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.
From future doctors and scientists to lawyers and teachers, these students are daunted by the prospect of repaying their HECS debts. They fear they may never be able to escape the financial burden.
The situation is further exacerbated by the rising cost of living and 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.
While the government acknowledges the hardship faced by students, there are no quick fixes. 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.
The irony is that Australia collects more in HECS repayments than it does in tax from oil and gas. Experts suggest that increasing taxes on fossil fuels could pay off the entire HECS debt within three years.
Students believe the HECS scheme, once a good social policy, has become a burden on their generation due to high inflation. Medical student Angus McRae, facing a debt of over $80,000, argues that many students didn't fully understand the implications of HECS when they signed up.
The average HECS debt of $26,494 will increase by $1,272, while those with debts exceeding $70,000 will see an increase of $3,360. This adds to the financial strain on students like scientist Jeryn Chang, whose debt will reach $100,000 upon graduation.
Student nurse Anastacia Prendegast worries about affording living expenses while on placement, as she has to complete 1,000 hours of unpaid work before starting to repay her HECS debt.
Petitions calling for changes to HECS indexation have gained significant traction online, reflecting the growing anxiety among students. The Australia Institute argues that a full 10% tax on fossil fuels could eliminate the entire HECS debt within three years.
Education Minister Jason Clare acknowledges the University Accord's recommendations but emphasizes the financial benefits of higher education. However, this offers little comfort to graduates like Madigan Paine, whose postgraduate studies have increased her debt to $50,000, impacting her ability to secure a home loan.
The rising cost of HECS is a major concern for students, who feel trapped in a cycle of debt. As they embark on their careers, they face the daunting task of repaying their loans while navigating the challenges of a changing economy. The need for a fairer and more sustainable solution to HECS is becoming increasingly urgent.