Poverty is a real threat for students

The proportion of students enrolled in higher education has been consistently on the rise for years. With this influx, there is also a larger number of graduates relying on income support, as it can be hard to land a job.

As of 2021, there were 1.6 million students enrolled in higher education, up by 27.4 per cent in the decade.

Coinciding with the rise in students is the number of people relying on government support. As of June 2020, twenty-three per cent of young people aged 16–24 received an income support payment, compared with 14 per cent in June 2019.

While COVID-19 certainly played a role in this rise, similar trends were recognised pre-pandemic. According to a study by the National Union of Students (NUS), 2019 “levels of student income support range from 29.0 per cent to 53.2 per cent of the Henderson Poverty Line for those living at home and 52.6 per cent to 66.0 per cent for those living away from home.”

The report noted that income support has slightly helped to increase poverty line percentages, but more can be done. In fact, a 2018 Universities Australia (UA) study found that 14 per cent of students across the country regularly go without food or other necessities because they can’t afford them. Meanwhile, 58 per cent said their financial situation is often a source of worry.

Increasing income support is a path forward to protect up-and-coming students facing financial hardship: “Students who are working and/or receiving student income support are still facing poverty; we as a nation need to address the low-income realities that Australian students face. From this, NUS believes that to support students out of poverty, we need an increase in student income to provide a solid foundation for their studies,” said NUS.

The same UA study highlighted the median annual income for full-time domestic undergraduate students is $18,300, while their median spending is $14,200. One-third have estimated expenses exceeding their estimated income.

Currently, the government offers varied youth and student allowances. According to the Services Australia website, the table identifies the parameters:

• Single, no children, younger than 18, and live at your parent’s home: $395.30 per fortnight
• Single, no children, younger than 18, living away from your parent’s home to study, train or look for work: $639 per fortnight
• Single, no children, 18 or older and live at your parent’s home: $455.20 per fortnight
• Single, no children, 18 or older and need to live away from your parent’s home: $639 per fortnight
• Single, with children: $806 per fortnight
• Principal carer of a dependent child granted an exemption from mutual obligation requirements for foster caring, non-parent relative caring under a court order, homeschooling, distance education or large family: $987.70 per fortnight
• A couple, with no children: $639 per fortnight
• A couple, with children: $691.80 per fortnight

With the cost of living rising and expenses becoming unfeasible, even for those regularly working, these incentives may not be sustainable.

According to the National Youth Commission Australia (NYCA), income support is pushing young Aussies into poverty.

“Youth Allowance and JobSeeker payments for young people fall, well, short of what is needed to meet the costs of daily living, particularly for those who must live away from home or who cannot rely on help from parents. High housing costs force students and jobseekers into poverty and housing insecurity, compromising education and employment outcomes, physical and mental health,” said NYCA.

“In short, we need a different model of income support that is simple, coherent and provides adequate support for young people trying to find a foothold in a casualised and uncertain labour market.”

Debt is a real threat for students, and that’s before considering the HELP payments that are owed after university completion. UA revealed that most of the debt for students is made up of tuition fees deferred through the HELP scheme. Full-time domestic undergraduate students’ median estimate of their debt at graduation is $38,200. For full-time domestic postgraduates, the median estimate is $54,100, as of 2017.

Balance the financial burden with the burnout and stress of entering the workforce, and you have a cocktail of disaster that can be detrimental to young people’s health.

A lack of experience can deter employers from hiring a graduate. Implementing work experience schemes could alleviate this issue and allow for students to gain experience, and possibly an income, prior to entering the job market.

However, the pandemic saw many of these initiatives fall to the wayside as remote and hybrid working phased out much of the onsite learning in workplaces.

These themes can be even more severe for international students, with up to one-third struggling to find work six months after completing their studies. In 2021, the full-time employment rate for international graduates with an undergraduate degree was 43 per cent compared with 68.9 per cent for domestic graduates.

Meanwhile, US graduates face similar troubles, with studies claiming less than half are confident about their career prospects after finishing their studies. Compounding this is the 38 per cent of employers who avoid hiring recent graduates, and 58 per cent of managers, directors and executives who say this cohort is unprepared for the workforce.

Support from the government and the open-mindedness of employers could be what turn these issues around and help lessen the hanging burden of poverty for students and graduates.

Jack Campbell

Jack is the editor at HR Leader.