SFSS – Student Financial Supplement Loan - Repayment Thresholds and Rates 2019

The Student Financial Supplement Scheme (SFSS) was a voluntary loan scheme for tertiary students to help cover their expenses while they study

The SFSS closed on 31 December 2003 and no new loans have been issued. Existing Financial Supplement debts will continue to be collected through the tax system.

If you took out a Student Financial Supplement Loan between the years of 1993 and 2003, you are required to repay some of your debt if your Repayment Income (RI) is greater than the thresholds in the table below.

The Repayment Income (RI) is your taxable income plus any total net investment loss (which includes net rental losses), total reportable fringe benefits amounts, reportable super contributions and exempt foreign employment income.

Hopefully, you have notified your pay office that you have a SFSS debt so that they can take extra PAYG Withholding on your behalf to cover your obligations. For the 2019 – 20 year your employer will start withholding SFSS if your wages exceed $882 per week.

When you have lodged your 2020 tax return, based on your Repayment Income (RI) the ATO will calculate how much SFSS will need to be paid

Unfortunately, the SFSS has no provision to make any voluntary payments.

The SFSS is calculated by your pay office and the extra tax is withheld from your wages, in most cases enough that will be enough to cover your SFFS obligation when your tax return is completed.

Reportable Fringe Benefits

In some cases, if you are receiving reportable fringe benefit it may be wise to ask your pay office to withhold extra PAYG Withholding to cover a possible shortfall in SFSS at the end of the year.

I have been asked by clients, is it worth salary sacrificing and receiving a reportable fringe benefit with the possibility of paying extra off the SFSS loan? Yes is my answer, the amount of tax saved by salary sacrificing will far outweigh any extra payments off your SFSS loan, keeping in mind that any extra payments will mean that your loan will be paid off earlier.

New SFSS Rates

From 1 July 2019, all study and training loans are covered by one set of thresholds and rates.

Repayment income (RI)Repayment rate
Below $45,881Nil
$45,881 – $52,9731.0%
$52,974 – $56,1512.0%
$56,152 – $59,5212.5%
$59,522 – $ 63,0923.0%
$63,093 – $66,8773.5%
$66,878 – $70,8904.0%
$70,891 – $75,1444.5%
$75,145 – $79,6525.0%
$79,653 – $84,4325.5%
$84,433 – $89,4986.0%
$89,499 – $94,8686.5%
$94,869 – $100,5607.0%
$100,561 – $106,5937.5%
$106,594 – $112,9898.0%
$112,990 – $119,7698.5%
$119,770 – $126,9559.0%
$126,956 – $134,5729.5%
$134,573 and above10%


  1. Hi all, i too have a huge student loan debt. i was unaware of this debt until i hit the $60,000 mark in 2008- i had graduated from uni in 2003.
    i have never received a bank statement about this loan in all the years i was receiving it, which was about 8 years- my debt was about $60,000 plus $40.00- HECS, i have since paid off my HECS debt- but cannot seem to make any dent in this SFSL.
    I have been paying this loan off since 2008 and it is still over $50,000

    I believe the whole thing was an unfair rip off between the CBA and the government.


    1. Hi there, we are currently mobilising a group of people to take action against this horrific and blatantly unfair SFSS loan scheme. We have also recently identified a break through that may bring some relief. Please consider joining our Facebook group to learn more:


  2. Hi again, I made a post on the 22/11/16 about my experience with the mature age student supplementary loan scheme. I mentioned my successful injury claims through the superannuation TPD insurance action. I stated the ATO wants $4500.00 in tax this 2015-2016 financial year. That is on top of the $25000.00 I paid on the TPD claim. Not bad hey? $30000.00 for a degree I cannot use and the ATO were the conduit for the reason why I had to leave university because they took my income away. The CBA could, at the time, get double the CPI interest rate on the open market as the real reason. So much for the ‘social conscience’ of the corporate world. I still would love to sign up for a class action.

    1. Hi there, we are currently mobilising a group of people to take action against this horrific and blatantly unfair SFSS loan scheme. We have also recently identified a break through that may bring some relief. Please consider joining our Facebook group to learn more:


  3. Hi, I was made redundant in 2001 from my job as a carpenter with nothing but a dole form. I started a dual Arts/ Science degree in 2002 and was offered the Mature age Student Supplementary Loan Scheme. It was the only way to sustain myself as the stipend austudy provided only covered the rent. A four year degree and contract for the supplementary loan for the duration was signed up to. Hi ho, no go, in 2004 as I entered my 3rd year I received a letter from the ATO a week before census day telling me too bad, so sad the contract was reneged on. The Austudy component was not returned and I had to pack up and do a financial withdrawal from my degree and hit the road as I could not pay my rent. In 2007 under the Howard regime of no safety for construction workers I became injured at work and by 2012 could no longer work fulltime. Fortunately I had two superannuation policies and had two successful claims through the TPD insurance. Now the ATO wants $4500.00 in tax this 2016 financial year for the loan scam. This was because the fund managers put my TPD benefits into the super account not the lawyers trust fund. So the continual problems arise because the puerile and petty bureaucrats in the various systems have no conscience for their fellow compatriots. Welcome to Austmerica folks and god bless ya all. I too will sign up for a class action.

