HECS not only student burden
Dorothy Illing, Higher education

UNIVERSITY students have become the new generation of borrowers, forced to run up credit card debts, take out private loans and rely on parents and spouses to get a degree.

Dubbed "Generation Debt", 700,000 Australian university students are among those
revolutionising the university experience through a dramatic shift in income support.

A new national report reveals fewer students receive government assistance through Youth Allowance and more are relying on paid work, which, for undergraduates, now makes up to three-quarters of their total income.

They spend less time on campus, skip more lectures and are running up an average private debt of $25,000 - on top of their government HECS loans.

The survey of 18,954 students across 37 universities warns the educational cost of the new generation is taking its toll. "During 2006, many Australian university students reported they were in stressful financial situations and many found it difficult to support themselves week-to-week," the report says. "A large proportion of students ... lacked adequate financial support and many were highly anxious about 'making ends meet' and the debts they were accumulating." The findings go to the heart of heated federal election debate about the cost burden on students and the levels of debt they will carry once they graduate.

Labor has pledged to cut HECS for some students, while the Government argues income-contingent loans do not deter them from going to university. But the private debt incurred by students has gone largely unnoticed in the debate. The independent study was commissioned by the peak Australian Vice-chancellors Committee and conducted by Melbourne University's Centre for the Study of Higher Education. It finds about 70 per cent of full-time undergraduates were working an average of 14.8 hours a week during second semester last year. And 42 per cent of part-time students were working at least 38 hours a week, equivalent to full-time employment. The average annual income from paid work increased from $8386 in 2000 to $11,960 last year, boosting income and improving students' annual deficits. Almost half the students surveyed believed that work was having a detrimental effect on their studies as their private debt ratcheted up. Many said they were working simply to afford necessities, transport, textbooks and other study materials. The study reveals the proportion of students taking out private loans rose from 10.7 per cent in 2000 to 24.4 per cent last year. The level of bank loans jumped by 71 per cent, credit cards by 42 per cent, borrowings from parents 48 per cent, and from spouses, 46 per cent. "

The survey of 18,954 students across 37 universities warns the educational cost of the new generation is taking its toll.
"During 2006, many Australian university students reported they were in stressful financial situations and many found it difficult to support themselves week-to-week," the report says.
"A large proportion of students ... lacked adequate financial support and many were highly anxious about 'making ends meet' and the debts they were accumulating."
The findings go to the heart of heated federal election debate about the cost burden on students and the levels of debt they will carry once they graduate.
Labor has pledged to cut HECS for some students, while the Government argues income-contingent loans do not deter them from going to university.
But the private debt incurred by students has gone largely unnoticed in the debate.
The independent study was commissioned by the peak Australian Vice-chancellors Committee and conducted by Melbourne University's Centre for the Study of Higher Education. It finds about 70 per cent of full-time undergraduates were working an average of 14.8 hours a week during second semester last year. And 42 per cent of part-time students were working at least 38 hours a week, equivalent to full-time employment.
The average annual income from paid work increased from $8386 in 2000 to $11,960 last year, boosting income and improving students' annual deficits.
Almost half the students surveyed believed that work was having a detrimental effect on their studies as their private debt ratcheted up.
Many said they were working simply to afford necessities, transport, textbooks and other study materials.
The study reveals the proportion of students taking out private loans rose from 10.7 per cent in 2000 to 24.4 per cent last year.
The level of bank loans jumped by 71 per cent, credit cards by 42 per cent, borrowings from parents 48 per cent, and from spouses, 46 per cent.
"I think they are not borrowing a lot more money but a lot more of the students are borrowing," University of Western Australia vice-chancellor Alan Robson said. Professor Robson said that while there was considerable private benefit in having a degree, the debt levels were now a concern. The report will be high on the agenda at a meeting of vice-chancellors in Sydney next week. http://news.com.au/newspulse\

"I think they are not borrowing a lot more money but a lot more of the students are borrowing," University of Western Australia vice-chancellor Alan Robson said.

Professor Robson said that while there was considerable private benefit in having a degree, the debt levels were now a concern.

The report will be high on the agenda at a meeting of vice-chancellors in Sydney next week.

sa.pres@nus.asn.au
rhiannon.newman@adelaide.edu.au