If you took out a Student Financial Supplement Loan between 1993 and 2003, you will have an amount to repay if your repayment income is greater than the thresholds in the table below.
The repayment income is your taxable income plus any net rental losses, total reportable fringe benefits amounts and exempt foreign employment income.
Hopefully you have told your pay office that you have the debt so that they can take extra tax out on your behalf to cover your obligations. For the 2008 – 09 year your employer will start withholding SFSS if your wages exceed $799 per week.
Unfortunately with the SFSS there is no provision to make any voluntary payments.
At the end of the year when you do your tax return, based on your reparment income the ATO will calculate how much SFSS will need to be paid
The SFSS that is calculated and the extra tax that has been taken out of your wages by your pay office is in most cases enough to offset each other.
2007 – 08
| Repayment income | Repayment rate |
| Below $39,825 | Nil |
| $39,825–$48,896 | 2% |
| $48,897–$69,405 | 3% |
| $69,406 and above | 4% |
I finished uni early because I was pregnant (end of 1995). I am now a married mother of 2 and have only been able to get casual jobs. My income has never been, or will be as far as I can see, $39,825 or more because I have been out of the workforce raising children and I my uni qualifications are out of date so no employer would employ me.
The loan keeps increasing every year. I am worried that I will never be able to repay it and am concerned that if I die the loan will be taken out of anything I may have in my will. It’s not that I expect I will have anything much but will my children or husband be burdened with this loan?
The only time the SFSS loan is written off, is when we die!
I have a small SFSS loan, of $4000, my concern is that with the accumulating interest, if I do suddenly get past the threshold, I will then have to pay it, at a time when I might need the money.
It was such a rip off, trading in welfare payments for the loan.
Oddly some people would be better off taking out a loan to pay it off, and then go bankrupt imho.
Unfortunately once the SFSS is passed into the hands of the ATO their isn’t any options to make a voluntary payment. The only choice is to pay it off once your income has passed the relative thresholds.
@ Em, I agree it was a rip off, trade in $50 of Centrelink payments and receive $100 of SFSS and then pay back $100 of SFSS.
I got my suppliment loan out in 1999 and am still paying it back – I don’t get a tax return – I get a tax debt. The last couple of years I end up paying out my tax return onto the loan and then some – only for the ATO to charge me another $500 increment.
I wouldn’t have been able to pay rent and study if I didn’t get the loan out because of the pittiful fortnightly benefit handed out to students. I have worked ever since and pay enough tax into the system without the government taking more cash off me.
If the federal government wants to really help australians they should provide better financial support for those who are trying to gain qualifications and participate in working society.
I have just gone up a tax bracket & found that my SFSS loan has sky rocketed with the annual indexing rate. Everyone I talk to is confused about what the SFSS is. I am getting plenty of info on HECS.
I cant see that going up a tax bracket is going to benifit me, things look worse than they did before.
As hard as I work at paying this off, it continues to grow. Good scheme? No, good scam by by the government. Does this debt die with me or will my kids end up paying for my misinformed decision.
Oh and if anyone thinks Salary sacrifice is going to help, remember the tax dept has got you there too, dont forget you have to gross up your wage, that may throw you into yet a higher tax bracket and youll have to pay more. Confused… so am I.
@ Karen, please look at my post re tax rates, http://www.accountantplus.com.au/wordpress/?p=239, the next rate change is at 80k. The scheme no longer exists so as it feels like you will never pay it off and if you have gone into the next tax bracket it shouldn’t take long.
As you say if you Salary Sacrifice, the SFSS will be calculated on the grossed up amount, more will be paid, but the loan will be reduced quicker. Salary Sacrifice is not taxed.
I have just finalised my SFSS debt, I to was scammed, trade off $50 of Austudy to get $100 of SFSS and then pay $100 back, 100% return for the Gov’t plus CPI adjustments.
At least it was realised eventually that allowing the Commonwealth Bank to exploit students with financial hardship was unacceptable and the ‘scheme’ was eventually axed (although this was not the reason it was cancelled i believe). I am trying to find further information if anything has been put to government, has anyone anywhere tried to push for reasonable changes to the SFSS and the conditions binding the unfortunate people who took out these ridiculous loans. Has there been any dialogue regarding a change in policy to the SFSS?? The fact that voluntary payments are not an option after 5 years is unacceptable and personally i believe all SFSS should be cut by 50% considering those with the debt essentially pay back double the loan plus indexing (ie. interest). I was unfortunately naive and struggled financially through uni so took out two of these loans, and although I blame myself for entering the agreement unaware of the conditions, it infuriates me that such a scheme could be introduced in the first place which so clearly exploits people trying to further themselves who are most vulnerable. Those coming from lower economic circumstances were handed on a plate to the Commonwealth Bank by the government, and effectively allowed to be exploited. If there is any further information about this, links, anything please post here as this was the only forum/information I was able to find online about this online. I believe government needs to revise this, and we should not be left to consider getting a loan and going bankrupt to pay off the SFSS as probably the most viable option.
