If we want more young people to go to uni, stop screwing them over

At the time, it felt like we’d been dudded.

For 15 years, since the crazy-brave days of Gough Whitlam, university degrees in Australia had been free. Yet here we were, about to start uni in the summer of ’89, knowing we’d be the first lot to cop a student debt under the government’s newly minted Higher Education Contribution Scheme.

University graduates are being burdened with debt.

The cost of my contribution towards an arts degree? A whopping $900 a semester.

If only the kids angrily picketing O-week knew how lucky we really were.

A generation later, my 21-year-old son is also a HECS pioneer – or HELP, as the scheme is now euphemistically acronymised. He started his arts degree in 2021, the first enrolment year after the Morrison government doubled the cost of humanities courses.

He now has a degree and a HELP debt of about $45,000. The debt is indexed at the rate of inflation, which is currently sitting at 4 per cent. This means that when his debt is next tallied by the Australian Tax Office, he’ll owe an additional $1800.

The Australian Universities Accord final report contained 47 recommendations for change.Credit: iStock

In other words, the cost of his indexation alone is the same as my old HECS fee.

My son and his graduating class of 2023 have every right to feel dudded. They’ll get no argument from the Australian Universities Accord panel, whose final report into the state of higher education in this country was published on Sunday.

The report found that the changes to HELP introduced by the Morrison government have not achieved their purported intention, which was to convince students to switch from arts, commerce and law subjects to science and engineering.

What the changes have done is burden a generation of young people with unfair levels of debt. The report concludes this outcome requires “urgent remediation”.

By the time I started thinking about buying a house and raising a family, my HECS debt was cleared. It will be very different for my son and his graduating class.

After I finished my degree and started working, I rarely gave much thought to the weekly sum that came out of my reporter’s salary to go towards my HECS debt. Back then, there was no indexation, the most the government clawed back was 3 per cent of taxable income and repayments only kicked in once you started earning an average wage.

By the time I started thinking about buying a house and raising a family, my HECS debt was cleared.

It will be very different for my son and his graduating class. There are 18 repayment thresholds within the current HELP scheme, ranging between 1 per cent and 10 per cent of taxable income. Repayments kick in once they start earning 50 per cent of the average wage. If high inflation persists, indexation will ensure their debt grows faster than they pay it down.

Once they earn enough to move past a repayment threshold, their new repayment will be calculated at the higher rate for their total taxable outcome. A perverse impact of this is that a pay raise might leave them with less money in their bank account.

Due to the size of their debts, they will be paying off their government student loans for longer. If and when they want to buy a home loan, their HELP debt will count against their capacity to repay, which is no help at all.

If this sounds like a crappy way to spend the first 10 years of your working life, remember that these are the ‘Coronials’: the generation of young people who finished high school and started uni in the COVID lockdown years; young people who, if they aspire to future homeownership in Sydney, Melbourne or Brisbane, will be taking on debt levels beyond the most lurid Gen-X imagining.

The final report of the Australian Universities Accord, in keeping with the bloating tendencies of most government-commissioned reviews, is too long. Its findings run to 408 pages and contain 47 recommendations. Higher Education Minister Jason Clare says the suggested reforms will take 20 years and successive governments to implement.

The report also contains a simple, clear message.

If we want more young people to go to uni stop screwing them over.

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