She believes that if university education is going to saddle students as young as 17 with this level of debt, which could follow them around for life, extra measures need to be put in place.
“I think it should be either compulsory financial literacy training or there should be compulsory financial disclosures and all the rest of it, just like credit cards have to do.”
The cost of some degrees increased sharply with the introduction of former prime minister Scott Morrison’s Job-ready Graduates Package in 2021, with the cost of a humanities degree rising to $50,000.
The current government has stopped short of immediately reforming university fees and will take advice on fees from the yet-to-be-opened Australian Tertiary Education Commission, which will be fully operational by January.
Melbourne University higher education researcher Associate Professor Gwilym Croucher said it was legitimate to question prospective students’ financial literacy and the responsibility of universities to make people aware of the costs and implications of the debt they took on.
“Everyone supports the government reducing debt, but it doesn’t alleviate this big structural issue that education has become too expensive,” he said.
“A more educated Australia has benefited the country and will continue to, but the question is: should students be burdened with that HELP debt, which has impacts on everything from buying a property to deciding when to start a family?”
George Wen, 28, voted for Labor because of the 20 per cent HECS forgiveness plan.Credit: Edwina Pickles
George Wen, 28, studied a law and commerce degree at the University of NSW. His debt hit $70,000 in the years after graduation thanks to the compound interest effects of the government’s indexation, but that did not faze him. “It was out of sight, out of mind,” he said.
However, he soon realised that it was prudent to pay it off. “It is better to start paying it off earlier … even though the indexation rate is lower than most interest rates, it will still compound over time,” he said.
Earlier this year, Wen’s debt stood at about $50,000. He calculated that he will benefit from just under $10,000 in debt forgiveness once the legislation is passed. “I am paying off a fair chunk … I will pay off around $15,000 this year, so hopefully I can knock it off next year,” he said.
“I think it is a really good initiative. It is the only worthwhile tax break my generation has gotten. It is one of the key reasons I voted for Labor.”
A spokesman for lobby group Universities Australia did not indicate whether it supported current practices around ensuring that prospective students are aware of the possible implications of student debt.
Its chief executive, Luke Sheehy, welcomed the government’s changes on Wednesday but urged further reform on fees.
“Scrapping the Job-ready Graduates Package to make student fees fairer, and expanding the Commonwealth Prac Payment, could help shift the dial on participation, which is what the country needs,” Sheehy said.