University is too expensive. The cost of studying popular courses such as law, commerce and social sciences is almost nine times higher than when HECS was introduced in 1989. This is almost quadruple the overall rate of inflation and has burdened students with much larger debts that take far longer to pay off.

These rising costs are likely to intersect with and amplify inequality between Australian states. There are substantial economic and social inequalities between Australian states, notably by some metrics Australia’s richest state (Western Australia) is about twice as prosperous as South Australia and Tasmania, even when population differences are considered.

According to data from the Australian Bureau of Statistics the average earnings for someone with a bachelor’s degree is about $80,000 in South Australia, $83,700 in Tasmania, and above $90,000 in all other states. While graduate earnings differ, university is not any less expensive in Hobart and Adelaide than elsewhere: a three-year arts degree is likely to cost about $50,000 at the University of Sydney, the University of Adelaide, and the University of Tasmania.

Differences in earnings between states mean that these degrees are likely to take far longer to pay off for Tasmanians and South Australians. In simple terms, comparing HECS repayments for someone on average earnings with the size of a $50,000 student debt, it will take South Australians and Tasmanians about 15 years to repay this debt, around five years longer than those in the other states.

This is inequality has been amplified by the expanding cost of degrees, particularly the Morrison government’s decision to drastically increase the cost of popular degrees such as arts. If these student debts are closer to $20,000, as was the case before the Morrison reforms, it would only take South Australians and Tasmanians around six years to repay, only two years longer than the other states. All of these rough figures optimistically assume that graduates are able to find appropriate work in their home state at this average earnings level.

Given the consistently high cost of university and significant differences in graduate earnings across the country, it is unsurprising that South Australian and Tasmanian university graduates often migrate to other states for work. Unfortunately, these ‘brain drains’ may expand interstate inequality.

When skilled workers move from less to more prosperous states, it can help boost productivity and economic growth in their new state while leaving skill shortages behind in their home states.

The Government has announced a range of reforms to the HECS system, including wiping 20% of existing student debts and adjustments to HECS repayments. While these reforms will deliver necessary relief, they do little to address the underlying cause of ballooning student debts: the expensive cost of university education.

While the Government has announced it is working on plans to adjust the cost of university degrees, few specific details have yet been announced. Hopefully, these plans help reduce rather than exacerbate interstate inequalities.