Managing educational expenses has been a challenge for many students, leading to the development of government programs like the Higher Education Loan Program (HELP). But what happens when financial hardships strike and repaying the HELP debt becomes overwhelming? In such circumstances, individuals might find relief through HELP debt deferral. This article delves into the intricacies of HELP debt deferral, elucidating its benefits and the application process.

Understanding HELP Debt and Repayments

The Higher Education Loan Program, often referred to as HELP, is a government-initiated program designed to provide financial support to students pursuing tertiary education. Upon completion of studies and when earning $51,550 or more in a tax year, individuals become liable to start repaying their HELP debt. The repayment amount varies based on income, ranging from 1% for incomes above $51,550 to a maximum of 10% for earnings exceeding $151,201.

Eligibility for HELP Debt Deferral

Applying for a HELP debt deferral involves establishing that repaying the debt causes substantial hardship or that special reasons warrant a deferral. This can be achieved by engaging a professional service, like a tax agent, to negotiate on your behalf. Alternatively, applicants can directly submit their application to the ATO.

The primary step is to complete the ‘Defer or amend your compulsory repayment or overseas levy form’ available on the ATO’s website. Alongside the form, you must compile pertinent documentation that supports your financial hardship claim. This documentation includes income and expense records and other relevant documents demonstrating your dire financial circumstances.

Supporting Documentation

To strengthen your application, specific evidence is necessary. These include:

• Official eviction notice (excluding warnings)
• Pending disconnection of essential services (water, electricity, gas)
• Notice of impending legal action
• Letter from charitable organization regarding loss of employment or inability to provide essentials
• Bank notices like overdraft calls or property repossession
• Overdue medical bills
• Doctor’s letter verifying inability to earn due to illness or caregiving
• School’s final notice for mandatory fee payment
• Funeral expenses
• Repossession notice of essential items (car, motorcycle)

Deferring HELP Debt: Understand the process

Deferment of a HELP debt offers a respite from compulsory repayments, giving individuals breathing space during financial hardships. Upon submitting the application form along with supporting evidence, the Australian Taxation Office (ATO) reviews the claim. In cases requiring clarification, the ATO contacts the applicant. The decision-making process usually takes about 28 days.

Successful Application

A successful application results in the ATO temporarily suspending compulsory repayments and excluding the deferred amount from tax assessments for the specified period. However, it’s essential to note that HELP debt deferrals are typically granted for no more than a year. If hardship persists, a re-application is necessary to extend the deferral.

Unsuccessful Application: What to Do

In instances of an unsuccessful or altered application, the ATO provides a letter outlining reasons. If dissatisfied with the decision, two courses of action are available:

• Lodge a New Application: If new grounds or previously unrevealed documentation exists, a fresh application can be submitted.
• Request a Review: Applying for an ATO review is an option, requiring a written request within 28 days of receiving the decision notice. ATO’s review decision is conveyed within 28 days.

In cases where you can file the application, liaising with the ATO for appeals or new applications is handled on the applicant’s behalf.

The Limitations of Debt Deferral

Deferment doesn’t eliminate the HELP debt; it offers a temporary reprieve, maintaining the responsibility for eventual repayment. This solution is meant for challenging situations beyond an individual’s control.

Cancellation of HELP Debt Under ‘Special Circumstances

Individuals can hold a HELP debt for unfinished study units if not withdrawn before the census date. Cancellation is possible only under ‘special circumstances,’ with successful completion or withdrawal for personal reasons not meeting the criteria.

Criteria for ‘Special Circumstances

To qualify for special circumstances cancellation, the following must be demonstrated:

• Beyond Control: The situation must have been beyond the individual’s control.
• Timing of Impact: The situation’s full impact occurred on or after the census date.
• Impediment to Completion: The situation made completing the unit(s) impracticable.

Applications for special circumstances cancellation involves submitting supporting documentation through the relevant higher education provider within 12 months of withdrawal.

Can You Appeal the Decision of HELP Debt Deferral?

Discontent with a provider’s decision opens avenues for appeal:

• Internal Review: Applying for an internal review is possible in writing within 28 days.
• External Review: If unsatisfied with the internal review decision, applying for an external review via the Administrative Appeals Tribunal (AAT) is an option within 28 days.
• Checking Debt Cancellation Status
• Individuals can assess their debt cancellation status through various methods:
• myHELPbalance: Accessible with a Commonwealth Higher Education Student Support Number (CHESSN), obtained from the Commonwealth Assistance Notice (CAN) or through myGov.
• myGov: Provides online visibility of HELP debt.

Benefits of HELP Debt Deferral

Temporary Financial Relief: Deferment temporarily alleviates the burden of repayment, allowing individuals to regain financial stability.

Focus on Essentials: Deferment ensures that basic necessities are met, promoting well-being during challenging times.

Preservation of Credit Rating: HELP debt deferral prevents missed payments from adversely affecting one’s credit score.

Flexible Repayment: Repayment resumes once financial circumstances improve, promoting a manageable and gradual approach.

Emergency Circumstances: Deferment aids those facing unforeseen emergencies, such as medical crises or natural disasters.

Conclusion

The Higher Education Loan Program (HELP) significantly aids Australian students pursuing higher education. When financial challenges arise, HELP debt deferral becomes a vital consideration. Providing temporary relief from repayments, HELP debt defer allows individuals to navigate their difficulties while acknowledging the eventual debt repayment responsibility. It is essential to fully comprehend the application process, potential outcomes, and the intricacies of debt cancellation under special circumstances. In making these complex decisions, seeking advice from financial professionals is invaluable. Their expertise can help individuals navigate the intricacies of the system, ensuring that they make informed choices that align with their long-term financial well-being. Remember, a thorough understanding of the terms and conditions, coupled with professional guidance, empowers individuals to maximize the benefits of HELP debt deferral wisely.