tag:theconversation.com,2011:/au/topics/student-fees-9071/articlesStudent fees – The Conversation2024-02-24T13:07:38Ztag:theconversation.com,2011:article/2242402024-02-24T13:07:38Z2024-02-24T13:07:38ZUniversities Accord: many students could pay less for their higher education … eventually<p><em>The federal government has released the final report on a Universities Accord. Taking more than a year to prepare, it is billed as a “blueprint” for reform for the next decade and beyond. It contains 47 recommendations across student fees, wellbeing, funding, teaching, research and university governance. You can find the rest of our accord coverage <a href="https://theconversation.com/au/topics/universities-accord-121839">here</a>.</em></p>
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<p>The Universities Accord final report makes recommendations that could significantly change what many Australian students pay for their higher education. </p>
<p>Course fees have increased dramatically in recent years for many domestic university students, burdening graduates with <a href="https://www.abc.net.au/news/2023-04-15/hecs-help-debt-financial-advice-indexation-student-loan/102218826">high debts</a>. It is not unheard of for graduates to have debts over A$100,000.</p>
<p>The report is damning of the former Morrison government’s <a href="https://theconversation.com/the-universities-accord-should-scrap-job-ready-graduates-and-create-a-new-multi-rate-system-for-student-fees-203910">Job-ready Graduates</a> scheme, introduced in 2021. This fuelled debts when it increased fees to some courses, such as humanities, communications and human movement.</p>
<p>But what should replace it?</p>
<p>The report says student fees should be based on lifetime earnings. But it also leaves a lot unsaid about what students will actually pay or when change might come.</p>
<h2>What will Australian students pay?</h2>
<p>By world standards, Australians already contribute a huge amount to the cost of their education. </p>
<p>Data from the <a href="https://www.oecd.org/education/education-at-a-glance/">OECD</a> shows there are only a few other countries where students and their families contribute more to the total cost of tertiary education.</p>
<p>To make the system “fairer and better reflective of the lifetime benefits that students”, the report recommends a reversal of some or all of the fee increases introduced under Job-ready Graduates. </p>
<p>This would mean significant reductions for many students. For example, the cost of many subjects in an arts degree rose by 113% under the scheme. Reversing the Job-ready Graduates increases could cost the federal budget a billion dollars or more, depending on the final details. </p>
<p>The report recommends “Commonwealth Supported” students (most undergraduates in Australia) should still pay different amounts for different areas of study. But it says fees should reflect “projected potential lifetime earnings” for graduates. </p>
<p>This would return to a logic that helped set fee levels before Job-ready Graduates. In the past, lawyers have earned more on average over a lifetime than nurses, so students studying law are asked to contribute more than those studying nursing. </p>
<p>To simplify the system, the report suggests fees would also be divided into three tiers instead of the current four.</p>
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<h2>Better ‘HELP’</h2>
<p>Australia’s HECS-HELP and FEE-HELP schemes for undergraduate and graduate students are the envy of many other countries. They mean students contribute to the cost of their education but remove barriers for those who cannot afford the fees upfront.</p>
<p>This is because students only begin to pay back their loans once they earn a certain level of income, and repayments change yearly if earnings change. There is no “real” interest on the loans, but they are pegged to inflation. This was less of an issue while inflation was low, but has recently seen student debts climb <a href="https://www.theguardian.com/news/datablog/ng-interactive/2023/may/03/millions-of-australians-face-higher-help-and-hecs-debts-see-how-inflation-will-change-your-repayments">by more than 7%</a>.</p>
<p>So the report recommends debts are increased each year based on whatever is lower, the Consumer Price Index (CPI) or Wage Price Index (WPI): in other words, inflation or how much wages are growing. This will cost the federal budget more but would mean the growth of an individual’s debt is more closely tied to wage growth. </p>
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Read more:
<a href="https://theconversation.com/the-job-ready-graduates-scheme-for-uni-fees-is-on-the-chopping-block-but-what-will-replace-it-209974">The Job-ready Graduates scheme for uni fees is on the chopping block – but what will replace it?</a>
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<h2>Making sure student debts are fair</h2>
<p>The report also asks Australian banks to view HELP loans differently from other debt, such as credit card debt, when assessing whether or not to approve a bank loan. This follows <a href="https://www.news.com.au/finance/money/wealth/increased-hecs-debts-to-impact-home-loan-borrowing-power/news-story/cbfe93045f77aa6c38149143eae90f9d">concerns</a> graduates are not able to secure home loans due to their HELP debts. </p>
<p>As the review panel explain, a key feature of a HELP scheme loan is the repayments change with income and only needs to be repaid above an minimum earning threshold, so it has much better terms than other loans.</p>
<p>The report also recommends other ways the HELP system can improve, especially for some groups of low-income earners. At the moment, repayments are based on a debtor’s entire income, rather than income above the repayment threshold. </p>
<p>This means repayments can increase as incomes rise above each threshold but by more than the total increase in income. As the report notes, in 2022-23, when a person’s income was $48,360 they repay nothing of their student debt, but a $1 increase in their earnings and they had to repay $483.61.</p>
<p>So the report recommends we move to a marginal repayment rates approach (like in some tax systems, which applies a tax rate to each extra dollar over a threshold), to minimise the chance that some HELP debtors are actually <a href="https://melbourne-cshe.unimelb.edu.au/__data/assets/pdf_file/0006/4509852/Gender-equity-and-policy-neglect-in-student-financing.pdf">worse off</a> for earning more. </p>
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<h2>Further help for students</h2>
<p>The report wants to see the government subsidise new fee-free “preparation” courses (an expanded range of what has been termed <a href="https://theconversation.com/what-are-enabling-programs-how-do-they-help-australians-get-to-uni-210269">enabling courses</a>). These are designed to prepare students to succeed in their studies and would be offered to anyone who had been accepted into government supported courses, with a <a href="https://www.sydney.edu.au/students/understanding-fees/commonwealth-supported-places.html">Commonwealth Supported Place</a>.</p>
<p>The review also wants to see financial support for students who have to do work placements to complete their degrees, such as nursing, allied health and teaching. These compulsory placements can be very costly for students. For example, recent <a href="https://theconversation.com/we-can-no-longer-justify-unpaid-labour-why-uni-students-need-to-be-paid-for-work-placements-203421">research on social work students</a> has found the financial burden of doing these placements can be crippling, with students having to give up paid work, travel long distances and pay for clothing.</p>
<h2>Student income support</h2>
<p>The report recognises one of the biggest challenges for many students, especially many underrepresented groups, is the cost of living while studying.</p>
<p>The current <a href="https://www.servicesaustralia.gov.au/how-much-youth-allowance-for-students-and-apprentices-you-can-get?context=43916">$639-a-fortnight</a> from Youth Allowance is hardly enough for even the most meagre lifestyle. This means university can be almost impossible for many people unless they have family support or additional paid work, which can often put pressure on their studies. </p>
<p>The report makes specific recommendations about extending eligibility criteria for student income support payments for some part-time students as well as increasing the threshold for the parental income test for eligibility for some students.</p>
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Read more:
<a href="https://theconversation.com/hecs-help-loans-have-become-unfair-for-women-but-there-is-a-way-to-fix-this-200546">HECS-HELP loans have become unfair for women but there is a way to fix this</a>
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<h2>A long way off?</h2>
<p>While the final accord report proposes some major changes, much of the detail, such as fee levels, is not included. </p>
<p>In fact, it suggests it should be up to a new Australian Tertiary Education Commission to sort out.</p>
<p>The details, not least who pays, what, when and how, are critical to the success or otherwise of the accord. They will likely shape its impact (positive or negative) for a generation to come. </p>
<p>Ahead of the next federal election (<a href="https://www.smh.com.au/politics/federal/election-in-2024-unlikely-cost-of-living-help-on-the-way-albanese-20240103-p5euwx.html">either this year or early next</a>), any major new policy with a high price tag like reducing students fees could be a big ask for the government.</p>
<p>Establishing a complex body such as a Tertiary Education Commission will also take time. And this runs the risk that political will could falter and priorities will shift, especially if there is a change of government. </p>
<p>Nevertheless, this much anticipated final report has good news for many universities students who are struggling with the costs of study, even if it does not offer any immediate relief.</p><img src="https://counter.theconversation.com/content/224240/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gwilym Croucher is an Associate Professor at the University of Melbourne</span></em></p>The Universities Accord final report makes recommendations that could significantly change what many Australian students pay for their higher education.Gwilym Croucher, Associate Professor, Melbourne Centre for the Study of Higher Education, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2155392023-11-07T19:35:00Z2023-11-07T19:35:00ZOnly 1.5% of students swapped fields due to the ‘Job-ready Graduates’ fee changes<figure><img src="https://images.theconversation.com/files/557220/original/file-20231102-29-2xp60q.jpg?ixlib=rb-1.1.0&rect=7%2C30%2C5044%2C3317&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.pexels.com/photo/person-writing-on-white-board-3781338/">Jeswin Thomas/ Pexels</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>In January 2021, the Morrison government changed the way university fees are set with the <a href="https://www.education.gov.au/job-ready">Job-ready Graduates scheme</a>.</p>
<p>The <a href="https://www.education.gov.au/job-ready/announcements/job-ready-graduates-package">idea</a> was to steer students into courses that would lead to “the jobs of the future”. So the scheme made some fields (such as history and journalism) more expensive and some (such as nursing, teaching, computer programming and engineering) less expensive. </p>
<p>Fees rose by as much as 117% for some fields and dropped by as much as 59% for others. The government believed this would affect student choices. </p>
<p>Education experts have been <a href="https://theconversation.com/the-job-ready-graduates-scheme-for-uni-fees-is-on-the-chopping-block-but-what-will-replace-it-209974">very critical</a> of scheme. They argue it is not only unfair, it would not work. But to date there have been few studies looking at the evidence. </p>
<p><a href="https://melbourneinstitute.unimelb.edu.au/publications/working-papers/search/result?paper=4751741">Our research</a> with our former student Maxwell Yong shows the impact of the Job-ready Graduates scheme was modest at best. </p>
<h2>Our research</h2>
<p>Our study looked at student’s preferences when applying for degrees and final enrolments (what they ended up studying). </p>
<p>We used data from the Universities Admissions Centre, which handles applications for degrees in New South Wales and the Australian Capital Territory. </p>
<p>We looked at more than 725,000 undergraduates applying between 2014 and 2022. This means we had seven years of data before the Job-ready Graduates scheme was introduced, and two years afterwards.</p>