  4. SFSS sucks still paying into this black hole, never received a statement don’t even know how much I am suppose to owe. Class action please?

    1. Hi there, we are currently mobilising a group of people to take action against this horrific and blatantly unfair SFSS loan scheme. We have also recently identified a break through that may bring some relief. Please consider joining our Facebook group to learn more:


  5. I too have been stung by this, my SSFS loan balance is now significantly larger than my HECS debt, which kinda says it all.

    Surely this accountancy group have enough email addresses now to start a class action?

  6. Yep, I too am on board this sinking ship. I took out two loans when I was 17-18. I am about to ring the ATO and find out how much my loan is now up to. I have not received any statements or any paper work on anything from the ATO/Centrelink in over 12 years. This loan sure was a rip off and scam. It was like borrowing money from a loan shark. I also would be interested in a joining a class action and I urge others to bookmark this site and keep an eye out so if there is a class action we can all band together.

  7. Same here… money hungry grubs. How can they say ut was interest free when in effect they charged 100% interest upfront?

  8. Wow. Yep. I am another one. I will certainly be interested in class action. Was young and naive in 1996-1997. This debt won’t go away.

  9. I am another one who is suffering now from getting a SFSS 18yrs ago. I have this year, for the first time reached the threshold and been required to make payment.
    I ‘traded’$60 f/n to get $120. Until now I had NO IDEA i was also required to pay back my own $60 that I had traded. How the heck do we get out of this nightmare?!?!

  10. Can i salary sacrifice, as this will take me below $49,000

    1. Author

      Michelle, for 2016 to 2017 financial year the threshold for paying the SFSS is $54,869, so you may be below that amount anyway.
      Unfortunately, salary sacrificing will not help as the sacrificed will be added back to your taxable income and the SFSS will be calculated on the original income amount.

      1. A Facebook group or page about this would be good. Reach more numbers.

  11. Hi all. Yep i was a sucker too. I took out 3 studebt loans between 1995 to 1998 owing $21,000. The last count saw my debt at $35,000 even though ive been paying through taxes for the past 12 years. I too would be interested in any class action. Im not earning enough to even pay the yearly interest.

  12. I started reading these accounts and have realised I’m not alone. Last time I looked at my SFSS debt was maybe 2 years ago and it was $25k+ and rising -I’m sure. i took this scam loan out when I was 19yo for two years so I could live and study as a poor student. Ive never earnt the minimum income before repayments and I can’t see myself earning $54869 for 2016/17. If I started to make voluntarty repayments I wouldn’t
    even scratch the surface. I’ve probably earnt $20k this year as I’ve just returned to work as my kids are now at a good age. Sigh….if only I was more savvy back in 1995, I’d have choose to starved than have this debt hanging over my head like a noose with kids in toe, ahhh the benefits of hindsight. I don’t want my kids to be dragged into this probably too late.
    Should a class action arise I want to be part of it!

  13. I’m adding my name to the long list of people who did what they thought was the only thing possible to get through studying.

    I took out one or two loans in the mid 90’s (1995? 1996?) and didn’t even complete uni because I had to work full time to survive. Yet I now have a debt worth over $35k. I don’t earn enough to be in the repayment bracket (I think I have once or twice in the past 20 years) and the debt keeps growing. How $7000 or $14000 can almost triple in 20 years is disturbing.

    I want this debt gone. My husband is worried that I’ll be forced to pay it back, but I tell him that the ATO can go and whistle for it until I die. However, it’s the principal of the thing. I only studied for 18 months at most but was talked into this loan by the CBA.

    I’m up for any petition, class action, placard waving etc to get this damn debt wiped. I’ve paid at least $100k in tax since leaving full time study and will probably end up earning and paying another $500k or more in tax before I retire. Money grabbing pack of over paid school children….I’ll vote for the first pollie who includes the wiping of this debt in their policy propoganda…..

  14. From my understanding, The Overseas Income Reporting only applies to HELP type debt assistance from July 2016 NOT the SFSS Loans from reading below…

    Going overseas

    From 1 January 2016, if you have moved overseas and have a Higher Education Loan Programme (HELP) or Trade Support Loan (TSL) debt, you will have the same repayment obligations as those who live in Australia. This applies if you already live or intend to move overseas for a total of more than six months in any 12-month period.

    You will need to update your contact details using our online services via myGov. You will also be required to make compulsory repayments towards your debt from 1 July 2017.

    Does that seem the case to anyone else?

  15. contanted slayter and Gordon there is no current class action but i have explained all and will be contacted regarding this class action pursuit.

