More than one in 20 people with a higher education debt owe more than $50,000, analysis of Australian Tax Office data shows.
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Of the 2.66 million people with a tertiary education debt hanging over their heads, 6 per cent owed more than $50,000 at the end of the 2015/16 financial year, compared with 2.1 per cent in 2011/12.
Meanwhile, a total of 14,046 people have accrued debts of more than $100,000, compared with 3339 five years ago.
The average HECS/HELP debt has also been steadily increasing at a rate that has outpaced inflation. Debtors owe the government $20,303 on average as of June 30 last year, compared with about $15,000 five years ago.
There are two main reasons for the increase, according to Grattan Institute higher education program director Andrew Norton.
Firstly, more students have enrolled in additional postgraduate study, which can double the amount of debt they take on. Secondly, flat wage growth and an increasing number of people not making repayments has caused existing education debts to accumulate each year in line with indexation.
Analysis of ATO data shows that 30 per cent of those with a higher education debt have not lodged a tax return for the 2015/16 financial year, suggesting that a large number of people are still studying or living overseas.
But of those who did report their income, at least 70 per cent were earning below the threshold amount for making loan repayments.
Repayments currently start when individual income exceeds $51,957, but will likely be lowered to $45,000 from July next year under the federal government’s higher education reforms.
The Grattan Institute estimates these changes would result in about 160,000 more people with HECS debt being compelled to start repaying their loans sooner.
The loans do not accrue interest, but increase in line with consumer price index rises each year, which tends to add about 2 per cent to the loan each year.
Stephanie Gigliotti spent six years at university before entering the workforce, and her student debt reached as high as $111,000, but she has since managed to get it down to five figures.
The executive officer at the Department of Human Services completed a Bachelor of Arts at Monash University and then went on to do a postgraduate Masters of Laws there, and said the studies set her up for her professional career.
“I definitely have the highest HECS debt out of my friendship group, but I think it’s a growing trend,” she said.
“I’ve accepted the fact that it's pretty much going to be there forever. With starting a family eventually, it will be something I won’t be able to pay off over the next 10 years, so it’s going to be something that sits there.”
