MTS does NOT give you any problems with the FEE-HELP Cap.
A Change of Law
On the 14th August 2018, new rules for FEE-HELP were voted into law.
This means from 1 January 2019, the FEE–HELP loan limit for students will be $104,440 (or, for students studying medicine, dentistry and veterinary science it will be $150,000).
From 1 January 2020, there will be a limit for how much students can borrow under HELP (including HECS-HELP), but these balances will be replenishable as students pay off their debts.
What does this mean for MTS apprentices?
In short, doing MTS does not contribute to you blowing your FEE-HELP Cap.
Let me explain why.
3 Ways to Live
When a person does an MTS Apprenticeship there are three ways that they can be engaged from an Industrial Relations point of view.
We jokingly describe them as “3 Ways to Live”. We call them:
1. FairWork
- They are engaged as employees and paid the FairWork Australia minimum wage.
- These apprentices do not do any nationally recognised study
- These apprentices are often paid the FWA Minimum Wage as a religious practitioner
2. Curriculum
- These apprentices are trained in accordance with am MTS approved curriculum for 12 hours (or 1.5 days) per week, (e.g. the AFES Syllabus)
- They are paid for 3.5 days per week at the rate of the FWA minimum wage.
- These apprentices do not do any nationally recognised study
3. MTS Scholarship These apprentices are combining hands on ministry training with nationally recognised theological study:
a. Team Leaders (those heading on to theological college post apprenticeship) are generally completing Certificate level theological study for a small portion of their week.
- You cannot get FEE-HELP for Certificate level theological study
- Their study to hands on ministry ratio is generally 7hrs:33hrs
b. Team Members (those who will not go on to theological college post apprenticeship) are generally completing a Diploma (or Advanced Diploma) of Theology over 2 years. That means:
- You CAN get FEE-HELP for Diploma level theological study
- Their study to hands on ministry ratio is generally 20hrs:20hrs
Which Ministry Apprenticeships access FEE- HELP?
There are no FEE-HELP debts incurred for the following types of apprenticeships:
- a Fair Work (Option #1 above) apprenticeship
- or a Curriculum (Option #2 above) apprenticeship,
- or an MTS Scholarship Team Leader apprenticeship (Option #3a above)
So which MTS Apprenticeship does access FEE- HELP?
The ONLY apprenticeship that has the capacity to access FEE-HELP is the MTS Scholarship Team Member apprenticeship (Option #3b above).
But these people will only complete the Diploma (or Advanced Diploma) of Theology, or the equivalent of 1st Year theological college, so they will not come close to the $104,440 cap, even if the apprentice has completed tertiary study before (HE or VET sector).
- If you are doing a Team Member scholarship apprenticeship, you would be studying the Diploma (or Advanced Diploma) of Theology qualification, which is eligible for FEE-HELP. You would expect to incur an additional FEE-HELP debt of around $27,500. Team Member apprentices would generally go into a paid ministry position after finishing their apprenticeship (or back into the secular workforce), and so would not reach their total FEE-HELP limit of $104,440.
Here’s an example:
Bill has finished a Science degree. Because he is an Australian Citizen the course is a commonwealth supported degree. Therefore he incurred a total FEE-HELP debt of $41,389. This leaves him with $63,051 left in his FEE-HELP limit. After working for a couple of years, Bill then does a Team Member apprenticeship which includes a Diploma of Theology. This adds a further FEE-HELP debt of $27,500, to his Science Degree debt of $41,389. But a total FEE-Help debt of $68,889 is well below the FEE-HELP limit of $104,440.
Don’t those doing the MTS Scholarship Team Leader apprenticeship blow their FEE- HELP Cap?
If they do, it has got nothing to do with their apprenticeship, because Team Leaders do not accumulate FEE-HELP debt during their apprenticeship.
As was stated above, “You cannot get FEE-HELP for Certificate level theological study”
The new FEE-HELP Cap will limit some people’s ability to go onto theological college, but the MTS Apprenticeship plays no role in increasing the FEE-HELP debt.
If you are doing a Team Leader scholarship apprenticeship, you would be studying the ASTC (Certificate) qualification, which is not eligible for FEE-HELP, and so the apprenticeship will not increase your FEE-HELP balance. When you get to Bible College at the end of your apprenticeship, depending on where you study, you would expect to incur an additional FEE-HELP debt of between $80,000 and $95,000.
Are there any other changes to the law worth noting?
Yes. As of 2020, if a person pays down their FEE-HELP Debt, they can incur more debt later on. The balances will be replenishable. That is new.
Here’s an example:
Jane has finished a Civil Engineering degree, which she studied as a commonwealth supported student, and incurred a total FEE-HELP debt of $41,389. This leaves her with $63,051 left in her FEE-HELP limit. Jane works for two years, making voluntary contributions of $15,000 off her FEE-HELP debt each year, bringing her available FEE-HELP loan amount to $93,051. Jane then goes to Bible College, and completes a four year qualification, which fills up her FEE-HELP debt with a small margin of error.
Does the MTS Scholarship help with the FEE-HELP Cap issue at all?
Yes.
If an MTS Scholarship Apprentice goes onto theological college they can “extend” their scholarship.
We call this “scholarship extension”. Past Apprentices on the “Scholarship Extension” can raise support tax deductibly during their theological college years.
This may not reduce their FEE-HELP Cap, but it does mean that the apprentice can raise those tuition fees tax deductibly.
Here’s an example:
Jane has finished a Civil Engineering degree, which she studied as a commonwealth supported student, and incurred a total FEE-HELP debt of $41,389. This leaves her with $63,051 left in her FEE-HELP limit. Jane then goes to Bible College, and completes a four year qualification, which costs $82,000. Her total FEE-HELP debt $123,389, or $18,949 over the limit of $104,440. If Jane set a support raising target of $18,949 extra to be raised over 4 years (or $4,737 p.a. x 4 yrs) then she could raise that tax deductibly and keep her FEE-HELP debt under the cap.