  16. I too have been rorted by this scheme. Apparently according to this website here http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd0304/04bd027
    Which is the evidence you need to prove what you paid already to the bank ie$1 to recieve $2 ATO has no idea that Commbank made off with the cash and then reported it as debt when the scheme was paid out by the federal government- talk about financial advantage by deception, the commonwealth bank made a 3.2 billion dollar profit from this scheme plus what they were paid by the government. Including breaching every known financial law and as in my case no explanation of t+c’s and no insurance scheme for the debt offered. The ATO hold no documentation, social security now human resources also have no documentation and ATO have no knowledge at all of the money we all paid to the bank ie $1 to get $2 back from Comm Bank and the full amount has been raised as a debt,,,!!! outrageous. I have been diagnosed with a degenerative spinal disease and will never return to functional employment. on this basis and the fact an incorrect amount of debt 27000 for 4 years of the scheme which should only be 12000. No department has any documents and the ATO get very aggressive. Contact the Inspector General of Taxation and make your complaint

    1. Hi Dean C
      im in the same boat, i was young and parents were going to hardship, and money was use to help my family . i only remember that at the time i had enroll in the dollarmite product from CBA and my parents got their flyer were it offer loan for students and the it was inteest free and i remember my parents telling me that this loan after 5years was nil , not need to be repay at all. and thats how parents and i were reel in into taking the loan when we went to CBA, to get this loan. now been too much to pay.
      I also recall been in an accident and having to go into bankrupsy coz i couldnt pay any debts, been a student and unemplyed at the time. my laywer ask me if wanted to include any debts, so i included the SFSS, only to find out that the ATO still incurring interest tru indexation on this loan that was suppose to be gone out of my life. I have fill and send a complain to the ATO to review this debt and others that i havent incur but appear in my statement
      they have call me only to ask me if i can contact all the organisation and find out or ask them to re do their invoices for the ATO to update the debt i got with them. so much for help.
      How that it work with this debt SFSS, CBA wont acknowledge they are the ones who gave loan and they also said i dont have a contract for such loan with them, so who do I owed and why i have to pay to the ATO for a loan not been acknowledge by CBA? very confused…
      how do i complain to the inspector general of ATO and would i still get any result? after having contact the ATO?
      Kind regards

      1. has there been any progress with this class action? I am very interested in being a part of it.

  17. My partner took out one of these loans for $6k back in 2000 whilst studying at uni, she graduated in 2003. Only yesterday we were wondering why her tax repayments were so high given she’s been earning less than $40k each year whilst studying her PhD. so we looked into it today only to discover that she now owes the ATO approx. $78k for the SFSS loan.

    Apparently (based on what I can decipher from the documents online) she had been given a total of 8 loans between 2000 and 2008 to the tune of $49k, indexing making up the other $29k. You could imagine our shock when finding this out particularly considering these loans ceased after 2003 and she has no recollection of ever been given any loan other than the initial $6k, what’s more is that it’s increasing by $2k each year. There is no way she’ll ever be able to pay that back. Further, she started working part time from 2005 and along with my financial support, had no need for further loans.

    We’ll be chasing this up first with the CBA tomorrow to try and get some answers then onto the ATO. Much the same as others on here, we have no documentation of these loans. I’m appalled that she was not kept informed of how much was owing over the past 15 years and she’s absolutely devastated that this will potentially be hanging over her for the rest of her life.

  18. I am yet another one who was sucked into this ridiculous loan and I’m very interested in a class action. It’s a scam and rip off. I would love to know how to get out of this situation!

  19. Hi everyone, I am also desperately trying to work out a way of getting rid of my husbands sfss debt. If anyone is starting a class action I would like to be involved.
    My husband originally took out the loan when he was 18 and is turning 37 this year, even though he has been working and paying the loan off the loan is still more than he originally borrowed.
    We now can’t borrow enough money to buy a house because of his debt.
    In reality he didn’t need to borrow the money, but he was told that the debt would be wiped after 5 years. He does not have any paperwork to show this.

  20. I think that we all knew that we’d have to pay back these “loans” eventually but being a poor student in 1995 and even though I knew that I’d sacrifice government payments for a “loan” it seemed like a good idea at the time.

    I worked as much as I could but to fit work and study in while living away from home and with parents that couldn’t afford to make my university payments getting extra money at the time seemed an easy answer.

    Without the extra assistance I am sure that I wouldn’t have been able to complete my degree.

    When I completed Uni in 1998 I had a SFSS loan of $21,000 with my years of working, several years out of the country, the price of inflation interest rate the government are charging and the fact I can’t pay any extra into it I now owe $20,269.

    So in 18 year and how ever many repayments I have paid off a whopping $731.

    There must be a significant talent pool in this group given that we are all university graduates with 20 odd years of professional service behind us, does anyone know of any action being taken? Petitions to sign? Politicians to harass? QC’s to fight for constitutional rights???

  21. My partner has a similar story- been paying back money for over 10 years and it won’t go away- and no- one can explain exactly what is going on… we have copies of original student loan contracts and would like to hear from others in similar circumstances,..

  22. Hi, What I would like to know is how this loan debt of mine has increased exponentially from 3 years of loan amounting to approx. 19000 to an amount of over $30000 when I was specifically told that it was an interest free loan. I would not have signed up for it otherwise.

    I am quite interested in a class action or any other kind of involvement with having these loan conditions reviewed by the government, and can possibly provide proof of the above – I will have to go through some old boxes of paperwork.

    1. Hi I signed up to the ‘mature age student supplementary loan scheme’ in 2002. My loan was revoked in 2004 with 1 week notice prior to census day. My Austudy component was not returned and forced me to return to the construction industry from which I had an involuntary redundancy due to injury. I was then injured again in 2007 and received a TPD claim through 2 super policies. The ATO now wants 20k due to the taxable component. I did not leave uni for any reason beyond the financial hardship imposed by reneging on a contract signed between me and the ATO for the duration of the degree. THANKS.