<p>Using various statistical models, we analysed whether students increased their preferences for fields that became cheaper and reduced preferences for fields that became more expensive. </p>
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<h2>Our findings</h2>
<p>Overall we found the Job-ready Graduates scheme only had a minor impact on course choices. </p>
<p>Just 1.52% of university applicants in our study chose fields they would have not chosen had it not been for the scheme, moving from humanities, arts, law and business to STEM (science, technology, engineering and maths) and teaching.</p>
<p>Maths and statistics had the largest drop of student fees (59%) of any field. But only one out of every 2,000 students responded by changing their preference to maths.</p>
<p>Communications, journalism and media studies had the largest increase in fees (117%). But only one out of every 350 students chose not to preference these fields in response.</p>
<p>This is perhaps not surprising. Under <a href="https://www.studyassist.gov.au/help-loans/hecs-help">HECS-HELP</a>, students do not have to pay university fees up-front. Many students also choose courses <a href="https://www.emerald.com/insight/content/doi/10.1108/09513540210415523/full/html">based on their passions</a> and interests rather than the amount of the deferred fees.</p>
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Read more:
<a href="https://theconversation.com/our-research-shows-how-students-can-miss-out-on-their-preferred-uni-degree-but-theres-a-simple-fix-207415">Our research shows how students can miss out on their preferred uni degree – but there's a simple fix</a>
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<h2>Big repercussions</h2>
<p>While we found only modest responses to these large fee changes, this does not mean students are not affected. Because of the reforms, many will accumulate much larger HECS-HELP debts. </p>
<p>For a three-year bachelors degree in journalism, the debt grows from around A$20,000 to A$43,500. For a mathematics degree, the debt falls from around $28,600 to $11,850. The new difference in debts ($31,650) is more than triple the old difference ($8,600). </p>
<p>Higher debts mean more years of making repayments. Longer repayment times may mean delayed home purchases and starting families. </p>
<p>These reforms overturned 25 years of university fees <a href="https://theconversation.com/university-fees-are-poised-to-change-a-new-system-needs-to-consider-how-much-courses-cost-and-what-graduates-can-earn-192023">reflecting the earning prospects of graduates</a>. Those likely to earn more post-graduation (lawyers, doctors, financiers) paid a bit more. Those likely to earn less (arts, nursing, teaching) paid a bit less. </p>
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<h2>The Universities Accord</h2>
<p>The Albanese government is in the middle of a <a href="https://www.education.gov.au/australian-universities-accord">broad review</a> of the higher education system, including university fees. The Universities Accord review panel is due to hand in a final report in December. </p>
<p>An <a href="https://theconversation.com/the-job-ready-graduates-scheme-for-uni-fees-is-on-the-chopping-block-but-what-will-replace-it-209974">interim report</a> was highly critical of the Job-ready Graduates scheme, saying it risks “causing long-term and entrenched damage to Australian higher education”.</p>
<p>As a new model is considered, it is important policymakers understand increasing HECS-HELP debts for some and reducing them for others is not going to prompt students into areas the government deems a “priority”. </p>
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Read more:
<a href="https://theconversation.com/the-universities-accord-should-scrap-job-ready-graduates-and-create-a-new-multi-rate-system-for-student-fees-203910">The Universities Accord should scrap Job-ready Graduates and create a new multi-rate system for student fees</a>
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<img src="https://counter.theconversation.com/content/215539/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jan Kabatek receives funding from Australian Research Council. He is affiliated with the ARC Centre of Excellence for Children and Families over the Life Course</span></em></p><p class="fine-print"><em><span>Michael Coelli has received funding in the past from the Australian Research Council and from the Department of Education. He has also completed some analysis work for the AI Group.</span></em></p>Australian university applicants are sticking to their preferred fields of study, despite dramatic changes to student fees in 2021.Jan Kabatek, Research Fellow, Melbourne Institute of Applied Economic and Social Research, The University of MelbourneMichael Coelli, Associate professor, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2030542023-05-11T20:09:13Z2023-05-11T20:09:13ZStudying can be a costly choice. Universities should address young people’s financial literacy gaps<figure><img src="https://images.theconversation.com/files/524329/original/file-20230504-17-icu5sy.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C5982%2C3970&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Tima Miroshnichenko/Pexels</span></span></figcaption></figure><p><em>This article is part of our series on <a href="https://theconversation.com/au/topics/universities-accord-big-ideas-137143">big ideas for the Universities Accord</a>. The federal government is calling for ideas to “reshape and reimagine higher education, and set it up for the next decade and beyond”. A review team is due to finish a draft report in June and a final report in December 2023.</em></p>
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<p>Australians with a HECS-HELP debts are facing an <a href="https://www.theguardian.com/news/datablog/ng-interactive/2023/may/03/millions-of-australians-face-higher-help-and-hecs-debts-see-how-inflation-will-change-your-repayments">estimated 7.1% increase</a> on their debts come the middle of the year, thanks to inflation. Some students have been <a href="https://www.smh.com.au/politics/federal/they-tell-you-it-is-interest-free-cherish-feels-stuck-in-hecs-debt-trap-20230426-p5d3dz.html">expressing shock and dismay</a> as their loans are interest-free and they believed they would not grow. </p>
<p>Although it is not “interest”, the effect for borrowers is the same. Decades of low inflation have meant HECS-HELP indexation has been largely ignored – until now. </p>
<p>This comes on top of already-significant HECS-HELP debts. An arts and law undergraduate this year now pay <a href="https://theconversation.com/the-universities-accord-should-scrap-job-ready-graduates-and-create-a-new-multi-rate-system-for-student-fees-203910">more than A$15,000 per year </a> in fees as a full-time student. </p>
<p>The repayments (which do not start until a certain income threshold is reached) impact disposable income and <a href="https://www.mortgagechoice.com.au/guides/does-hecs-debts-affect-your-home-loan/">borrowing capacity</a> and <a href="https://theconversation.com/hecs-help-loans-have-become-unfair-for-women-but-there-is-a-way-to-fix-this-200546">may negatively impact women</a> disproportionately.</p>
<p>This is why universities should do more to help students better understand their HECS-HELP debt and make financial decisions in general. The Universities Accord is a prime opportunity to initiate this change. </p>
<p>The accord review is looking at how universities can meet the knowledge and skills needs of the future. On top of other generic skills learned at university, such as communication, collaboration, problem-solving and critical thinking, we need to add financial literacy. </p>
<h2>Studying is a financial decision</h2>
<p>It can be argued universities have a moral obligation to build financial literacy skills and educate students about how course fees are charged and then repaid when they start working. </p>
<p>Universities rely on student fees as a substantial part of their funding. And students accrue significant amounts while studying – often in the tens of thousands of dollars. </p>
<p>The 2021 ANZ <a href="https://www.anz.com.au/content/dam/anzcomau/documents/pdf/aboutus/esg/financial-wellbeing/anz-au-adult-financial-wellbeing-survey-2021.pdf">Financial Wellbeing Survey</a> found that 18–24 year olds struggle with financial planning, choosing products, understanding online risks and credit-trap awareness. </p>
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<img alt="A young woman works with a calculator and laptop with sheets of paper." src="https://images.theconversation.com/files/524325/original/file-20230504-17-q92t5q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/524325/original/file-20230504-17-q92t5q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/524325/original/file-20230504-17-q92t5q.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/524325/original/file-20230504-17-q92t5q.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/524325/original/file-20230504-17-q92t5q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/524325/original/file-20230504-17-q92t5q.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/524325/original/file-20230504-17-q92t5q.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Young Australians do not have good levels of financial literacy.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
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<h2>What is financial literacy?</h2>
<p>Financial literacy is a <a href="https://dera.ioe.ac.uk/22325/1/doc_833.pdf">core life skill</a>. It includes lodging tax returns, managing superannuation and ensuring you have enough money to look after yourself and your family. </p>
<p>It requires you to be competent in many aspects of the financial decision-making process. It includes the person’s knowledge of financial concepts, their ability to gather and sift through information and compare products, and their confidence in making decisions involving money. </p>
<p>Although the concept is broad, there is a <a href="https://gflec.org/education/questions-that-indicate-financial-literacy/">set of five questions</a> about interest rates, the stock market and mortgages that are regularly used to measure an individual’s level of financial literacy. </p>
<p>The Household, Income and Labour Dynamics in Australia <a href="https://melbourneinstitute.unimelb.edu.au/hilda">survey</a> has asked these questions and shows a decline in <a href="https://www.smh.com.au/business/the-economy/our-financial-literacy-crisis-can-you-answer-these-5-money-questions-20230109-p5cb6c.html">average correct answers</a>. Between 2016 and 2020 men went from 4.1 to 4.0 and women went from 3.7 to 3.5. </p>
<p>More alarming than the overall decline and increasing gender gap is the decline in financial literacy for those aged 15 to 24. Average scores fell from 3.4 to just 2.9 out of a possible five points for young people. </p>
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Read more:
<a href="https://theconversation.com/teaching-and-research-are-the-core-functions-of-universities-but-in-australia-we-dont-value-teaching-203657">Teaching and research are the core functions of universities. But in Australia, we don't value teaching</a>
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<h2>Why should unis get involved?</h2>
<p>Nothing substantial is currently being done to address this knowledge gap among young Australians. </p>
<p>In its early iterations, the National Financial Literacy Strategy (later named the <a href="https://www.financialcapability.gov.au/strategy-2022">Financial Capability Strategy</a>) focused on driving improvement through formal education in schools. </p>
<p>However, the effort has <a href="https://theconversation.com/aussie-kids-financial-knowledge-is-on-the-decline-the-proposed-national-curriculum-has-downgraded-it-even-further-163110">not shifted the dial</a> on school performance in terms of financial literacy and there are <a href="https://theconversation.com/many-students-dont-know-how-to-manage-their-money-here-are-6-ways-to-improve-financial-literacy-education-177918">issues with the focus on maths</a> in the school curriculum over building specific financial literacy skills. </p>
<h2>The US example</h2>
<p>Making financial literacy classes compulsory is not an overly ambitious goal. In the United States, <a href="https://www.ngpf.org/state-of-financial-education-report/">19 states</a> either require or plan to require students to do a personal finance course to graduate from high school. </p>
<p>There are signs this may be mandated in colleges and universities. A 2019 <a href="https://home.treasury.gov/system/files/136/Best-Practices-for-Financial-Literacy-and-Education-at-Institutions-of-Higher-Education2019.pdf">US Treasury Department report</a> recommended universities and colleges “should require mandatory courses to teach students financial concepts and skills”. This would include:</p>
