19yo reveals choice Australian Gen Zers now have to make
A 19-year-old has exposed the brutal reality of being a university student in 2024, revealing what her HECS debt is actually costing her.
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Sarah is only 19, but she says she’s already made a decision that could stop her from ever being able to own her own home.
The young Aussie says people her age have a clear choice.
“Would you rather go to university or have a home?” she asked on TikTok.
Sarah has already made her choice, and is of the firm belief it is one or the other. She’s in her second year studying a management degree, majoring in events. She lives in Sydney’s affluent lower north shore and works four jobs to help sustain herself while studying.
While previous generations were instilled with the belief that a tertiary education was their ticket to financial security and home ownership, Sarah is among a cohort of young Aussies who believe they are experiencing the opposite.
“Now our generation is like, we can’t have both,” she said.
While a degree has traditionally been viewed by Aussies as coming with a better chance of securing a higher-paid job and therefore being able to save up for a deposit, young Australians are now also seeing it as a mechanism to accumulate debt.
Sarah says that with the way things are heading, young people face an impossible task of trying to save for a deposit and secure a home loan after entering the workforce full-time already shouldered with the debt from their years of studying.
Rather than starting their careers with an advantage, there is a belief that uni graduates are delaying their earning years while also racking up debt.
“I think there’s a choice between going to university and buying a home due to the combined HECS system and astronomical house prices in Australia,” she told news.com.au.
Student loans known as HECS/HELP are not charged interest; the amount is indexed to inflation each year. Over the past decade, the average indexation rate was just shy of 2 per cent. However, as inflation has skyrocketed, the indexation rate has too. Last year, it hit a decade high of 7.1 per cent.
The year before, it reached 3.9 per cent.
Comparison website Finder’s latest research found that 63 per cent of young people are either slightly or extremely concerned about their student debt, and more than half of the people with debt owe up to $40,000.
Sarah is concerned that taking time to complete her degree and not just getting straight into a full-time job could strain her finances. She argues that she’s heard of people getting rejected for home loans because of their university debt.
“It is all pretty alarming and quite honestly unfair,” she said.
The young Aussie said she first noticed the link between going to university and struggling to purchase a home last year when HECS indexation spiked. Suddenly, people were looking down the barrel of having to pay off an extra 7 per cent.
“There was a lot of talk on campus about it and a general consensus of feeling lost. Personally, I have not met anyone who has gone to university within the past 10 years who has bought a house,” she said.
Sarah said she tries to have a “positive” outlook on things but doesn’t think home ownership is likely.
“You can get into a slump if you think about it too much. Instead I’m just focusing on making my life as enjoyable as I can. I have a small bit of savings that will eventually go towards the potential of purchasing a property in the future,” she said.
Sarah said that she’s not going to focus on building up her finances because, right now, it feels pointless.
“Instead of focusing on building my finances for a currently unachievable investment, I’m choosing to spend my money on travelling and experiences,” she said.
“I do have a bit of hope that I will eventually be able to purchase a house, but being realistic at this stage, I don’t think that’s necessarily a possibility.”
Some peers have found a workaround, Sarah said, choosing not to go to university until they purchase a property and plan to attend as mature-age students, which she thinks is an “interesting” choice.
“I’m holding out hope that I will eventually be able to buy a house, but I think I’ll have to make a lot of sacrifices to be able to do that,” she said.
Graham Cooke, head of consumer research at Finder, said that the burden of student debt is increasing.
“Student debt has been more of a burden in recent months, due to its interest being tied to the cash rate, which has increased 13 times. It is possible that for some students, this extra debt burden will push buying a home further into the future,” he told news.com.au.
Mr Cooke added that how much that debt impacts someone’s financial future comes down to how much student debt a person has.
“Someone with a manageable HECS debt might not be significantly affected, while someone with a much larger debt could struggle to qualify for a big enough loan,” he advise.
Originally published as 19yo reveals choice Australian Gen Zers now have to make
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