University students say the Labor Government’s recent move to cut 20 per cent off student debt and change repayment rules is an important and welcome step in the right direction. But others are concerned the legislation does not go far enough in addressing the most troublesome — and gendered — aspect of the student loan crisis. 

Women shoulder nearly two-thirds of Australia’s $82 billion student debt total, with an uneven impact across different socio-economic and cultural groups. 

The debt divide

There are more women earning university degrees than men, so it may seem reasonable that women would have a higher share of student debt. 

But Monash University PhD candidate Amanda Peters, who researches gender equality policy, says women have a tougher time paying it off than men.

The burden of care and the segregation of women and men in the labour force are the primary drivers of this inequality, Peters says.

This means men dominate high-paying industries and are more likely to advance into senior roles.                                                                     

“That is really important to this, because at that stage of your career — maybe in your late 30s and 40s — many women are having children or working part time in order to care.

"So, in that crucial life stage, men are likely to be surging ahead in their careers and earnings, and able to pay off their debt, whereas women aren’t,” Peters says.

“What it means is that women become saddled with debt for longer and because it is going up every year with indexation; they will be repaying more over time.” 

Peters says a woman is more likely than a man to have student debt later in life, which can impact her financial security and ability to borrow if there is a separation. 

“It really diminishes women's financial security later in life if they've still got debt.”

New rules 'a trade-off for women'

Under Labor’s new repayment rules, people won’t start repaying their student loans until they earn more than $67,000 — up from $54,435 — and repayment rates will only apply to income above that amount.

Economist Matthew Maltman of the e61 Institute says “graduates will end up paying off their debt at a slower rate".

"They will be paying less of their debt earlier on in their careers and will shift some of their debt repayment on to later on in life,” Maltman says.

“This will have a meaningful impact in terms of increasing take-home pay earlier on in life and may help young people to buy a house or save up to start a family.”

The trade-off? Women who take time out of the workforce to have and care for children will carry a higher stock of debt at that stage of life, which could take longer to pay off, he said. 

“For some people, they're just not ever going to be able to pay that off. And so, at that point, they're quite disincentivised to return to work.”

Women’s officers of Monash’s Law Students Society Ki Li Clarke and Zara Nazikian say they hear from both undergraduates and postgraduates struggling with vast student debt.

Clarke says Labor’s new repayment rules may make it harder for women who take leave from work to pay off their student debt.

“It sees a full-time student that will become a full-time worker, that is a man, a white man, and they will have a career progression and then they will be able to pay off their debt," Clarke says. 

"But if you work less or take a break and then can't get back into the workforce as easily or you don't get those promotions, it is just accumulating.”

The 'Job-ready' Graduates legacy

Women’s higher student debt is also attributable to the Scott Morrison-era Job-ready Graduates (JRG) package, which increased fees for some degrees and reduced the cost of others.

It was intended to encourage more enrolments in priority courses by reducing their fees, such as science, engineering and mathematics, while increasing fees of other courses.

Many arts and humanities degrees more than doubled in cost, and law and commerce degrees increased significantly as well.

Research by the e61 Institution shows the one-off, 20 per cent cut will mostly benefit recent graduates who paid increased fees, but does little for current students, creating inequities.

Clarke says the biggest issue facing students is the JRG increasing their debt burden further.  

“The perception in the JRG that arts units are not leading to a measurable career feels quite sexist in its bias,” she says.

“Units or degrees that are considered more feminine and social-related are less prioritised and less valued, even though they are the ones making meaningful change.”

Importantly, Clarke says the rising fees weigh most heavily on women from marginalised backgrounds, for whom a humanities or social sciences degree provides an important university entry point.

Nazikian says students from lower socioeconomic backgrounds may have to choose less expensive courses to reduce their expenses, but economically advantaged students can pursue their preferred studies without such considerations. 

“I think it is very classist to have a system where people who have the money to pay these full fees and rely on their parents, and potentially live with their parents, can pay these full fees, so they are able to do this extra study,” Nazikian says.

This is evident in postgraduate options like the Juris Doctor law degree, which Nazikian is studying, wherein students often hit the HELP loan limit, which is around $126,000, before completing all required units, leaving $20,000–$30,000 to pay out-of-pocket.

This is out of reach for many minority students, with researchers warning this lack of representation in the legal profession could be contributing to difficulties in accessing legal services.

Clarke says the JRG also ignores people’s personal preferences and skills. 

“If it means they have to compromise what they want to do in order to do that, not even for enjoyment but for longevity, can they do a career for their whole life that they do not necessarily feel passionate about? That is something we would not want,” she says.

Agreeing with Clarke, Nazikian says “just because you wave money over at someone over here, it doesn't mean you are going to be particularly good at it”.

MOJO News has contacted Federal Education Minister Jason Clare for comment.