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<li><p>clear, timely and customised information to inform student borrowing</p></li>
<li><p>communicating importance of graduation and major on repayment of student loans</p></li>
<li><p>preparing students to meet financial obligations upon graduation.</p></li>
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<p>Many US universities already have financial literacy courses. The Ohio State University, for example, runs a <a href="https://swc.osu.edu/services/financial-coaching">financial coaching program</a> to assist thousands of students each year in setting financial goals, budgeting and banking, credit, debt repayment, saving and retirement planning. </p>
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Read more:
<a href="https://theconversation.com/many-students-dont-know-how-to-manage-their-money-here-are-6-ways-to-improve-financial-literacy-education-177918">Many students don't know how to manage their money. Here are 6 ways to improve financial literacy education</a>
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<hr>
<h2>How can we improve financial literacy?</h2>
<figure class="align-left ">
<img alt="A young person works on a computer next to a cup, book and phone." src="https://images.theconversation.com/files/524331/original/file-20230504-27-v47tvu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/524331/original/file-20230504-27-v47tvu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=900&fit=crop&dpr=1 600w, https://images.theconversation.com/files/524331/original/file-20230504-27-v47tvu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=900&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/524331/original/file-20230504-27-v47tvu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=900&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/524331/original/file-20230504-27-v47tvu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1131&fit=crop&dpr=1 754w, https://images.theconversation.com/files/524331/original/file-20230504-27-v47tvu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1131&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/524331/original/file-20230504-27-v47tvu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1131&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Universities could mandate financial literacy courses as part of graduates. Specific information about student debts could also be provided before students take on a loan.</span>
<span class="attribution"><span class="source">Vlada Karpovich/Pexels</span></span>
</figcaption>
</figure>
<p>There are many opportunities for Australian universities to formalise financial education. </p>
<p>At the strategic level, they should add “developing financially capable students” to the list of graduate attributes. </p>
<p>They could then mandate all students complete a course on managing personal finances as part of graduation requirements. There could be flexibility about how this is done – online and cross-institutional study are both obvious options.</p>
<p>Student services can also provide workshops on tax, budgeting, superannuation, insurance, inflation and the economy and investing. </p>
<p>Finally, if students are electing to defer their fees via HECS-HELP, they should be required to complete a specific non-graded financial literacy module to better understand the implications of accruing the debt.</p><img src="https://counter.theconversation.com/content/203054/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tracey West has received funding in the past from Ecstra Foundation, the Financial Basics Foundation and the Financial Planning Association to conduct research. </span></em></p>It can be argued universities also have a moral obligation to educate students about how course fees are charged and then repaid when they start working.Tracey West, Lecturer in Behavioural Finance, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2039102023-04-30T20:02:57Z2023-04-30T20:02:57ZThe Universities Accord should scrap Job-ready Graduates and create a new multi-rate system for student fees<figure><img src="https://images.theconversation.com/files/523111/original/file-20230427-18-2212o2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p><em>This article is part of our series on <a href="https://theconversation.com/au/topics/universities-accord-big-ideas-137143">big ideas for the Universities Accord</a>. The federal government is calling for ideas to “reshape and reimagine higher education, and set it up for the next decade and beyond”. A review team is due to finish a draft report in June and a final report in December 2023.</em></p>
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<p>The university fees (known as “student contributions”) paid by most domestic undergraduates are a difficult issue for the <a href="https://www.education.gov.au/australian-universities-accord">Universities Accord review</a>. </p>
<p>Student contribution rates have significant consequences for student, university and government finances. The success or failure of the whole reform process may depend on managing the politics of who pays and how much. </p>
<p>Some university lobby groups <a href="https://go8.edu.au/submission-australian-universities-accord-panel-discussion-paper-consultation-15-ideas-to-deliver-a-seamless-tertiary-education-system">are calling</a> for a flat rate student contribution for all subjects and courses. This would reduce costs for many students but substantially increase student contributions for politically sensitive groups, including teaching and nursing students.</p>
<p>A multi-rate student contribution system – with the aim of making average student debt repayment times similar across different courses – would be more politically acceptable. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-inequity-of-job-ready-graduates-for-students-must-be-brought-to-a-quick-end-heres-how-183808">The inequity of Job-ready Graduates for students must be brought to a quick end. Here's how</a>
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<h2>Current student contributions</h2>
<p>The Morrison government’s <a href="https://www.education.gov.au/job-ready">Job-ready Graduates policy</a> set current student contributions in 2021. For subjects the government deemed “job ready” or “national priorities,” student contributions were lowered to attract students. Other subject prices were set at neutral levels or increased to deter students. </p>
<p>The cheapest annual charge for a 2023 full-time student is <a href="https://www.education.gov.au/higher-education-loan-program/approved-hep-information/funding-clusters-and-indexed-rates">A$4,124</a> for nursing, teaching and agriculture. Engineering, science, IT, allied health and performing arts cost $8,301. Students in medicine, dentistry and veterinary science pay $11,800. The highest rates are for law, business and most arts disciplines, set at $15,142. </p>
<p>These student contributions are added to federal government subsidies called “Commonwealth contributions”, which also vary by discipline, to create a total funding rate received by universities. </p>
<figure class="align-center ">
<img alt="A student walks past a row of bikes at Sydney University." src="https://images.theconversation.com/files/523116/original/file-20230427-28-y6pgdf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/523116/original/file-20230427-28-y6pgdf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/523116/original/file-20230427-28-y6pgdf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/523116/original/file-20230427-28-y6pgdf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/523116/original/file-20230427-28-y6pgdf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/523116/original/file-20230427-28-y6pgdf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/523116/original/file-20230427-28-y6pgdf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Arts, business and law student fees are now more than $15,000 a year.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>What are university groups calling for?</h2>
<p>Two university lobby groups, the <a href="https://go8.edu.au/submission-australian-universities-accord-panel-discussion-paper-consultation-15-ideas-to-deliver-a-seamless-tertiary-education-system">Group of Eight</a> (which includes the University of Melbourne and University of Sydney) and the <a href="https://atn.edu.au/news-and-events/latest-news/atn-submission-response-to-the-australian-universities-accord-discussion-paper/">Australian Technology Network</a> (which includes Curtin, Deakin and RMIT universities), want a single student contribution rate regardless of subjects taken. </p>
<p>The <a href="https://iru.edu.au/policy_submissions/australian-universities-accord-iru-submission/">Innovative Research Universities</a> group (which includes Flinders, Griffith and James Cook universities) recommends a two or three tier student contribution system, with prices varying according to graduate employment outcomes. </p>
<p><a href="https://andrewnorton.net.au/2022/10/04/the-five-student-contribution-rationales-since-1989/">Before the Job-ready Graduates</a> scheme was introduced, student contributions were roughly linked to future expected earnings in a similar way. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/nobel-laureate-brian-schmidts-big-ideas-for-how-australia-funds-and-uses-research-204015">Nobel laureate Brian Schmidt's big ideas for how Australia funds and uses research</a>
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<h2>My submission to the Universities Accord</h2>
<p>Job-ready Graduates assumes student contributions significantly influence student course choices. </p>
<p>But <a href="https://andrewnorton.net.au/2020/06/21/jobs-interests-and-student-course-choices/">student interests</a>, and within those interests <a href="https://andrewnorton.net.au/2020/06/28/financial-influences-on-job-seeking-university-applicants/">employment prospects</a> and expected salaries, are the main drivers of course choices. </p>
<p>In practice, the Job-ready Graduates scheme delivers financial penalties and rewards for course choices students would mostly have made anyway. For students who borrow under the <a href="https://www.studyassist.gov.au/help-loans">HELP loan scheme</a>, this means longer or shorter repayment times than previously. </p>
<p><a href="https://www.education.gov.au/australian-universities-accord/consultations/consultation-accord-terms-reference/submission/15035">My submission</a> to the Universities Accord review focused on practical consequences for students, the government and universities. </p>
<h2>Consequences for students</h2>
<p>On the surface, a single annual student contribution rate makes repayment burdens more equal. </p>
<p>Students in longer courses would pay more in total, but final HELP debts on completion would be more similar across courses than under Job-ready Graduates or the previous student contribution system.</p>
<p>In practice, however, the same debt has different on-average consequences depending on degree taken. Annual <a href="https://www.ato.gov.au/Rates/HELP,-TSL-and-SFSS-repayment-thresholds-and-rates/">HELP debt repayments</a> are based on the debtor’s income, so students with <a href="https://theconversation.com/students-choice-of-university-has-no-effect-on-new-graduate-pay-and-a-small-impact-later-on-what-they-study-matters-more-171491">degrees leading to better-paid occupations</a> make more annual progress towards paying off their HELP debt. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1582107230525980673"}"></div></p>
<p>With a single student contribution level graduates in high-paying fields would repay their debt much more quickly than graduates in lower-paying fields.</p>
<p>Slow repayments mean a larger number of years of outstanding HELP debt being indexed to inflation. This year’s indexation <a href="https://www.abc.net.au/everyday/help-debt-indexation-how-to-save-money-by-paying-early/102261222">will be 7.1%</a>. With more debt to repay as a result, repayment times will increase.</p>
<p>Student contributions based on expected future income narrow these differences in repayment times. The <a href="https://www.education.gov.au/higher-education-loan-program/resources/201819-help-report-data-extract">available analyses of repayment times</a> have flaws, (including mixing HELP debtors who started and finished their degrees at different times) but nonetheless support this proposition.</p>