I totally agree with everything already posted. I have a large SFFS that I need to pay and I have the ATO threatening to take me to court over it. I was 16 years old when I was advised that I could take out one of these “loans”. At the time my family was struggling through the after effects of the recession and my money was used to help my mum pay the mortgage to keep the house. Im not sure how the government could collude with the commonwealth bank to scam unsuspecting students but something needs to be done about this. I have children of my own now and simply cant afford to pay the SFSS off. If there was ever talk of a class action or some legal representation that may be made available to help us all with this situation, I would be very keen to find out and get on board.
Honestly, I am so embaressed that I was so naive and desperate to take this loan out. It has made me feel so much better to read that other (intelligent) people made the same mistake.
I have one of these and I now have three children and it seems will never earn over the threshold amount to repay this loan.It plays on my mind alot and I would like to clear this debt as it is growing before my very eyes. Clearly something needs to be done. The ATO should be making changes, so that we can make our own repayments. Otherwise this is blackmail – with no way out. Anybody who has any answers, please post them here.
Cheers
@ Jo, I finished studying in ’94 with a 4k debt. It took 15 years for my circumstance to align so my income was greater than the threshold. In that time the debt increased to 6k.
It is not a huge increase from 4k to 6k over that period of time, but to get the 4k of debt I traded off 2k of Austudy so in reality my debt has increased from 2k to 6k in 15 years.
I completely agree with all of the above. I have two of these ‘loans’, and was completely led astray, and unaware of the circumstances surrounding the ‘loans’ at the time of taking them out. What type of ‘loan’ sucks you in to ‘trading in’ $50 of centerlink money to receive $100 (and then pay back $100 plus interest)? Ridiculous. I used this money to complete my university degree. My parents were both incredibly hard workers, but were both low income earners (from the country) and could not afford to subsidise me living in Melbourne to complete the degree. Surely there is some action that we can all take to get the previous ‘loan’ amounts reduced to 0??
hi everyone,
i am so glad to hear i am not the only one who feels scamed, class action, lets do it!!!
i have called slater and gordon and put the idea of a class action to them, if people are interested please contact them i think the more people out there who contact slater and gordon could mean that they take on our case! i just want the 100% interest i paid returned back to me, the austudy i am entiled to. If a bank was changing these rates thaey would of been run out of town, why should a government get away with praying on the poor! sophkou@hotmail.com
I feel exactly the same way as Vicky, as everyone else for that matter.
Please let us know when a class action is initiated!
yes! I agree with you all and a call action should definitely be initiated.
totally agree with this rip off tactic and wondering what actually happens if you never earn near the threshold, does that then mean you do not repay the loan at all??
have just realised i have not received statements for a while now and it must be just adding up and up…..
it is wrong you cannot just pay it out if you happen to come into money, or even via a bank loan! if this loan was taken away it was for a good reason and the ones that were sucked in (silly me) should have some sort of compensation in the way of a reduction in interest at the very least!!
have you folk seen this?:
http://www.ato.gov.au/individuals/content.asp?doc=/content/00102966.htm&page=1&H1
seems to have the answers to your questions
good luck
The link to the ATO website describes how you can voluntarily repay your SFSS loan, the ATO site talks about a 5 year window that you have between when the loan was taken out and when the ATO takes control of recouping the money.
As the last loan for the scheme was given in 2003 then the last date for the voluntary repayment was 5 years later in 2008. Any who have the loan now in 2010 certainly can not make any voluntary payments.
Is that a typo? You definitely -can- make voluntary repayments to your SFSS loan, just like to your HECS/HELP debt. The ATO website even has information on how to make Bpay payments like a ‘regular’ bill in netbank.
http://www.ato.gov.au/individuals/content.asp?doc=/content/00249013.htm&page=23&H23
I have just started work and will be forced to make compulsory payments, and have started considering making these voluntary payments to pay it off quicker.. so I don’t have to think about this scam loan any longer.
Yes I’m another that was scammed. Was thrown out of home at 16 (in my dad’s eyes he’d supported me to year 10 which was one more year of education that he’d gotten so he’d done his duty). No way I could afford rent, food on top of school so I took out the loan. Regretted it ever since. Am still paying it back even though now it’s based on my income as if I was only suporting myself with that income and I am the sole financial support for my family.
Hi Z, thanks for that info. I was one who thought that we couldn’t make voluntary repayments. It’s good to know we can as I hate seeing how much my debt has grown over the years. It will be good when the debt is gone. Thanks again.
CLASS ACTION I have just read through the comments and I am too in the same boat. One comment made note of a possible class action through Slater and Gordon. I think that it is so important that people band together on this issue whether it be through class action or direct written complaints to the Government. Please give an indication as to who has contacted S and G or the Government. I am sure you would agree that this particular scheme took advantage of mostly young people, some being from lower socio-economic environments. From what I have read there is a clear indication that most people went for the loan not ‘fully’ knowing what they were getting into. Being a Government program there should be much more accountability for such a SCAM. We must now do something about this. Please give indications of who has already made contact with Slater and Gordon and who is willing to do so. There are many grounds that can be worked on here.
