in the major capital cities than
in other regions where local youth unemployment is already running
high. Check your local newspapers and campus for possible work.
Summer vacation employment programs
Earn money and gain relevant work experience froom prospective
post-university employers. Find out more from your university
career-advice office.
Student loans
From the university
Interest free loans up to $2000 are generally available to
full-time students, although this figure depends on the university.
These loans tend to be short term and students are encouraged to
repay before they graduate through an instalment plan. You cannot
generally borrow to repay your HECS fees.
From the bank
Many banks will also offer student loans where repayment is
deferred until after you graduate. However, the interest is
capitalised during your non-repayment period. Check with your bank.
If you are a full-time student, make sure your bank knows this.
Otherwise you may find yourself up for banking fees once you turn
18. That's because the banks only recognise a birthdate. As a
result once you turn 18, you will probably be charged fees unless
you tell them you are a full-time student.
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Step 1:
Step 2:
Each week financial advisor Noel Whittaker answers your
questions.
