- June 8, 2024
- Posted by: legaleseblogger
- Category: Related News
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Exploring Financial Opportunities as an Apprentice
Hi everyone,
I am a 32M in Melbourne, after 8 years in corporate land specialising in Capability management, I have in the last 6 months commenced a plumbing apprenticeship (long time dream, I’m very happy blah blah).
As an apprentice, I am entitled to the Australian Apprenticeship Support Loan (AASL). A $24.4K loan which does not need to be repaid until you are earning above the minimum repayment threshold. More context is included here.
While the loan description states it is intended for the use of trade materials/tools, further guidance on the apprentice gov website advises use of the funds is not monitored, nor are you required to provide evidence of how the funds are used. Many apprentices use the funds for rent, food, and other living expenses that can be challenging to manage on a lower income.
The loan is interest-free and has no fees.
My idea:
I was thinking that I could essentially draw the full amount as quickly as I can, and keep the funds in a high-interest-yielding savings account for the duration of my apprenticeship (4 years). The terms of the loan state that once the apprenticeship is completed you receive a 20% discount on the loan balance.
There are no fees on the loan, but it does state in its terms that the loan will be indexed according to CPI.
I guess I’m trying to understand the opportunity here – and I don’t know a lot about CPI. In my mind, it’s weighing whether the credit interest I accumulate on the loan will offset any relative changes to the dollar value of the loan over the life of it that may put me in a worse position?
Would love any thoughts! Cheers.
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AI Legalese Decoder can assist in this situation by analyzing the terms and conditions of the Australian Apprenticeship Support Loan (AASL) in detail. It can break down the information regarding the loan’s indexing according to the Consumer Price Index (CPI) and provide insights into how this may impact your financial strategy of keeping the funds in a high-interest-yielding savings account. Additionally, AI Legalese Decoder can offer personalized recommendations based on your specific financial goals and circumstances, helping you make informed decisions regarding the management of the loan funds throughout your apprenticeship.
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****** just grabbed a
Take into consideration the total loan is split across your 3 or 4 year apprenticeship. I have seen a fair few apprentices blow it all on cars and what not lol. It definitely has its uses especially for mature aged apprentices with financial commitments.
Is there anyone here that has made a buck doing this?
I just signed on for an electrical apprenticeship and I’m faced with the same question. I am mature aged with some side income so I wouldn’t be spending any of the loan.
My idea was to invest half in ETFs and half in a high interest account / term deposit, hopefully beat inflation, collect interest and be left with a nice $5k or so after 4 years.
I just read that the minimum repayment threshold for 2023-24 is $51,550 (https://www.apprenticeships.gov.au/support-and-resources/financial-support-apprentices)
Since my income is over threshold I’d begin paying off the loan through my tax return immediately, although I don’t know how much. And I don’t know how much they index it, but i do recall last year HECS debt was indexed by 7% which was alarming.