Wow – feel so much better knowing I wasn’t the only one. I realised it was a scam at the time, however I’m sure I’m not the only one where circumstances of necessity forced unintelligent financial decisions – which would have needed to made regardless based on the peanuts we were getting paid back between ’96 and ’02.
I think I only took the SFSS option for about 2.5 years early on in this period, but when I realised I already accrued significantly more debt than what I would have in total with HECS it was sufficient for me to say “enough”.
I’ve managed to pay off HECS purely through the tax system over the last 4 years (thanks to the inherent FBT implications related to salary sacrifice), however I’ve barely dented SFSS. The government continues to make more and more money off me with each annual CPI adjustment.
I should add that when applying for SFSS, I don’t believe there was enough information to clarify exactly how much CPI would affect me over the long term, especially after accruing a significant amount of debt. Based on circumstance I don’t think it would have affected my decision, however others could have been potentially dissuaded.
I sincerely hope something is done about this – people we trust in power should be looking after our best interests and not be allowed to take advantage of people, especially those who need help the most. I’ll keep tabs on this discussion, hopefully someone out there has the ability to stand up for us, at to least fight for our right to pay back what we owe, and not what some scamming politician(s) decreed by methods of profiteering.
I totally agree twith the above comments,my daughtewr and I would be very interested in joining a class action with Slater & Gordan, I was on a disability support pension and did the same traded $50 etc, my debt has risen to over $21,000, I have since gone back to work and have begun Salray sacrificing. I also dont think it was explained properly…. Pat
Hi,
I also have a supplement debt, have been paying this off for years now, each tax return, decent amounts and it does not seem to be getting decently smaller, the intrest does not help and I am quite frustrated with this loan.
I also feel it was not explained properly at the beginning and found to be paying back double of what I had realised. I also would like a solution for this and wondered if anyone found further information, and any information regarding the class action.
jane
Hi all I spent many months back & forth between the Finance department of the ATO trying to get rid of this debt and have it waived. NO Luck though. I was over 40 & single mum who went back to study at Tafe as advised by Centrelink at the time that this was a good idea to help at at the time financially. I am now 59 years old & receive a $500 mature age rebate from ATO but pay back $1200 each year on the debt now that I have finally started to earn enough to pay it back. My debt went from $7000 to now over $14000 and I would definitely be in on a class action. Will contact Gordon & Slater myself
CLASS ACTION NOW!!! CLASS ACTION NOW!!!
What is the process? How does one start the ball rolling? Surely a call to Slater & Gordon could start it, however how many people are required to get it up and running?
I just got my notice of assessment from the ATO. SFSS is at $26,832 and rising! This scheme was a total scam. At the time i was at uni and raising two young kids and needed the money. I had no idea it would end up like this! Something needs to be done.
I am contacting my federal member for parliament to see what changes can be made at a legislative level.
I am VERY interested in CLASS ACTION. I have 2 loans that I took out and thought that I would be repaying half, not the full amount! Not the part of my benefit that I was entitled to as well!! I have been complaining about this for years. I will call slater and Gordon this week. Has anyone had any luck with Slater and Gordon?
I too will contact the local member here.
Hello all,
I clicked “submit a story” to A current affair.
If enough of us write they may notice!!
http://aca.ninemsn.com.au/contacts/
What’s the update with S&G.. anyone?
I think that sort of attention is good..
However, I will still write to my federal member to see what sort of response I can gauge..
Frankly, at this point, I just want the repayments to cease. It’s literally money wasting away as I barely repay anything due to indexation.
I would be interested in knowing what are the numbers of former students affected..
You can make voluntary payments http://www.ato.gov.au/content/downloads/IND00249013n2789.pdf
It was a ripoff as you Would take a loan for 7k but have to give up 3500 of your payments to receive the $7000 e.g. For example, if you trade in $3,500 of your allowance over a year, you will get $7,000 as a loan. therefore you only got $3500 loan in reality.
So you would only receive half the amount of what you took the loan for (that’s worse than a loan shark) then you pay interest again on the loan lol
That type of loan is normally seen on a current affair as a loan shark ripping of the innocent.
I have all the correspondence from the original brochure, it also states that you can make voluntary payments when it is handed over to the tax office.
I think there is a nice name and shame in this taking advantage of low income earners as they needed this money the most. I had 3 toddlers at the time of this loan and I need the money but at what cost.
And I quote from the centerlink website
Most loans require students to”trade-in” (or give up) part of their Youth Allowance, Austudy payment, ABSTUDY or Pensioner Education Supplement to receive double that amount as a Financial Supplement loan. For example, if you trade in $3,500 of your allowance over a year, you will get $7,000 as a loan.
