In Australia, We Don’t Worry So Much About Our Student Debt

First, in regard to the word ‘uni’ (wherein uni = university = college): I’m Australian, and I once had a Canadian boyfriend-ish person who was all ‘Gah, call it university! It’s important!’ But in Australia we do tend to stick with the diminutive for pretty much everything. Maybe it’s our relaxed attitudes? Maybe I am making a gross generalisation? I DON’T KNOW, WE ALL JUST CALL IT UNI OK?

I’ve been going to uni on and off, sometimes full-time and sometimes part-time, since 2004. In that time, I’ve gained a Bachelor of Communication, Bachelor of Arts with Honours in Creative Writing, and I’ve started a Master’s in Applied Linguistics. My parents paid my first two semesters of fees upfront, about $4,500, and then I started racking up my loans (then called HECS for Higher Education Contribution Scheme, now called HELP for I don’t even know).

The Australian Federal Government provides these loans for Australian citizens, charging no interest. They send me a statement every year, and it goes up slightly, in line with the consumer price index. Most undergraduate degrees are Commonwealth Supported, which means that a certain amount of the fees are covered by the government. In short, the government pays some, and lends me the rest.

To me, my $30,000 uni loan doesn’t feel like real money, or a real debt. The repayments are made only if I earn over a certain amount, which is about $40,000 per year. And because I don’t earn very much as an agency temp, I really think I will never pay this loan back in full.

Many of my humanities/arts graduate friends have the same feelings; our loans don’t weigh on our minds. Sometimes we think how nice it would be to be earning enough to pay the loans off, but we mostly just want jobs related to our field and enough money to live on doing what we love.

Occasionally, I pull some overtime at work and the government takes $40-$70 from my pay towards the loan—it’s a gentle reminder that it’s there and waiting. But I also have friends who have paid for their degrees in full up front, or who have completely repaid their HECS/HELP debt because they studied something “proper” and got a “proper” job (hello accountants).

I don’t mean to sound flippant or ungrateful that I have such easy access to higher education; and certainly I could have made it even easier on myself by not buying a house at 21, not working the whole way through my studies, and instead getting Youth Allowance (financial assistance for students, also paid by the government). The sad thing is I just that I don’t see a job in my future where I will be earning enough to make significant payments. The job market where I live is not great, and I’m tied to the area with a home I’m paying off (another giant debt!) and an aging dog I will not leave.

I wanted to get into the public sector graduate programs, working out in the community, and had interviews with both the Federal and State government, but never quite got over the line. So now I’m a temp whose been working in the same (pretty great, if simple) job for nearly two years as a casual employee. Casual employment is a thing my American friends say doesn’t exist in the USA, but it’s a large chunk of the labour force in Australia. We basically get a higher hourly rate in exchange for ZERO job security and no guaranteed hours. So while my financial situation is something that bothers me a great deal, my uni debts aren’t a part of the worry.

My degree is something I use in my own time, for now. If I’m ever in a position to pay for it, then that’d be nice too.

Samantha Mee lives in Queensland, Australia.

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35 Comments / Post A Comment

EvanDeSimone (#2,101)

Owning a home and at 21 and having student debt not dominate ones life without significant parental assistance is, i think, inconceivable to the average young American. I’m starting to think that moving to Australia might just beat a lifetime of unrewarded toil.

wearitcounts (#772)

@EvanDeSimone no no no

IKARIA REMEMBER

WaityKatie (#1,696)

@EvanDeSimone Yeah, I read 2/3rds of this article with a “huuhhhh? whaaaaa?” expression on my face. So matter of fact, like “oh, of course there’s this NO INTEREST LOAN that everyone gets from the government and never even has to pay back if they don’t make enough,” and then “ALSO there’s ANOTHER HUGE POOL OF MONEY that you can get for living expenses.” And after my bewilderment now all I feel is depressed for not being born in Australia.

EvanDeSimone (#2,101)

@WaityKatie Aussie envy is a normal part of the American experience I think

EvanDeSimone (#2,101)

@wearitcounts I thought we might want to travel a bit since we’re going to live to be a million

wearitcounts (#772)

@EvanDeSimone you’re so thoughtful, you with your planning.

notetoself (#1,291)

@WaityKatie Until very recently there was a ‘first home buyers grant’ of $7000 (now you only qualify for it if you purchase a newly-built property) and a baby bonus of $5000 (if your household income is less than 75000 dollars).
Australia is pretty great. Come!

