Law students buck trend on government student loan losses

By Melissa Coade|07 April 2016

Amidst recent controversy around the spiralling costs of the government's student loan program, law students are defying the weak job market as one of the groups with the strongest prospects of repaying their debts.

A Freedom of Information (FoI) investigation has shone the spotlight on ‘doubtful debt’ – a classification that refers to debt never expected to be repaid. The ABC yesterday revealed that the federal government is forecasting losses in excess of $13.5 billion dollars on four years’ worth of loans.

Graduates who do not meet the $54,000-a-year income threshold to repay their HECS-HELP fees are captured in these losses, with the government subsidising the interest on the debt. As a result, the numbers contributing to the doubtful debt phenomenon are not necessarily unemployed graduates.

Commenting on the growing rate of students graduating from law courses, Council of Australian Law Deans (CALD) Chair Professor Carolyn Evans, said law graduates are among the most likely (along with medicine and dentistry graduates) to repay their HECS-HELP debt.


“If you look at the Grattan Institute report, you’ll see that law students overwhelmingly fully repay their HECS-HELP debt and only a very tiny percentage don’t make repayments compared to other disciplines,” Prof Evans said.

“I think this also has [wider] implications, given that you repay only after you get to a certain salary level. This suggests that law graduates are doing well in the employment market compared to those from many other disciplines.”

The report to which Prof Evans refers is Doubtful debt: the rising cost of student loans. It shows that in 2011 fewer than five per cent of LLB graduates made no repayment and just over 15 per cent made a partial payment. The domestic employment rate plunged to an all-time low in 2012, with jobs in the legal market following the same track.  

From 2013-2014, Australian Financial Review data analysis shows the total number of students completing a law course rose by 9.2 per cent and the legal job market has experienced an average annual growth of 4 per cent.

Despite the numbers, Prof Evans said opportunities for graduate employment among law students are strong.


“Law schools are conscious that law graduates are going on to a number of paths where their skills and experiences are well utilised. We are all more conscious of that and making that message more explicit at the time our students enroll.

“The trend in HECS repayment suggests law graduates are more successful despite a change in the mix of law graduate employment destinations,” she said.

The Australian Law Students' Association (ALSA) has taken a similarly pragmatic view.

“It is no longer constructive to restate that the number of traditional corporate law jobs is reducing. The industry, universities, professional and student bodies and the media ought instead focus on creating and expanding opportunities for law students,” ALSA President Paul Melican said.

“Law students have a unique and diverse skill set with practical application far beyond the traditional law industry. ALSA is focused on providing positive opportunities to law students and expanding the horizons of the graduate law market into more diverse industries.”

Mr Melican added that the current tertiary FEE-HELP limit of $99,389 should be increased for students of law.

“A special limit of $124,238 already applies to students studying dentistry, medicine and veterinary science courses. At a minimum, this [should] be expanded to include law qualifications […] the combined cost of which can be roughly $140,000,” he said.

Law students buck trend on government student loan losses
Intro image
lawyersweekly logo


LGIAsuper acquires Suncorp superannuation business

LGIAsuper acquires Suncorp’s superannuation business

Former solicitor blocked from returning to profession

Former solicitor blocked from returning to profession amid ‘serious doubt’

Corrs platform head joins Ashurst Advance

Corrs platform head joins Ashurst Advance

What really motivates employees

What really motivates employees?