Countries attracting the most Aussie ex-pats – ranked from least expensive living costs and tuition fees – are New Zealand, Canada, Germany, Denmark, Ireland, the US, Switzerland, the United Kingdom, and Japan, according to an analysis of UNESCO Student Mobility data.

It comes as average student loan debts in Australia have increased from $15,200 to $24,800 in the past decade, with the federal government last year placing a 7.1 per cent increase on outstanding HECS-HELP student loans in the largest bump of the past 30 years.

Increases in the cost of living have also deterred international students from travelling to Australia in favour of subsidised education across Europe, where enrolments were open for the autumn 2024 semester, according to an artificial intelligence platform developed to search and rank studying costs.

Erudera, the European company behind the AI platform, revealed Australia has struggled to return to the pre-pandemic levels for international students due to increasing costs for both tuition and living.

“The higher education landscape includes significant affordable college options that students may not be fully familiar with,” said Erudera's Alma Miftari.

She said lower-cost institutions are being overshadowed by their big-name counterparts.

“However, these lesser-known universities often offer commendable academic programs at significantly lower tuition fees, and studying abroad offers a rich tapestry of benefits that extend well beyond financial considerations.”

For student Stefan Djukic, however, it was Australia’s cost of living rather than the melting pot of experiences that drove him from Sydney to Europe, where he is studying for a masters degree at Belgrade’s Singidunum University.

The 23-year-old had resigned himself to repaying a HECS-HELP loan over 20 years until a chance conversation with a friend led him to Serbia, where tuition fees start at $1655 per year.

“What appealed to me was that there was a much more personalised experience as the classes – all had less than 30 people – and the teachers would go out of their way to help you learn, a luxury that would cost exponentially more in Australia,” Djukic said.

Australia has 13,268 students studying abroad, with the most in English-speaking countries, including the US and UK.

For Australians, Erudera found that free and nominal-fee education can still be found in countries across Europe:

Finland: Tuition from $6626 per year for English-taught degrees, with an average cost of living between $1620 to $2147 per month, including rent. Foreigners can work up to 30 hours per week while studying. Two-year post-grad work visa available.

Germany: Free to minimal tuition with a cost of living between $1722 to $2115 per month. Foreigners can work full-time for 120 days or part-time for 240 half days without a permit. Eighteen-month post-grad work visa available.

Greece: Tuition from $2485 per year with a cost of living of between $1260 to $1482 per month. Work allowed for 20 hours per week during the semester and 40 hours during vacations.

Iceland: Free or minimal tuition but a higher cost of living at between $2267 to $3273 per month. Students can work up to 15 hours per week during the academic year, but a permit is required. Six-month post-grad work visa available.

Luxembourg: Tuition from $1988 for English-taught degrees, or free/minimal for degrees taught in French, German or Luxembourgish. Nine-month post-grad work visa available. The cost of living is between $2342 to $3372 per month, with work allowed for 346 hours during the academic year.

Malta: Tuition from $1789 with a cost of living between $1570 to $2103 per month. All foreign nationals require a permit to work. Six-month post-grad work visa available.

Netherlands: Tuition from $9940 with average cost of living between $1930 to $2726 per month. Work allowed for up to 16 hours per week and full-time during the summer. One-year post-grad work visa available.

Switzerland: Tuition from $662 per year with an average cost of living between $3101 to $4002 per month. International students can work up to 15 hours per week during school term and full-time during summer. Six-month post-grad work visa available.

The idea was to steer students into courses that would lead to “the jobs of the future” by making some fields (such as history and journalism) more expensive and others (such as nursing, teaching, computer programming and engineering) less expensive.

Fees rose by as much as 117% for some fields and dropped by as much as 59% for others. The government believed this would affect student choices.

Education experts were very critical of scheme. They argue it is not only unfair, it would not work. But to date there have been few studies looking at the evidence.

Our research, with our former student Maxwell Yong, shows the impact of the Job-ready Graduates scheme was modest at best.

Our research

Our study looked at student’s preferences when applying for degrees and final enrolments ie what they ended up studying.

We used data from the Universities Admissions Centre, which handles applications for degrees in New South Wales and the Australian Capital Territory.

We looked at more than 725,000 undergraduates applying between 2014 and 2022. This means we had seven years of data before the Job-ready Graduates scheme was introduced, and two years afterwards.

Using various statistical models, we analysed whether students increased their preferences for fields that became cheaper and reduced preferences for fields that became more expensive.

Our findings

Overall we found the Job-ready Graduates scheme only had a minor impact on course choices.