  23. Hi, Glad I found this thread and Yes I got sucked in too. I was a poor student and this was a carrot dangled in front of my face – without any real paperwork or contract and now I have a debt of $25,000 going up. We have to get this out there! A whole generation of students need to be re-imbursed for this ridiculous scheme! Please keep posting and updating with your stories/links and ways to get a CLASS ACTION!

  24. Has anyone here who took out a student supplementary loan with the CBA before the ATO took over the loans still got a copy of the contract? I’m interested in the terms and conditions of the loan (I lost mine). I’m also interested if anyone still has any literature (brochures and the like) on the loans being publicised and what was being held out by the bank to induce students to sign up. I remember something like “interest free” was included.

    Interestingly, I phoned the ATO this morning to ask if they had a copy of the original contract that I signed (as the government is now the legal owner of the chose of action (debt) which was bought back from the CBA after the first five years of the contract. They did not and advised me to contact the CBA.

    What is even more perplexing is when I did contact the bank to ask whether they had any record of my contract or any material concerning its terms and conditions, I spoke to a very helpful officer who was interested in my situation where he made some enquires with the product department on my behalf. He later got back to me and told me this in part which I asked him to send to me:

    “I can confirm that the loan your customer is referring to was the Student Financial Supplement Scheme (SFSS) which began from Jan 1993 to Dec 2003. This was not a Commonwealth Bank product but an agreement that was created between the Commonwealth Bank of Australia and the Australian Government to support our student population with university/college fees and charges. Therefore there is no PDS (product disclosure statement) that is available for the customer to provide from the CBA.”

    It would be interesting if someone were to challenge the legal basis of the loan with no evidence of a contract or its terms and conditions.Then if I didn’t make a contract with the bank as it was not their product, and they did not have to make a product disclosure statement – who the hell was I dealing with? I find this difficult to reconcile with the following from the Social Security Guide on the Student Financial Supplement Scheme (SFSS):

    “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.”

    ‘Buy back’? This suggests that the initial debt (chose of action) was with the CBA.

    Anyway, I’m in the process of researching and gathering evidence to mount a possible case. One possible avenue, considering the length of time that has elapsed, is the constitutional question: is the government’s acquisition of the debt (from the CBA) “on just terms” under s 51 (xxxi) of the Constitution? The CBA would have been open to various causes of action when these loans were offered under s 52 of the then Trade Practices Act for deceptive and misleading conduct, or unconscionable dealing at equity.

    This matter would appear to still be a live issue if we can all get together on this.

    1. Hi- my partner is currently dealing with similar- just received copies of contracts etc for 2000 and 2002 – they are unable to find his records for 2001… please e- mail me on ambertucker@excite.com .. He has been paying off years- don’t understand how this is happening

    2. Hi Clem, I found your submission very interesting. I found this forum through searching for ways to reduce SFSS and government plans to consolidate the current debts.

      The government is currently owed $553.2 million according to the 2015 budget so I’m sure they aren’t willing to wipe them.

      But I do agree that what everyone on here experienced and is still going through is unconstitutional.

      How have you gone getting further info and starting a case?

    3. hi Clem. im in the same boat, i was young and parents were going to hardship, and money was use to help my family . i only remember that at the time i had enroll in the dollarmite product from CBA and my parents got their flyer were it offer loan for students and the it was inteest free and i remember my parents telling me that this loan after 5years was nil , not need to be repay at all. and thats how parents and i were reel in into taking the loan when we went to CBA, to get this loan. now been too much to pay.
      I also recall beeb in an accident and having to go into bankrupsy coz i couldnt pay any debts, been a student and unemplyed at the time. my laywer ask me i wanted to include any debts, so i included the SFSS, only to find out that the ATO still incurring interest tru indexation on this loan that was suppose to be gone out of my life. I have fill and send a complain to the ATO to review this debt and others that i havent incur but appear in my statement.
      I wil keep you posted on what happens.

    4. Yes i have my contract and it doesn’t really have any small print to read through its a very basic application form with all your details on it. I took 2 loans out. but i had three loans against my loan so i asked for this to be investigated through centrelink (they have archived copies of the contracts, as do CBA). Anyway they lost the third loan paperwork, then they retrieved it after a period of time. The application had been forged. It was not my writing! evan my name was spelt wrong!! not my signature but close!
      So this all totalled for the 3 loans around 10K.This started in 1993, 1997 and 1998. The highest it got to was $16500, but in saying that i have paid off over $11,500 (including the traded money). The last 3 tax returns i have been earning good money over 70K and so have has this SSL taken from my tax of around 2K per year. I still owe 11K. So in total by the time i pay off i would of paid around 23K.
      Another thing i noticed was when the money came over from the CBA to ATO the loan amounts also were much higher for example the 5K loan came over at$5736. Each of the 4 loans with added figures (???) totalled over $1500 extra on top of the already 100% interest.

