How student debt changes made the same degrees more expensive

Recent university graduates who racked up big debts to get an arts degree are set to have $10,000 wiped from their HECS account in the coming months but those just starting their study are unlikely to see the same financial windfall.

The Albanese government will move to legislate a 20 per cent discount after winning the federal election but tertiary analysts say adjustments to how much students pay for their degree are likely to be years away.

University of NSW students Diya Sengupta and Sabrine Nasri, 20, are both set to pay in excess of $50,000 for their degrees.Credit: Kate Geraghty

Under former prime minister Scott Morrison’s Job-ready Graduates program, the cost of a humanities degree rose to $50,000.

The current government says it wants to look at fee reform but rather than change now, it will take advice on fees from the yet-to-be-opened Australian Tertiary Education Commission. It will be fully operational by January 2026.

Monash University higher education policy researcher Professor Andrew Norton said the government had prioritised a 20 per cent reduction in existing HECS bills because it was a simple and concise political message. “And that’s what they got with a 20 per cent HECS reduction,” he said.

“They have not fixed the underlying issue … it is unlikely we’ll see any fee changes until 2027.”

Education Minister Jason Clare describes the issue slightly differently: he says they are taking a “staged” approach to reforming the cost of degree, with changes starting to make debt indexation fairer.

“Second, we are cutting student debt by 20 per cent,” he said.

The 20 per cent reduction will be calculated based on what a person’s debt amount was as at June 1, 2025, before indexation was applied.

“And from July 1 this year, the government will reduce the amount Australians with a student debt have to repay per year and raise the threshold [for] when people need to start repaying.

“We are also establishing the Australian Tertiary Education Commission and one of the things it will provide advice to government on is the cost of degrees.”

Professor Gwilym Croucher is the deputy director of the Centre for the Study of Higher Education at the University of Melbourne.Credit: Michael Quelch

University of Melbourne higher education researcher Professor Gwilym Croucher welcomed the 20 per cent fee reduction but he said that compared to other countries, Australian students were paying more for university.

“[The 20 per cent reduction] doesn’t address the bigger challenge for Australia in terms of setting student contributions in a fair way,” he said. He estimated the cost of reversing the controversial degree pricing stood at around $1 billion.

The number of Australians burdened with university mega-debts has doubled in the past five years. Almost 57,000 hold a debt of over $100,000.

When University of NSW student Diya Sengupta enrolled in a combined law and communications degree, it was the first year of the Job-ready Graduates program with higher course costs for students. Five years later, she has a HECS debt of $65,000.

If she had enrolled a year earlier, she would have paid less than half of what she did to study communications subjects, while law units would have been 20 per cent less.

“It is unfortunate that so much of the fees you pay is up to the chance of when you did your degree,” said Sengupta, president of the university’s student representative council. She will get $13,000 off her HECS once the debt forgiveness legislation passes parliament.

“I am always glad to be paying less HECS. But it is a bit of a Band-Aid solution to the bigger problem of education being overpriced,” she said.

“So much of education is charged not on the value of the course, but on what the government of the day has decided.”

Fellow University of NSW student Sabrine Nasri will not get as big a discount on her existing HECS debt for her double degrees in media and social sciences because she is only partway through her degree. However, she is still paying the higher prices introduced under Job-ready Graduates. Her degree is listed on the University of NSW website with a $69,000 price tag.

She questioned the value for money and the quality of the education on offer when it came to learning.

“Once I did look at my classes and how much they were. I should not be paying [thousands] to sit in a class for an hour and have a tutor be paid to read off a book,” she said.

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