WaityKatie (#1,696)

@notetoself Can I be, like, a welfare-state freeloader and come and get all these benefits even though I’m a foreigner? (I can learn Australian law! Probably!)

notetoself (#1,291)

@WaityKatie Totally! Tell immigration I sent you! (I think you’d have to become a permanent resident if not a citizen, but no big deal).
There are bad things about Australia, naturally – I don’t want to be a total jerk – but I’m proud of much of what our government does.

tuntastic (#2,769)

@WaityKatie If you want all of that AND gay marriage, come to New Zealand!

WaityKatie (#1,696)

@tuntastic All of that, gay marriage, AND Flight of the Conchords!

Australians are also incredibly racist. Even against white people! EVIDENCE

plumb-bob (#263)

@stuffisthings Point of balance – I live in Melbourne, I take public transport nearly every day to and from work, several different lines, and have done for years. It’s so common to hear other languages it doesn’t even register, yet I have never in 30 years seen anything like that video. It was a big deal here because people were shocked.
Sorry, I just needed to defend my lovely melburnians (not that guy if course, he’s an arse).

meg (#329)

not to mention that if you pay your tuition as you go each semester, you get an immediate 20% discount – my bachelor’s degree was only about $2000 a semester over three years. though, my parents paid for my education – they really wanted to give me an amazing debt-free start because when they were at uni in the 70s everything was *free*. reading student debt issues on this site has made me appreciate anew how fortunate we are to live in this country!

JitterBug (#1,972)

@meg it’s only 10% now :( there was that whole thing how the discount helped the wealthy disproportionately, so it got cut back.

kellyography (#250)

Higher Education Loan Program(me). Better name, better acronym. Terrifying, deadly country. Also: You bought a house at 21? How does that work, and how can I get in on that?

EvanDeSimone (#2,101)

@kellyography I always forget about the “everything is poisonous” issue. Beautiful country though if you manage to survive.

bgprincipessa (#699)

@EvanDeSimone I highly recommend Bill Bryson’s “In a Sunburned Country” for countless descriptions of the countless poisonous things!

ThatJenn (#916)

@kellyography I know multiple people who bought houses at that age, especially during the age of predatory lending. It’s theoretically possible again now that we’re past the knee-jerk reaction to that easy credit, but much harder… but with a full-time job out of college (hahahahah) you could probably qualify for a loan without too much trouble if you’ve been carefully building credit for a few years (this is a good reason, I guess, to get your teenager a credit card?).

(I actually bought a house when younger than that, but I co-owned it with my mother so I’m not sure it counted, other than the maintenance issues – I lived in it with roommates and my mother was on the other side of the country, and I often wished I could just call the landlord to deal with things. I actually still wish that, at 28 in my third house.)

JitterBug (#1,972)

@EvanDeSimone I went to a BBQ last weekend and woke up the next day with about 15 bites from at least two different types of insect the next day. Itchy, but not fatal :)

Lily Rowan (#70)

@ThatJenn But how do you have a down payment??

ThatJenn (#916)

@Lily Rowan More complicated, but here’s a few options: (a) get a separate shorter-term loan for that (less easy to do these days but still theoretically possible), (b) if you have some financial flexibility, use savings and/or gifts to make one up IF you are buying in a cheap area and only need a 5% down payment (for instance, my current house is worth $100-120k, so I’d “only” need $5-6k saved up for that, which is… a reach but plausible), or (c) just don’t have one – especially a few years ago you didn’t always need one. That said, it’s MUCH harder in today’s climate of wanting an extended credit history and a 20% down payment. All of these options make pretty major assumptions about privilege in any case, let’s be clear.

Lily Rowan (#70)

@ThatJenn Yeah, I’m just amazed at a 21-year-old having any thousands of dollars, I guess…. Also, I’ve always lived in more expensive places, so for me personally, there isn’t much under $350K that I would be interested in. (And of course, I did mean “one,” not you personally, which I’m glad you got.)

ThatJenn (#916)

@Lily Rowan Yeah, the place where you live is a MAJOR factor. I’ve lived in really cheap places. In 2007 I was seriously looking at (but did not buy) a $55,000 two-bedroom house near the graduate school I was then attending in upstate New York (so… 5% = $2,750, which is plausible if still difficult for a new grad to have in savings plus graduation gifts), and the $110k house I live in now is a 3-bedroom 1-bath plus a separate 1-bedroom 1-bath cottage, on 1/3 of an acre, walking/biking distance from a major university in an OK neighborhood. There’s no chance you could get that for under $400k in the state where I grew up without some really major maintenance problems. (And to be fair, it was worth more like $180-200k here when I bought it in 2007.) My mom just became a realtor up where she lives and we went on a practice run visiting house in “my price range” near where she lives, and I was really depressed looking at what $250k buys you up there.

