ASIC has updated its regulatory guidance to clarify how the Higher Education Loan Program (HELP), and other student loan commitments, may be considered by banks and lenders assessing whether a consumer can afford to take on new credit.
The update to Regulatory Guide 209 Credit licensing: Responsible lending conduct (RG 209) follows a request from the Treasurer for ASIC and the Australian Prudential Regulation Authority (APRA) to review their guidance for lenders, and subsequent consultation with industry associations and consumer groups.
ASIC notes the Government's program of reforms aims to improve access to credit and help more first home buyers get on the property ladder.
The update to RG 209 acknowledges that HELP debts are different from other forms of debt because the amount that is required to be repaid depends on a person's level of income.
The update to RG 209 is limited to the treatment of HELP debts in lending assessments. It does not change broader lending policies or responsible lending obligations.
It aims to provide clarity on the nature of HELP and student loan repayments and how lenders may consider HELP debts when undertaking responsible lending assessments.
ASIC and APRA have been working together to ensure any changes to HELP guidance is consistent.
More information
Regulatory Guide 209 Credit licensing: Responsible lending conduct (RG 209)
ASIC is Australia's corporate, markets and financial services regulator.