I have just received a statement from the ATO in regards to my SFSS loan. Total shock. This is the first statement I have received in 9 years!! And – just as I have been reading everyone elses case – a significant increase in the balance. I have been stewing over it and I am so glad to have found this website. My big questions are – can anyone please tell me – what can we do about it? Has anyone had success with anything? I have read heaps about banning together for class action – so what, where and how? I would be very appreciative for any info.
Hello
I have been thinking about this con for a while. I too took out the loan when I was 16/17. I did not understand at the time that I would be forgoing $3500 of my Austudy. Was there a legal age that you had to be to enter into a loan in 1994??? I was told taht it would helo and that it would be interest a interest free loan. At the age of 17 it looked great. It was only when I started to get the statements that I realised I had been shafted. Can you please post the contact detail of the Solicitors so I too can contact them. Thanks there is obviously alot of people in the same boat. Cheers
I will write up a submission to the Á Current Affair’program if that fails we can hit Today Tonight. I think if we could get some publicity it may help towards giving this some exposure and possible legal support. Its was a government rip off that took advantage of low income earners and charged 100% interest straight off the bat (No wonder it disappeared). Anyway see how I go
I too have emailed ACA. I have also been looking into why it was axed in 2004. All that was mentioned was the cost to the Government and that the Youth Allowance was introduced. Can anyone advise if there was a legal age for signing financial contracts for loans in 1994?? Thanks.
Something else that may help if to lodge a complaint with the Financial Services Ombudsmen. The number is 1300 780808 or email via http://www.fos.org.au
For me the information about the scheme was not clear enough and may have been misleading or deceptive!!!
I look forward to feedback on this matter.
I totally agree with all the comments here I to have written to the ATO and the Department of Finance without success and I am currently on my last option of writing to the ombudsman. Looking at these comments it is exactly the sentiments I have written about can not believe how badly we are all being F#@ked and no one cares. In these times with the government short on cash I think they will continue to screw us. What we need is some kind of register to see how many of us are out there (powere in numbers) Is anyone tech savy enough or know how to register this info safely (the only one who really knows how many of us are out there are the ATO/government and they are not going to help us. If there are enough of us and we go to the right members of parliment we may win this in the end but we need to have numbers (there must be thousands if not tens of thousands of us)
I have an SFSS loan totalling almost $13,000 which was just over $8,000 back in 2001 when I finished borrowing money to study and survive. This is the first year that I have earnt over the threshold, and I will finally start to pay it off. I am keen to launch a class action against the government, commonwealth bank, and welfare agencies involved in this horrendous scam.
Students are the people who are struggling to become better members of society through education while big business, political parties and trades are subsidised with bucketloads of money.
Basically I have borrowed $4000 over 2 years and I now owe $13000. Everyone who has an SFSS debt should post on this site, stating how much it is. The power of numbers will be the only way it can be written off.
Education is truly not valued in this country, and this SFSS scam is proof.
Totally agree with everyone here – I got two loans in 2000 now up to $15,000. Really had no idea what I was signing – can’t blame anyone for that but myself really however I don’t think the loan should have been available in the first place because it was such a rip off. I wish I’d been a bit smarter at the time. I wish someone at the bank (I got mine through the Commonwealth Bank) had said to me “do you really know what you’re getting yourself into”?
Hello. I have again written to ACA for help. Can anyone tell me if there is any news on the class action front???? Cheers
I was told that i would never have to pay back this loan by centrlink and my bank! that the threshhold would go up every year and unless i made a packet then i would never have to pay it back. I dont think 45k is a packet. Then 3 weeks ago i get a information statement asking me for $900. I feel scammed. I would never of taken this loan if i had known every year it increases. I feel like i was not informed properly and scammed!
I was just contributing to this conversation on http://www.iblob.org I think we need to spread our word and gather as many followers as possible then put a petition forward via TV media or government.
i took out this loan when i was on a sole parent pension in 2001 to attend some retraining in health at tafe. I wasnt offered any other alternatives to help me gain employment and feel that i have been let down by the very system that was supposed to support me in training and finding employment. I wouldnt have been able to borrow that money from the bank as I was on a pension and I dont see how it was right for the government to ‘loan’ money to people to help them train for work which the government then collects taxes on!
My mum got my sister and I to sign for this little did we know that she was spending the money whilst we were at uni and we still paid our own way through work adn doing chores etc. Little did we know that we would then be stuck with these very high “loans” I am very annoyed with this and now instead of getting ahead in life you just seem to take 2 steps back.
I can’t believe the government can do this to students and yet people who sit on clk pymts don’t have to pay it back it just a joke for all of us who were trying to get ahead with out careers and be something and not want to rely on welfare now get stung by the government and CLK.
I recommend you all lodge complaints with the Commonwealth Ombudsman http://www.ombudsman.gov.au. This scheme was a government scheme, it took no account of the students ability to repay the loan or any assessment of their financial circumstances. It was also generally very poorly explained to us. If enough complaints go to the Commonwealth Ombudsman at once, they will have to investigate the systemic problems and raise them with the government. This is the most appropriate way to seek redress for this rort.
