Financial Supplement debt is financing offered by the Social Security office of the government of Australia. This program was most heavily utilized by prospective students seeking financing for higher education. Effective December 31st, 2003, the Australian government closed the program to new borrowers. However, the decision does not affect open obligations.
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Student Financial Supplement Scheme
The SFSS was the most heavily used portion of the Financial Supplement debt provided by the Social Security Administration. The loans were designed to assist students seeking financial assistance for higher education. Among the guidelines for these loans were: adjustments for cost of living increases, student income level, and an option to opt-out of paying while still in school.
As stated before, borrowers can opt-out of paying while in school. However, by making payments during the loan contract period (while in school), students earn a bonus or a reduction in interest. This was an incentive designed to help
generate consistent income for the government.
New Supplement Debt Program
Effective July 1st, 2006, the Australian government instituted a new policy on student loans. The new program set stricter limitations on repayment during the "contract period," and more concrete policies on income levels required for repayment during contract periods.
Payments are still being collected on the original financial supplement debt program loans. Current borrowers must visit the Australian government online pay system (see "Resources" below) to make payments. Students can also make paper bill payments to the address listed on their loan statement.
Consumer Price Index (CPI)
The previous Financial Supplement debt program was based upon the Consumer Price Index (CPI). This index measures the strength (or weakness) of the Australian economy based on consumer spending, cost of goods and services, and inflation. The loans still outstanding are adjusted to the new CPI rate each year on June 1st to account for cost of living increases.