Is university worth it when the cost of living is so high?

What’s the average cost of a university degree?

First, we'll get down to brass tacks: How much do people spend on university?

In 2023, the average bachelor degree costs between $20,000 and $45,000, though most Australian undergraduates don’t pay for university upfront. They take out a HECS-HELP loan with the government to cover the cost of their studies, and only start repaying that debt when they earn a certain amount of money.

While HECS debt doesn’t attract interest, it is ‘indexed’ every year on 1 June to keep up with the cost of living. This means your HECS increases slightly each year until you pay it off.

In 2021, when inflation was low, HECS debt was only indexed at 0.6%. But in 2023, with inflation up, HECS debt will be indexed at 7.1%, so graduates are going to see a higher-than-usual increase on their student loans.

You’ve probably read a lot about this in the media over the last few weeks, and it’s important to understand if you’re starting to think about university.

With HECS debt going up, is university still worth it?

Financial experts actually refer to HECS as “good debt” because there’s no deadline to pay it off, and repayments only increase in line with your salary. They view investing in a degree as an investment in your future earning potential.

And as financial advisor Jacie Taylor recently told the ABC, it’s unlikely that HECS debt will be indexed at such a high rate for long. “It may just be that this year becomes a blip”, she explains, with history suggesting inflation will go back down.

The benefits of a university education

It’s easier to find full-time work throughout your life

The job market can be competitive, no matter your industry. And that will only become truer in the future, when highly skilled technical experts will be even more in demand than they are now. The National Skills Commission recently found that nine out of ten new jobs will require a post-school qualification by 2026.

As of now, those with a certificate, diploma or degree are 79% more likely to be employed than those without a qualification. If you have a bachelor degree or higher, you’re even more likely to have a full-time job. A degree can give you that extra bit of job security in a constantly changing world.

Your earning potential goes up

Bachelor degree graduates on the whole have access to more diverse job opportunities, meaning they’re better paid. People with a bachelor degree currently earn a median weekly wage of $1,500, while people without a qualification only earn a median wage of $934 a week.

This goes up over time, with graduates seeing an 88% increase in their salary in the decade after they finish uni. These higher lifetime earnings can make it easier to weather periods of economic uncertainty, like what we’re seeing right now.

There are more opportunities to find your path in life

A degree gives you the space to immerse yourself in an area you’re passionate about. This can lead you to interests and careers you never even knew about, which could change the course of your whole life.

Plus think of the people you’ll meet, and the exciting new ideas that you’ll be exposed to, helping you grow as a person. It can be hard to put a price on that.

What to do if you're still weighing up your options

For more information about how HECS works, book a free one-on-one call with an Open Universities Australia student advisor. They can walk you through the tuition fees for different online degrees, and potentially even steer you towards some lower cost options in your area of interest. With a decision like this, it never hurts to speak with someone in the know. When your dream career is concerned, every piece of advice helps.

Please note: The information included in this blog is general in nature and should not be taken as financial advice. Speak to a qualified financial advisor if you want guidance on your specific circumstances.