Just 1.52% of university applicants in our study chose fields they would have not chosen had it not been for the scheme, moving from humanities, arts, law and business to STEM (science, technology, engineering and maths) and teaching.

Maths and statistics had the largest drop of student fees (59%) of any field. But only one out of every 2,000 students responded by changing their preference to maths.

Communications, journalism and media studies had the largest increase in fees (117%). But only one out of every 350 students chose not to preference these fields in response.

This is perhaps not surprising. Under HECS-HELP, students do not have to pay university fees up-front. Many students also choose courses based on their passions and interests rather than the amount of the deferred fees.

Big repercussions

While we found only modest responses to these large fee changes, this does not mean students are not affected. Because of the reforms, many will accumulate much larger HECS-HELP debts.

For a three-year bachelors degree in journalism, the debt grows from around $20,000 to $43,500. For a mathematics degree, the debt falls from around $28,600 to $11,850. The new difference in debts ($31,650) is more than triple the old difference ($8,600).

Higher debts mean more years of making repayments. Longer repayment times may mean delayed home purchases and starting families.

These reforms overturned 25 years of university fees reflecting the earning prospects of graduates. Those likely to earn more post-graduation (lawyers, doctors, financiers) paid a bit more. Those likely to earn less (arts, nursing, teaching) paid a bit less.

The Universities Accord

The Albanese government is in the middle of a broad review of the higher education system, including university fees. The Universities Accord review panel is due to hand in a final report in December.

An interim report was highly critical of the Job-ready Graduates scheme, saying it risks “causing long-term and entrenched damage to Australian higher education”.

As a new model is considered, it is important policymakers understand increasing HECS-HELP debts for some and reducing them for others is not going to prompt students into areas the government deems a “priority”.

Jan Kabatek is a research fellow at the Melbourne Institute of Applied Economic and Social Research, The University of Melbourne and Michael Coelli is an associate professor at The University of Melbourne

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Last year, Greens Senator Mehreen Faruqi introduced new legislation to freeze student debt in a bid to address rising costs of living.

A Senate inquiry advised against the bill on Monday, meaning university graduates may face a debt hike of up to 7 per cent in June.

Senator Faruqi firmly rejected the Committee's decision and said the government was “out of touch with the reality of millions struggling with student debt.”

“An education system that traps graduates in a debt spiral and forces them to repay student loans when they are barely earning above the minimum wage is unsustainable and broken,” she said. 

If successful, the Senate Inquiry found the proposed law could have cost the government $9bn.

University student debt in Australia has more than doubled over the past decade, with the number of HECS-HELP loans rising to nearly 830,000 in 2019. 

The current inflation rate in Australia is 7.8 per cent.

Indexation is applied to debt to keep its real value but also keep it in line with changes in cost of living.

The new proposed indexation rate would mean a potential rise of up to 3.1 per cent since last year's figure.

An estimated three million students will be impacted by the new indexation rates from June.

Amid the anticipated rise, students and alumni have called for indexation to be paused.

University graduate Gemma McWhirter started a petition to stop HECS-HELP indexation which has gathered nearly 5,000 signatures.

Gemma confessed her struggles to pay off her previous HECS debt under the current indexation scheme.

“When I graduated, little did I know that I would not pay off my HECS debt until I was 52," she wrote on social media.

“That is largely because of HECS debt indexation, which doubled my debt while I spent time out of the workforce raising my family.”

According to the ATO, indexation rates for study and training loans apply to accumulated study that has remained unpaid for more than 11 months.

The exact figure for the new indexation rate will be revealed in June.

From June 1, the indexation rate applied to HECS–HELP loans will jump to 3.9 per cent, the highest rate in a decade.

Last year, the rate was just 0.6 per cent.

The average HELP debt is $23,685 based on Australian Tax Office 2020-21 data, suggesting the average debt will jump by about $923 on June 1.

Financial adviser at Sydney’s Golden Eggs, Max Phelps, advised those with student debt to get in before the deadline and pay it down or off, if they could.

But he added that young people should view the debt in the context of their other goals.

“If paying off a student loan suddenly means you don’t have a deposit for a house, and you need to buy a house, then obviously it’s a bad idea to do it,” Phelps said.

“And if you’ve got a personal loan that’s accruing at 10 per cent interest, or a credit card debt at 20 per cent, then obviously you shouldn’t be paying it off.

“There’s no point taking money off a 20 per cent credit card in order to save a 3.9 per cent growth in HECS.

“We don’t want people getting into other debt so they can pay their HECS.”

But for those with spare cash or who could draw from a mortgage offset account with an interest rate significantly lower than 3.9 per cent, “this is the week to pay it off”.

