University students will benefit from housing and JobSeeker boosts after the federal budget but there are fears enrolment rates could suffer as student loan indexation reaches a 30-year high.
Students face an uphill slog to pay off HECS-HELP debts after the Consumer Price Index (CPI) reached 7 per cent on April 26, with no further subsidies announced in Tuesday's budget.
University of Newcastle Professor Roberta Ryan, who directs the Institute for Regional Futures, said the sector faced low enrolment rates amidst increasing debt. She said many potential students were opting for free TAFE programs or full-time work amidst low unemployment rates for the Hunter.
"The whole sector has faced some challenges in terms of first-year enrolment factors," she said. "[The indexation] also impacts people's willingness to commit to graduate studies because they are already dealings with a big HECS debt."
While Professor Ryan was pleased to see a small rise in rent assistance and JobSeeker payments for students, she feared mounting debts would impact graduate wellbeing.
"It really is the perfect storm," she said. "For our region, we've got excessive growth in both rental and general housing costs, we've got relatively low wages, particularly for first year out graduates, and we've got high indexation."
The average degree costs $33,000, which would accrue $2,310 in the next financial year if it has not begun to be paid off. University of Newcastle graduates earn a yearly average of $55,800 this financial year, according to The Good Universities Guide, and therefore make compulsory repayments of about $660 per year.
This figure means first-year out Newcastle graduates are accruing more than two times the amount of debt they are required to pay off.
Educations debts are considered when people apply for mortgage loans, which "significantly impacts" the ability of young works to break into the housing market as cost of living rises, Professor Ryan said.
University Australia's chief executive Catriona Jackson said she was pleased to see the government include cost of living support measures in the budget and felt proposed changes to the HECS-HELP system would have deducted taxpayer money from other vital services.
"Although the overall size of student loans may be increasing, repayment amounts aren't, and university graduates will be no worse off at this current time," Ms Jackson said.
"Any changes to HELP, past or future, should be carefully assessed to ensure they do not risk the policy intent, which is to remove barriers to a university education."
It is too early to know if any of the 4,000 government-funded university places for STEM degrees in the budget will be allocated to the University of Newcastle.
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