<p>For example, before Job-ready Graduates law students were charged more than humanities students, but graduates from both fields on average took nine years to repay their HELP debt. Typically law graduates earn more than arts graduates and so repay more debt each year.</p>
<p>Setting student contributions based on future income leads to more equality of effort in repaying than a flat rate student contribution system.</p>
<h2>Consequences for government</h2>
<p>HELP debt costs the government money as well as students. Normally the government incurs interest subsidy costs, calculated as the difference between what it costs the government to <a href="https://www.rba.gov.au/statistics/tables/xls/f02hist.xls?v=2023-04-18-09-28-20">borrow money in the bond markets</a> and the <a href="https://www.ato.gov.au/rates/study-and-training-loan-indexation-rates/">CPI-linked indexation rate</a>. </p>
<p>Unusually <a href="https://andrewnorton.net.au/2023/03/21/should-help-debt-be-indexed-at-the-lesser-of-cpi-and-another-economic-indicator/">CPI exceeds the bond rate</a> this year, but this is not expected to last. Not all HELP debtors repay, with <a href="https://www.education.gov.au/higher-education-publications/resources/reporting-help-receivable-30-june-2021">15% of new debt estimated</a> to be eventually written off at taxpayer expense. </p>
<p>Job-ready Graduates made HELP more costly. For example, more than doubling the debt of humanities graduates means they will take much longer to repay fully than previously, if they ever do. Interest and bad debt costs will increase. </p>
<p>A repayment times-based policy would help manage the government’s own financial risks by allocating a high share of HELP debt to students likely to repay in full. </p>
<h2>Consequences for universities</h2>
<p>For universities, the total funding rate matters more than how it is divided between Commonwealth and student contributions. But student contributions matter independently in one specific set of circumstances: when universities “over-enrol”.</p>
<p>This happens when a university reaches its <a href="https://www.education.gov.au/collections/higher-education-providers-2021-2023-funding-agreements">maximum level of Commonwealth contribution funding</a>. Any additional students are funded at the student contribution rate only. </p>
<p>Student contributions alone may not cover costs in courses with labour-intensive teaching methods or practical training components. For students in health courses, for example, <a href="https://www.health.vic.gov.au/education-and-training/fee-schedule-for-clinical-placement-in-public-health-services">universities pay hospitals</a> and other health services for clinical placements. </p>
<p>Job-ready Graduates significantly cut student contributions for teaching and nursing, which have compulsory work placements. Universities would lose money if they over-enrol in these courses, discouraging them from offering more student places. </p>
<p>Both the single rate and tiered student contribution systems would be an improvement on Job-ready Graduates, by improving on the economics of over-enrolment in teaching and nursing. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/why-arts-degrees-and-other-generalist-programs-are-the-future-of-australian-higher-education-203046">Why arts degrees and other generalist programs are the future of Australian higher education</a>
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<h2>The politics of single rate student contributions</h2>
<p>A flat student contribution that left the government and universities in the same financial position as now would be about $10,000 per year for a full-time student. </p>
<p>$10,000 is more than double what teaching and nursing students pay now. While most would still pursue their career goals, a large price increase would confuse the messaging when policymakers are trying to increase enrolments in these fields.</p>
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<p>Nursing and teaching students need to pay more than now to make the system work for all stakeholders, but a multi-rate system would put them in a low or mid-tier student contribution band of less than $10,000 a year. </p>
<p>Teaching and nursing are highly feminised and popular with low socioeconomic status (SES) students. Based on 2021 enrolment data, a flat student contribution would, on average, lead to women paying slightly more than under Job-ready Graduates. Low SES students would also, on average, pay slightly more. </p>
<p>The dollar differences are not huge, at about $1,000 extra for women and $1,500 more for low SES students on average over a three year degree. But again, it would confuse the government’s messaging, with the <a href="https://www.education.gov.au/australian-universities-accord/resources/terms-reference">Universities Accord terms of reference</a> requiring policies to increase low SES enrolments. </p>
<h2>What now?</h2>
<p>A flat rate student contribution would be simple and improve on Job-ready Graduates for universities and students in high student contribution courses. </p>
<p>But a three or four-tier student contribution system would do more to equalise repayment burdens between students. It would be fairer overall, and politically easier for the government to sell.</p><img src="https://counter.theconversation.com/content/203910/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Norton is on the Universities Accord Ministerial Reference Group, an unpaid advisory committee. </span></em></p>A multi-rate student contribution system could make average student debt repayment times similar across different courses.Andrew Norton, Professor in the Practice of Higher Education Policy, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1838082022-06-05T20:02:12Z2022-06-05T20:02:12ZThe inequity of Job-ready Graduates for students must be brought to a quick end. Here’s how<p>Labor’s <a href="https://theconversation.com/labors-promised-universities-accord-could-be-a-turning-point-for-higher-education-in-australia-183810">promise of a “universities accord”</a> suggests a slow and careful approach to higher education policy. A <a href="https://www.theaustralian.com.au/higher-education/jason-clare-rides-his-zingers-into-the-education-ministry/news-story/05f80142fe540653a596b9eb0908fe13">new education minister</a> without a strong background in the portfolio may also want time to get across the issues. </p>
<p>In general, taking this time to get policy right and build support for it is a good approach. But when current policy is causing problems and lacks significant support there is a case for acting more quickly. This is the situation with the previous government’s <a href="https://www.dese.gov.au/job-ready">Job-ready Graduates</a> student funding policy <a href="https://www.aph.gov.au/Parliamentary_Business/Bills_LEGislation/Bills_Search_Results/Result?bId=r6584">enacted in late 2020</a>. </p>
<p>Job-ready Graduates imposes unfair <a href="https://www.studyassist.gov.au/help-loans">HELP debts</a> on some students, adds to the government’s costs of running the HELP loan scheme, and <a href="https://theconversation.com/labor-offers-extra-university-places-but-more-radical-change-is-needed-173219">distorts university incentives</a> in distributing student places between courses. </p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/labors-promised-universities-accord-could-be-a-turning-point-for-higher-education-in-australia-183810">Labor's promised universities accord could be a turning point for higher education in Australia</a>
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<h2>How are university courses funded?</h2>
<p>A mix of <a href="https://www.dese.gov.au/higher-education-loan-program/approved-hep-information/funding-clusters-and-indexed-rates">contributions from the Commonwealth and students</a> fund domestic undergraduates in public universities. Added together, these contributions are the overall funding rate per subject. </p>
<p>The government sets Commonwealth contributions, which vary by academic discipline. The government pays universities according to their enrolments up to a <a href="https://www.dese.gov.au/collections/higher-education-providers-2021-2023-funding-agreements">capped total grant amount</a>.</p>
<p>Universities set student contributions up to a legal maximum, which also varies by discipline. Universities are paid directly by students or through <a href="https://www.studyassist.gov.au/help-loans/hecs-help">HECS-HELP loans</a>. Total student contribution revenue is not capped.</p>
<p>Once universities reach their maximum Commonwealth contribution grant they can still increase enrolments, but on student contribution revenue only. These extra students are called “over-enrolments”. Historically, over-enrolments have been an important source of flexibility in meeting student demand.</p>
<p>In its basic architecture, Job-ready Graduates has similarities with previous funding policies, other than the <a href="https://theconversation.com/demand-driven-funding-for-universities-is-frozen-what-does-this-mean-and-should-the-policy-be-restored-116060">demand-driven system</a>, which uncapped both Commonwealth and student contributions.</p>
<p>Where Job-ready Graduates differs is in the setting of Commonwealth and student contributions. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/demand-driven-funding-for-universities-is-frozen-what-does-this-mean-and-should-the-policy-be-restored-116060">Demand-driven funding for universities is frozen. What does this mean and should the policy be restored?</a>
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<h2>Commonwealth cut per student contribution</h2>
<p>Job-ready Graduates increases student places by keeping <a href="https://andrewnorton.net.au/2021/05/14/the-budget-and-higher-education/">total university grants at roughly the same level</a> but reducing the average Commonwealth contribution. Universities need to deliver more student places for each million dollars in public funding.</p>
<p>Labor has already promised a <a href="https://andrewnorton.net.au/2022/05/22/a-few-notes-on-the-future-of-higher-education-policy/">small, and possibly temporary</a>, increase in total Commonwealth contribution funding. Given the government’s <a href="https://budget.gov.au/2022-23/content/bp1/index.htm">overall budget position</a>, a significant increase per student may not be feasible.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/labor-offers-extra-university-places-but-more-radical-change-is-needed-173219">Labor offers extra university places, but more radical change is needed</a>
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<p>For universities, increases in student contributions at least partly offset reductions in Commonwealth contributions under Job-ready Graduates. </p>
<h2>Student contributions changed radically</h2>
<p>The most radical element of Job-ready Graduates was a further change to student contributions. Before this policy took effect, a mix of assumed private financial benefits and course costs explained student contribution levels by discipline. The price gap between the cheapest and most expensive discipline was about $4,500 a year. </p>
<p>Job-ready Graduates abandoned this system. Instead, it uses student contributions to manipulate student demand. </p>
<p>In nursing and teaching, “job-ready” courses the previous government favoured, student contributions were cut by about $2,700 a year. In disfavoured courses they went up. The biggest increases of $7,800 a year were in humanities other than languages. </p>
<p>The gap between the cheapest and most expensive course more than doubled, to $10,550 a year. </p>
<p>Higher or lower Commonwealth contributions partly offset these changes to student contributions, so overall funding rates changed by less than the student contribution levels. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/3-big-issues-in-higher-education-demand-the-new-governments-attention-183349">3 big issues in higher education demand the new government's attention</a>
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<h2>Job-ready Graduates has long-term impacts</h2>
<p>The Job-ready Graduates assumption that students would respond to these price signals and change enrolment patterns was never sound. Course preferences still <a href="https://andrewnorton.net.au/2020/06/21/jobs-interests-and-student-course-choices/">depend on student interests</a>. For financially motivated students, <a href="https://andrewnorton.net.au/2020/06/28/financial-influences-on-job-seeking-university-applicants/">differences in job and salary prospects</a> are also more significant than how much they pay for their course. </p>
<p>Job-ready Graduates annually shuffles hundreds of millions of dollars in HELP debt between students. Some students, like those in nursing or teaching, will owe less than previously and repay their debt earlier.</p>
