Student rates

“I should repay my loan at 76”

Insight examines what is behind our culture of debt and what rising interest rates mean for the future. Watch Dealing with Debt on Tuesday, June 28 from 8:30 p.m. on SBS or on demand .
When Tori Tennant graduated from college in 2020, she found herself with over $180,000 in combined student debt from her veterinary studies.
Due to recent inflation, her debt has since been pegged up to $193,000, a big financial burden for the 25-year-old, who is just starting out in her career.
“It’s difficult because I love my job. I love being a vet,” Tori said.
“It’s just a little stressful to have that in your head, that it’s just something that can always be there.”
Tori studied a Bachelor of Science followed by a Doctor of Veterinary Medicine, which normally takes seven years, but Tori condensed it to six years in an effort to reduce her student debt.
“One less year means one less year you have to borrow,” she said.
Now working in a clinic in the Victoria area and earning $55,000 a year after tax, she pays $75 a week.
But current escalation rates thwart Tori’s efforts.

“The amount comes off, but then it comes right back, plus an extra. I haven’t put a dent in it yet. »

Tori works as a full-time veterinarian.

The (AVA) is pushing for student debt forgiveness programs for regional vets like Tori.

“People feel like early-career vets make a lot of money when the reality is that you have a lot of debt and you’re not actually making a big salary,” said Dr. Zachary Lederhose, AVA spokesperson. .
“When it increases by 3.9%, when your income does not increase at the same rate as the debt, it can be very disheartening.
“We’re trying to give students a way to tackle that debt while advancing their careers.”
Tori’s financial burden is not too uncommon for domestic students taking full-fee courses for medicine, dentistry, and veterinary science programs.
Although these loans are among the highest, young Australians have faced record levels of student debt across the board with showing that the average HELP loan now stands at $23,685, an almost three-fold increase from the 2003 average of $8,500.
The increase matches the trend seen across Australia, with overall household debt rising to $203,800 according to .
“We have seen over the last 30 or 40 years a massive increase in the level of household debt in Australia,” said Shane Oliver, chief economist for AMP Capital.

“The household debt-to-income ratio fell from around 40% in 1970. It now accounts for around 180% of household income.”

Shane Oliver, chief economist for AMP Capital.

Shane Oliver, chief economist for AMP Capital.

This increase in debt is accompanied by the highest rate of inflation we have seen in two decades. Reserve Bank Governor Philip Lowe estimated that rates should rise another 5.1% to 7% by the end of the year. This increase would lead to even higher indexation of student loans such as Tori’s, with the prospect of ever paying it back remaining out of reach.

“The optimist in me means at some point [I could pay it off]but I think I made a rough estimate…I should pay it back when I’m 76,” Tori said.
She fears that this debt will limit her chances of taking out a loan for a house in the future.
“It’s kind of scary to go to the bank and say, ‘This is how much I earn, this is how much debt I have’, like, can I have even more debt?” , Tori said.
Mr Oliver said acquiring debt is necessary in our economy, although he said people needed to do their homework when taking out a loan.
“Enter with your eyes open. Make sure you understand the risks that debt can entail, as it is the thing that could send you into bankruptcy.
As the financial burden on young Australians mounts, Tori said she has no regrets about pursuing her dream career, even in the face of a lifetime of debt.
“If I had to do it again, I would do it over and over and over again,” she said.

“I would much rather go and do something I love every day, find value and help people and their animals and unfortunately have a lot of debt than go to work every day and not find value. or meaning to that.”