Never understood how this could have even been legal? Cash in $3500 of your benefit to the bank and they then give you $7000….to which you then have to pay back while accumulating a horrendous amount of interest on the loan calculated daily. WTF happened to the initial $3500 you gave them? Essentially they only gave you $3500 + the $3500 you gave them yet they end up collecting $10,500 + the ridiculous amount of accumulated interest??????
how do we find out how much i owe? ive been taxed the last two times 1500 and 1800, i think i got the 7000 loan in 2003 so i wanna know how much i owe….
I’m with you folks. I have just paid $10,000 for both SFSS and HECS through tax. I feel tricked It seems grossly unfair. Lets do a class action.
Hello
I just followed Brad’s advice and emailed http://www.ombudsman.gov.au. Hopefully if enough people email or phone then an investigation will take place. Please contact the ombudsman it might just be the start to getting this resolved.
Tried emailing the ombudsman, here’s their reply:
We usually do not investigate complaints that are over 12 months old; this is because it can be very difficult to get useful information and to sort out any problems as cases get older.
As your complaint dates back 11 years, I have decided not to investigate your complaint.
Hi,
I guess we wouldn’t have a problem in paying the actual debt, not some grossed up and deceivingly ridiculous figure! If we took out say 2 loans at 3.5K each, a total of $7000 then we should pay that not $14,000 + 10 years of CPI (interest!!!) which some how makes is nearly $20,000!!! I’m in for a class action, a 19-20 y.o student in Australia is still quite ‘gullible’ and especially when you are going through tough times, we should get our rights in this regards and at the least pay off what we were given and nothing more, and better still if it can be wiped clean as we were all duped by the banks and now the govt!!!
HI guys yep me too i were ripped offf with this dam loan,
i’m not sure how much i’m still trying to find out will get the documents at the end of the week
i’m curious to know has anyone else been hassled by them to pay back money i have been hassled on many occasions especially when i try to study again,
interested if anyone else has received this kind of harassing behaviour, might give maurice blackburn a call and see if there interested in a class action,
the loan was a rip off and a scam targeting people that are reall to young to fully understand the consequince of such a loan, i know i never did.
There would have to be thousands of people out there that would like to wipe there loan
thankyou
rebekah
OMG i cant belive this garbagge. I have taken out a very small amount and have been slapped with $22,000
has anyone filed any legal actions that we can all tag on to?
I took out 3 loans when i was 18, now im 32 and boy do i regret it.I was under the impression that if you earnt under the average earing threshold for more than 5 years the loan would be erased.I have not received any imformation from the ATO for over 7 years now & thought my loan had been erased.After ringing them the other day boy did i get a shock! -they said my loan had increased to over $9700!!! I couldnt believe it! I asked them why i hadn’t received any statements or anything at all in the mail and they said they no longer send anything.There are prob alot of people out there who are totally unaware they even have a loan anymore. These loans were very poorly explained and in 2003 the government stopped lending them-prob because they realised they could no longer legally RIP OFF TAFE students-for every $1 of youth allowance or austudy you get $2 and a big bill in the future!If any one is mounting a case please could they post it on here as i would be very interested.The government has ripped us all off.
I am now intending to pay this debt. Education has made me learn faster, and I’m planning on making so much money that this debt will be amount to almost nothing in terms of total earnings. I knew it was a scam at the beginning, but I took it anyway, and for this I accept responsibility. It has been a great learning experience about parasitic debt. My plan = make a lot of money quickly, solving all financial problems and kill debt permanently.
I have 2 quick questions:
1. does anyone know what happens if you dont repay the loan? for example if someone dies? or you simply dont earn enough to ever repay it.
2. How do I check how many loans I have signed for? (I thought I took 3 loans but have a debt of over $35,000!!!)
cheers
No one else is required to pay your loan, if you pass away the balance the load can’t be collected off any one else.
A phone call to the ATO will provide you with the balance of your loan, or if you use the services of a tax agent they will be able to look up your balances to.
Just found some info on the ATO Website that might help with answer 1. if anyone has a law degree and can explain in plain english what it means:
“DECEASED ESTATE
A trustee or executor needs to lodge all
outstanding income tax returns on behalf
of a deceased person, up to the date of the
person’s death. Any compulsory repayment
included on a notice of assessment that relates
to the period before the person’s death must
be paid from the estate, but the remainder
of the accumulated debt is cancelled. Neither
the deceased person’s family nor the trustee
is required to pay the rest of the accumulated
Financial Supplement debt.”
Does this mean that if you die they take the full amount of the SFSS money from your estate? or just the amount owing for that financial year???
The site also states that even if you go bankrupt you have to pay it back(with what money? WTF!) , as follows:
“BANKRUPTCY
Financial Supplement debts and accumulated
Financial Supplement debts are not provable
under the Bankruptcy Act 1966. This means
you will have to pay those debts as if you had
not been declared bankrupt.”
http://www.ato.gov.au/content/downloads/IND00249013n2789.pdf
This loan is unreal…………..RIPOFF!