<p>Others, like those taking humanities courses, will owe much more and keep repaying for years longer than before. Some may never fully repay their HELP debt.</p>
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<p>While HELP is designed to allow slow or incomplete repayment, this should reflect varying individual circumstances. It is not sensible or fair to assign repayment periods and risks based on course choices. </p>
<p>Slow or no repayment increases the <a href="https://twitter.com/andrewjnorton/status/1392075423094173697/photo/1">cost of HELP to the government</a>. This is not prudent when it already faces large budget deficits.</p>
<iframe title="Higher education loan repayments and outstanding debt" aria-label="Grouped Column Chart" id="datawrapper-chart-BX3aq" src="https://datawrapper.dwcdn.net/BX3aq/2/" scrolling="no" frameborder="0" style="border: none;" width="100%" height="400"></iframe>
<p>The system also affects the economics of over-enrolment. </p>
<p>In fields such as arts, law or business, the student contribution covers more than 90% of the maximum revenue a university could get per student. These fields are close to a de facto demand-driven system, with only minor financial constraints on increased enrolments for universities already earning their maximum Commonwealth grant. </p>
<p>In fields such as education and nursing, less than 25% of maximum per student revenue comes from the student. Over-enrolments in these fields are almost certainly loss-making, creating a deterrent to accepting more students.</p>
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<h2>How can this system be fixed?</h2>
<p>To fix the system we need student and Commonwealth contributions that vary within a narrower range. </p>
<p>This change can be close to budget-neutral. Course that are too expensive, relative to other fields, would have student contributions decreased and Commonwealth contributions increased. Courses that are too cheap would have student contributions increased and Commonwealth contributions decreased. </p>
<p>Estimates of 2022 enrolments could be used to ensure contribution increases and decreases balance each other, leaving the government and universities in the same financial position. </p>
<h2>A fast or slow change?</h2>
<p>Student contribution increases are normally “grandfathered”, so only new students are affected and continuing students are retained on the old rates. </p>
<p>Grandfathering is generally preferable, so students partway through their course are not suddenly hit with unexpected extra charges to finish it. But Job-ready Graduates creates so many problems that it should be ended as quickly and comprehensively as possible.</p>
<p>If the new student pricing system was introduced for 2023, students facing higher charges would have benefited from up to two years of discounted student contributions. Their total course cost at graduation would still be lower than for other students.</p>
<p>A fast fix for the problems of Job-ready Graduates does not preclude later changes coming from the accord process. It is an interim measure to correct errors rather than a long-term policy.</p><img src="https://counter.theconversation.com/content/183808/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Norton does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Huge disparities in how much students pay for courses mean graduates of high-fee disciplines will take longer to repay their debts or might never do so. That will ultimately add to government debt.Andrew Norton, Professor in the Practice of Higher Education Policy, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1833492022-05-22T20:01:58Z2022-05-22T20:01:58Z3 big issues in higher education demand the new government’s attention<p>Higher education did not figure prominently in the election campaign. The <a href="https://theconversation.com/heres-what-the-major-parties-need-to-do-about-higher-education-this-election-180855?utm_source=twitter&utm_medium=bylinetwitterbutton">biggest issues</a> facing the sector, in particular the arts, humanities and social sciences, could never be fully addressed in six weeks, but the Australasian Council of Deans of Arts, Social Sciences and Humanities (DASSH) urges the incoming Labor government to act on three issues as a priority.</p>
<p>The first is the impacts in Australia’s universities of the former Coalition government’s <a href="https://www.dese.gov.au/job-ready">Job-Ready Graduates Package</a> announced in June 2020. The changes included enormous fee increases for humanities, arts and social science (HASS) subjects. </p>
<p>The second issue is the <a href="https://www.dese.gov.au/university-research-commercialisation-package/resources/university-research-commercialisation-action-plan">Research Commercialisation Action Plan</a> released in February this year.</p>
<p>Third, the acting minister for education and employment, Stuart Robert, <a href="https://www.arc.gov.au/letter-expectations-minister-arc">wrote</a> to the Australian Research Council (ARC) in December 2021 to direct that a significant portion of research funding be awarded to projects that demonstrate a strong connection with Australia’s manufacturing priorities. Research funding for the arts, humanities and social sciences is shrinking. </p>
<p>Taken together, these three policy shifts represent a sustained assault on the arts, humanities and social sciences. Ministerial vetoes of ARC <a href="https://www.arc.gov.au/grants/discovery-program/discovery-projects">discovery grants</a> in late 2021 added to the picture of federal government disregard for our fields of education and research and their role in Australian society.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/heres-what-the-major-parties-need-to-do-about-higher-education-this-election-180855">Here's what the major parties need to do about higher education this election</a>
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<h2>The myths about ‘job-ready’ graduates</h2>
<p>The Job-Ready Graduates Package was announced in 2020. Student <a href="https://www.theguardian.com/education/2021/feb/08/demand-for-arts-and-humanities-still-high-despite-coalition-university-fee-increases">fee increases</a> of 113% apply to most arts degree subjects from 2022. This has had a <a href="https://dassh.edu.au/wp-content/uploads/2022/05/DASSH-statement-March-CPI-education-figures.pdf">direct impact on inflation</a>. </p>
<p>The previous government assumed that studying these subjects will not get you a job, despite its own <a href="https://www.qilt.edu.au/surveys">graduate outcomes data</a> showing the opposite. <a href="https://www.universitiesaustralia.edu.au/stats-publications/student-stats/">According to Universities Australia</a>, 36% of domestic students and 11% of international students were enrolled in arts, humanities and social sciences in 2018. Yet the government inferred that these disciplinary fields contribute little to Australia’s cultural and economic interests.</p>
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<p>According to <a href="https://dassh.edu.au/wp-content/uploads/2018/11/DASSH_HASS_and_Future_Workforce_FINAL_Report_2018.11_.21_.pdf">research</a> commissioned by the Council of Deans, graduates from the HASS fields make up two-thirds of the Australian workforce. The <a href="https://qilt.edu.au/docs/default-source/default-document-library/2021-ess-national-report.pdf">QILT Employer Satisfaction Survey</a> of 2021 showed graduates of “society and culture” degrees exceed the national average in their preparedness for employment.</p>
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Read more:
<a href="https://theconversation.com/3-flaws-in-job-ready-graduates-package-will-add-to-the-turmoil-in-australian-higher-education-147740">3 flaws in Job-Ready Graduates package will add to the turmoil in Australian higher education</a>
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<h2>A blinkered approach to research commercialisation</h2>
<p>The research commercialisation plan will focus research efforts on the six national manufacturing priorities identified in the <a href="https://www.industry.gov.au/data-and-publications/make-it-happen-the-australian-governments-modern-manufacturing-strategy/our-modern-manufacturing-strategy">Modern Manufacturing Strategy</a>. </p>
<p>Researchers in the humanities and social sciences will find it <a href="https://twitter.com/auDASSH/status/1509358484349132800">almost impossible to attract funding</a> under these priorities. The creative industries might have better prospects in some areas such as design for new technologies.</p>
<p>However, the Coalition government’s own policies were contradictory. The <a href="https://www.dese.gov.au/national-research-infrastructure/2021-national-research-infrastructure-roadmap">National Research Infrastructure Roadmap</a>, released in April 2022, points to “outcomes from research in the creative arts, humanities and social sciences disciplines” as being “critical to achieve the economic, social and environmental benefits we strive for”. The roadmap suggested this research will “play an important role in ensuring social acceptance and uptake of research outcomes, adoption of new technologies and ensuring ethical and responsible development and application of emerging technologies”. </p>
<p>The Council of Deans <a href="https://twitter.com/auDASSH/status/1511950479684927490">welcomed</a> this recognition of the value of HASS research.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/will-the-governments-2-2bn-10-year-plan-get-a-better-return-on-australian-research-it-all-depends-on-changing-the-culture-176358">Will the government's $2.2bn, 10-year plan get a better return on Australian research? It all depends on changing the culture</a>
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<h2>HASS research suffers from meddling in grants</h2>
<p>In December 2021, acting minister Robert asked that discovery grants be assessed under a strengthened national interest test. He also asked the ARC to “bring forward a proposal to enhance and expand the role of the industry and other end-user experts in assessing the National Interest Test of high-quality projects”. </p>
<p><a href="https://dassh.edu.au/wp-content/uploads/2021/12/DASSH-Statement-ARC-proposed-changes-December-2021.pdf">We have argued</a> these proposals represent a major shift for researchers in Australia. They would further entrench the changes that are pushing research dollars away from arts, humanities and social sciences.</p>
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<p>Not only this but, <a href="https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;page=1;query=Catharine%20Coleborne;rec=2;resCount=Default">as I noted</a> at a Senate hearing on the ARC Amendment Bill 2018, applying a national interest test to inquiry-driven research links funding decisions to immediate, commercial and political concerns. Our STEM colleagues <a href="https://physicstoday.scitation.org/do/10.1063/PT.6.2.20220513a/full/">agree</a>.</p>
<p>ARC research grants have also been subject to <a href="https://dassh.edu.au/wp-content/uploads/2022/01/DASSH-STATEMENT-ARC-Veto-19-Jan-2022.pdf">vetoes</a> by government ministers, drawing <a href="https://twitter.com/auDASSH/status/1501707290432655362">condemnation</a> both <a href="https://www.aph.gov.au/e-petitions/petition/EN3949">in Australia and internationally</a>. The vast majority of grant vetoes since <a href="https://parlinfo.aph.gov.au/parlInfo/download/committees/reportsen/024901/toc_pdf/AustralianResearchCouncilAmendment(EnsuringResearchIndependence)Bill2018.pdf%3BfileType=application/pdf">2005</a> have affected humanities and social science projects, with the government showing ignorance of our contribution. Senator Amanda Stoker, for example, representing the education minister at a Senate estimates hearing in February, <a href="https://www.smh.com.au/politics/federal/not-value-for-money-liberal-senator-stoker-defends-research-grant-veto-20220216-p59wzi.html">said</a>: </p>
<blockquote>
<p>“We are very happy to stand by the decision to reject a research project on how climate shaped the Elizabethan theatre. Presumably it’s something about how the theatre might have needed a roof or something.”</p>
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Read more:
<a href="https://theconversation.com/why-we-resigned-from-the-arc-college-of-experts-after-minister-vetoed-research-grants-175925">Why we resigned from the ARC College of Experts after minister vetoed research grants</a>
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<h2>What next?</h2>
