STOP Investing and Pay Off Your Student HECS-HELP Debt.

[@Randoo_99]

This channel is a hidden gem. Unbelievable quality and production, and the content itself is so useful. Looking forward to seeing what the future holds

[@raymondla]

Really appreciate that Oliver, glad you enjoy the content. Definitely more and better content to come in the future!

[@chezwickcheese139]

I find it sickening that when I was at uni there was no mention of these loans being indexed at all.

[@raymondla]

I definitely wasn't aware either, but silver lining is at least we don't have to pay interest on it!

[@stephensteamahead1089]

@@raymondla If indexing the loan by the CPI isn't interest, then DA! what is. The level of income before you have to pay, is constantly being dropped by the coverment, and they allow the loans to compound. They are such contract brakers. Im 64 and have $18000.00 in dept, acquired in the late nineties , and it would be a mirical if I earned enough in a part time job to pay anything back, Id like to, because I dont like owing it. The government would have to compromise, to make it possible for me. I have a home, but no real super. my fear is they will find a way to extract it from low income earners. Great show.

[@01sigh]

The government should have sent you an invoice with the balance owing every year during your uni days.

[@stevemcallister486]

My wife and I paid down her HECs Debt in 2021. She had a balance close to 80K. Looking back I am so glad we paid that off then. Great channel.

[@raymondla]

That is an awesome achievement! Must've felt great to finally pay that all off!

[@reecegebert5565]

Hi Raymond, awesome video. I think another couple of points to discuss/elaborate on is the timing of the indexation and the opportunity cost of that money (especially for higher income earners). If your employer is withholding HECS payments from your salary (say 9-12k per year for earners above 120k a year) this won't be deducted from your HECS balance until you do your tax return (ie the indexation will occur BEFORE your 9-12k is deducted from your loan). Essentially the Government is double dipping, that 9-12k could be put in offset or in a high interest savings account (4-5% atm), which in turn will make the ROI of paying off your HECS quite a bit higher than 7.1%. Additionally, could argue that the increase in cashflow of 9-12k per year could be invested (since you're already used to living without that extra money). Anyways, thought id throw in my 2 cents as to why i've paid mine off. #notfinancialadvice

[@taylersin3421]

Exactly the same story here. The money has already worked saving intrest via my offset for 11 months and now it saves me a further 7.1 percent. I notified my employer today that my debt is paid and they have con firmed the deduction will no longer apply starting this week. So the extra dollars will replenish my offset account and after tax return I will get my deducted money back for a big boost.

[@raymondla]

Hey Reece, great points that you made here and definitely valid considerations to the decision process as to whether or not pay off your HECs or not. Congrats on paying off your HECs btw! 🙂

[@viewsan]

I wish I saw this video sooner before June 1st, because I got hit with that fat 7.1% fee just recently and it shattered my soul ! 🙃

[@raymondla]

Inflation might also be quite high next year at this rate !

[@willh5048]

Thanks for the video! It helped with getting more clarity and understanding in my decision making. The main reasons I decided to pay my HECS-HELP is the psychological aspect of not being in debt. I am blessed with a steady income and have no plans to buy a house anytime soon so using the extra cash to pay off my debt seems feasible. I am also not much of a risk taker and so I don't see myself placing any extra cash into riskier assets.

[@raymondla]

Hey Will, glad the video was useful. It's definitely a great feeling when you finally have paid off all of your HECS, can't go wrong with that option.

[@DevTristan]

I'm so glad you discussed the longer term scope to consider as this is something I've been preaching to all of my friends asking. Great informative video - can't wait to see this channel grow!

[@raymondla]

Thanks Dev, I've told my friends about the longer term implications as well but most of them are all still making a large repayment this year haha, which I can't fault either way.

[@Jess-vb4um]

Thanks for the informative video. I recently decided to pay off the remainder of my debt. With my current income I would have had it paid off in a few years anyway, and I'm not looking to buy a house in that time, so for me I think it makes sense to avoid the indexation if the debt would have been paid off soon anyway. It's so tricky though and I've certainly spent a lot of time thinking about it! While it was terrifying to transfer $30K+ to the government, it does feel good that I won't have to think about it any more. Plus, I'll get a chunk of that back in next year's tax return due to the funds that have already been held by my employer. Thanks again!