That means that if your income for the financial year is greater than the threshold then the normal amount is due, if there is any balance left on the loan then that is cancelled. Nobody else is required to pay it off.
i worked for over 20 years -paying taxes, i was out of work for a year so i went back to school to get a diploma and increase my chances of getting more work. i had to raid supermarket bins for food so i had enough to pay rent. the best my country could offer was this 100% interest loan! as far as i’m concerned this was basically creative accounting to take advantage of desperate people. i only needed $100 a fortnight to keep out of trouble but had to give up $100 of my entitled benefit to get the extra and pay back the full $200. i new it was bad then but it was better than being on the street so i wear it but i will never Forget that the government aren’t to be trusted and are in this instance loan sharks
I don’t remember how much I was actually loaned over the 4 years I completed my undergraduate degree while living on Austudy as an independent due to family breakdown – youth counsellors advised me to apply for the loan as it was the only way to get an allowance that would meet cost of living. 13 years later I’m now up for >$35k and the payments I made last year were LESS than the amount it was indexed.
I don’t mind paying back what I borrowed, minus the amount of Austudy I was required to trade in, but the indexation is killing me.
I borrowed 7k when i was 16 and at TAFE at that time, i’ve been working for the past 8yrs and been paying off this loan. I hardly thought twice why am i paying a loan of for 8yrs and still going.
When i came across this site, i got the shock of my life, cant believe that we have been screwed by the so CommonWealth govt.
Guess i would pay off my mortgage but i would still be owing money for this 7k SFSS loan.
Absolutley no Justice
Has anyone tried apply for deferement?
How do you apply for deferment?
http://www.ato.gov.au/individuals/content.aspx?menuid=0&doc=/content/00284229.htm&page=16&H16
Hello,
If you would all like to start a group complaint, please email your details to me at a.simone.h@gmail.com
with your name and email so that I can collate them in a group letter and petition.
I will prepare a group complaint to the financial ombudsman.
Alicia
I regret very much taking out the loans:I was at TAFE and out of home etc: and advised to take this loan by the admissions people; and can see now that it was a very dishonest scheme for the loanee( and an in need one at that-it should have been more explicit with the costings)
I also did not know the extent of the amount I need to pay back until I did some taxes-and boy did I get a shock!
I have no issue paying back the actual principal, and would happilly do so and think that was just. But the indexed CPI interest is a massive scam and we have been fooled absolutely. I really wish I could go back in time and find another way . I am so furious with myself
Hi guys,
I got the shock of my life when I found out the amount I have to pay for the SFSS. Like many of you I took out SFSS during the late 1990, early 2000 for 4.5 years. How stupid was that. Now some years late I am faced with a massive bill of $52143. I have been earning over the threshold for some years now, however the compulsory repayments are less than the indexation, hence every year I am finding myself in more debt as a result of this ripoff scheme. How could the government allow this to happen? I took the loan at the advise of a centrelink official. What’s more back in the late 90′s – as a newly immigrant to Australia I did not understand the English language like I do now. My understanding was that there was no interest for this loan and the trade-off or trade back of my austudy entitlements made no real sense. It would appear that the actual loan had a 200% interest applied to it upfront. The $3500 that you had to trade off from your austudy and then the actual loan. Even now I still don’t understand how can one end up having to pay back $10500 plus indexation for a miserable $3500 received. How can this be legal in a democratic and fair country like Australia??? Even the former communist regime of the country I have migrated to Australia from was not capable of ripping off its citizens like this. Anyone for class action,I would be really interested. Any advise regarding this matter will be really appreciated.
Was also duped by this scheme…young naive and stupid with parents who didn’t have very good financial ethics. If there is a class action happening I’d be very interested in joining.
I am so angry with the Australian Govt over this stupid rip off scheme that targetted students with this loan. I too was out of home and on ABSTUDY and was told by Centrelink that the only way i could finish my study would be to apply for the loan. Stupid me (against my dads advice) signed up for it. 9 years later its still there and has only got bigger even tho i am paying compulsory payments and it makes me so frikken angry.
What i dont get is this – in order to get the loan we had to TRADE in OUR OWN ENTITLEMENTS in order to get money from the government. WHY THE HELL do we have to pay back the whole frikken amount (plus indexation) when we GAVE the stupid government HALF of the money that we were entitled to in the first place.
The biggest scam i have heard of, the government should be ashamed of themselves for this, they have stuffed up the lives of many thru this, and to think that due to the indexation many of us will still be paying this off long after we retire.
SHAME SHAME SHAME
I say we hit them up with a class action, im sure there is enough of us that got sucked in by this scheme, lets fight for justice………
I have just created a group on facebook called ‘Ripped off with student financial supplement scheme? Lets fight for Justice…’
http://www.facebook.com/groups/356959764336898/
lets band together and fight for OUR rights, if we get enough people together who share the same voice and vision then who knows what will happen… lets fight for Justice!!!!