<p>The value of our disciplines can be seen in every part of Australian life. Without arts, humanities and social sciences research we would not be using languages to build peace and diplomacy in our region, or have our current social institutions forging democracy. We would not have “Big History”: the study of how how humans and our environment have co-existed and influenced change over time leading to the profound understandings of humanity’s origins through interdisciplinary research. We would have little shared conceptual knowledge of our nation’s ancient histories and Indigenous cultures.</p>
<p>We have extensive collective experience as deans of these disciplinary fields in almost every university in Australia. We argue that researchers in the humanities, arts and social sciences have been highly responsive to the need to forge relevant research. </p>
<p>We look forward to working with the next minister for education to implement changes to these policies that will benefit our universities and the hundreds of thousands of students studying in our degree areas.</p><img src="https://counter.theconversation.com/content/183349/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Catharine Coleborne is the President of the Australasian Council of Deans of Arts, Social Sciences and Humanities (DASSH), the peak body for Deans (and equivalent roles) of these fields across Australia and New Zealand, representing 43 university members.</span></em></p>The Coalition government showed a disdain for the arts, humanities and social sciences. The plight of these disciplines requires action from the incoming Labor government on three fronts.Catharine Coleborne, Dean of Arts/Head of School Humanities, Creative Industries and Social Sciences, University of NewcastleLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1656572021-08-13T12:27:04Z2021-08-13T12:27:04ZColleges are using federal stimulus money to clear students’ past-due debts – an economist answers five questions<figure><img src="https://images.theconversation.com/files/415905/original/file-20210812-19-h77ol2.jpg?ixlib=rb-1.1.0&rect=44%2C0%2C4928%2C3268&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Trinity Washington University in Washington, D.C. is one of several colleges using federal money to clear their students' debt. </span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/trinity-washington-university-is-opening-its-first-new-news-photo/537977310?adppopup=true">Astrid Riecken For The Washington Post via Getty Images</a></span></figcaption></figure><p><em>Editor’s note: A growing number of <a href="https://www.wsj.com/articles/city-university-of-new-york-to-wipe-out-125-million-in-student-balances-11627575951">colleges and universities</a> across the country are using money from the American Rescue Plan to clear their current and graduating students’ debt. The <a href="https://www2.ed.gov/about/offices/list/ope/arp.html">American Rescue Plan</a> was signed into law in March 2021 and allocated nearly $40 billion to the Higher Education Emergency Relief Fund III. Colleges and universities may use a portion of these funds to cover <a href="https://www2.ed.gov/about/offices/list/ope/heerflostrevenuefaqs.pdf">lost revenue</a>, including unpaid student account debts. Here William Chittenden, an expert on debt in higher education, explains what this means for college students’ futures.</em> </p>
<h2><strong>1. How does debt clearance work?</strong></h2>
<p>Current students, recent graduates and colleges and universities will all benefit from debt clearance. </p>
<p><a href="https://www.wsj.com/articles/hbcus-deploy-covid-19-pandemic-funds-to-forgive-millions-in-student-debt-11627464602">Debt clearance</a> is not the same as student loan forgiveness. Rather, debt clearance refers to the forgiveness of amounts that students and recent graduates owe to their universities for past semesters for things like tuition, fees and room and board. With these debts outstanding, current students may not be able to <a href="https://www.wsj.com/articles/city-university-of-new-york-to-wipe-out-125-million-in-student-balances-11627575951">register for classes the following semester</a>. </p>
<h2>2. <strong>How do students benefit?</strong></h2>
<p>Students and recent graduates who were <a href="https://www2.ed.gov/about/offices/list/ope/heerflostrevenuefaqs.pdf">enrolled on or after March 13, 2020</a>, may be eligible for debt clearance. Those who can demonstrate financial hardship will benefit, as they will not have to repay the debt. By clearing this debt, universities are <a href="https://www.wsj.com/articles/hbcus-deploy-covid-19-pandemic-funds-to-forgive-millions-in-student-debt-11627464602">allowing current students to finish their studies</a>.</p>
<p>For recent graduates, having debt outstanding to their school <a href="https://policies.txstate.edu/university-policies/03-01-06.html">may prevent them</a> from obtaining a transcript or proof that they graduated. By clearing the debts for recent graduates, alums can, as noted by the chancellor of City University of New York, Félix V. Matos Rodríguez, “<a href="https://www.wsj.com/articles/city-university-of-new-york-to-wipe-out-125-million-in-student-balances-11627575951">move ahead in pursuit of their educational and career objectives without the specter of unpaid tuition and fees</a>.”</p>
<h2><strong>3. How will colleges and universities benefit?</strong></h2>
<p>Colleges and universities will also benefit, since the debts that are being cleared are being paid for by the federal government instead of the university. Schools are receiving funds they may have had to write off. This gives universities money to spend in the local economy on things like office supplies and catering services. </p>
<h2><strong>4. Will school debt clearance benefit the economy?</strong></h2>
<p>The direct economic benefit to students and recent graduates is simple to measure, as it is equal to the amount of the debt forgiven. A student who has $1,000 in debt cleared receives a direct economic benefit of $1,000. </p>
<p>The indirect benefits to students are positive but harder to measure. If the debt clearance allow students to finish their final semester and earn their undergraduate degree, they will <a href="https://www.bls.gov/careeroutlook/2020/data-on-display/education-pays.htm">earn 50% more</a>, on average, than those who completed some college but did not earn a degree. I consider that a significant benefit to students.</p>
<p>Federal dollars used for debt clearance will be spent by colleges and universities on a variety of goods and services. That spending ripples through the economy. The estimated size of the economic impact of this spending by universities varies greatly. The state of Washington estimates that each dollar the state spends on higher education at the University of Washington <a href="https://www.seattletimes.com/opinion/the-multiplier-effect-of-skimping-on-higher-education/">generates $1.48 in economic activity</a>, while Oklahoma estimates there is <a href="https://tulsaworld.com/business/multiplier-effect-local-economies-boost-from-colleges-and-universities-is-studied/article_85052b14-cbca-527c-86c4-4a92806e5701.html">$9.40 of economic impact</a> per dollar spent on higher education. Although the exact dollar impact is unknown, all estimates are that <a href="https://courses.lumenlearning.com/boundless-economics/chapter/introduction-to-fiscal-policy/">it will be positive</a>. </p>
<h2><strong>5. How fair is it to clear balances for students and graduates at this time but not others?</strong></h2>
<p>We are in the midst of a <a href="https://onlinelibrary.wiley.com/doi/10.1111/jocn.15365">once-in-a-century global pandemic</a>. In the second quarter of 2020 we saw the <a href="https://www.usatoday.com/story/news/factcheck/2020/08/08/fact-check-u-s-quarterly-gdp-drop-worst-modern-history/5569089002/">largest decrease</a> in gross domestic product on record. In April 2020, <a href="https://www.cnbc.com/2020/05/08/jobs-report-april-2020.html">over 20 million people</a> lost their jobs, and unemployment hit levels <a href="https://www.washingtonpost.com/business/2020/05/08/april-2020-jobs-report/">not seen since the Great Depression</a>. The economic hardships students are facing because of the pandemic are extraordinary. Therefore, it can be argued that federal funding for debt clearance is fair, given the extraordinary circumstances.</p>
<p>On the other hand, one could ask the question: Is it fair that those students who also experienced financial hardship this past year, but still managed to pay their tuition in full, will not get debt clearance? What about students who suffered financial hardship before March 2020 and owe money to their university? Why is their debt not eligible for clearance? </p>
<p>Nobel Prize-winning economist <a href="https://miltonfriedman.hoover.org/internal/media/dispatcher/214184/full">Milton Friedman stated</a>, “There is no objective standard of ‘fairness.’” Unfortunately, without such a standard, individuals will disagree on the question of debt clearance fairness.</p>
<p>[<em>You’re smart and curious about the world. So are The Conversation’s authors and editors.</em> <a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=youresmart">You can read us daily by subscribing to our newsletter</a>.]</p><img src="https://counter.theconversation.com/content/165657/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>William Chittenden does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Colleges and universities are using federal money to clear their students’ debt. An economist explains who will benefit from this move.William Chittenden, Presidential Fellow, Texas State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1279042019-12-09T19:20:47Z2019-12-09T19:20:47ZLegal win doesn’t mean Ontario student associations are in the clear<figure><img src="https://images.theconversation.com/files/305717/original/file-20191207-90597-12a0os3.jpg?ixlib=rb-1.1.0&rect=196%2C515%2C3898%2C2173&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Students walk on campus at the University of Guelph in Guelph, Ont., in March 2017. An Ontario court recently ruled in favour of student associations and struck down an Ontario government directive that threatened their survival.</span> <span class="attribution"><span class="source"> THE CANADIAN PRESS/Hannah Yoon</span></span></figcaption></figure><p>The Ontario government’s so-called <a href="https://news.ontario.ca/maesd/en/2019/01/government-for-the-people-to-lower-student-tuition-burden-by-10-per-cent.html">Student Choice Initiative</a> was <a href="https://www.theglobeandmail.com/canada/article-ontario-court-strikes-down-policy-allowing-students-to-opt-out-of-fees/">recently declared unlawful</a> following a court challenge launched by the <a href="https://cfs-fcee.ca/">Canadian Federation of Students</a> and the <a href="http://www.yfs.ca/">York Federation of Students</a>.</p>
<p>The <a href="https://cfsontario.ca/wp-content/uploads/2019/11/Cdn-Fed-Students-v-Ontario-20191121.pdf">Ontario Divisional Court’s decision</a> <a href="http://www.tcu.gov.on.ca/pepg/mtcu-university-tuition-framework-guidelines-mar2019-en.pdf">voids the government’s requirement</a> that post-secondary institutions must distinguish between fees that are considered compulsory and those deemed non-essential. The directive also allowed more students to opt out of paying fees to student associations through a so-called opt-out window, which some students took advantage of.</p>
<p>Campus organizations, including student unions, newspapers and radio stations, food banks and LGBTQ support centres, received less funding this year due to students opting out. Some organizations were forced <a href="https://www.macleans.ca/news/canada/student-fees-ontario/">to lay off staff or cut services.</a></p>
<p>The court’s decision reaffirms the autonomy of universities to manage their own relationships with their student organizations.</p>
<p>The message delivered was clear. Governments cannot interfere with post-secondary student associations that belong to and are solely funded by students. </p>
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<p>News of the decision was celebrated by student associations, but on campuses across Ontario, they’re still anxiously awaiting the government’s next move. </p>
<h2>Three arguments</h2>
<p>The legal challenge advanced by the Canadian Federation of Students is based on three arguments. First, the government acted outside of the laws that govern colleges and universities. Second, its policy directives were made to serve an improper purpose and in bad faith. Third, the government breached a duty of procedural fairness by failing to consult with student associations prior to issuing the policy. The court only needed to address the first argument since it raised legality directly. </p>
