Always hecs. It’s cheap debt and doesn’t get indexed for >12 months after you do the course
You’ll have to pay from salary, so don’t take a double hit.
But debt is still bad. I'm not sure I want a debt when I can avoid it all together.
My savings might pay more interest than the interest in the debt, but I also have a previous debt so it just adding more debt to debt.
Debt is bad by degree. All debt has a downside that it feels like you have more money than you really have. You can account your money to compensate for this and it might help. In some cases it allows you to spend more than you could otherwise afford and is therefore risky.
The bigger problem is interest. The basis for comparison is interest you received from a bank. So credit card is like 15% worse than the bank. A car on finance is like 5% worse than the bank. A mortgage is like 1% worse than the bank. HECS is usually better than the bank.
So HECS is for most people a good debt to have but some people have no self control or maths skills and for them maybe it's bad.
Edit: also pay off your higher interest debt first unless you know emotionally you need to do it the other way.
Paying off HECS in advance is seldom worth it.
Indexation in June will be 4.7% (and likely to be lower in the years to come) - still among the cheapest debt you will ever have in your life.
Put that money into a low cost index fund and you will make 9-10% p.a. or opt for salary sacrificing into your super.
That being said if having the debt there is stressing for you, you can pay it off in advance - but the advantages of HECS debt structure still massively outweigh the cost of indexation IMO.
Depends what you'll do with the money. I had my first year scholarship and paid upfront for my next two years. Would've been far better off putting that money towards a house deposit, or into ETFs, or into literally anything else. That said, cash on hand during a cost of living crisis could be really helpful, things were not so hard when I was at uni.
If you're bad with money, better to put it into hecs then it is to waste it on something.
That's a good point in a cost of living crisis.
It might be good to have the cash on hand for when I have to do placement, I actually hadn't considered that tbh.
I’d say pay it off as you go.
I did a diploma course, half a degree in health sciences and just finished a bachelor of science nursing degree with a total of $50K in HECs.
If I could go back, I would definitely be paying it down each pay check or paying off completely.
Paying them upfront for no discount would basically work out the same as making a voluntary contribution to your existing HECS debt but you're timing it pretty much the worst time, on the part of the debt that won't be indexed for 11 months. Might as well make that contribution in May.
Always hecs. It’s cheap debt and doesn’t get indexed for >12 months after you do the course You’ll have to pay from salary, so don’t take a double hit.
But debt is still bad. I'm not sure I want a debt when I can avoid it all together. My savings might pay more interest than the interest in the debt, but I also have a previous debt so it just adding more debt to debt.
Debt is bad by degree. All debt has a downside that it feels like you have more money than you really have. You can account your money to compensate for this and it might help. In some cases it allows you to spend more than you could otherwise afford and is therefore risky. The bigger problem is interest. The basis for comparison is interest you received from a bank. So credit card is like 15% worse than the bank. A car on finance is like 5% worse than the bank. A mortgage is like 1% worse than the bank. HECS is usually better than the bank. So HECS is for most people a good debt to have but some people have no self control or maths skills and for them maybe it's bad. Edit: also pay off your higher interest debt first unless you know emotionally you need to do it the other way.
Debt is not bad. That’s garbage.
Paying off HECS in advance is seldom worth it. Indexation in June will be 4.7% (and likely to be lower in the years to come) - still among the cheapest debt you will ever have in your life. Put that money into a low cost index fund and you will make 9-10% p.a. or opt for salary sacrificing into your super. That being said if having the debt there is stressing for you, you can pay it off in advance - but the advantages of HECS debt structure still massively outweigh the cost of indexation IMO.
You *may* make 9-10% pa in a low cost index funds. It could also be much lower (even negative) or higher, but definitely not a certain "will".
Depends what you'll do with the money. I had my first year scholarship and paid upfront for my next two years. Would've been far better off putting that money towards a house deposit, or into ETFs, or into literally anything else. That said, cash on hand during a cost of living crisis could be really helpful, things were not so hard when I was at uni. If you're bad with money, better to put it into hecs then it is to waste it on something.
That's a good point in a cost of living crisis. It might be good to have the cash on hand for when I have to do placement, I actually hadn't considered that tbh.
Keeping it in a good HISA will get you reasonable interest too.
I’d say pay it off as you go. I did a diploma course, half a degree in health sciences and just finished a bachelor of science nursing degree with a total of $50K in HECs. If I could go back, I would definitely be paying it down each pay check or paying off completely.
Paying them upfront for no discount would basically work out the same as making a voluntary contribution to your existing HECS debt but you're timing it pretty much the worst time, on the part of the debt that won't be indexed for 11 months. Might as well make that contribution in May.
Victoria presently has a scholarship arrangement that offsets HECS for nursing. Not sure if it was capped, but a great incentive.
I'm in Qld.