2 min read

The Reality of Student Loans in Australia: Separating Fact from Fiction

by Tenzing Tsewang



If you're thinking of going to university after leaving high school, then you're likely going to need to apply for a student loan. It's a big decision that requires you to know the facts. Here, we look at what a student is, what it's for and the reality of how you pay it back.

Are you thinking of heading to uni to continue studying? If so, you're part of the approximate 58% of students who take this path. When talking with your mates about your future plans, a topic for discussion is likely to be the need to take out a student loan when studying for your undergraduate degree. However, this is a BIG decision that you need to think about seriously.

As you're standing on the cusp of higher education, you might hear all sorts of things about the complexities of student loans, so here we help you separate fact from fiction by laying things out as they actually are. Officially known as the Higher Education Contribution Scheme or HECS for short, this financial support has short and long-term implications.

You're absolutely not alone in navigating this terrain, but it's important that any decision you make is an informed one. So, come with us now as we give you an unvarnished view of what to expect.

What is a Student Loan in Australia?

A student loan in Australia is designed to help you cover your educational costs as you pass through your degree course. Now, here's the daunting part - on average, it means it will put you in $24,771 of debt, according to 2022 figures. Don't worry, though, because as you'll see moving through this article, it's not paid back like any other type of loan.

Basically, a student loan is a financial bridge that allows you to pursue a degree without needing to pay your expenses upfront. Instead, you're borrowing money to pay for tuition.

Student Loans Cover Tuition Fees

Primarily, student loans in Australia are to cover your tuition. These fees are paid directly to your university, so you don't see that money. This allows you to attend classes and get the qualifications your intended career requires.

They DON'T Cover Textbooks & Supplies

Beyond tuition, you'll have other expenses like textbooks and other course materials that you will have to meet the cost of yourself. Roughly speaking, this costs around $650 per year.

They DON'T Cover Food, Accommodation & Equipment

Accommodation and food are obviously needed while studying. However, this is something else that you or your parents need to be able to cover. You'll also need to be able to fund other school-related costs like equipment (laptops), stationery and field trip fees.

If this is not possible, you can apply for Financial Aid and Long Term Loans, which are assessed for eligibility by the University Fund Committee. They look at your personal income, as well as that of your parents (as they'll need to be your guarantor), with some even requiring your expected expenditure for each academic year.

Being Well-Organised is a Must!

As we can see, going to university is a big commitment in terms of time and money, and getting through financially requires you to be well-organised. That's why it’s not a good idea to go out spending your money on nights out when it should be kept for day-to-day student life.

Being sensible with your money can save you so much time and stress, as when you're not, you can get into trouble and need to reach out for emergency funds from friends or family. It's the last thing you need when you've got studying to do!

So, When Do I Pay My Student Loan Back?

Ok, so the good news as a high school leaver is that it may be quite a few years before you start paying your student loan back. You pay nothing at all until you start earning at a certain level. Let's take a more detailed look at how it breaks down.

  • Payment Starts Once You Earn Over $51,550 Per Year

Unlike traditional loans, student loans are designed to be more manageable in how they are repaid. It's aligned with your income so that you're able to afford it more comfortably. For the year 2023-24, the earning threshold is figure is 2023-24 year is $51,550 per year.

  • "How Much Do I Have to Pay Back Each Month?”

Depending on your income level, the amount paid back is usually between 1-10%, so the more you earn, the more you'll be paying back each month. There's no interest added, but it is indexed each year in line with the cost of living.

  • "How Are Student Loan Payments Taken?"

That's not something you have to worry too much about, as the payments are taken automatically via the tax system. You'll just see it as a deduction on your payslip. You can also make additional voluntary repayments whenever you like - something that can help you pay off your loan much faster and reduce the total amount you have to pay.

With a crucial decision like this, it's so important to understand how student loan repayments work. It's there to help you navigate college or university, but it does require you to be financially responsible, or you could run into trouble. While you don't have to pay it back until you can afford it, you do have to pay it back, so these are important factors to consider.

Deciding Whether Work or Uni Is Right For Your Future

If you're still trying to work out whether the university or work route is right for you, the Wandr learning and discovery platform is here to help you. It's a tricky decision for sure, but also an important one, and our courses can give you a great idea about which path to take.

Whether talking about our Essentials, Trial Run, Career Kickstarter or Skillin' It! courses, they give you an up-close view of a wide variety of roles and industries while providing you with expert guidance from real-world professionals who understand what's needed to succeed.

Among the many areas covered by Wandr training, you can sample careers in…

  • Business, Management
  • Mental Health & Wellness
  • Travel & Tourism
  • Entrepreneurship
  • Graphic Design
  • Fitness & Nutrition
  • Photography
  • Cyber & Tech
  • Fashion
  • Beauty

Without having to commit in any direction, you can get great insight into what life is really like in specific roles. You don't want to spend 3 years at uni studying for a job that you end up not liking, and with Wandr training to guide you, you won't have to!

Choose the Right Professional Path With Wandr Training

Making your way after leaving high school can be frighteningly complex and altogether confusing. However, thanks to the Wandr discovery and learning platform, all the stress is taken away. Our interactive, video-led courses cover thousands of topics, and our 1-to-1 career coaching offers priceless insight that helps you find the right professional path.
To discover more about us and the benefits of Wandr, visit us today at www.wandr.au, where you'll see everything you need to know! Alternatively, why not have a relaxed chat with our friendly team by calling 1300 611 404 or emailing support@wandr.au to learn the many ways in which we can help?

by Tenzing Tsewang



If you're thinking of going to university after leaving high school, then you're likely going to need to apply for a student loan. It's a big decision that requires you to know the facts. Here, we look at what a student is, what it's for and the reality of how you pay it back.

Fitness and Business Mentor



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