A new study by Australian Financial Services (AFS) has found a $20,000 annual increase in student debt is more than twice the price tag of a good medical degree.
The study, conducted by the University of Queensland and the Australian National University (ANU), looked at student loan repayments made by graduates between January 2018 and December 2020.
The study found a median loan amount of $20.5, compared to a median of $12.9 for graduates with no medical school.
The average total debt per student was $29,800, which was almost $10,000 higher than the average student debt for graduates from medical schools that do not have a medical degree, according to the report.
“The average student loan balance is almost double the amount the average person pays for a university education,” the report said.
“With the rise in medical students, average student loans are expected to continue to increase.”
The report said average student borrowing is $23,800 for those who completed medical school and $23.8 million for those with no degree.
In 2017-18, the average average student borrowed $16,000, with $10.5 million in outstanding debt.
“There is a significant difference between the average undergraduate and medical student, with one quarter of graduates with a bachelor degree having debt of more than $100,000,” the study said.
The report’s authors, Dr Simon Rees, from ANU’s School of Economics and the School of Public Health, and Dr Paul Coughlan from the University’s Centre for Health Policy and Research, said they were surprised by the amount of debt students were taking on to study medicine.
“These are graduates who, in terms of income, are struggling to make ends meet, yet they are saddled with medical debt that is almost triple what their average household income is,” Dr Rees said.
Dr Rees and Dr Coughlin were both co-authors of the paper.
“What we were surprised to see was that, in the past, students had paid off the debt in the form of student loans, but now that we have these loans, they are still saddled in the process of paying it off,” Dr Croughlan said.
It was a significant increase from the average debt of about $20 a year for graduates without a degree.
“It’s a huge number for an undergraduate degree, which is something that’s very rare,” Dr Bick said.
“It’s actually quite remarkable.”
Dr Reus said the trend of graduates being indebted in their late 20s and 30s was likely due to the increase in the cost of living.
“This trend has to do with the fact that people are starting their careers and then getting married and having kids and things like that,” Dr Deane said.
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