      There definitely is some inconsistencies and especially due to changing hands, and consequently figures changed at this point too. I went all the way with this through the tribunal and did not win as centrelink had proof the money went into my account and i have a strong income so i was deemed fit to be able to pay back. The factor of the trade in for me was huge but not considered, also the fraudulent of me not appling for one of my loans. They tried to give these loans away and i had plenty of friends taking out the large loans. I avoided this and right from the start i called it a scam due to the trade in sito.

      Im still fighting this and would be interested to know any news regarding the class action.

      Also if you wish to get a statement of all your indexation charges and debt figures. What you can do is join the mygov website https://my.gov.au
      and here you can add the Australian Taxation Office. From here it has a section on loans and you can view and print both the HELP/HECS and SSL.
      Hope this helps. But i called centrelink and got transferred and was able to have all details sent to me. This is such a painful thing to try to sort out. I believe that the laws have been broken here from the government and that at the very least they should return the austudy money that we were rightly entitled too. The trade in system is unacceptable, but due to financial hardship many students were forced to take up this offer, which was handed on a platter pretty much. I needed extra money to pay for textbooks as my family were not financial to assist me and at the time going through a divorce. I was on my owe and also like many others i was vulnerable and desperate at the time. Shame on you Jonny Howard!! Why not tax the big corporations why take from the poor?

  25. Please encourage others who commented to Sign the petition.

  26. I haven’t managed to read all the comments but I agree with those I’ve read. Yes, we were ripped off by CBA. My debt now increases by around $1,000.00 per year. I am now retiring and will carry the debt to my grave. Luckily it will be interred with me and won’t be taken out of my estate but what a mill-stone. I would be happy to be part of any class action. My debt is now $38,327.00 originally taken out merely to survive whilst I studied. The only winner- CBA!

  27. I just checked my Supplement Loan debt taken out in the year 1999 which was once $7,000. My debt has now ballooned to $15,000. Add my HECS debt on top and I owe over $30,000! I cannot believe how the Commonwealth Bank, Centrelink and ATO can justify borrowing half and paying back double. Ethically it doesn’t make sense. Like others, I was not clear of the ramifications with this scheme particularly 15 years later and now owing $15,000. I will contact the ATO to clarify the huge debt increase and contact a Solicter to see if there’s any way the debt can be reduced. I will keep you informed.

    1. hi. karen. thank you for the update. looking forward to hear what you can find to fix this. i have currently filed for a complain to the ATO on the charges they have indexed my loans and other amounts that i have not incur.
      kind regards

  28. The Student Financial Supplement Scheme was introduced from January 1993. It was initially referred to as the AUSTUDY/ABSTUDY Supplement. The supplement had it s origins in a proposal contained in the Chapman Report into Austudy released in January 1992. Opposition from student unions, parent organisations and academics was fairly strong due to fears that loans would eventually replace Austudy payments and that students would be increasingly loaded down with debt. A fuller coverage of the origins of the scheme can be found in the Bills Digest for the legislation introducing the supplement: the Student Assistance Amendment Bill 1992.(1).

    The supplement and Austudy were administered as part of the education portfolio until the introduction of Youth Allowance in July 1998. At that time responsibility for the supplement passed to the Department of Family and Community Services (Department of Social Security until October 1998) and it was renamed the Student Financial Supplement Scheme (SFSS).

    Currently the scheme offers loans of between $5000 and $7000 per annum to Youth Allowance, Pensioner Education Supplement, Austudy Payment and ABSTUDY recipients who trade in one dollar of their income support entitlement for every two dollars of loan received. Other students can qualify for a loan of up to $2000 if they are a dependent tertiary student who is not eligible for income support, but would have been if not for the Parental Income or Family Actual Means Test and the adjusted parental income and family actual means is below $64 500.

    The Commonwealth Bank of Australia provides funds for the loans, through an agreement with the Commonwealth Government. Repayments do not have to commence until five years after the loan was taken out when the loan contract period with the bank ends. Voluntary repayments made during the contract period attract a 15 per cent bonus. When, after five years, the contract period has expired, the Government pays the bank the amount the student still owes and collects the debt through a HECS style arrangement administered by the Tax Office. Repayments only start when the student’s taxable income reaches the minimum threshold ($34 494 for 2002-2003).

    The table below provides the number of loan acceptances since the Scheme s inception in 1993 and the total loan acceptance amount across all payment types. It was provided by FACS to the Senate Community Affairs Committee.(2)



    Austudy Payment





    Total acceptance amount


















































































    1. N/A Not applicable.

    2. The Department of Family and Community Services administers Austudy Payment, Youth Allowance (YA) and Pensioner Education Supplement (PES).

    3. The Department of Education, Science and Training (DEST) administers ABSTUDY and ABSTUDY PES and administered AUSTUDY until 1998.

    4. AUSTUDY was replaced with Austudy Payment in 1998.

    5. Youth Allowance was introduced in July 1998.

    The Government announced its intention to end the SFSS on 24 April 2003.(3)

    Basis of decision
    Minister Anthony puts forward the following reasons for ending the scheme in his 24 April press release and the Second Reading Speech:

    the scheme is administratively cumbersome and poorly targeted

    the mechanism where income support entitlement is traded in for a loan operates effectively as a hidden interest charge

    the scheme is creating high levels of student debt

    up to 50% of loans are unlikely to be repaid according to an unpublished report from the Australian Government Actuary

    in 1993 there were few commercial loans available to students and interest rates were high, but now commercial loans at competitive rates and campus loans are available, and

    Youth Allowance now provides flexible benefits so take up rates for the loans have declined by one third.

