HECS debt

HECS debt is a widespread concern among Australian students, but it is especially burdensome for those undertaking a legal degree.

Despite the looming shadow of their HECS loans, Callum Donnolley highlighted how most law students embark on their university journey with a casual disregard for the financial burden.

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“HECS loans are never considered a pressing obligation for students commencing university studies. Many continue to underestimate the value and impact of their HECS loans well into their studies and into their final year,” Donnolley said.

Donnolley added: “Considering the extraordinary value of HECS loans for many students (for law students undertaking a double degree, it is often greater than $50,000.00), graduates’ salaries are garnished well into their career.”

In light of the current economic crisis, Donnolley underscored that balancing the consistent management of HECS repayments with other expenses remains and will continue to be a pressing concern.

“Ensuring such payments are consistently and adequately accommodated for whilst also accounting for the myriad of additional expenses in the current climate is of great concern in the early stages of my career,” Donnolley said.

As Sabrina Liang noted, HECS debt poses a significant concern for juris doctor students. While Liang, a New Zealand citizen, is not eligible for HECS, she has closely observed and relayed the concerns expressed by her peers regarding the growing financial burden associated with this debt.

“A primary issue for students studying [for a] juris doctor (JD) at the University of Melbourne, is the HECS cap. Because the JD is a postgraduate degree, students will have studied an undergraduate degree, which cost at least $30,000 previously.

“With the HECS cap at $113,000, if students are on a full fee place for the JD (approx $137,000–$155,000), they will end up having to pay around $30,000 out of pocket. Students often drop down to part-time university to work and earn enough to pay the upfront cost,” Liang said.

Liang indicated that substantial financial constraints are compelling many juris doctor students to pursue commercial law as a more financially viable career option.

“These financial constraints significantly influence career choices, pushing many students towards commercial law due to the high costs of the PLT (around $10,000 to $15,000) and the lack of available HECS funding upon graduation,” Liang said.

Another law student reported that the substantial financial burden of debt significantly impedes their ability to achieve future milestones, such as purchasing a home, making these goals appear particularly daunting.

“It’s difficult to think about purchasing a home in the future when most law students have an $80,000 debt or more. The financial burden of such a significant debt can make planning for major life milestones, like home ownership, seem daunting,” they said.

“High-cost HECS courses can be a disincentive for students to pursue their degree of choice. The pressure to ‘make back your investment’ can create student anxiety when finding a job after completion of studies.”

The current cost-of-living crisis

The ongoing cost-of-living crisis has markedly undermined law students’ financial stability, adversely affecting their academic performance and overall personal wellbeing.

Donnolley conveyed his firsthand experience of the financial strain resulting from rising living costs and increasing expenses.

“Having grown up north of Newcastle and moved alone to Sydney for university, balancing work with study has been crucial for the past five years.

“Over the past 18 months, many expenses for which I had previously been able to accommodate have rapidly and exponentially increased. Basic utility bills such as gas and electricity have skyrocketed and have led to increased pressure on the balance between hours spent on academics and work,” Donnolley said.

Due to the financial pressure law students face, Donnolley observed that academic expenses, which were previously manageable with upfront payments, are now being deferred and incorporated into student loans for future repayment.

“Academic expenses which I had previously been comfortable paying upfront (such as student amenity fees) have now had to be incorporated into student loans to be paid back later,” Donnolley said.

Liang detailed how the persistent cost-of-living crisis has significantly affected juris doctor students, including herself, to “drop down to part-timer work and part-time studies” to manage financial pressures.

She articulated that this adjustment extends the direction of students’ studies, consequently delaying their entry into the workforce and reducing their earning potential.

“While the Melbourne University JD is marketed as a three-year degree, the average is now either 3.5 or four years.

“This means that by the time students enter the workforce, they have a lower earning potential as they will have been studying tertiary education for at least six [to] seven years,” Liang said.

“In addition, the structure of the JD, as a postgraduate course, means that most students are over 21 and tend to live out of home and need to pay rent, bills, food and various other essentials. The sharp increase in rent has been felt across our age range, where my friends have experienced significant rent hikes of over, forcing them to move out.”

Similarly, the anonymous law student reported how managing a full-time job to meet current financial demands while pursuing full-time studies poses a significant challenge that many are compelled to navigate.

“I have had to take on full-time work, which can be very challenging to balance with full-time study. I strive to achieve my best in university, but it is difficult to attend classes after working an eight-hour day,” they said.

“Working more days to cover [the] cost of living which has had negative effects on grades and wellbeing, affecting employment. Additional pressure to perform in the workplace to secure a consistent income stream.”

More to come.