<p>According to the court, the government acted unlawfully. The court’s reasoning stemmed from the fact that there was no statutory authority that allowed cabinet or the education minister to interfere in the internal affairs of student associations. </p>
<p>The court also rejected the government’s position that the matters brought forward weren’t issues that the court or a judge could appropriately resolve. The government argued, unsuccessfully, that those issues are “core policy decisions based on social, economic and political considerations, and are exercises of the <a href="https://www.canada.ca/en/department-national-defence/corporate/reports-publications/military-law/crown-prerogative/introduction.html">Crown prerogative power over public spending</a>.”</p>
<p>Though it’s true that one of the two major sources of income for Ontario universities are government grants, accounting for roughly a third of their overall operating revenue, the court reminded the province that “universities are private, autonomous, self-governing institutions … publicly assisted but not publicly owned or operated.” Therefore, they aren’t subject to interference without proper legislation.</p>
<p>Nonetheless, there are two sides to this story. </p>
<h2>Another side to the story</h2>
<p>On the one hand, the court’s decision strengthens the autonomy and independence of post-secondary institutions and student associations. On the other, the court provides a possible road map for the government to lawfully implement its policy initiative directed at students. That’s because the crux of the court’s decision is that the policy is inconsistent with current legislation governing universities. </p>
<p>While the government has yet to respond to the court’s decision, there are three possible ways it can proceed. </p>
<p>First, the government could appeal the initial decision to a higher court and seek to uphold the original policy directives. </p>
<p>Second, the government might attempt to make the policy directives lawful by bringing in new legislation. </p>
<p>The third option would be for the government to do nothing and concede defeat. </p>
<p>But no matter what approach the government takes, all three options will have some implications for universities and student organizations. </p>
<p>Either one of the first two approaches would have an impact on how student organizations collect fees that are essential to how they operate. The challenge that student organizations face in the event of an appeal is losing potential revenue if students can continue to opt out of paying some fees until the final outcome of an ongoing legal battle. </p>
<h2>Waiting game</h2>
<p>In the event the government takes the legislative route, the fate of the Student Choice Initiative will be in the hands of the provincial government. Student organizations would also be faced with a waiting game. </p>
<p>If the government decides to concede defeat, student organizations might go back to business as usual. But with revenue lost for some due to the policy directive being in place for the fall semester, the question becomes: Who will pay for the lost revenue associated with the initiative?</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/305692/original/file-20191206-90569-1otn19l.jpg?ixlib=rb-1.1.0&rect=242%2C0%2C3352%2C1983&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/305692/original/file-20191206-90569-1otn19l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/305692/original/file-20191206-90569-1otn19l.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/305692/original/file-20191206-90569-1otn19l.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/305692/original/file-20191206-90569-1otn19l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/305692/original/file-20191206-90569-1otn19l.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/305692/original/file-20191206-90569-1otn19l.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">The Ryerson University campus in Toronto is seen in January 2019.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Chris Young</span></span>
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</figure>
<p>Conceding defeat would therefore raise issues around whether the government will replenish the lost revenue as a result of allowing students to opt out. </p>
<p>Though the third option might be the most desired response for student organizations, it may also be one that results in future legal battles between the Ontario government and the students who took advantage of the opt-out process if they are in any way financially affected by reversing the policy.</p>
<p>Appealing the decision might prove futile for the government since, as this case demonstrates, judges could be sensitive to university self-government and view student organizations more favourably than legislators. </p>
<p>Even though student associations have been described as <a href="https://www.cbc.ca/news/canada/toronto/doug-ford-accuses-student-unions-of-crazy-marxist-nonsense-in-fundraising-email-1.5015042">“crazy Marxist nonsense”</a> by Premier Doug Ford, the court has recognized the important role of student associations within universities and society. </p>
<h2>Not exactly more affordable</h2>
<p>The Student Choice Initiative was framed as part of the government’s plan to make post-secondary education more affordable and accessible to students. Yet as the first semester of this academic school year comes to a close, the situation on campuses seems to suggest otherwise.</p>
<p>The optional fees mandated by cabinet in fact amount to less than one per cent of a full-time student’s overall tuition and ancillary fees. </p>
<p>As the court noted in its decision:</p>
<blockquote>
<p>“Total tuition and university and student ancillary fees are $8,687.30; the student association fees — the only fees deemed by cabinet to be non-essential — are $60.60 of this total.” </p>
</blockquote>
<p>Rather than making education more affordable and accessible, the government’s policy directive forced student organizations into a corner. </p>
<p>Student associations at <a href="https://www.queensjournal.ca/story/2019-04-04/news/the-student-choice-initiative-explained/">Queen’s University</a> and the <a href="https://thevarsity.ca/2019/03/29/provincial-government-releases-official-guidelines-on-student-choice-initiative-details-of-tuition-cuts/">University of Toronto</a>, among others, have struggled to distinguish between ancillary and optional fees in hopes of saving services like food banks, school newspapers, legal clinics and campus radio stations. </p>
<p>While the court’s decision is a positive step in the right direction for student organizations, the Student Choice Initiative will nonetheless have a longer lasting impact on campuses. </p>
<p>For now, the survival of student organizations, and the services they provide, depends on whether the government finds a way to lawfully implement the Student Choice Initiative — whether that means through the courts or the legislature. </p>
<p>[ <em>Like what you’ve read? Want more?</em> <a href="https://theconversation.com/ca/newsletters?utm_source=TCCA&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=likethis">Sign up for The Conversation’s daily newsletter</a>. ]</p><img src="https://counter.theconversation.com/content/127904/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Said is affiliated with the Graduate Student Association at the University of Guelph. </span></em></p>The survival of Ontario student associations, and the services they provide, depends on whether the government finds a way to lawfully implement its Student Choice Initiative after a legal defeat.David Said, PhD Candidate/Researcher, Political Science, University of GuelphLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/955102018-05-08T10:49:33Z2018-05-08T10:49:33ZBudget 2018: what’s in store for education<figure><img src="https://images.theconversation.com/files/218005/original/file-20180508-46335-p90rnk.png?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Mai Lam/The Conversation NY-BD-CC</span>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>It wasn’t a big budget for education this year, with schools funding already set in the last Budget, and the funding freeze for universities announced in the Federal Government’s mid-year budget update in December.</p>
<p>But the National Schools Chaplaincy program will become permanent, with A$247 million set aside over four years from 2018-19.</p>
<p>And there is some good news for students in regional, rural and remote areas, with:</p>
<ul>
<li><p>A$96.1 million over four years for young people in regional, rural and remote communities to transition to further education, training and employment</p></li>
<li><p>A$14 million over four years for 185 Commonwealth Supported Places annually for students commencing a bachelor degree at university through a Regional Study Hub</p></li>
<li><p>A$53.9 million over four years to improve regional students’ access to youth allowance, and</p></li>
<li><p>A$123.6 million over five years to regional universities for additional Commonwealth Supported Places from 2017-18.</p></li>
</ul>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/217985/original/file-20180507-46335-111xz8p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/217985/original/file-20180507-46335-111xz8p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=393&fit=crop&dpr=1 600w, https://images.theconversation.com/files/217985/original/file-20180507-46335-111xz8p.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=393&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/217985/original/file-20180507-46335-111xz8p.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=393&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/217985/original/file-20180507-46335-111xz8p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=494&fit=crop&dpr=1 754w, https://images.theconversation.com/files/217985/original/file-20180507-46335-111xz8p.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=494&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/217985/original/file-20180507-46335-111xz8p.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=494&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Mai Lam/The Conversation</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<h2>Schools and early education funding</h2>
<p><em>Glenn Savage, Senior Lecturer in Education Policy and Sociology of Education at University of Western Australia</em></p>
<p>Despite ongoing political debates about school funding, most of the big news happened in last year’s budget, when the federal government formalised details associated with its <a href="https://www.education.gov.au/funding-schools">Quality Schools</a> reform package.</p>
<p>The package centres on a commitment to align school funding with the Schooling Resource Standard (<a href="https://theconversation.com/changes-to-school-funding-your-questions-answered-77243">SRS</a>) recommended in the 2011 Gonski <a href="https://docs.education.gov.au/documents/review-funding-schooling-final-report-december-2011">report into school funding</a>. </p>
<p>To achieve this, the government plans to <a href="https://theconversation.com/changes-to-school-funding-your-questions-answered-77243">progressively raise funding levels</a> for government schools from 17% to 20% of the SRS and for private schools from 76.8% to 80% of the SRS by 2027.</p>
<p>The government argues that this delivers an <a href="https://budget.gov.au/2018-19/content/essentials.html">additional $24.5 billion</a> for Australian schools over the decade, and says it <a href="https://docs.education.gov.au/system/files/doc/other/funding_will_be_tied_to_reforms.pdf">will be up to states</a> as to whether they wish to fund the remaining amounts so that all schools reach the full SRS.</p>
<p>The government also claims its reform package provides more consistent needs-based funding when compared to the so-called “<a href="https://theconversation.com/gonski-model-was-corrupted-but-labor-and-coalition-are-both-to-blame-65875">special deals</a>” established under the Labor Gillard government. </p>
<p>Labor doesn’t agree, suggesting the Coalition is shortchanging the nation to the tune of <a href="http://parlinfo.aph.gov.au/parlInfo/download/library/partypol/5650034/upload_binary/5650034.pdf;fileType=application%2Fpdf#search=%22ALP%22">A$17 billion</a> (the initial claim was <a href="http://www.abc.net.au/news/2017-06-05/fact-check-has-the-government-cut-22bn-from-schools/8526768">$22 billion</a>) when compared to promises made by the former Gillard Labor government. </p>
<p>Labor has <a href="http://parlinfo.aph.gov.au/parlInfo/download/library/partypol/5650034/upload_binary/5650034.pdf;fileType=application%2Fpdf#search=%22ALP%22">promised</a>, if re-elected, to return to the Gillard model.</p>
