Students Face Mounting Debt as Costs Rise
Eleven university students are about to graduate, but their joy is overshadowed by the looming debt of over $750,000 in HECS loans. This financial burden weighs heavily on them, even before they start earning a living.
From future doctors and scientists to lawyers and teachers, these students are daunted by the prospect of repaying their HECS debts. They fear they will never be able to escape the financial burden, especially in the current climate of rising inflation and living costs.
The situation is further exacerbated by the upcoming 4.7% increase in HECS indexation, the second highest under Labor. This means HECS debts have risen by a staggering 16.62% since 2022, adding to the financial pressure on graduates.
While the government acknowledges the hardship faced by students, there are concerns that no quick fix exists. The University Accord, designed to improve affordability and accessibility of higher education, calls for a fairer and simpler system. However, students believe even reducing the indexation rate won't be enough, and many are calling for a complete overhaul of the HECS system.
Experts suggest that increasing taxes on fossil fuels could provide a solution. The country currently collects more in HECS repayments than it does in tax from oil and gas. A full 10% tax on these exports could potentially pay off the entire HECS debt within three years.
However, the government remains cautious, emphasizing the long-term benefits of higher education and the potential for increased earning power. Yet, for many students like Madigan Paine, a 28-year-old teacher, the increasing debt is a tangible reality that affects their daily lives and future plans.
The rising cost of HECS is a growing concern for students and graduates. As inflation continues to rise, the burden of this debt threatens to hinder their financial stability and limit their opportunities. Finding a sustainable solution that addresses the concerns of both students and the government is crucial to ensure a brighter future for higher education in Australia.