Ross Higgins

An investment-linked insurance bond could be the salvation for students or their families that want to avoid the potentially crippling impact of student debt.

Annually, Australia’s Higher Education Loan Payment (HELP) program makes student loans totalling more than $6 billion[1]. Eligible students under the 2015 FEE-HELPlimits can borrow from the Federal Government up to $122,162 for medicine, dentistry and veterinary science students and take on debt to $97,728 for all other students.[2]

Even for students in Commonwealth supported places, Undergraduate Bachelor Degrees cost $15,000 to $33,000 while higher value courses like veterinary and medical are even more expensive.

“The situation is worse for post-graduate qualifications where the full brunt of the user pays and new deregulating model hits hardest. Some masters and doctorate programscost in excess of $50,000,” said Ross Higgins, Managing Director of Austock Life, a leading specialist issuer of insurance bonds.

Concern about the escalating cost of education has intensified in recent years since the nation’s universities and vocational educational training system began significantderegulation of course fees.

These changes increased the financial burden, both for domestic and especially for foreign students.

So unless students (or often their parents or grandparents) can afford to pay their course fees upfront, they face the reality of having little or no choice, but to take onpotentially considerable levels of student debt.

“Alleviating student debt can be invaluable to their early adult life opening the way to the important things of bygone times, such as buying a home, starting a family, overseastravel or even starting a business,” advised Mr Higgins.

One option is the ChildBuilder insurance bond which forward thinking parents and grandparents can use to build financial provisioning earmarked to reduce or payout thegrowing student debt burden on their children and grandchildren.

Of course, if the insurance bond is not used (or fully exhausted) for paying course fees directly or discharging student loans, it can be used by a child or grandchild over itsvested stage for other worthwhile purposes.

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[1] Andrew Norton, 2014Doubtful debt: the rising cost of student loans, Grattan Institute (April 2014)
[2] Australian Government – Department of Education, Thinking about studying: A postgraduate degree? (FEE-HELP 2015)

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