UNIVERSITY, A PATH TO SUCCESS, OR A PATH TO FAILURE? (Hieu Chau ECO002)

Summary

Although university graduates don’t necessarily get higher level entry jobs than non-graduates, there are a lot of jobs where having a degree is necessary to advance
People with degrees are able to earn up to 800,000 more than others
Having a degree doesn’t necessarily mean that you will have a ticket to a high-paying job
There are a lot of factors which influence the pay of workers, but generally, those with degrees are able to receive a better job than those without degrees.

HELP Debt Explained

The help debt is a debt which is charged by universities, for the course yo are enrolling in. Although HELP has no interest rates, it is inclined to inflation indexation, which means that the HELP debt will raise, according to the inflation rate of the Australian economy. This means that unlike most loans, this one doesn’t have any interest rates. Another aspect that the debt has is the fact that it will be taken off your future salary if you earn more than 42,000 a year. this has been lowered from 51,000 in 2017. This means that as you find a job, your debt will gradually pay itself off.

Opportunity Cost

There are an infinite amount of choices which you can choose once you finish high school, but the 2 most popular choices seem to jumping straight into the workforce, or going to university in pursuit of a degree for a dream job.

The first choice is to get a job immediately, and go straight into the workforce. Depending on the experience that you have, it is likely that you have a limited amount of choices, in choosing what you want to become. However, a lot of entry level jobs will still offer you around 40,000 to 50,000 a year. Although you are able to have a starting job, which is equal to graduates, it is unlikely that you will advance any further without a degree.

On the other hand, if you instead choose to go to university, you will incur student debt, as well as spending a couple years of your life studying further, depending on which degree you choose. However, it was found out that within 3 years of being empoyed, the average median salary went from 56,000 to 68,000 annualy. this means that in the long term, it is a lot more likely for you earn a lot more money with a degree, than it is without.

Bibliography

Dayman, I., 2018. Was Your University Degree Worth It?. [online] ABC News. Available at: <https://www.abc.net.au/news/2018-04-11/was-your-university-degree-worth-it/9637850> [Accessed 15 March 2020].

Doyle, J., 2020. Students Set To Face Higher Uni Fees Under Government Shake-Up. [online] ABC News. Available at: <https://www.abc.net.au/news/2017-05-01/university-fees-to-rise-in-federal-government-education-shake-up/8487564> [Accessed 15 March 2020].

Wright, P., 2020. Paying Back Your HELP Or HECS Student Debt, Explained – ABC Life. [online] Abc.net.au. Available at: <https://www.abc.net.au/life/paying-back-your-help-hecs-student-debt-explainer/10982072> [Accessed 16 March 2020].

2 Comments