[@raymondla]

Congrats on paying off your HECs Jess! I definitely felt a huge sense of relief when I finally paid off my HECs a few years back! Make sure to tell your employer's payroll to no longer withhold tax for HECs anymore as well, it will be like getting a mini pay raise!

[@r1jugupta555]

This is fantastic, professional and informative content Raymond! Well done 😊

[@raymondla]

Glad you found it useful!

[@bloomlover231]

I needed this thank you so much !!!

[@t-bone7988]

great video mate

[@danzk]

It makes sense to pay now if you're close to paying it off in 1-2 years. Indexation will be applied before HECS withheld from your pay check is taken into account.

[@raymondla]

Agreed, if you're close to paying it off then better to pay it off this year!

[@emanuelbrizuela9305]

Very helpful video, awesome explanation, thanks mate

[@raymondla]

No problem 👍

[@ellacaulfield9939]

Love this video 🙌🏼 thanks

[@raymondla]

Glad you enjoyed it!

[@annas4376]

Great explanation, thanks so much!

[@raymondla]

Glad you found the video useful Anna!

[@natalijaoconnell4215]

I'd be curious to hear your thoughts on how to navigate HECS when you have not been working for multiple years due to having a family, illness, change in circumstances etc. As women are significantly disadvantaged regarding HECS as it is usually us who takes time off work to have children and raise them, but out indexation continues to increase. Specifically on debts around or over 50-100k.

[@raymondla]

Hi there, I think it really depends on if you are planning to go back into the workforce, HECs debt isn't passed on to your dependents so theoretically you could just let it sit there. On the other hand if you are planning to take out a mortgage in the future it may hinder your ability to get a loan.

[@RorysRamblings]

I haven't paid anything into mine. I don't see the point or any benefit of paying it off aside from increasing borrowing power. Since house prices are extremely unaffordable there's no point paying off my HECS.

[@raymondla]

Totally reasonable, no problem with just having it paid off slowly overtime.

[@01sigh]

I was hoping you would also mention that paying down your HEC debt is an obligation. Our government spent the money to help you receive an undergraduate degree. Thus giving you more oppotunities. We should pay it off so that the government can then use that money to pay for another students fees.

[@ShaneChiswick]

I am in my mid 50's with a very large HECS debt. I would like to retire and would not have to make any payments and one day pass away with maybe double my current HECS debt. My worry is that the govt could make HECS payable out of your deceased estate and make it retroactive. Comments?

[@raymondla]

Hey Shannon, even if the government were to implement that policy, based on how new policies are typically implemented it would only affect students in the future and not applied to people with existing HECs debt.

[@ShaneChiswick]

@@raymondla I think you may be right Raymond - thanks

[@ShaneChiswick]

@@raymondla Given my stated circumstances - would I be wise to pay my HECS now or not in your opinion?

[@lnnn4351]

I've the same analysis as you Shannon, I believe within the next decade Gov will change law. I'm in my 40's and I'm finished my mortgage and will retire in 10 years as well so I'll pay my HECS debt by next year.

[@ShaneChiswick]

@@lnnn4351 I think when the govt is desperate for money - they will change policy on paying back HECS from deceased estates. They even proposed doing this a few years back. I think they will make it retroactive too.

[@BasedinReality1984]

I started with $83k in debt and thanks for indexing its not around $95k . Buy the EOFY I’ll have paid 9k towards it. I’m gonna chuck all my tax back towards it plus around $25k of my own money. I can’t stand having this debt hanging over my head. Also seeing 10% of my pay disappear each week hurts. This whole indexing thing was NOT made clear to me. Without making extra payments I’d be paying this off for 20 years thanks to indexing

[@raymondla]

At least the government has changed the indexation with the latest Federal Budget! Hopefully you'll get a nice credit in your tax return this year! Great job to paying your HECs debt down man!

[@BasedinReality1984]

@@raymondla yeah apparently there is a credit that will be applied this year, for last years ‘overcharge’ that should take a good few K of the total. What’s ridiculous is I was already charged 25% when the loan was created for the vet fee. Over the life of the debt the government will get an astronomical amount of money out of me.

