In the midst of a worsening cost-of-living crisis, more than 3 million Australians continue to be burdened by student debts.
The impacts of soaring inflation means those with Higher Education Loan Program (HELP) debts will be slugged with an average of $1700 in extra debt.
The HELP scheme, formerly known as Higher Education Contribution Scheme (HECS), is supposed to encourage people to study by reducing upfront costs.
But, now, debts totalling more than $74 billion continue to burden former students, particularly those working in low-paid undervalued professions, such as teaching and nursing.
HELP debts are tied to inflation via automatic indexation and, as inflation soars to at least 7.8%, debts will increase on June 1.
Student debts have continued to rise as university degrees become more expensive.
In the decade 2011–21, debts rose from an average of $14,404 to $23,685, according to Alison Pennington. Pennington is Adjunct Senior Research Fellow in Politics, Philosophy and Economics at La Trobe University and has just released Gen F’d? How Young Australians Can Reclaim Their Uncertain Futures.
“In 2019, the federal Coalition government lowered the repayment threshold to $45,881 [a year], which saw 130,000 mostly young workers lose income to HECS repayments — two-thirds of whom were in jobs that didn’t even need a degree,” Pennington wrote.
She described the indexation of student debts as “entirely arbitrary” and highlighted last June’s rate rise of 3.9% as “piling more than $1.9 billion in extra debt onto students”.
The proportion of debts has also risen, with the percentage of debts of more than $10,000 rising from 47.5% in 2005 to 72%.
Greens Senator Mehreen Faruqi introduced a private members’ bill last November seeking to abolish indexation on student debts and raise the repayment threshold to the median wage.
Faruqi told the Guardian: “Abolishing indexation on student debt and raising the minimum repayment threshold would be a good start, and provide much needed money in people’s pockets at a time when they are struggling to make ends meet or pay rent.
“Ultimately, we need to treat education as a right, not a privilege, and make TAFE and university fee-free.”
The Guardian reported on research by the Futurity Investment Group that found that women graduates have bigger study debts than men and are more likely to be earning less money.
“A lot of the traditional female professions — teaching and nursing — over the last 40 years have become professionalised, requiring university degrees and gathering debt,” Futurity spokesperson Kate Hill said.
“Traditional male trades haven’t been — and they’re cheaper, you’re paid as you go through that process.”
This, combined with the growing gender pay gap, means rising student debts continue to have a worse impact on women compared to men.
The research found that debts were seriously impacting people’s ability to plan and look after themselves properly. Nearly 60% said the student debts impacted their ability to buy a home and 16% said they were unable to afford medical and dental treatments.
Andrew Chuter, a university maths lecturer and Socialist Alliance candidate for the Legislative Council in the New South Wales elections, told Green Left that all student debts should be cancelled. Fees for degrees is just another way of privatising education for the rich.
“Australia has the means to guarantee free public education from primary, all the way through to tertiary education and TAFE,” Chuter said.
“HECS/HELP debts should be scrapped and funding cuts to education, including TAFE, need to be reversed.”