How much will it cost for your child to go to university?     040

University education these days is certainly big business.  Total revenue in Australia is in the billions of dollars with more than 100,000 staff being employed. When your son or daughter goes to university you will be contributing to this huge revenue earning industry. But just how much will it cost?  This depends on the type of degree your child is doing, whether it is a double degree, the university attended, and a number of other factors. In this blog post I want to go through the main costs, including some costs you may not have thought about.

Will it all be worth it?  Research consistently shows that the earnings of graduates are significantly higher than the earnings of non-graduates, on average. If your child pursues a career or profession which makes use of the competencies acquired during university then the financial benefits will come. Average earnings in Australia are about $58,000 but the average income of a male in full-time employment is $76,000. The average starting salary for a new graduate is $57,000 but top professional positions could start at $66,000. A teacher, at the end of his or her salary scale, would earn approximately $90,000, which places teachers just inside the top 15 per cent of taxpayer earnings. An accountant, with a large international company or investment bank, could expect to reach $110,000 to 130,000 before the age of 30, with aptitude, application and post-graduate training. Most parents then look upon university education as an investment in the future of their children. But like all investments, preparation is needed, and also the minimisation of administrative costs.

The basic financial setup is that the government pays some of the cost—known as a Commonwealth supported course—of your child’s university education. Your son or daughter borrows from the government the rest of the cost of the degree under the Higher Education Loan program, known by its acronym, HELP. University fees are about $20,000 per year and the student borrows about $8,000 per year, to be paid back later. These repayments begin when your child’s income reaches $42,000 per year, a change from the previous $54,000. At an income of $42,000 the repayment rate will be only one per cent. There are now no discounts for early repayment.

How much your child has to pay greatly depends upon the type of degree, the university, and the duration of the study. The current Universities Admissions Centre guide—something which senior high school students should purchase—sets out likely student contributions. There are three types of courses. Band One courses are cheapest and include the humanities, behavioural science, education, clinical psychology and nursing. Contribution costs range up to about $7,000 per year. Band Two courses, such as computing, architecture, engineering, mathematics and science range up to about $9,000. The most expensive are Band Three courses such as law, dentistry, medicine, veterinary science, accounting and economics, with contributions ranging up to more than $10,000.  A medical student would need to repay about nearly $12,000 per year and courses can be six years.

These three levels of costs are the maximum levels which universities are allowed to charge. Unsurprisingly most universities charge the maximum, but not all. Some universities may only charge $5000 for Band One courses, as an example. Charges are based on a full-time student load of eight units per year, so part-time study each year would cost less, although there would be more years required to finish the degree. As you might expect these charges are likely to increase each year.

This can all really add up but it can be repaid over a period of years, although it remains a liability when your child is being assessed for a home loan.  If you think these fees are high consider the position of international students who must pay, for a science or engineering degree at Sydney University, about $37,000 per year. Fortunately there is assistance through schemes such as Youth Allowance or Austudy, and variety of scholarships. A first step would be a visit to the government website, www.human services.gov.au.

There are a range of other costs such as compulsory student union fees, about $150, now euphemistically called the Student Services and Amenities Fee so students do not know they shouldn’t really be paying it. Then there are textbooks, photocopying, travel, living away from home etc. When added together it can be quite significant. Here is a summary of selected approximate costs, based on a 39 week university year. You will need to work out your own figures which may be quite different depending on the circumstances.

You can see of course that if your son or daughter lives away from home, costs would be far higher, and it may not be necessary to purchase good quality IT. But whatever the costs, they can be addressed using various types of allowances, concessions, scholarships and traineeship programs, as provided by the government, universities, future employers and other sources. The Universities Admission Centre includes some of these details in its guidebook, published annually. Most types of scholarships and traineeship programs where your child works and attends university at the same time, are highly competitive.

The time to start thinking about these is actually during Year 10, because this is when students have to start accelerating their personal development and building up their resumes. For most students, during the university term time and holidays, there is ample time to have a part-time or casual job, but again this needs to be planned for because it is also competitive.

Now most parents would suppose that scholarships go only to students who score very highly on their ATAR.  However now, more than before, there is money available for the financially disadvantaged and also for students who didn’t get the ATAR they hoped for but who can show qualities in other areas. An article by Polly Simons (Helping hand to cover costs, Sunday Telegraph, 16 Oct 2016, p. 97 states that each year Sydney University offers in excess of $84 million to students in a range of situations. There are closing dates for scholarship applications so parents and students do need to be well organised and well prepared, and know just what is on offer out there. Even a small amount of financial help is worth it as Simons points out in her article.

All content copyright—Mark Thackray—Australian Educational Services