[chottocharaii]

The only % you pay, is on the money above the threshold amount. So if you earn 52k, you only pay the 8% of your student loan back on the 2k above the threshold.

So yes, it is stepped, and no, there is no incentive for staying below that threshold.

re: your second point, there is no 'incentive' to study in those fields, it is merely possible to do so. It is good, as fields that are low-earning like literature and art; are not reserved only to people in society who have parents with disposable income. It's an egalitarian policy, more in line with Australian cultural values than American.

re your third paragraph: indeed. The result of our system however is that the vast majority of students major in commerce & science; perhaps because the incentive of a lucrative career is enough to stop everyone pursuing arts.

[tybit]

HECS repayments are one of the only Australian taxes I can think of that actually isn’t progresssive and the percentage is applied to your whole income, not just that above the threshold. Which is why it’s also such a gradual tax, not even hitting 8% until a fair way past 100k.