Students are more likely to borrow more than ever and are also more likely than ever to start new jobs.
The result is a growing class of debtors that is driving the economy.
A look into how these trends are affecting the education sector can help to manage what’s left of a market that’s now experiencing unprecedented pressures.
As we’ve previously reported, student loans are a major factor in the growth of the cost of education in Australia.
According to the latest Australian Bureau of Statistics (ABS) figures, the total number of students enrolled in Australian universities has risen from 4.1 million in 2007 to 4.5 million in 2018.
At the same time, the cost has risen at a much faster rate, from 6.1 per cent of GDP in 2007-08 to 10.1 in 2018-19.
This means student debt is now the single biggest source of Australia’s $1.1 trillion GDP.
The ABS estimates that the average student is spending $2,828 a year on loans and fees, with the average debt load in the 20-34 age group reaching $4,500 a year.
While it’s tempting to blame the rise in student debt on the fact that many students are starting new jobs, the reality is that a majority of students in the education industry do not find new work and are instead increasingly relying on student loan repayments.
A new report released by the Australia Council of Trade Unions shows that the industry’s biggest employers are the universities and colleges, with a total of $2.9 billion of student debt in their accounts.
The industry’s reliance on student loans is not only contributing to the high levels of debt in the sector but also a high risk of failure.
The report points out that the number of job vacancies has risen by almost 60 per cent since the financial crisis, and many students have taken on job offers that have failed to pay off their loans.
In the wake of the financial crash, some employers have been able to cut costs by downsizing their workforce and cutting hours and hours of operations.
This has caused the number and quality of jobs in the tertiary sector to fall by 40 per cent in the past five years, according to the Australia Post.
The decline in the numbers of jobs and the high costs associated with running a business has meant that many businesses are turning to student loan debt as a way to reduce costs and stay afloat.
As a result, many students struggle to find employment.
One in four students are working part-time, while one in three are on parental leave.
These are only some of the factors that make it difficult for many students to make ends meet.
Student debt and joblessness are not the only reasons students struggle with student loans.
Some students also struggle with the job market.
The number of Australians who are unemployed is higher than it was 10 years ago.
This is due to the economic downturn and many of those students who are employed do not have enough funds to pay for living expenses.
This may be partly due to a lack of education and also because of a lack in the workforce.
According, a recent report from the Australian Bureau’s ABS Student Loans and Investments Study, a higher percentage of Australians with a tertiary education are working than the general population, with many struggling to find work in the field.
According the report, those with tertiary degrees are also less likely to find a job compared to those without a degree.
The trend of increasing student debt may not be a coincidence, with more and more students now relying on the financial aid system to cover the costs of higher education.
But students may also have a higher risk of falling behind in their education.
While the average amount a student borrows is $22,000, some are likely to exceed that.
According for example, students with higher education qualifications may have a greater need for the government-backed loan repayment plan, the student loans repayment plan (PLP), which is currently only available to those with a Bachelor of Education or higher degree.
These students may be more likely have a lower credit score and may be less likely than others to be able to access the PLP if they have more debt.
Students with higher incomes may also face higher debt levels.
The average amount of debt a student has in the last three years is $36,000.
While students with more modest means may not have to worry as much about debt, those who are older may struggle to repay their debts because of the higher cost of living.
According data from the ABS, over half of the people with the highest average monthly income are also the most likely to have the highest amount of student loans in the first three years of their education, as well as the highest proportion of borrowers with student debt.
In other words, higher income earners are more inclined to use student loans to fund higher education, while lower income earners may be at greater risk of struggling to pay back their debts.
The Australian Education Union says that there are