[@Boz196]

I’m 21 in final year of Uni and lucky enough to live with my parents so I have very little expenses. I’ve got a 10k emergency fund saved and now I’m just putting 70% of income into index funds. I’m not sure though if I should instead be paying of my hecs because the return I get investing is much greater than the indexation on the loan, last year being an anomaly.

[@raymondla]

That's awesome that you're investing so early! I would personally put my money into index funds, as you said last year was definitely an anomaly and inflation has been trending down the whole year.

[@hughjazz4447]

Great video mate! I'm a recent graduate and have 28k HECS debt, and have the capacity to pay it off and still have a lot of savings left. Do you reckon I should pay before the indexation, or just leave it and invest elsewhere? Not looking to buy property anytime soon, but am confident in having a deposit amount due to banked up savings

[@raymondla]

Hey Hugh appreciate that feedback. I think this question comes to your own personal preferences, but if you can pay it all off this year I might be leaning more towards paying it off!

[@hughjazz4447]

@@raymondla Cheers Raymond, appreciate your help and all the excellent videos you put out!

[@ParryteemosQ]

Hi Raymond, what's your opinion on repaying HECS for 2023/2024 FY, with the indexation being confirmed at 4.7%?

[@raymondla]

Personally I wouldn’t as inflation is only expected to keep coming down and you could expect a greater return on your money through other assets

[@liampokharel1084]

What if i'm looking to buy a property in the next 12 months?

[@raymondla]

Hey Liam, depends if you already have your deposit ready. But I'd probably just hold onto the cash.

[@ausboy2281]

HECS debt can significantly limit your borrowing power so depending on how fast your able to save the money back again I would just pay it down, that’s what I’ve done so I can re-finance

[@computer-training-for-seniors]

What with? Bottle tops?

[@joshb8233]

Don't worry about being happy, pay it off. I've done mine this year and sold some of my investments to achieve it. Best decision of my life, i look at the money I was paying for hecs as a ROI. I crunched the numbers and it was an additional 3k return to my pocket, tax free. I'm fortunate as i live a minimalist lifestyle and invest, if you are going on holidays and eat out a lot then you are setting your self up for failure. If you can't pay your hecs down how can you be expected to pay of your house. I don't have a house and live at home. Hear is some food for thought if you live in a property it's a liability if you are generating a positive income it's a asset

[@donaldlyons17]

So you live with other people yet tell people to pay their debts off? That is like me saying well I paid my loan off why can't everyone else pay their off . Well first the obvious my housing was 50% less compaired to income just 15 years ago so yeah I had plenty left over to pay it off with!!!! They don't all have those advantages....

[@isaacmcauley6616]

Can you please explain how to calculate it as an ROI?

[@joshb8233]

@@isaacmcauley6616 about 9%

[@kairos_fluent]

Hi Raymond. May I ask how big was your HECS debt and how long did it take for you to pay off ?

[@raymondla]

I don't recall exactly how long it took but it was probably around ~$32k after I left uni

[@kairos_fluent]

@@raymondla Oh I see, thanks for the reply.

[@AgathaTsing]

I sold my investment property, and paid off all my mortgage and contributed the capital gains to me and my partner’s super, now no more monthly mortgage to pay, I feel so much richer 😂

[@raymondla]

Hey man being debt free must be awesome, congratulations man! Enjoy the freedom!

[@FM-dm8xj]

Wouldnt this be applicable only for seasoned (stable high paying jobs) graduates?,ie NOT students.

[@raymondla]

I think this would be applicable for anyone who has a HECs debt who has the disposable income to pay it down. If you're still studying then yes it probably won't apply to you in most cases.

[@FM-dm8xj]

@@raymondla Sweet, can you make a video on how students should invest?

[@ceejae2349]

Pay as we go so that our children don’t start their adult life in debt.

[@raymondla]

That's definitely very generous of you as a parent to pay your HECs for your children! But probably something I would like to do in the future as well

[@SimoneShaw-fy2zm]

Why cant yoou invest and maybe 1/3 to hecs debt? STOP MAKING THE GOVERNMENT RICHER MAKE YOURSELF RICHER THEY DON'T CARE!

[@raymondla]

I'm personally definitely investing over paying off my hecs debt