Me personally, I just had an immense leg up privilege-wise because (a) I had no student debt thanks to the help of my generous and financially lucky family and a massive scholarship, (b) my mother had just gotten an inheritance she was looking to invest when I bought the first house, and (c) we sold that first house at the top of the market, creating my down payment for the next house. But obviously most people don’t get all of that (and I am very aware of how lucky it has made me over the years, all of it).

notetoself (#1,291)

@EvanDeSimone We tell everyone that everything is poisonous to scare people away and keep all the affordable education and health care to ourselves.

@kellyography In the US we just have Humongous Endless Loan Payments. HELP!

JitterBug (#1,972)

I’m doing my MA at the moment at uni in Australia for free right now because all Higher Degree Research programs are free for australian citizens at public universities (yay government-funded education!).

I am confused how going on Youth Allowance would have made life easier for this writer though. As an undergrad I got about $92 a week so it just meant I graduated with a massive credit card debt as well as my HECS debt. Agree about HECS debt not feeling real, though.

For anyone who wants some actual figures, you needed to earn $47,196 gross in the 2011-2012 financial year before you needed to pay any of the debt back. Repayment amount varies between 4% to 8% of your income. If you pay more than $500 back in addition to this repayment, you get an extra 10% debt repayment (so $550 taken off the balance for a $500 repayment).

Keck (#2,466)

I hear from my friend who lives Down Under that the economic situation there looks scarily like USA circa 2007, complete with a rather large housing bubble. True?

notetoself (#1,291)

@Keck
Not entirely: we’ve always had much tougher financial regulations, so there was never the degree of subprime lending and creation of credit derivatives here (we were involved in the global trade of them). Property prices are very high in the capitol cities (particularly Sydney) but that is due to high demand: the majority of our population living in urban areas is increasing dramatically (Greater Sydney’s population is 4 million out of a national population of just over 20 million), including our growing immigrant population.

We are definitely riding out a mining bubble though, so when that ends in the next 5-10 years there will be a downturn if not a full-blown recession.

@notetoself I’m far from an economist but we are definitely well, well overdue for a massive housing market crash. The price of property has been outpacing wages and CPI for about two decades. Owning a home is deeply ingrained in the national character, which was fine, until property investment became the national pastime. I have had several homebuying friends of my age (early 20s) say to me, in a heartbreakingly earnest tone, that property is a good investment “because it always goes up in value.”

People of my generation haven’t been locked out of the market, exactly, but I would rather rent in a decent neighbourhood for the rest of my life rather than buy a display home in a treeless suburb in Deer Park or Fountain Waters are whatever other crummy development 50 k’s out of the city first homebuyers are living in these days.

questingbeast (#2,409)

This was interesting. Sounds much the same as the UK- I’ve never given my loan a second thought, and I can’t really imagine earning enough to start paying (fingers crossed though!)

@questingbeast You can’t imagine earning more than £15,000 p.a.?

Cameron’s Britain.

novembertea (#2,203)

This person’s student loan situation reminds me of mine in the sense that I don’t worry about it too much. I know I am fortunate compared to many people I know who are struggling with huge amounts of private loan debt. I am able to not worry so much because I have only federal loans. I did have a Sallie Mae loan at one point, but I paid off the balance with a new Stafford loan I received because of none other than Suze Orman – if I never watched her show I never would have known to do that. Now all of my loans are under IBR (Income Based Repayment). This means that my loan payments will be based on my debt to income ratio until after 25 years, when the debt is erased. No matter how much I earn, or how much the debt balloons, I’ll never pay more than the standard monthly payment for a 10 year repayment plan on the original principal. Right now, I’m earning $15,000 a year with two jobs and I have no monthly payment. If and when I earn enough to make payments, I still believe I’ll never pay back the entirety of the 45K loan plus interest by the time I’m 49. Check out IBR if you haven’t already.

The student loan system is similar here in NZ – I had a tuition scholarship so didn’t need to worry about borrowing money, thankfully, but reading about all the student loans that personal finance bloggers juggle (and I read a LOT of PF blogs) kind of gives me stomachache.

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