FEE-HELP & VSL Student Loan Tax

Date —

15 September 2020

Education Sector/s —
Higher Education ◾ Vocational Education & Training

Summary —

With the great support of its members, the Independent Tertiary Education Council Australia (ITECA) has undertaken a concerted advocacy campaign to have the Student Loan Tax levied on most FEE-HELP Loans* and VET Student Loans permanently abolished. ITECA has undertaken a series of meetings in the past week with senior parliamentary stakeholders to progress the objectives of independent providers in the higher education, vocational education, training and skills sectors.

Key Issues —

One of the great travesties of Australia’s tertiary education system is that students accessing either a FEE-HELP Loan or a VET Student Loan is required to pay a Student Loan Tax on top of the amount that they borrow.

For higher education students, the Student Loan Tax tax is 25% and thus for a student accessing a $40,000 FEE-HELP Loan the total debt obligation to the Australian Government becomes $50,000. After strong advocacy by ITECA, the Australian Government has announced that the 25% tax will drop to 20%. ITECA is to appear before a Senate Committee this week in support of this change.

Students undertaking a Diploma or higher qualification with independent Registered Training Organisations (RTOs) face a student loan tax of 20% and thus a student accessing a $18,000 loan ends up with a debt obligation to the Australian Government of $21,600.

In the lead-up to the 2020 Australian Government Budget, ITECA has set out two reforms to the Student Loan Tax.


ITECA Advocacy ―
Student Loan Tax Temporary Suspension


The Australian Government has implemented at the temporary suspension of the FEE-HELP Loan and the VET Student Loan tax for units of study with a census date of 1 April 2020 to 30 September 2020 as part of the Covid-19 response. ITECA has argued that this suspension be continued through to 30 June 2021 given ongoing challenges associated with the Covid-19 pandemic.


ITECA Advocacy ―
Student Loan Tax Permanent Removal


ITECA continues to be a strong advocate for the permanent removal of the FEE-HELP Loan and the VET Student Loan tax and lobbying to this end continues. One option currently being considered is a stage phase-down over three to four years.

The campaign to end the Student Loan Tax is an excellent example of what member-driven policy advocacy is all about.

“The ITECA membership has been highly engaged on this issue and it’s been a defining element of the campaign to end the Student Loan Tax. The increasing focus on this issue by government shows what ITECA members can achieve,” said Troy Williams, ITECA Chief Executive.

ITECA will continue to engage with its members and the Australian Government on this issue in the lead-up to the Australian Government budget.

Further Information —

If you're an ITECA member and would like more information on this matter, the ITECA team would value the opportunity to talk to you.  Simply send an email to policy@iteca.edu.au or telephone 1300 421 017.  Stay up to date via Twitter, Facebook and LinkedIn.

* Students at Bond University, The University of Notre Dame Australia, University of Divinity, and Torrens University Australia do not pay the student loan fee

Disclaimer & Copyright —

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IHEA Independent Higher Education Australia

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