I’ve spent part of my long-service leave doing a subject through Open Universities Australia. But as well as learning more about statistics, I thought I could use my enrolment to make a point.
Though lending students money for their fees on an income-contingent basis is a good idea, as I have complained before the HELP scheme is now too complex, anomaly-ridden, and expensive for taxpayers.
The particular absurdity I wanted to highlight was that if you do a subject through Open Universities Australia, there is no charge to borrow money under FEE-HELP (students at private providers and TAFEs pay a 20% surcharge). But OUA students still get a 10% bonus on any repayments they make.
I thought I would be able to would be able to take out the FEE-HELP loan, and using the bonus clear my approximately $900 in debt for about $820. I’d then write a newspaper article criticising this free money scheme and call for it to be fixed.
As it turns out, I haven’t been able to do this. When I rang the ATO this week asking for the electronic funds transfer number needed to make my repayment, they had no record of my debt.
‘When did you enrol?’, they asked. ‘Early this year’ I replied. While HELP debts are not officially incurred until a ‘census date’, which I think was at the end of March, it seems it takes quite a while for the ATO to get this data. OUA has sent me an official notice of my debt to the ATO, but the ATO knows nothing about it.
Indeed, the person I spoke to at the ATO said that they didn’t even have the second semester 2009 debt information. What this means is that many people who should be starting to repay will not be, because the ATO has no record of them.
At this level of inefficiency, I might be able to delay repaying until I sort out my 2010-11 tax late next year.
If this is typical, it suggests that improving communication of debt information is another way that the government could reduce the high cost of lending students money.