Why the rate of older Aussies with 'younger person debt' has doubled

Debt associated with studying at higher education facilities is usually only associated with younger people, but the number of people over 60 with this type of debt has more than doubled in the past five years.

And, perhaps more alarmingly, it isn’t due to more older Australians turning to study in their golden years, but rather an increased amount of people pushing retirement and still owing a Higher Education Loan Program (HELP) debt (formerly known as a HECS debt).

According to a report in The Sydney Morning Herald, the size of the HELP debt in 2019-20 for those aged 60 is $1.3 billion, which was up from $576 million in 2014, with experts predicting more people will die with this debt unpaid.

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As well as the size of the debt growing, the number of people aged over 60 still owing money to the HELP scheme also grew.

In 2014, there were around 56,000 in this age group still owing a debt, which had ballooned out to more than 100,000 in 2019-20.

While over-60s account for just 3.5 per cent of people with a HELP debt, the growth in this cohort has outpaced that of other age brackets in recent years.

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The government-funded HELP scheme allows students to defer paying for their degree until they earn a taxable income (currently $46,620).

Professor Andrew Norton, a higher education expert from the Australian National University (ANU), told The Sydney Morning Herald that he didn’t believe that this growing debt was caused by a boom in people undertaking degrees later in life.

“The dominant explanation is simply the ageing of people who borrowed at younger ages, with a bit of extra debt coming from people who were starting studying at a relatively old age,” Prof. Norton said.

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“For example, in 2019, there were only 1260 people over 60 who started a bachelor degree – so not massive numbers. I think we are starting to see the ageing of the original HECS cohort.

“Even though very low amounts are being written off at the moment each year, over time this will turn into a big number once we’ve got all these older people who are just not repaying. Eventually, they’ll pass away and debt will be written off.”

Council on the Ageing (COTA) chief executive Ian Yates told the SMH that the low interest charged on HELP debts made them less likely to be paid off early.

“People don’t prioritise paying off HELP debt as much [as other debts] as it’s traditionally so low interest,” Mr Yates said.

The COTA chief explained that some people might plan to pay off the debt in retirement using super.

“I suspect in many cases, though, the debt will never be recovered,” he said.

Federal education minister Alan Tudge told the SMH he expected many older Australians to take up the option of studying later in life to improve their qualifications.

“Older workers should have the same opportunities to upskill and reskill as young people entering the workforce or those already working,” Mr Tudge said.

“When people get additional qualifications, they typically increase their salary, regardless of the age they upskill.”

Do you still have an outstanding higher education debt? How many years ago did you finish studying? Do you think the government should pay for higher education? Why not share your thoughts in the comments section below?

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Written by Ben