    Financial Impact
    The closure of the scheme results in added expenses over the next four years due to increased expenditure on Youth Allowance, Austudy Payment, Abstudy and Pensioner Education Supplement. An estimated $166.4 million will be spent because students who cannot take out loans will not be trading in part of their income support entitlement to access loans. A small saving against forward estimates over four years of $7.1 million will be made due to indexation of a lower level of outstanding loans than if the scheme had continued.(4)

    The money that would have been lent under the scheme if it were to continue does not show up as a saving against the forward estimates. This is because loans are not expended money. They are assets.

    Reaction to the closure announcement
    Position of interest groups
    The Australian Vice-Chancellors Committee (AVCC) responded to the Minister s April announcement by calling for an overhaul of student income support. AVCC CEO John Mullarvey was quoted as saying:

    it needs to be reformed in such a way that it is effective in reducing the need for students to work excessive hours and so avert the detrimental effect on academic performance of heavy work commitments promoted by economic necessity.

    The concept of providing those students, who are eligible for income support with subsidised loans, is a useful one that deserves a better scheme, rather than total removal.

    In our comprehensive package of reform measures put to the Federal Government, the AVCC has argued that the Government needs to consider alternative systems of financial support that allow access to payments at the time of need, while studying, perhaps in exchange for repayment or lower repayment at periods in the future.

    This might have the effect of breaking through the negative impact of the present income tests and thresholds, which we have also argued must be increased.(5)

    National Union of Students (NUS) President Daniel Kyriacou welcomed the end of the scheme which his organisation had opposed from its inception.(6) Sarah McDowell, the National Welfare Officer for the NUS wrote in the Swinburne Student Union newspaper (The Swine) as follows:

    The loan scheme was always a recognition by the government that students were struggling to survive on Centrelink payments. The scheme was introduced as an attempt to fix this problem. It was a complete failure. The government now must commit to increasing youth allowances and austudy payments. Students can not be expected to work in their part time jobs and attend full time university study while living more than 30% below the poverty line.(7)

    Student opinion was however divided on the issue with a follow up article in the next issue of the Swine attacking the NUS officers for welcoming the demise of the much needed loan scheme when they had not been able to convince the Government to improve levels of student income support.(8)

    ALP policy position
    Shadow Minister Macklin responded to the announcement of the end of the scheme as follows:

    The Howard Government says it is axing the Student Financial Supplement Scheme because the scheme is creating high levels of student debts, many of which are not repaid. But it is increases in students fees that accounts for the vast majority of Australian student debt. If the Howard Government genuinely wants to reduce student debt it must rule out any new increases to student fees.(9)

    The policy position of the ALP has been made clearer with the release of the Aim Higher education policy document on 23 July 2003.(10) Proposed student income support initiatives included the following:

    retention of the Student Financial Supplement Scheme(11)

    extension of rent assistance eligibility to Austudy Payment recipients,(12) and

    the reduction of age of independence for students on Youth Allowance to 24 in 2005 and 23 in 2007.(13)

    Australian Democrat position
    The Democrats position as stated by Australian Democrats’ Higher Education Spokesperson, Senator Natasha Stott Despoja is as follows:

    The Democrats have expressed concerns about this scheme previously because of its inequitable nature; it is a poorly designed policy that increases debt of students in the worst financial position.

    Many students were forced to take out these loans because student income support is too low and access is highly restricted.

    If the Government is genuinely concerned about student debt, it will not burden students further by deregulating fees.

    The answer to student support has never been loans, it is about providing meaningful income support that’s above the poverty line.(14)

    The Government has argued that the scheme should go because of its flawed structure, declining take up rate, high level of unrecoverable debt and lack of relevance to post Youth Allowance student income support arrangements. The reactions to the closure of the scheme cited above vary on the value of the scheme itself but generally support the need for enhancements to student income support especially if the scheme is closed. In the absence of any enhancements those students who still use the scheme will have one less income support option available to them. Students who cannot readily access part-time work may be particularly affected. They may be parents, people with disabilities, those living in regions of low employment opportunities or those studying courses with high levels of contact hours. The proportion of students receiving Austudy Payment, Pensioner Education Supplement or Abstudy who take out loans appears to be rather higher than is the case for recipients of Youth Allowance. These students are more likely to be parents (sole or partnered), people with disabilities or indigenous people than are Youth Allowance students.

    1. Hi there, we are currently mobilising a group of people to take action against this horrific and blatantly unfair SFSS loan scheme. We have also recently identified a break through that may bring some relief. Please consider joining our Facebook group to learn more:

      SFSS Class action Grassroots

  29. Just found that the NSW Government forward planned and amended the law for the purpose of these loans.

    Student Loans to Minors
    Although minors generally can’t sign binding contracts, federal student loans are an exception. A change to the Higher Education Act in 1992 permitted students under age 18 to sign legally binding contracts for their own federal loans, helping minors finance an education without the help of an adult.

  30. 21 years on and I am still paying for this bloody debt!!!!!! Government should be strung up for taking advantage of young students.

