Current and former university students owe the Commonwealth a record amount of money, with a new report estimating that more than $6 billion in student debts is never expected to be repaid.
A study conducted by the Grattan Institute has found that university students have accumulated Higher Education Loan Program debts in the amount of $26.3 billion; this figure represents an almost $10 billion increase since 2007.
“These student debt figures are problematic and present a cycle of despair”, says Anthony Warner, Founder and CEO of insolvency firm Debt Free Australia. “Many students will spend a fair majority of their working lives paying off the student debt they accumulated in order to gain these careers.”
For current students, Debt Free Australia advises looking into payment methods that allow one to pay parts of their student debt as they fall due. Under the HECS-HELP scheme, students will actually pay less for their studies if they pay their whole or partial student debt amount upfront. “Not only will this reduce the amount of interest one will accumulate, but it will also teach Australian youth how to manage their money from early on”, says Warner.
For those who have already graduated and begun work, the burden of student debts may already be taking their toll on their finances as repayments are taken directly from one’s wages once they begin to earn above the minimum threshold for compulsory repayment.
“More often than not, people are finding themselves in dire financial situations as a result of their student debt”, Warner states. “Rather than moving overseas in order to avoid repayments, as many continue to do, they should seek professional financial assistance and rectify the situation.”
Debt Free Australia recommends that Australians struggling with the effects of student debt consider the ways in which a Debt Agreement, Personal Insolvency Agreement and other debt solutions may assist their financial situations. It is because of their total focus on their clients’ best interests that Debt Free Australia offer the lowest price (guaranteed) for their services, and operate a toll-free advice line available at all hours of the week.
For more information on Debt Free Australia and how they can assist current or former students struggling with their student debts, contact 1800 676 598.