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Student debt in Australia could be worse off than in the United States

Media Release
Lee Rhiannon 12 Jun 2014

Greens higher education spokesperson Senator Lee Rhiannon said the Coalition's moves to Americanise higher education will see the Australian university system mimic the worse aspects of the US system.

In the United States total student debt is over $1 trillion dollars (1). Students in the US will graduate with an average debt of $29,000 USD or $31,000 AUD (2).

Analysis by the Grattan Institute's Andrew Norton, a higher education policy advisor to the Coalition government has estimated student fees and as a result student debt in Australia will be significantly higher under the Coalition's reforms.

According to Mr Norton a teaching degree could cost $49,000, a nursing degree $38,000 and an engineering degree $61,000. Analysis by the National Tertiary Education Union supports this view.

"It is very likely students in Australia with graduate with more debt than students in the US. But it gets worse as the interest rate on student debt could also be higher in Australia than in the US," said Senator Rhiannon

"Students who receive government loans in the US in 2013 will pay off their loans at a fixed interest rate of 3.86% (3). This interest rate will not change regardless of how long it takes a graduate to pay back their debt.

"Under the Coalition's changes, current and future students as well as anyone with an existing student debt will pay off their loans with a variable interest rate - tied to the 10 year government bond rate, up to a cap of 6%.

"The current bond rate is 3.76%. However, the long term average is 5.5%. So students have no certainty as the rate will vary.

"With a higher starting debt than in the US, and interest rates that are likely to be higher, Australian students are very likely to be paying more for their degrees.

"Women, people from disadvantaged backgrounds and low income earners will be the hardest hit by these changes.
"High levels of debt can deter students from low-income and disadvantaged backgrounds from enrolling in a degree.

"The campaign against the Coalition's regressive and cruel changes to higher educating is growing and the Greens will continue to stand alongside students, university staff and the community in fighting them," said Senator Rhiannon.

To find out what your debt will be under the Coalition's proposed changes: www.whatwillmydegreecost.com.au

Contact - 0487 350 880

(1) http://www.ibtimes.com/obama-announce-student-loan-debt-relief-expansion...
(2) http://money.cnn.com/2013/12/04/pf/college/student-loan-debt/
(3) https://studentaid.ed.gov/types/loans/interest-rates

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