Your guide to the Centrelink Student Start-up Loan

December 13, 2023

Did you know that eligible university students can receive a $1,201 loan twice a year to help with the cost of their studies? Here's everything you need to know about the Student Start-up Loan.

There’s plenty to think about when you commit to a university course. One major decision is how you will pay for everyday living expenses while juggling study. 

That’s where the Student Start-up Loan can be helpful. If you’re already receiving a government payment through Centrelink, you may be eligible to apply. 

What is the Student Start-up Loan?

The Student Start-up Loan is an interest-free loan of $1,201 that certain university students can receive twice a year. You’re only eligible to apply if you currently get Youth Allowance, Austudy or ABSTUDY Living Allowance payments, and you study full-time with your university. 

The loan is tax-free, so you don’t have to declare it as income on your tax return. 

What can you do with the Student Start-up Loan?

The loan is intended to give you a hand while you’re studying (and able to work less), so it’s entirely up to you what you do with the money. You could use your payments to buy school supplies like textbooks, cover part of your rent/mortgage, or pay for daily living expenses like groceries. Once it’s in your bank account, it’s yours. 

Do you have to pay back the Student Start-up Loan?

Yes, since it’s a loan, you will have to pay it back eventually. Centrelink makes this straightforward by adding the amount of your loan onto your HECS-HELP debt. This means you will only start paying it back through your income tax once you’re earning over the compulsory repayment threshold. In 2023-24, that’s $51,550. 

An important thing to remember is that while this debt is interest-free, it is indexed every year to keep up with inflation. And since you will be adding extra amounts to your HELP debt, you will end up paying off a larger amount than you would from your course alone.

If the Student Start-up Loan helps you reach the finish line, then it may be worth it in the long run. But it’s best to factor this into your decision before you apply.  

How do you apply for the Student Start-up Loan?

Login to your linked Centrelink account on MyGov and follow the steps below:

1. Select Payments and Claims from the drop-down menu and then Update Circumstances.
2. Click Apply for/Manage Student Start-up Loan.
3. Tick the loan periods you wish to receive payments for.
4. Read the Terms and Conditions and accept the Declaration.
5. Submit your application. 

If you about to start a new course, you’ll only be able to apply for the loan once your classes begin.

Who can apply for the Student Start-up Loan?

Not every Australian student can apply for the Centrelink Student Start-up Loan. As mentioned above, you must already claim Youth Allowance, Austudy or ABSTUDY payments. 

You also need to meet certain study requirements. Namely: 

• You should have a full-time study load. 
• You should be enrolled in a higher education course that is approved by Centrelink.
• You should remain enrolled while you’re receiving the loan. 

If you switch courses or your study load changes, make sure you let Centrelink know within 14 days. This can be done through your MyGov account online. Otherwise, you could be overpaid or asked to pay the money back earlier.  

What are Student Start-up Loan approved courses?

Centrelink will only give you the loan if you’re studying a higher education course that’s listed on the National Register of Higher Education Providers.

It must be: 

• A diploma
• A degree; or
• A preparatory course before you start a diploma or degree (like an undergraduate certificate).

It’s fine if you’re studying your course online through Open Universities Australia, as long as you meet the above criteria. 

When is the Student Start-up Loan paid?

Successful students are paid twice a year after each loan period kicks off from 1 January and 1 July. Centrelink will deposit your loan payment at the same time as your regular student allowance payment. 

What if I’m not eligible? Are there other loans for students on Centrelink?

There are a variety of other payment support options available through Centrelink for students. These aren’t loans, but regular allowances for those with certain needs (for example, perhaps you need to relocate for study, or you have a disability). You can see a list of payment options on the Services Australia website.  

We also have a list of frequently asked Finances and Centrelink questions that you may find helpful. 

How Open Universities Australia can help you

We know understanding the complexities of student loans can take some time—and sometimes you need to chat with someone in the know. You can always give our student advisors a call if you have a question about paying for your course. We can walk you through the various funding options available, or point you in the right direction if you have a query that’s best answered by Centrelink directly. 

Get in touch with a student advisor today or book a free one-on-one phone consultation if you want to chat about your study needs.