Female university graduates in Australia are earning less than men while racking up more debt from their degrees, new research reveals.
The Futurity Investment Group’s university debt report, which surveyed more than 1,000 Australian graduates, found 70% of males earned more than $60,000, compared with 59% of women. Men were also more likely to be earning more than $100,000 (35% compared with 21% of women).
At the same time, nearly half (46%) of female graduates finished university with a Hecs (Higher Education Contribution Scheme) or Help (Higher Education Loan Program) debt of between $20,000 – $50,000, a rise of 14% in three years and slightly higher than men (43%).
Kate Hill, an executive at Futurity Investment Group, says the type of courses that have higher proportion of women tend to lead to lower paying professions, despite the cost of education being similar to other degrees.
“The outcome as far as job opportunity and career growth, coupled with traditional family roles where females tend still to be the partner who takes time off for care, combine to form what we’re seeing now,” she said.
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“A lot of the traditional female professions – teaching and nursing – over the last 40 years have become professionalised, requiring university degrees and gathering debt. Traditional male trades haven’t been – and they’re cheaper, you’re paid as you go through that process.”
Care degrees including teaching, nursing and social work are disproportionately made up of women and require hundreds of hours of unpaid work placements to complete. In contrast, people pursuing trade apprenticeships are paid during their training.
The report by Futurity, an independent finance company that offers education bonds for students, found the long-term financial and social burden of Hecs-Help debts had broadly risen in the past three years, with the average balance jumping by 10% to $22,636.
The majority (61%) of respondents – aged between 22 and 29 – finished university with a Hecs-Help debt of between $20,000 and $50,000, an increase of 13% since 2020.
Debts are also taking longer to be paid off, affecting major life events including housing and starting a family.
The average time to fully repay the debt is now 9.5 years, trending up from 7.5 years over the past 15 years.
More than two-thirds (68%) of those who attended university have Hecs-Help debts in their 30s, and just over half (51%) are still paying off their debt in their 40s, the report said.
And 59% of respondents said their debt had affected their ability to buy a home, a 9% jump from three years ago, while 16% were unable to afford medical and dental treatment because of their debt.
The research aligns with data from the Australian Tax Office that shows more thanthree million Australians have a Hecss-Help debt, totalling $74.3bn. That is a 20% rise in the past five years.
Of those with student debts, 60% are women, who are holding 58% of the total debt.
Hill said the average time to repay debt would soon blow out in excess of a decade when factoring in the soaring inflation over the past 12 months.
“The average Help debt has increased and each subject is more expensive than it was last year,” she said.
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“While we’ve seen wages uptick in more recent times, previously low inflation dwarfed increases and people’s ability to pay back a large amount has fallen.
“It’s a concern, not just financial but impacting so many key social factors for individuals … their ability to be on top of finances [and] to progress their life as they’d like to.”
Education minister Jason Clare said the University Accord process, due to report by the end of 2023, would consider issues of affordability and the gender pay gap.
“Help encourages more people to engage in university education and obtain qualifications ... this is important because we know nine out of 10 jobs in the future will require a tertiary qualification.
“Help has played a big part in getting more women a university degree, but more needs to be done to address the gender pay gap.
“The secure jobs, better pay reforms we passed through the parliament puts gender equality at the heart of the workplace relations system.”
Senator Mehreen Faruqi, the Greens spokesperson for higher education, has introduced a bill to freeze student debt and raise the minimum repayment threshold, with support from peak education unions.
She said people shouldn’t be “punished with a debt-sentence” for studying.
“The problem is about to get much worse, with student debts likely to be indexed by around 7% in June based on modelling prepared for my office,” she said.
“Women already bear the brunt of soaring debt and rising indexation will make that even worse. Sitting back and allowing the student-debt crisis to worsen is fundamentally anti-women.”
Faruqi called on the government to dump the stage-three tax cuts and support people burdened by “crushing student debt”.