I was also duped by the SFSS in 2000. I borrowed 5k and lost 2.5k of Austudy in return. I then had a bad car accident a few months before the end of the uni year and had to withdraw so didnt qualify for Austudy anymore. This meant I also didnt qualify for the SFSS anymore, so they ‘back traded’ the balance of my SFSS against Austudy I had already been paid before I took out the SFSS!! Crooks!
Hello
Can anyone tell me if a class action has started.
Cheers
Is there something set up for those who don’t use facebook? And has anyone in a capital City contacted any solicitors to find out if it is even possible to start a lawsuit????
Cheers
Hello All,
I was ripped off by this scheme in 1994 and still paying for it. Any word on a possible class action ??
Cheers, Loret
Im on board with this, Ombudsman and class action are a good start.
This debt is a bit overwhelming – I don’t think that there is anything that can be done accept pay it off slowly over the years, I really wish that I didn’t take this out and that I knew what I was getting myself into. $18k…
We got screwed people.
Dear all,
I, too, was taken advantage of under this scheme. As a rural student, I had no choice but to relocate to the city to study at university. I was unable to make ends meet on the measly ‘Austudy’ I received, and was forced to apply for the loan. I also worked part-time, to the detriment of my studies.
Although I am currently repaying the “loan” at the highest % rate, it looks as though I will maintain this debt for MANY years to come. All of this for being a socio-economically disadvantaged rural teenager, with a desire to better my situation through tertiary education!
I would like to see a class action suit, and would welcome any feedback on actions others have taken so far. I am looking into my options for fighting this through legal and political channels.
Cheers,
Jennifer
i too am looking at it now… once i gather enough information i will contact my local MP and see how it goes from there…
found this info…
http://guidesacts.fahcsia.gov.au/guides_acts/ssg/ssguide-1/ssguide-1.2/ssguide-1.2.7/ssguide-1.2.7.40.html
1.2.7.40 Student Financial Supplement Scheme (SFSS) – Description
The SFSS
No financial supplement loans are available from 1 January 2004.
From 1 January 2004, the SFSS is closed administratively as there is no agreement with a participating corporation for the provision of financial supplement. This means that no new loans are available under this scheme from 1 January 2004.
For existing loans, a person’s loan repayment arrangements will continue unchanged. Students may make voluntary repayments to the CBA during the first 5 years of their loan contract. The Commonwealth Government will then buy-back the loans and collect repayments through the taxation system. Loan recipients do not have to repay their loan until their income is above average weekly earnings.
Background information
Prior to 1 July 1998, students could access a loan under the former Austudy Scheme. The loan was previously called the Austudy Supplement. After 1 July 1998, the SFSS allowed eligible tertiary students to increase the amount of assistance they were receiving by taking out a loan under the scheme.
Under this scheme, eligible tertiary students could trade in all or part of their YA, Austudy or PES entitlement for twice the amount in the form of a loan. Full-time tertiary students ineligible for YA because of the level of their parent’s income and/or family actual means could elect to access a SFSS loan of to up to $2,000 a year as long as their parents’ combined income and family actual means were below a certain level. The SFSS was paid fortnightly.
Act reference: SSAct section 1061ZY Eligibility to obtain financial supplement
Policy reference: SS Guide 1.2.1.20 Youth Allowance (YA) – Description, 1.2.2.30 Austudy Payment (Austudy) – Description
I’d be interested in joining a class action. My SFSS debt is over $50,000 for four loans. How can the government get away with a scheme with 100% interest up front?
hey everyone, sorry i posted ages ago that i would call stater and gordon and i did, but they said they would discuss it and call me back they never did.
has anyonelse got any leads??
In a fortnight’s time, interest will be added by the ATO. I regretfully paid mine today so that no more interest could be added. I got 10% off. I thought I’d feel better & in a way I do – no more interest & no more worrying about it! However, I still am not happy with the situation. I was told by a fellow student that you only ever had to pay it back if you earned over so much. Johnny Howard set this scheme up. 5 years later I learn that the debt has gone to the ATO? WTH??? Another page on facebook is financial redress with James Middleweek. Good luck everyone & keep in touch. Book mark this page
I also accumulated 2.5 years worth of maximum SFSS from when I was 17-19 years old. I knew what I was forgoing and getting myself into, but it’s a drag that follows you around for life
After recently becoming interested in legal things, I wonder (and 2 people have touched on this above) – wouldn’t you be able to dispute the contract entered into while under 18?? In most circumstances minors can’t be held liable for contracts under age. Worth disputing $7000 portion (first year, while aged 17) of the debt??
i too have been naive back then and took out this loan. my SFSS loan is way bigger than my actual HELP debt. as some people have stated up the thread its just plain highway robbery. you sacrfice $50 off your centrelink payments to get $100 back which basically amounts to the loan you owe. interest is basically 100% the moment you take out the loan plus interest every year indexed.
is there any update on this? has anyone done anything to address this issue? im willing to pay off my SFSS loan based on the actual amount i really loaned in the first place, in my example that would just be $50 plus any interest applicable.
