The shocking reality of college debt is that Australia has been brought to light by a freedom of information publication that reveals that some students are facing bills in excess of half a million dollars.
The top 100 students who owed the most money to Australia’s tax office were released on Wednesday, revealing that the country’s most indebted student owed an eye-watering $737,070.48 to the government.
Their debt eclipsed the second-place holder, who owes $495,990.47.
More than two dozen people owe more than $250,000 in their debts to the Higher Education Loan Program (HELP), which was named the Higher Education Contribution Scheme (HECS) in 1989.
The amount owed by these college graduates — who may have studied some of the more expensive courses, such as medicine or law — will also get a lot higher in seven weeks.
No interest is charged on HELP/HECS debt, but they are adjusted for inflation on June 1 each year, in a process known as indexation.
The Higher Education Loan Program started in 1989 and was originally called the Higher Education Contribution Scheme. Students are photographed at a graduation ceremony
The current indexation rate, set in June 2022, is 3.9 percent, rising of 0.6 percent compared to the previous year.
An average of $1,500 will be added to student loans this year, but for those with debts of a quarter, half, or three quarters of a million, the increase will be much greater.
What is HELP/HECS?
If you attend university or a recognized higher education provider, you can get a HECS-HELP loan to pay for your studies.
The Higher Education Contribution Scheme – Higher Education Loan Program (HECS-HELP) is a Commonwealth Government loan program that helps eligible students pay all or part of their student contribution.
HECS-HELP debt must be repaid through the Australian tax system once your income is above the mandatory repayment threshold.
For fiscal year 2022-23, the mandatory repayment threshold is $48,361.
The largest HELP/HECS debtor will see their debt increase by as much as $28,745 to $765,816 if they fail to pay off some of their debt before June 1.
The second largest debtor will be saddled with an additional $19,343 in less than two months, bringing their debt above the half-million mark to $515,334.
HECS-HELP debt is repaid through the Australian tax system once an individual’s income rises above the mandatory repayment threshold, which is currently $48,361.
This makes it likely that those with huge debts have accumulated most of it not through college, but by rarely, if ever, earning enough to pay it back.
The amount due would then increase annually through indexation.
There are about three million graduates with outstanding student loans in Australia.
Under the HELP system, students can get up to $109,206 to pay for most college courses, and even more to study more expensive subjects like medicine or aviation.
According to the National Union of Students (NUS), this year will see the largest indexation increase in decades.
In a submission to a Senate hearing on the cost of living last month, the NUS said students needed immediate help.
The shocking reality of student debt is that Australia has come to light through the release under the Freedom of Information Act of the amounts owed by the top 100 debtors (pictured)
“By increasing the amount of student debt they take on, the government is limiting their ability to take out home loans, further excluding them from the market,” the union said.
Oscar Chaffey is one of those whose student debt rises more than most while he studies medicine.
The third year postgraduate medical student at the University of Sydney told SBS in July 2022 that “I think it’s almost a truth as a cow that I’m worried about a debt of nearly $50,000 that will only grow by tens of thousands of dollars before I have any means to pay it back.”
“It is depressing that in Australia, a country where education was once seen as a public good, young people are expected to go into so much debt to get an education,” he added.
Six Australian universities are ranked among the top 100 in the world by the Times Higher Education publication – and higher rankings mean higher costs.
The highest-rated Australian institution is the University of Melbourne at 33rd, followed by the Australian National University and the University of Queensland, which rank jointly at 54th.
Monash University ranks at number 57, University of Sydney at number 58 and UNSW at number 70.
The huge sums owed by some former students have met with shock and bewilderment online.
“And I thought mine was hefty. Cheeky,” said one, reflecting what many thought.
Students are pictured at an entrance to the University of New South Wales in Sydney
“The post-nominals would be a paragraph long,” another wrote, referring to the letters after the names of the various debtors, which reflected their degrees.
One person may have been too honest when he said, “I think I’m one of these.”
But another suggested how such huge debts could have accumulated.
“If you go abroad after university and never make money in Australia, you don’t have to pay it back,” they said.