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Young Australian Shares Regret Over Mounting HECS Debt
Pascal Zoghbi, a 22-year-old graduate from Perth, has become a representative voice for many young Australians grappling with the burden of student debt. Having graduated in 2023 with a Bachelor of Business, majoring in enterprise and innovation marketing, Zoghbi now finds herself significantly in the red, with a HECS debt topping $50,801 after a recent indexation.
Rising Debt Amid Promised Reductions
While the Australian government has pledged to provide relief by cutting HECS and HELP debts by 20%, the reality for many graduates remains daunting. Zoghbi discovered that her debt, initially around $48,000 post-graduation, had in fact increased due to the indexation process intended to adjust for inflation. “I genuinely thought it would be at least under $50,000,” she expressed, revealing her shock upon knowing her repayments seemingly amounted to little more than a band-aid on a significant financial wound.
Despite the upcoming 20% cut that is set to benefit millions, Zoghbi is still faced with a steep $40,000 in debt. She shares her disillusionment, stating, “I’m still $40,000 in debt for a degree that is not worth being $40,000 in debt for.”
The Evolving Job Market
As university costs soar, the time needed for graduates to repay their HECS debts has also lengthened—from an average of 7.3 years in 2006 to 9.9 years today, according to research from the Australia Institute. Zoghbi, concerned about her future, admits she doesn’t wish to contemplate how long it might take for her to clear her debt. “I’d probably cry,” she remarked.
Worse yet, she finds that the skills she learned in her degree are seldom applied in her current marketing position. “It’s not worth the debt at all,” she said, pointing to numerous colleagues in her field who have succeeded without formal degrees, instead relying on experience and networking to secure positions.
Recent Indeed research indicates a growing preference for experience over formal qualifications, with 67% of job seekers and 55% of employers affirming this shift. “Employers increasingly view on-the-job experience as a more telling indicator of a candidate’s potential," explained Indeed career expert Sally McKibbin.
A Call for Change in Higher Education
Zoghbi’s sentiment resonates with many young Australians who are questioning the traditional education route as a means to achieve career success. She believes universities must reassess their curricula to ensure that they are providing genuine value and relevant skills for current job markets.
The government’s proposed changes to HECS repayment schemes aim to address some concerns. Initially announced in July, potential legislation seeks to cut 20% off student loan debts—a move that could relieve around $16 billion worth of debt for approximately three million Australians. This reduction will be backdated to June 1, ahead of a 3.2% indexation change that would typically inflate these debts.
In addition to the debt reduction, plans are in place to increase the minimum income threshold for repayment from $54,435 to $67,000 and modify how repayments are calculated based on income above this threshold. By tethering HECS indexation to either the Consumer Price Index or the Wage Price Index, this aims to provide further financial relief to graduates.
Final Thoughts
Zoghbi’s experience underscores the need for reflection within the Australian higher education system, particularly as graduates face not only financial burdens but also an evolving job market that places increasing significance on practical experience over academic credentials. As more young people advocate for reforms in how education is delivered and valued, the conversation about HECS debt continues to hold critical importance in shaping the future of Australian students.
