Debt growing: Young people fear they will never pay off uni education

Jess Mulcahy, 30, completed an arts/law degree at Deakin University from 2016-2021.

The single mother was working part-time and could only attend the 'cloud' campus online.

Ms Mulcahy said she was now wondering how long it would take her to pay off her debt, which is growing due to indexation.

"My HECS was $70,328 and when indexation was applied last year it jumped up to $75,322," she said.

"If it stays around this rate an additional $5000 or so will be applied to my HECS debt every year.

"I'm still not earning enough to make contributions, I can't work any additional hours because of my parenting commitments and a lack of affordable childcare in the area, so it's just going to keep growing."

Ms Mulcahy said she believed the high rate of indexation would deter some people from studying, particularly single mums.

"At a minimum, the indexation process needs to be reviewed and ideally paused," she said.

Ms Mulcahy said it was an issue that was affecting a high number of women.

"It's an issue that disproportionately affects women because parental responsibilities mean that we're often taking breaks from our career or working part time and because of this we're often not earning enough to cover living expenses, let alone enough to start making payments," she said.

"If we happen to be in the fortunate position where we are earning enough to start making contributions, then the way HECS debts are indexed mean that any contributions we do make are effectively cancelled out. It's one step forward, two steps back."

Ms Mulcahy said she believed these financial barriers were preventing women from enrolling in tertiary education.

"Something really needs to be done about this situation," she said.

Alex Priebbenow also has a HECS debt that is increasing each year.

"I completed my degree in 2014 with a HECS debt of just shy of $70,000," Dr Priebbenow said.

"I never made enough money to have to pay anything back and I then had three kids.

"My debt is sitting at $86,000 now after earning just shy of $6000 in interest last year alone."

Dr Priebbenow said she was only working part time and would probably not earn enough to pay off any of the debt for five years.

"I hate to think what my debt will be by then," she said.

Almost three million students and graduates in Australia owe money for their tertiary studies, and on June 1, 2024, these debts will increase by between 4.2 and 4.8 per cent, according to projections from the Parliamentary Library, commissioned by the Greens.

The Higher Education Contribution Scheme (HECS) debts, or Higher Education Loan Program (HELP), are given to students and indexed to inflation each year.

The indexation rate reached a decade high of 7.1 per cent in 2023.

While Prime Minister Anthony Albanese acknowledged that HECS was an area the federal government needed "to do much better" on April 18, everyday Australians are faced with the anxiety of ballooning debts.

A petition was started by independent MP Dr Monique Ryan and has garnered 260,000 signatures.

"Young people are facing a housing crisis, a cost-of-living crisis, and a climate crisis - they shouldn't be facing a HECS debt crisis as well," the change.org petition says.