Money arena: Student loan vs investing

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Debt is an inevitable part of life, particularly as you transition into adulthood. Most commonly, the very first type of debt you're likely to deal with as an adult is your student loan.

Australia has some of the highest university fees in the world. This means its graduates are also saddled with some of the highest student loan debt on the globe. According to the Australian Bureau of Statistics' most recent data, the average in 2011-12 was $17,200 - halfway to a house deposit in some places!

Of course, there are strategies for managing this debt. While everyone needs to make a certain base repayment rate on their HELP debt, depending on their income, prudent savers can also make bonus voluntary repayments to the Australian Taxation Office.

The useful thing about this is that - until January 2016 - every time you make a voluntary repayment of $500, your debt will have an extra 5 per cent of the repayment total added on by the government. There are also other useful strategies to help you with this load that could see you pay down your debt faster, and save yourself some money on interest.

The question is, should you put your money straight towards your debt once you finish university? Or might it be more beneficial to take these sums and invest them?

Taking the investing route

While tackling debt is essential to building wealth in the long run, it's important to note that your HELP debt is not like the others. Student loan debt in Australia is not charged with interest - instead, it's merely 'indexed' on June 1 every year, meaning that it is adjusted in line with the change in the cost of living. You've therefore got a little more room to play with financially, as you're not constantly having to chase interest payments.

That means it's not as great a risk if you simply continue to make minimal repayments while putting extra aside to invest. With the right investment strategy - and a responsible, tactical mix of assets - you could eventually end up making enough to pay down your HELP debt if you wanted to. This is where getting the right advice and education on managing investments and debt repayments becomes vital.

If you think this is the way forward for you, be sure to talk to a qualified financial adviser first. If you're not going to put that money to paying down your loan, you certainly don't want it to go to waste.