ANU economist Professor Bruce Chapman, whose research interests include student loans, said the increase was “not very important at all for students” and should be ignored.

Chapman said the indexation meant the real value of the debt had been adjusted to take into account inflation and over time, graduate wages would increase by the same amount.

“They haven’t recently, but generally speaking they do. It’s only been the last year or two years there’s been a slight decrease in wage growth compared to the price growth,” he said.

Chapman said the debt would only affect a student in the late stages of paying it off, taking them slightly longer to settle it.

“What this is going to do is add 3.9 per cent to the extent of the debt you owe, which will add a very short period of time, a month or two, maybe more, but not much, to how long you pay the debt,” he said.

“It’s pretty much irrelevant to the situation of any graduate and for even those whose wages might not go up as fast as inflation, it does almost nothing to their life, except add a very short period of extra repayment.

“But if wages keep going up by the same extent, it all gets cancelled out.”

There were 2.9 million people with an outstanding HELP debt in 2020–21, with outstanding HELP debt rising to just over $68.7 billion, up from $66.4 billion in 2019–20, according to the ATO.

Phelps said those who had paid off their student loan often were viewed more favourably by home loan providers.

“Often as soon they’ve paid off their HECS, their serviceability jumps, which means they can buy the property they wanted to buy and didn’t have to wait another six months to save up for it or wait for a pay rise,” he said.

“It can actually increase borrowing capacity by longer having the HECS debt.”

While student loans don’t attract interest, the debt is indexed annually according to the Consumer Price Index, which measures inflation.

Inflation is currently running at 5.1 per cent annually and wages are not keeping pace.

Wages rose by a lower than expected 0.7 per cent from January to March, and 2.4 per cent over the past year, Australian Bureau of Statistics data revealed this month.

Students can start repaying their HELP debt through their taxes, once they earn above $47,014.

They are able to make voluntary repayments at any time, in addition to the compulsory repayments.

The findings appear in Futurity Investment Group’s Impact of University Debt Report, which surveyed more than 1000 Australians who attended university. 

Earnings

The Impact of University Debt Report found stark differences in the earnings of university-educated individuals based on their sex and age. For instance, 39 per cent of females earn less than $40,000, while only 27 per cent of males recorded a similar salary bracket. Conversely, the report also found more than half (57 per cent) of university-educated males earn in excess of $60,000 per year, compared to 42 per cent of females. 

Age also played a key factor in determining earnings, the report found. Roughly one in two (53 per cent) of university-educated individuals aged 30–39 earn more than $60,000 per annum. In contrast, 41 per cent of 22–29-year-old Australians earn less than $40,000.

HECS-HELP debt

The Impact of University Debt Report also found substantial differences between the HECS-HELP loans of males and females. For example, one in four (24 per cent) of the male respondents finished their university studies with a HECS-HELP debt between $20,000 and $50,000; in contrast, close to one in three of the female respondents (32 per cent) had accrued a similar amount of debt.

The report also highlighted that very few Australians are paying fees up front and instead relying on HECS-HELP loans. An overwhelming 90 per cent of university-educated individuals in their twenties have a HECS-HELP debt, with that figure dropping to 72 per cent in their 30s.

Concerningly, almost half (48 per cent) of individuals surveyed who were in their 40s still had a HECS-HELP debt, with “the average time to repay HECS-HELP debt ... now approaching 10 years and ... trending up”.

HECS- HELP debt has also had some impact on home ownership, while 41 per cent of respondents reported their HECS-HELP debt has had some impact on their ability to purchase a car. The amount individuals earned also had a significant impact on their ability to make voluntary payments, which can help pay off HECS-HELP loans over a much shorter time period.

For instance, only a third (31 per cent) of respondents earning less than $40,000 have made voluntary repayments towards their HECS-HELP loan. In contrast, over half (57 per cent) of individuals earning more than $60,000 have made voluntary repayments.

Other key findings
In addition to concerning findings regarding gender inequality in earnings and debt, the report highlighted a number of other issues salient to the sector, including:

• Thirty-five per cent of employed respondents are not employed in their field of study, while a higher percentage of 40-49-year-olds (42 per cent) are also working outside of their study area.
• Close to half (44 per cent) of respondents “are negative or neutral about the value of their university education because of HECS-HELP debt”. 
• The ‘gendering’ of particular professions continues to be significant, with 61 per cent of females studying education, with another 66 per cent studying health. On the other hand, 81 per cent of respondents studying Information Technology are male and 79 per cent studying engineering are also male.

