Australians rack up university debts they may never repay
Huge study debts amassed by retirees may never be paid back, as the group of Australians who owe the most amount of money are revealed.
Money
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Tens of thousands of Australians at retirement age have amassed more than $1.2 billion in university debts they are unlikely to ever repay.
Alarming statistics from the Australian Taxation Office found in the 2018/19 financial year, three million Aussies accrued Higher Education Loan Program (HELP) debts totalling a record $66.5 billion.
But of 2017/18 financial year ATO data, it found there are 97,400 Australians aged 60 and over — many of who have likely to be retired — who still owed on average $13,400 each.
In total, they owe a massive $1.27 billion.
And at death, all final tax returns must be lodged but if any HELP debt remains after that these are wiped.
The Federal Government has been forced to take action on get people to pay back their debts sooner.
This year the Morrison Government lowered the threshold for people to start paying back debts once they earn $45,881 or above.
The previous threshold was $51,957.
But despite the mass amount of debt owing Federal Minister for Education Dan Tehan said they were working hard to get the debts paid back at a faster rate.
The recent change he said meant an additional 136,000 debtors would be forced to start making compulsory repayments.
“We did this to help ensure the long-term sustainability of Australia’s generous HELP scheme and manage the escalating growth in outstanding student debt,” Minister Tehan said.
“Only the Morrison Government was prepared to tackle the record levels of student debt, which currently stands at a staggering $66.5 billion.”
But he said if the debts were “left unchecked” they would “spiral out of control and mean a quarter may never be repaid.”
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The ATO data also found the age group that owed the biggest amount of debt was those aged 20 to 29 — 1.38 million Australians owed $33.6 billion. But worryingly some of the biggest HELP debt balances racked up by Australians sit at $536,000, $459,000 and $445,000.
University graduate Jemma Sergeant, 22, completed a 3.5 year Bachelor of Business degree at the University of Technology Sydney and this week started her first full-time job as a trust analyst.
She ran up about $35,000 in HELP debt and was now being forced to make compulsory repayments of about 5 per cent of her income towards the money owed.
“Knowing I owe so much money isn’t a very good feeling,” she said.
“Having a debt like this plays on my mind.”
She said she hoped to start bringing down her debt level as soon as possible.
Originally published as Australians rack up university debts they may never repay