How Much Debt Do Australian Students Have?
You hear a lot about it. The debt that Australian students are piling upon themselves simply so they can attend university. It’s a divisive discussion. Facing off are the bleeding hearts who believe in free education and those who lambast the ‘professional students’ who somehow managed to spend ten years and lots of the government’s money on studying the philosophical nature of air.
Ross Gittins thinks that HECS is a good thing. It pains me to disagree with Ross (aka, God) on anything, but I think we may part ways on this issue.
Average Australian student debt is on the rise
I’m four weeks from the end of an undergraduate degree in Communications. In the three years I have spent at university, I have learnt about Foucault, flanerie (don’t ask) and talked a lot about my feelings. I’ve done the student things; the happy hours, the long chats over a coffee, with the proprietor staring at me with barely concealed rage. I’ve also managed to rack up a debt by the age of 22 of around $16 000 for the privilege. And my university costs are paltry compared to those of people crazy enough to study law, or a degree that requires more than three years to complete.
Sixteen thousand dollars. Even as I write, I feel slightly ill. That’s about a year of my current income. That’s a sizeable chunk of a house deposit. That is one hell of a trip overseas that I won’t have because I’ll be paying back my debt. I understand that the money for education has to come from somewhere. But sometimes I find the idea of all that money just a little hard to swallow.
Australian students are set to borrow $825 million a year, some for degrees that will cost over $200 000. My $16 000 is a drop in the ocean of what Australian students still owe to the government, a staggering nine billion dollars.
My favourite (and I mean favourite in a starkly nihilistic, Waiting-for-Godot kind of way) fact that I found while researching this was a gem from the Sunday Telegraph. Apparently they managed to find some poor sucker who had accrued $310, 000 of debt. As they pithily put it, “to repay a debt of $310,497, would take 39 years on an income of $100,000 a year and 186 years on an income of $41,000 a year”. I hope the government isn’t holding it’s breath to get that money back.
So what does this mean for the average twenty-something who has student debt?
Sadly, student debt is probably quite a large factor in a lot of aspects that apparently ‘characterise’ my generation. Student debt makes it harder to buy your first home. A research paper by the Council of Australian Postgraduate Associations suggested it also is a reason my generation is leaving home later and delaying having children.
All of this doesn’t just drain the individual of their spare pennies; student debt costs the Australian economy too. Treasury estimates that up to one third of HECS debts never get repaid. The report from CAPA suggested that people with larger HECS debts, like lawyers and doctors, hike up their fees so as to pay off their loans quickly.
A rethink of the way we pay for higher education appears to be called for. And if they feel like scrapping all repayments before I start paying back my sixteen grand, you won’t hear any complaining from these quarters.
Do you have a student debt? Do you find it affects your ability to save and invest?
Is saving even a priority for twenty somethings? Share your thoughts with us.
Capa link source: http://www.capa.edu.au/files/impact_of_student_debt.pdf
Related Posts