  31. I too made the stupid decision to take out three of these loans – the first one before I was even considered old enough to vote! It is absolutely disgusting how the government ripped off students, some of who weren’t even 18 yet. I’m so ashamed about this too, as I was vaguely aware that it wasn’t a good idea and my parents warned me against it, but as a poor student living out of home and studying a design degree that required a lot of materials, It seemed like the only option. I had no idea it would affect me so much later in life. My debt was at about $25k at its worst and 18 years later is now sitting at around $14k. I have earnt over the threshold for some time and have basically got used to the idea that I won’t have a tax return each year. The worst situation for me was the year when my employer forgot to ‘tick a box’ when I moved to a new area and the deductions weren’t taken out – I got a bill of almost $2k. For the rest of that year, I not only had to pay back my debt to the ATO but I also had to make extra compulsory repayments as I’d done my return late that year. Now I have a child and a mortgage and I’m studying at uni again. I was shocked to find out today that my newly accrued HECS debt and SFSS debt are not consolidated (for some stupid reason I thought they would be put together), and I have to pay about $4k a year off HECS and $2k a year off the SFSS, earning about $70k a year. Back in 1998 $70k pa used to be a lot, but these days it’s just average – especially when you take into account child care and mortgage payments. To top it off my partner underestimated our income last year by $700 and so we got the family tax benefit when we shouldn’t have. We are absolutely crippled with ATO debts that they won’t consolidate. I think I’m going to have to quit uni and I actually think I’d be better off earning $15k less. It’s so depressing. The SFSS is the worst though, as it was just so unfair! It has been hanging over my head for way too long and I just feel so angry that the government got away with it.

  32. Hello. I was just wondering if I live out of the country and never work again (i.e. I am a housewife and married abroad) then will I have to repay this debt?
    And if so how?

    1. Author

      Anita, The criteria to pay off the debt is if you earn more than $53,345 as your adjustable taxable income you pay off the debt, otherwise no payment needs to be made. The debt is not taken from the estate of a person upon death.

  33. Ditto on all the above. I just came back from my accountant to sort out tax and I for the first time had to pay tax vs getting a return to help my family out. How could this possibly be the case… give up study money e.g. $1000, get $200, then pay back $200. Effectively have lost 100+200 dollars! How is it possible for a teenager to be able to plan ahead for this event. I am all for action against the government allowing the CBA to cam its own people… kids no less. How can this be allowed? Now they are saying if we obtain permanent residency in another country, they have plans to chase us down. There’s no escaping this financial leach!!!

  34. Something has to be done about this – I have a debt of over $50,000. I was young and had no idea of the financial implications at a time when I was struggling to meet basic needs whilst studying. It is evident from the article above that SPSS was scrapped as it was poorly designed and people were being ill-informed.

  35. I reached the income threshold a few years ago and since then my employer has been taking an extra 3% tax every fortnight towards the SSFS so I’m being paid about $80 less than I should be but as well as this I’ve been taxed another 3% at tax time. I’m not sure if this is right but I’m not able to get any clear answers from the ATO.
    Does anyone know if this is correct?

    1. Author

      Alice, the amounts paid every fortnight are basically extra tax credits and are not paid off your loan debt. The payment of your loan account happens once a year when you lodge your tax return.
      Payment to your loan account can not be determined until your tax return is lodged and your true taxable income is calculated.
      So the tax and SFSS loan withheld from your pay is just an estimate of what could be paid at the end of the year when your taxable income is calculated.

      1. Thanks Geoff. So do the amounts I pay fortnightly affect the SSFS sum payable at tax time?

        Sorry, I’m still a little confused 🙂

        1. Author

          The annual payment is calculated by using the taxable income, the fortnightly payments are an estimate of what needs to be paid annually and should cover the final amount.

  36. Wow I’m so glad I have seen this page. I cannot believe so many of us were scammed like this and still nothing has been done. My loan was only small about $2500 but its nearly up over $5000 now!!!! It’s only now after reading this page am I finally understanding it. I surely didn’t back then in 2001. I should have got out when I could back then. I didn’t even have enough money to pay for the course. So in turn I owed this loan and the course as well and never got my certificates. I also have never gone back to the profession I studied so it was a complete waste of time. Back then if I had paid the course I could not even cover my rent so of course the rent, bills and food came first. Surely if this can be proved that it was such a scam someone has to do something about it!!!!!!! I have just signed to petition but I think what we need now is someone who knows the legal system who will fight for us!!!! I know I have ignored it for years just hoping it went away but clearly it hasn’t. I wonder how many others have done the same. I was actually secretly hoping at the end of this feed I would have found a solution. If anyone know of a lawyer that would take this on, lets do it!!!!!!!