Methodology

Of the more than 1000 survey responses forming the report, individuals were all Australian citizens and had either completed a university degree, were currently studying a university degree, had deferred their university studies or withdrawn from a university course. Fifty-one per cent of respondents were females and 49 per cent were males.

Survey responses were received from all states and territories, with NSW providing the highest percentage (30 per cent), closely followed by Victoria (29 per cent). Fifty-seven per cent of respondents were employed full time, 29 per cent were employed on a part-time basis, and 15 per cent were unemployed. 

Finally, a range of age groups were represented in the survey:

• 20-29-year-olds - 20 per cent
• 30-39- year-old - 25 per cent
• 40-49-year-olds - 24 per cent
• 50-59-year-olds - 18 per cent
• 60+  - 12 per cent

Futurity CEO Ross Higgins said the Impact of University Debt Report shines a light on how loans to fund a university education “can have long lasting effects”. 

“Debt acquired at university should not negatively impact important financial and social objectives, including purchasing a home, a new car, starting a business or later-in-life career changes,” he said. 

“The research also highlighted the growing gender pay gap, which is often exacerbated when females take career breaks to have children, raise a family, then return to work in a part-time role. 

“It’s unacceptable they are earning less and leave university with more HECS-HELP debt than their male contemporaries.”

The Futurity CEO said that, despite the obvious gender imbalances, the survey found that the majority of Australians who attend university are “positive or neutral about the value of their university education despite their HECS-HELP debt and the financial and social impacts”. 

“However, with the cost of a university education exceeding $50,000 in many instances, it’s essential people considering a tertiary education understand debt acquired at university can carry financial and social burdens later in life," he said.

“It’s crucial all Australians understand the value of having dedicated savings and funding for university education so they can avoid large HECS-HELP debts impacting financial wellbeing and their ability to achieve their goals later in life.

“With the total cost of education now demanding a far greater share of the family budget, parents and grandparents need effective savings and investment solutions to meet the educational  aspirations of their children and grandchildren.

“Dedicated education savings and investment vehicles can help cover the cost of university. Not only will they alleviate the financial and social burden later in life, but also enable Australians to upskill, learn new technologies and explore different career paths.” 

The college said the move might exacerbate anticipated workforce shortages – a dearth of 125,000 nurses by 2030 is predicted.

Debate around legislation to reduce the minimum repayment threshold from $55,000 to $45,000 at a one per cent repayment rate will continue when parliament returns from its six-week winter break. The dollar figure is up from the $42,000 proposed in last year's budget.

Liberal senator James Paterson recently told parliament that HELP lending has grown rapidly with the expansion of the demand-driven system.

“The amount accessed for HELP loans has increased from just $3 billion in 2009 to $7 billion in 2016,” Paterson said.

“The fiscal challenge for the government is that HELP repayments have not kept pace with HELP lending growth. From 2010–11 to 2016–17, the level of new debt not expected to be repaid increased from 16 per cent to 25 per cent.”

Paterson said the measures in the bill are modest but fair and added that they will ensure the income-contingent loans program remains sustainable for future generations of students and taxpayers.

But Adjunct Professor Kylie Ward, chief executive of ACN, said pushing nurse graduates to repay their university loans before establishing permanent and secure employment is “unfairly handicapping graduates from realising their potential”.

It would also add to the pressures that students training to be nurses currently face, Ward said.

“People enter nursing because it is a vocation, not for financial gain, but we still have to ensure this vital workforce is able to live on their salary.”

Labor’s Murray Watt rose in the Senate to oppose the Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018.

Watt said: “Let's remember that, by and large, the only students who are taking out loans to undertake higher education are those from lower and middle-income families.

“If you're fortunate enough to come from a rich family, you've got parents who can pay ... your HELP loans. But it's working-class and middle-class kids who are being faced with the prospect of having to repay their loans at a much earlier stage of their career while they are also trying to save up for other things like a house or a family.”

During the debate, South Australian independent Tim Storer said the lower loan repayment threshold is preferable to other higher education cuts, so that future students entering tertiary education would have the same opportunities and quality of education as those already in the workforce.

Australian Greens senator Sarah Hanson-Young opposed the move, saying the government would prefer that nurses, teachers and early childhood educators “went off and did their university degrees, started paying back their loans and then shut up and weren't heard from again”.

With women making up more than 90 per cent of the nursing workforce, ACN added that the move would, in the main, unfairly disadvantage working women.

“We must invest in nurses at all stages of their careers to ensure Australia has a sustainable nursing workforce,” Ward said.

“Education is an integral aspect of ensuring that Australia has the healthcare workforce that it needs to properly care for its community. Investing in our health services and workforce is investing in the health of our population.”

