Student Debt !

There is no doubt that a university degree is now a necessity if you want to enter a profession with above average pay levels.  The age of " learn it on the job " is over and both teaching and nursing entry involve time at university as part of the curriculum.

A long time ago the government opened university study widely across all social spectrums by schemes in which student debt became part of a government loan with an undertaking that this debt would be progressively repaid when the student entered the workforce and their salary reached a certain level.

An amazing amount of that debt money is in arrears and now seems unlikely to be ever repaid.  A popular guise for gaming the system is to earn a degree and then pop off overseas with that valued diploma and get well paid work in a foreign country far out of reach of the Australian tax office.  Another tactic widely used is to continue studying, either to gain a masters level or to branch into another discipline to accumulate an even greater debt - without entering the work force.  That is what some cynics call a " professional student " !

The government is proposing to cap student debt at $100,000 and reducing the salary level at which repayments become mandatory from $54,000 to $ 44,000.   The debt figures are alarming.   The number of students with debts in excess of $ 50,000 has blown out from 28,664 to 159,475 in the past six years and of those 14,000 now owe more than $ 100,000.

Analysis shows that students on pathways that include law, accounting, banking and business management  were the most likely to exceed that $ 100,000 threshold.  It is increasingly common for students to  take on more complex combinations of degrees, often without a break to enter the workforce.

Another concern is the drop out rate.   Some students take up courses beyond their ability level and others simply lose interest as it progresses.  Those who walk away and discontinue are still responsible for the debt accrued, and in many cases their lack of qualification ensure that they never reach the salary level where repayments are enforced by the tax office, but that debt remains a burden on their credit record.

This proposed $ 100,000 cap will pose a major threat to those undertaking post graduate study and those returning to study after a lengthy travel break to visit other parts of the world.  Hopefully, it will have the effect of making students more careful in evaluating courses and comparing them with their intended future lifestyle - and taking into account the end debt load.

Perhaps one of the problems is the pressure from families for young people to take up university because of changing work demographics.   Some who are better suited to the trades, and these days qualified trades folk are often earning better money than  traditional professions.  Hopefully, it may bring a more careful evaluation of life choices when school ends and critical career choices need to be made.  Not everybody is destined to go to university.