HECS Debt and Tax

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Australian Taxation Office

• 

  SimbaGirl on 12/09/2021 - 21:15

  +7

  According to the ATO, you can’t claim either the tuition fees you’ve paid (if under a HECS-HELP scheme) or any HECS-HELP loan repayments as per their Education and Study - specific self-education expenses page under “specific expenses you can’t claim: https://www.ato.gov.au/Individuals/Income-and-deductions/In-… . From that page:

  “You can't claim a tax deduction for the following expenses:

  Tuition fees to an education provider you pay or the Australian Government pays under HECS-HELP

  The cost of accommodation and meals associated with day-to-day living expenses

  Repayments you make (whether compulsory or voluntary) on debts you may have under the following loan schemes
  HECS-HELP
  FEE-HELP
  OS-HELP
  VET Student Loan (formerly known as VET FEE-HELP)
  SA-HELP
  SFSS
  Trade Support Loans program (TSL)
  Student Start-up Loan (SSL)
  ABSTUDY Student Start-up Loan (ABSTUDY SSL).”

• 

  CheapskateQueen on 12/09/2021 - 21:35

  The cost of your undergrad course can't be claimed - it's incurred to help you get the job which means it's "incurred too soon". So it doesn't matter if it's prepaid or deferred to HECS, it's not deductible.

  Other post-grad costs can be deducted if it meets the necessary connection test, even if it's deferred to FEE-HELP. It's the cost of the course, not the repayments, that are (potentially) deductible

• 

  Zephyrus on 12/09/2021 - 21:38

  +1

  The ATO website is a bit confusing. HECS you can't deduct at all, this is fairly clear.

  If it's FEE or VET HELP, it seems you can claim the costs of the course when you do the course e.g. the year you actually did the course.
  You can't claim the repayments though.

• 

  Kangal on 12/09/2021 - 22:07

  I think a rule of thumb is No.
  HECS is so you can get your education at all, and then you pay it back later. You do have to pay interest on top, but that's the cost of doing business. If it were allowed to be tax-write off, then essentially the education/service was free to the individual.

  Just think, if your scores were better and you ended up paying for your education out of your own pocket… then wouldn't you be at a financial disadvantage compared to your peers? I mean, they didn't have to study as hard as you, or didn't have to work to pay off their education up-front. Shouldn't they be the ones who are rewarded?

  I think Higher-Education was okay in Australia, but it has been in steep decline over the past two decades. Even worse when you look at the States. I think the world leaders in this segment are in Europe, where typically you get paid to study, or it is free, or it is very very cheap. They understand that for a strong future, they need capable citizens, and so their society bears that weight… until the very citizens return the favour, whilst expanding the nation and its interests (eg Research, Health, Infrastructure, IT, Security, Agriculture, etc etc).

• 

  star-ggg on 12/09/2021 - 22:25

  +2

  HECS isn't tax deductible because the course fee has already been government subsidized to be less than a full fee paying student. FEE-HELP is tax deductible because you are incurring the debt at full fee rates.

• 

  happydude on 12/09/2021 - 22:34

  +1

  HECS-HELP cannot be claimed at all. The taxpayer is already subsidising the course making it cheaper for you and the claiming a tax deduction on it would be considered a double dip. But you may still be able to claim textbooks and travel under normal self education deductions.

  FEE-HELP can as this is full fee paying (no government subsidy). When you claim it, you claim the whole fee for the unit in the financial year the debt was incurred. ie the census date.

  You could check if your course has a full fee paying option and what the costs would be to make it claimable but it would likely not work out better for you.

  P.S get a new accountant.

  https://www.ato.gov.au/Individuals/Income-and-deductions/In-…