The legislation, which would cut government subsidies for university degrees by an average of 10 per cent whilst introducing a real interest rate to HECS-HELP loan repayments, faces an uncertain fate in the Senate with the Palmer United Party having publicly stated that it plans to oppose the reforms.

PUP’s own policy on higher education, which it took to the federal election last year, states that the party would abolish all tertiary education fees and make higher education free to all Australians.

Despite this, the education minister, Christopher Pyne, said last week he remained confident of negotiating the reforms through the PUP-controlled Senate by the end of the year.

“I’ll negotiate with the Senate over the course of the next three months, and I’m realistic enough to know that the reform bill that we pass in November will probably not be exactly the same as the bill that I am introducing,” Pyne said. “That is the nature of our democracy … and I am looking forward to that negotiation.”

The Coalition’s reforms have the continuing broad support of university chiefs; however, in backing the legislation peak body Universities Australia has renewed its call for two key aspects of the new laws to be amended.

UA chief executive Belinda Robinson reiterated recent calls from G08 chair Professor Ian Young for existing HECS repayment arrangements to be maintained, rather than attract higher interest.

She added that lower income thresholds for mandatory HECS-HELP debt should also be scrapped and pleaded for the Senate to moderate the government’s overall cut in its contribution to tuition fees.

“It is also critical, as with any substantial industry change brought about by [new] policy settings, that a package of support be provided to universities, particularly those that serve disadvantaged and regional communities,” Robinson said.

Meanwhile, on Thursday, federal Labor MPs – who have pledged to fight the reforms – lined up to slam the government’s proposed reforms as “divisive”, “mean spirited” and likely to “place a massively increased debt burden, particularly on Australian women”.

Labor MP Gai Brodtmann said concerns over increased fees under the government’s reforms were already forcing some prospective students to consider studying abroad.

“I recently visited my alma mater, RMIT, and I was shocked to hear from a number of students that they knew people who were planning to move to Europe to attend university because, even with the cost of moving abroad and the cost of living in Europe, it will still be cheaper than studying in Australia,” she told Parliament. “As a result, Australia will lose the precious intellect and potential of these bright young Australians. There will be a brain drain.”

The government’s reforms are expected to pass the lower house next week.

In an address to the National Press Club yesterday in which he spruiked the virtues of the government’s higher education reform package, Pyne acknowledged that for university leaders “the single biggest issue raised” was the rate of interest students would pay.

“We have proposed that students should pay, in effect, the interest rate the Government has had to pay to lend to them,” he said. “This is both fair and important for a fiscally sustainable Higher Education Loan Program.

“I have been consulting with universities and others … on their concerns about this measure and about alternative proposals. Naturally, I will give careful thought to all that has been said in this constructive dialogue.”

Pyne also indicated the government might be willing to consider amendments to its legislation in the Senate.

In response, Universities Australia chief executive Belinda Robinson urged the Senate to consider amendments aimed at improving the fairness of the student loans scheme, along with possible changes to the proposed 20 per cent cut in federal funding for the sector.

“For this package to take its place in the history books of policy reform as something more than a veneer for shifting costs from the government to students, moderating the 20 per cent cut is needed,” Robinson said in a statement. “UA has also long been part of the chorus calling for a change to the proposal to index student loans at the long-term bond rate capped at 6 per cent.”

Robinson also called for the inclusion of packages that would support institutions serving disadvantaged and regional students, should they be negatively affected by the funding reforms.

The bulk of Pyne’s address, however, was focused on reiterating the government’s case for the deregulation of university fees and listing the prominent supporters the reforms have so far garnered from within the higher education sector.

Pyne echoed Go8 chair professor Ian Young’s argument last week that deregulation would allow universities to better support research whilst encouraging greater course and training pathway diversity within the higher education sector.

He took aim at what he described as “a lot of misinformation and outrageous predictions about exorbitant fees” under deregulation, arguing that more considered analysis and modelling indicated any increases to fees would not result in the “stratospheric numbers the opposition are maliciously trumpeting to scare Australians away from higher education”.

The minister also defended the government’s intention to increase students' contributions towards their own higher education costs to about 50 per cent, suggesting current levels represented an unfair imposition on taxpayers.

“Over their lifetime, graduates may earn around a million dollars more than if they had foregone university,” he said. “Currently students contribute only around 40 per cent, on average, while the taxpayer pays 60 per cent. Ask yourself if this is fair when they are benefiting more than those who are paying the bulk of the cost.”

Pyne said he was considering ongoing advice on the reforms and expected to introduce the government’s higher education legislation package to parliament later this month.