'Failed' university scheme hurting home ownership prospects

The Australian government faces mounting pressure to dismantle the Job-Ready Graduates scheme, a policy that has dramatically inflated the cost of higher education for many students, consequently jeopardizing their ability to purchase homes.

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I just chose to eat the cost.

Introduced in 2021, the scheme aimed to incentivize students toward fields deemed a government priority, such as nursing, computing, teaching, and engineering, by making these degrees cheaper. However, it led to a sharp increase in the cost of humanities, arts, and law degrees. Chith Weliamuna, a 20-year-old pursuing a double degree in law and politics, philosophy, and economics, anticipates accumulating nearly $90,000 in debt by graduation, a burden he has accepted due to his passion for his studies.

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Economists argue that this substantial student debt directly impedes young Australians' home ownership aspirations. Beyond reducing savings capacity, banks factor existing student loan obligations into their assessment for mortgage approval, thereby limiting the loan amount a bank is willing to offer. Shane Oliver, chief economist at AMP, stated that high student debt constrains access to the property market, either delaying entry or making it impossible altogether.

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unfinished business

Education Minister Jason Clare has conceded that the scheme "failed" and remains "unfinished business." He is currently awaiting recommendations from the Australian Tertiary Education Commission (ATEC), which is conducting a comprehensive review of university funding and expenditure. However, this advice is not expected for at least another year. ATEC commissioner Barney Glover has also echoed the sentiment that the scheme has not succeeded. In the interim, an estimated 300,000 domestic students are projected to enroll in the most expensive degree programs next year, facing maximum annual contributions of $18,025.

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