  37. I to took out a SFSS loan in 1994. I remember being told that if I didn’t earn enough money in ten years from taking out the loan then the debt would be wiped. Well it has been 20 years and it keeps going up and up. This year is the first year my income is over the threshold and I will have to start paying it back. I can’t even remember how much my original debt was but I have over $10000 now.
    I had previously contacted Centrelink (some years ago) and was told to contact my local member. Who did nothing. I just want this to be dealt with

    1. I remember being told something similar, I vaguely remember being told something like if I didn’t make that certain amount then I wouldn’t have to pay it. Im sure i was never told about the interest at all. And really why did we agree to give up part of our pathetic pay back then to get it!!!! We would have been better off just paying back the loan like any other normal loan. I guess they were just targeting us the ones who didn’t know any better 🙁

  38. Yeah i got one 13 years ago. I cant believe it was even legal. I couldn’t get a bank loan so how was it possible to get this?
    I’m a single mum with three kids now, I want to clear this debt so I can move forward with my life. I feel exploited, as I was a teenager from a broken, low income home. I cant even imagine what I was thinking. I don’t remember even discussing it with an adult.
    I don’t know what to do?

  39. I owe over $40K I’d be happy to join a class action – has anyone started?. I have had contact with the academic that helped the govt formulate this scheme – he of course was surprised that I spoke of it as a poverty trap for the disadvantaged! He was happy to meet me and talk to about it but I havent taken it further with him as I just felt it was pointless fighting the govt! but hey maybe i’d be up for joining a group action.

  40. I’d be happy to join a class action. I still owe 50K, even after making repayments for over 10 years.

  41. My Story:

    I was 18 – 1996, got accepted into RMIT, went to local dole office and they suggested this brilliant new loan scheme… no idea what I was signing, but it sounded great.

    I took out 2 X $3500 over 2 years. This equated to 7K total. Did the 2 years and forgot about it completely. Skip forward ten years and I get a bill for 16K …. WTF

    Found out that when the 7.5 was discharged the CBA effectually charged 100% on the total loan doubling it + interest so that 7K ballooned to 17K+ …. woot!

    Up until 2011 I was making next to nothing and for the last 4 years I’ve been paying off more then 2.5K a year …which exceeds 10K .. and I some how still owe them another 10K …

    The messy part is that the payments come out of my tax returned and now I have a 4K tax bill as well (because it gets moved to ATO a % per year) .. which I am paying off at $200 a month. So It really feels I am getting no where

    Right night I still owe the Government around 14K .. I feel so taken advantage of

    For lols I contacted my local member, who did nothing what so ever.

    1. I have contacted Slater and Gordon re class action. Surely I can not be the first person to do this? – however I will report back my findings.

      1. It is absolutely disgracefull. I too owe around 45k fantastic, way to kick the poor when their down.. my payments do not cover interest. yay yay aya go ‘straya.

      2. Hi there, we are currently mobilising a group of people to take action against this horrific and blatantly unfair SFSS loan scheme. We have also recently identified a break through that may bring some relief. Please consider joining our Facebook group to learn more:

        SFSS Class action Grassroots

  42. I to have the same issue. Did a class action take place? I would pay back what I “loaned” without the interest or extra 100%. If I loaned $100 I will pay $100. I don’t see why we should pay anything more. Sadly I was dumb @ 21 and now I am stuck with only one option, “get a loan, pay the debt and file for BANKRUPTCY”.

    1. Hi there, we are currently mobilising a group of people to take action against this horrific and blatantly unfair SFSS loan scheme. We have also recently identified a break through that may bring some relief. Please consider joining our Facebook group to learn more:

      SFSS Class action Grassroots

  43. Oh and my debt between HECS and SFSS was $43,000+

  44. I too, was very young and financially desperate when I took out what was originally a small SFSS loan that ballooned into a monstrosity. I was in my late teens and had moved out of home to a new city and was struggling to put food in my mouth. The loan eased a bit of pressure at that time but boy did I pay for that for years to come! The hardest financial lesson I’ve ever learned.

    It’s a shame both me and others like me were taken advantage of when we were in a vulnerable situation (and at the time only about 19 and not too financially savvy). I, too, was shocked that my SFSS scheme was less than HECS originally but soon surpassed my HECS/HELP after indexation (a fancy word for interest if you ask me that becomes compound interest as the years pass). I suspect the ATO don’t send out statements because they probably get a fresh round of angry calls each time they do. But you can call up each to to ask for a statement to be mailed out to you as often as you like (or order one through your ATO online account).

    It’s taken me 20 years to pay off both HECS/HELP and SFSS but I was only able to do this after I came to the sinking realisation that compulsory payments weren’t going to cut it, it’s like making the minimum payment on your credit card statement, and I would have to make voluntary payments if I wanted to be free from it. So I vowed to pay off chunks of it with each tax return every year. You can obtain BPAY details (biller code and reference numbers) for each of your loans and just make the payments yourself. It will mean no holidays for you, no Foxtel, no brand new cars, no takeaway coffees, basically a no frills lifestyle for YEARS and YEARS but it is do-able if you set your mind to it.

    A few months ago I ordered a statement and found out I was down to my last $1383. I prayed to God that He would help me finally be debt free this year. I was offered a six-week work contract at $50/hr and I drew up a budget to pay off the debt. FINALLY FREE!! God bless you all in your endeavours–you’re gonna need divine help to tackle that monstrous debt and what I can only describe as a scam targeting vulnerable people.

  45. Hi
    I’m interested in class action also. I paid mine back a few years ago but my sister’s is still outstanding. Just reading all the responses refreshed my memory with how bad these loans were…god I was only 17 when I took this out.

  46. Has anything progressed with this class action?

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