Being a little older, I missed out on the introduction of these loans, but I know if I’d been a student when they were introduced, I would have also been scammed, as I was quite broke at the time.
I have recently however, been helping a friend with tax matters. She took out a loan in the nineties, when two months in, her circumstances changed and she only accessed a quarter of it. She assumed the Commonwealth Bank would pay the remaining amount back, but we recently discovered that it appears only a third of her unused loan was returned to the government. So her debt started out at triple the amount she actually accessed (if we use the arguments above – it works out to six times what she actually borrowed). She has only been in a high enough tax bracket in the last couple of years to need to start paying it back, so was unaware of the amount it had escalated to, until after all bank records had been eradicated. We are kind of stuck about how to even begin to sort this one out.
Any ideas, anyone?
SCAM!!! Like many of you, i was in need of finanacial support to purchase a PC for studies during ’97 to keep up with the subjects that i had been studying at the time. My parents were hard workers but were low income earners. A friend referred me to the SFSS loan and i thought it was a good idea at the time. I was 17, desperate, naive and eager to recieve good grades when i signed for a loan of 4000. 15yrs later and i am being punished from my government for needing their support. And im still paying taxes!!, I will make sure that word of mouth gets this site more comments and attention so that we can hear from more people who have been affected. Time for some action!!
Took out several loans in the late 90′s while studying at TAFE and receiving AUSTUDY. At the time I was living at home with my mother, who was on a disability pension. My parents had separated and my sister had left home so financially times were very tough. I too have been scammed by this scheme believing at the time I would have to only pay half of it back, now my debt has risen to over 26k and ive only now passed the repayment threshold. We all really need to take a stand on this and contact any solicitors/lawyers we know of to see if there is any way we can have our loan repayments either reduced, (repay only what we borrowed) or have it completely removed from our tax records. We should get a website up and running so that anyone who had been affected by this sign a petition so we can take this to the highest level if need be. Im happy to assist in any way to have this scam put out to the mainstream media to raise awareness so that further action can be taken
I was shocked and embarrassed when I received a statement in the mail for my supplement loan debt of 50k a few years ago. I didn’t know what to do and because I had started full time work again, thought that the deductions from my salary would reduce it over time. However, four years later, it is over 50k despite deductions, because of indexations of 3.5k pa. It seems that it will never get paid off even though I’m working full time. Like many of you, I was a poor student struggling to survive whilst studying for a degree. I had no support from family and living in an expensive city of Melbourne. I did part time work of 10-15 hous pw on top of full time study, but it was unbelievable that the government reduced my austudy payments when I earnt over a certain amount per week. So I couldn’t earn enough money to live and pay for uni expenses, which forced me to take out the supplement loan to the maximum over 4 years. Now, 15 years later, it had increased to a staggering amount that contradicts its primary purpose: the supplement loan was meant to help those who are disadvantaged, but it has had the reverse effect: I feel overwhelmingly ashamed, stupid and stuck in debt thanks to our supposedly fair society. I am so glad I’m not the only one here and that people want class action. We need to do something.
Great to see others questioning the merits of this scheme (scam) – I will certainly join any action taken on this – I work in finance and suspect any private organisation that attempted to market a similar product with such a lack of disclosure around the financial implications to a typically young and financially struggling market would be torn down immediately. Students like me who took this were backed into a corner – a government program designed to help with 100% interest accumulated at inception – and interest on that interest for the life of the loan. Here I am over $50,000 of debt later with a young family, thanks for nothing!!!
Well i agree that it was the biggest rip off of low income earners trying to improve their education. I too took out the loan as I was supporting a wife and 2 young children. i was at uni from 1992 to 1996 and took out the loan for most of the time just to pay rent and put food on the table. When I got the SFSS statement from the ATO this year it said I had a balance of $2117.00. After processing my tax return I only owed $52.94. I have now completed the repayment of the SFSS loan after 16 years, I was earnng over the threshold from the day I finished uni. And if there is a class action then I would like to be involved too.
Drowning, drowning in it. I had a $5,000 loan now well over $50,000. What the hell!They sent me a payment slip. What a joke.
I rang the ATO and explained that I couldn’t possibly pay it in 10 days. I received no support or help at all from them.
Now I am about to be hit with the next round of interest. I was told the loan would be interest free at the time. Help
I too stupidly took out a number of loans in the 90s when I was a single parent with 2 kids trying to get my degree. My supplement debt has now overtaken my HECs and is growing by the minute. I Now find myself in a decent job earning good money have to pay top of the band for HECS and supplement meaning Im paying an extra 12% tax on my income. I have deferred my supplement for the past 3 years as if I factor that in I cant afford to meet all my obligations. It was the biggest scam ever perpetrated against low income people in Australia. I think it is a human rights violation and maybe we should talk to the UN. What do others think?