Student debt: 'I should pay off my loan when I'm 76'

Veterinarian Tori Tennant has mounting student debt, and she's not alone. The financial burden of studying a degree is being felt by domestic students in full-fee courses for medicine, dentistry and veterinary science programs.

A woman standing at a gate on a farm, with green pasture in the background

Tori Tennant is a vet in regional Victoria.

Insight takes a look at what's behind our debt culture and what rising interest rates mean for the future. Watch Dealing with Debt on Tuesday, June 28 from 8.30pm on SBS or On Demand .
When Tori Tennant graduated from university in 2020, she was left with over $180,000 of combined student debt from her veterinary studies.

Due to recent inflation, her debt has since indexed up to $193,000, a big financial burden on the 25-year-old, who is just starting out in her career.

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“It's hard because I adore my job. I love being a vet,” Tori said.

“It is just a little bit stressful having that on the back of your mind, that that's just something that may always be there.”

Tori studied a Bachelor of Science followed by a Doctor of Veterinary Medicine, which normally takes seven years, however Tori condensed it to six years in an effort to reduce her student debt.

“One less year means one less year you have to put on the loan,” she said.

Now working in a clinic in regional Victoria and making $55,000 a year after tax, she has been making weekly repayments of $75.

But the current index rates are counteracting Tori’s efforts.

“The amount comes off, but then it just comes straight back on plus extra. I haven't put a dent in it yet.”
Tori pictured with a lamb.
Tori works as a full-time vet.
The (AVA) is lobbying in favour of student debt forgiveness programs for regional vets like Tori.

“People have a perception that early-career vets are making a lot of money when the reality is that you've got a big debt, and you're actually not making a significant wage,” said Dr Zachary Lederhose, spokesman for the AVA.

“When it's growing at 3.9 per cent, when your income isn't growing at the same rate the debt is, it can be very disheartening.

“We’re trying to give students a way to tackle that debt while also furthering their careers.”

Tori’s financial burden is not too uncommon for domestic students in full fee courses for medicine, dentistry and veterinary science programs.

While these loans are some of the highest, young Australians have been facing record levels of student debt across the board with showing the average HELP loan now sits at $23,685, an almost threefold increase from 2003’s average of $8,500.

This increase matches the trend seen across Australia with overall household debt increasing to $203,800 according to .

“We have seen over the last 30 or 40 years a massive increase in household debt levels in Australia,” Shane Oliver, chief economist for AMP Capital, said.

“The ratio of household debt to income has gone up from around 40 per cent in 1970. It's currently around 180 per cent of household income.”
Shane Oliver, chief economist for AMP Capital.
Shane Oliver, chief economist for AMP Capital.
This increase in debt is paired with the highest inflation rate we’ve seen in two decades. The Reserve Bank governor, Philip Lowe, estimated that rates are expected to rise yet again from 5.1 per cent to 7 per cent by the end of the year. This increase would result in student loans such as Tori’s indexing up even higher, with the prospect of ever paying it off remaining far out of reach.

“The optimist in me wants to say at some point [I could pay it off], but I think I worked out a rough estimate … I should pay it off when I'm 76,” Tori said.

She is concerned that this debt would limit her chances of taking out a loan for a home in the future.

“It's kind of scary to go to the bank and be like, ‘This is how much I'm earning, this is how much debt I have,’ Like, can I get even more debt?" Tori said.

Mr Oliver said that acquiring debt is necessary in our economy, although he said people need to do their homework when taking out a loan.

“Go in with your eyes open. Make sure you understand the risks that debt can involve, that it's the thing that could send you bust.”

While the financial burden on young Australians is growing, Tori said she had no regrets about chasing her dream career, even in the face of a lifetime of debt.

“If I had to do it again, I would do it again, and again, and again,” she said.

“I would much rather go and do something that I love every day, find value, and help people and their animals and unfortunately, have a large amount of debt than just go to work every day and not find any value or any meaning in that.”

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5 min read
Published 28 June 2022 at 7:00am, updated 28 June 2022 at 9:27am
By Sam Dover
Source: SBS

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