Yahoo Finance The quick decision young Aussies forced to make that's plunging a generation into debt: 'Owe $60k'
Young Aussies like Alana Avallone say they felt “pressure” to go to university straight after high school and are now stuck repaying thousands in HECS debt.
A young Aussie says she wishes she took a gap year rather than going to university after school and racking up tens of thousands of dollars in HECS debt. Millions of Aussies saw their student debt rise by a brutal 4.7 per cent earlier this month.
Alana Avallone jumped straight into university after completing high school, graduating with a Bachelor of Communication majoring in media arts and production from UTS in 2020. The 25-year-old told Yahoo Finance she felt pressure from her friends and family to continue to study, a decision she now wishes she had considered more.
“All my friends were going to uni and it felt like it was the expectation to continue to study after high school. I wanted to be like everyone else and get a bachelor’s degree,” Avallone said.
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“I clearly remember my family telling me that if I take a gap year, I’ll come back and not want to study again. [They said] it was better to continue to study while I was still in that mind set after high school.
“People were telling me that you’ll go into your gap year and then you’ll come back and you’ll be lazy and not want to go to uni.”
Avallone had initially hoped to work in the film and TV industry but after she graduated she realised the career “wasn’t the right choice” for her. The Sydney resident said it wasn’t until she went travelling alone for the first time last year that she had more time to think and realised she was more interested in pursuing writing and journalism.
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“After I did my trip and I came back and spent some time thinking about it, I decided that I really wanted to pursue writing. So I’ve gone on to do a certificate as an add-on to my bachelor’s degree,” she said.
Avallone said she now has more than $60,000 in HECS debt that she tries “not to think about”, which will only get bigger once she finishes her six-month certificate.
“That’s accumulated because I did a pathway course then I went and did a three-year uni course. I can’t imagine what it will be after I finish the certificate that I’m doing in writing,” she told Yahoo Finance.
“I try not to think about it and stress too much. I’m sure one day it will get paid. It does cross my mind and I wish I thought about it more and I wouldn't have had this HECS debt.”
While Avallone said university allowed her to meet new people and learn about different things, she said she wishes she took a gap year off initially to help build her confidence and give her more space to figure out what she actually wanted to do.
HECS debt skyrockets
More than three million Aussies were slugged with higher student loans when HECS-HELP increased at the start of the month. Loans went up 4.7 per cent with indexation, which is the second-highest amount in a decade, with the average debt of $26,494 increasing by $1,245.
The government has proposed capping the indexation rate to either the Consumer Price Index (CPI) or Wage Price Index (WPI), whichever is lower. Legislation still needs to pass for the change to be applied but, when it does, a credit will be applied back to loans.
Yahoo Finance has spoken to young Aussies like 28-year-old Lauren Eardley who say they are now “falling into a cesspit of debt” due to their rising HECS debt.
"I'm going to have this decision I made when I was 18 hang around me forever,” Eardley said.
"I’m scared to ever have kids or use maternity leave [as that might] jeopardise my income. This is a crisis.”
Young Aussies ‘pressured’ to study
New research from Contiki found young Aussies are feeling “pressure” to go to university and get a good job straight after school. Half of Aussies surveyed felt they would let their parents down if they didn’t continue to study post high school, while 27 per cent felt pressure to study because their siblings had gone down this path.
Around 63 per cent believed that if they didn’t go to university and get a degree under their belt, they wouldn’t be able to secure a well-paying job.
University degree dropouts have reached a record, with more than 50,000 students leaving their studies each year. Recent Federal Education Department data found a quarter of students who started their studies in 2017 had dropped out by the end of 2022. This was the highest rate since records began in 2005. Interest in university study is also down, with overall numbers dropping 13 per cent since 2016.
It comes as some experts say the value of a university degree is diminishing. Superior People Recruitment founder and director Graham Wynn told Yahoo Finance it was now “much easier” to get into uni and get a degree than it was 20 or 30 years ago.
“The entry levels are much lower, the pass marks are lower and there are far more uni places than there used to be,” Wynn said.
“Consequently, qualifications aren’t valued as highly as they used to be because every Tom, Dick and Harry gets one these days.”
Avallone said she initially believed going to university was the only way she would be able to secure a high-paying job but she has since changed her mind.
“In most places these days, you can still get a job without a degree,” she said.
“I realised it’s not always necessary. There are other pathways you can take. If I had of gone to TAFE and done the same thing, it wouldn’t have made a difference.”
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