<p>This ensures funding will be a defining issue at the next federal election, especially given last week’s <a href="https://theconversation.com/gonski-review-reveals-another-grand-plan-to-overhaul-education-but-do-we-really-need-it-93119">Gonski 2.0 report</a> has made a suite of recommendations that the federal government supports and could very well require an additional injection of federal funds to implement.</p>
<p>But any potential changes hinge on whether the Coalition is actually in power when next year’s budget is delivered. And, if so, whether it has any luck pursuing the new Gonski agenda with states and territories.</p>
<p>Aside from these ongoing Gonski wars, this year’s budget contains a few additional highlights.</p>
<p>Most controversial is A$247 million over four years to extend the <a href="https://education.nsw.gov.au/student-wellbeing/whole-school-approach/wellbeing-support/nscp">National School Chaplaincy Program</a>, which will have a new anti-bullying focus. The program was first introduced under the former Howard Coalition, but was subsequently dumped by Labor. It’s strongly supported <a href="https://www.theaustralian.com.au/national-affairs/education/schools-chaplain-program-extended-with-bullying-focus/news-story/04fdad5f42fed011f3b33d13d93ef6dd">by conservative backbenchers</a>. </p>
<p>Other notables in this year’s budget include:</p>
<p>• A$440 million to extend the <a href="https://www.education.gov.au/national-partnership-agreements">National Partnership Agreement on universal access to early childhood education</a> for a further year.</p>
<p>• A$154 million to promote active and healthy living. This includes A$83 million to improve existing community sport facilities and expand the <a href="https://www.sportingschools.gov.au/">Sporting Schools</a> and <a href="https://www.ausport.gov.au/ais/grants_and_funding/local_sporting_champions">Local Sporting Champions</a> programs.</p>
<p>• A$11.8 million over three years to expand the <a href="https://www.education.gov.au/early-learning-languages-australia">Early Learning Languages Australia</a> program to more preschools and trial the program in 2019 and 2020 from the first year of school through to year two in primary schools.</p>
<p>• A$6 million over two years (from 2017-18) to continue and update the communications campaign to increase public awareness of changes to the Quality Schools package (aka public relations to sell the government’s reform package).</p>
<p>• A$1.3 million per year until 2020-21 to continued funding the <a href="https://www.moneysmart.gov.au/teaching">MoneySmart Teaching</a> program, designed to improve financial literacy education in schools.</p>
<p>• A$134.3 million over four years to the Northern Territory as part of the children and schooling component of the <a href="http://www.federalfinancialrelations.gov.au/content/npa/community_services/national-partnership/NT_remote_aboriginal_investment_NP.pdf">National Partnership Agreement on Northern Territory Remote Aboriginal Investment</a>.</p>
<p>Finally, the government has signalled its intention to continue exploring ways to deliver new and diverse pathways into the teaching profession, with the view to increasing the supply of quality teachers. This measure builds on previous work associated with the <a href="http://www.teachforaustralia.org">Teach for Australia</a> program. </p>
<p>To pursue this aim, <a href="https://budget.gov.au/2018-19/content/bp2/download/bp2_combined.pdf">the government has suggested</a> it will invite proposals in 2018 from providers to deliver alternative pathways into teaching.</p>
<h2>Higher education and VET funding</h2>
<p><em>Andrew Norton, Program Director of Higher Education at Grattan Institute</em></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/218008/original/file-20180508-46335-nlccfc.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/218008/original/file-20180508-46335-nlccfc.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/218008/original/file-20180508-46335-nlccfc.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=393&fit=crop&dpr=1 600w, https://images.theconversation.com/files/218008/original/file-20180508-46335-nlccfc.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=393&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/218008/original/file-20180508-46335-nlccfc.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=393&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/218008/original/file-20180508-46335-nlccfc.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=494&fit=crop&dpr=1 754w, https://images.theconversation.com/files/218008/original/file-20180508-46335-nlccfc.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=494&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/218008/original/file-20180508-46335-nlccfc.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=494&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Mai Lam/The Conversation</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<p><strong>VET</strong></p>
<p>The long aftermath of the VET FEE-HELP loan fiasco is still being felt in the 2018-19 Budget. The government is planning to spend A$36.2M over fours years for a new IT system to ensure compliance in the replacement <a href="https://www.education.gov.au/vet-student-loans">VET Student Loans </a>program. </p>
<p>The <a href="http://www.ombudsman.gov.au/about/vslo">VET Student Loans Ombudsman</a>, given the task of receiving student complaints about vocational education lending, is to receive another A$1 million to help deal with the large numbers of people making complaints. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/217987/original/file-20180507-46341-8xuokj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/217987/original/file-20180507-46341-8xuokj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=393&fit=crop&dpr=1 600w, https://images.theconversation.com/files/217987/original/file-20180507-46341-8xuokj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=393&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/217987/original/file-20180507-46341-8xuokj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=393&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/217987/original/file-20180507-46341-8xuokj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=494&fit=crop&dpr=1 754w, https://images.theconversation.com/files/217987/original/file-20180507-46341-8xuokj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=494&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/217987/original/file-20180507-46341-8xuokj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=494&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Mai Lam/The Conversation</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<p><strong>Higher education</strong></p>
<p>Higher education’s big Budget news came early, in the December 2017 <a href="https://www.budget.gov.au/2017-18/content/myefo/html/">Mid-Year Economic and Fiscal Outlook</a> (MYEFO). It announced a two-year pause in tuition subsidy growth, and a range of reforms to the Higher Education Loan Program (HELP). There is no major change to these decisions in the 2018-19 Budget.</p>
<p>The pause in tuition subsidy growth has been implemented. It was done <a href="http://andrewnorton.net.au/2017/12/17/how-can-the-government-cap-funding-for-commonwealth-supported-student-places/">without going back to parliament</a> using <a href="https://docs.education.gov.au/node/49011">university funding agreements</a>. For domestic bachelor degree places, universities will receive the same total amount that they received for 2017 for each of 2018 and 2019. Previously, there were “demand driven”, meaning that the Government would fund every student the universities enrolled. </p>
<p>This funding freeze means that universities won’t receive the value of <a href="https://app.heims.education.gov.au/HeimsOnline/IPInfo/Payment/IndexSearch">inflation indexation</a> to <a href="https://docs.education.gov.au/node/44991">per student Commonwealth contributions</a>, or Commonwealth contributions for any additional students they enrol above 2017 levels. But they will still receive <a href="https://www.studyassist.gov.au/help-loans-and-csps-commonwealth-supported-places/student-contribution-amounts">indexed student contributions </a> for all students they enrol. </p>
<p>The government has also used the funding agreements to reduce the number of Commonwealth-funded diploma, associate degree, and postgraduate coursework places. About 4,000 allocated places were abolished, but some of these weren’t being used anyway, so the practical effect may be limited. </p>
<p>Soon after these policies were announced, partial exceptions began with the University of Tasmania, the University of the Sunshine Coast and Southern Cross University all receiving additional places. These are <a href="https://budget.gov.au/2018-19/content/bp2/download/bp2_combined.pdf">confirmed in the Budget</a> at a cost of A$124 million over five years. </p>
<p>In addition, the Budget has a new announcement of A$96 million over four years for nearly 700 extra student places for young people from regional areas. This is in response to the <a href="https://www.education.gov.au/independent-review-regional-rural-and-remote-education">Independent Review into Regional, Rural and Remote Education</a>.</p>
<p>Including the new places, funding on Commonwealth contributions through the Commonwealth Grant Scheme will be<a href="https://docs.education.gov.au/system/files/doc/other/education_and_training_portfolio_budget_statements_2018-19_full_print.pdf"> just over A$7 billion </a>for 2018-2019. </p>
<p>From 2020, the government says it will resume funding increases based on population growth for universities that meet yet-to-be determined performance criteria. The Budget paper shows predicted spending of A$7.3 billion in 2020-21. </p>
<p>But numbers this far out are moot. With an election due in the next 12 months, and Labor indicating it will <a href="http://www.tanyaplibersek.com/speech_universities_australia_conference">go back to demand driven funding</a>, the funding freeze could be over by then. If the Coalition survives in office, it may also make substantial changes. </p>
<p>The other major MYEFO announcement was to the Higher Education Loan Program (HELP) loan scheme. Unlike changes to total tuition subsidy payments, these need legislating and the relevant bill is <a href="https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r6051">still before the Senate</a>. </p>
<p>The most important proposed changes to HELP are the <a href="https://docs.education.gov.au/system/files/doc/other/45k_hybrid_threshold_cpi_indexation_lp_0.pdf">income thresholds</a> determining whether, or how much, a HELP debtor needs to repay each year. If it passes, the bill would lower the initial repayment threshold from A$52,000 a year to A$45,000 a year. HELP debtors earning between A$45,000 and A$52,000 would repay 1% of their income. But some other thresholds are more generous than now, and many HELP debtors would end up <a href="https://grattan.edu.au/news/designing-a-more-sustainable-student-loan-system/">paying less per year</a> than they do now. </p>
<p>The government also originally proposed a A$100,000 lifetime cap on borrowing under HELP for all courses except medicine, dentistry and veterinary science, rather than just the full-fee student <a href="https://www.studyassist.gov.au/help-loans-and-csps/fee-help">FEE-HELP scheme</a>. The Budget confirms that the cap would be A$100,000 of HELP debt at any one time, allowing people who have paid off some debt to borrow again. </p>
<p>Whether HELP reforms eventually pass the Senate remains to be seen. In either case, it is fortunate for the higher education sector that they were not rejected prior to the May 2018 Budget. The freezing of the demand driven system showed the government was not bluffing when it said it needed to reduce higher education spending. Like the demand driven system, <a href="https://www.education.gov.au/higher-education-participation-and-partnerships-programme-heppp">equity programs</a> and some <a href="https://www.education.gov.au/research-block-grants">research programs</a> are vulnerable to cuts the parliament cannot easily stop. </p>
<p>As it turns out, these programs survive in the Budget.</p>
<p>Research funding will receive a modest boost, with nearly A$400 million extra over five years for <a href="https://www.education.gov.au/national-collaborative-research-infrastructure-strategy-ncris">research infrastructure</a>.</p>
<p>Although the higher education sector gets off lightly in the Budget compared to MYEFO, higher education providers will be hit with extra charges. The Government plans to charge them more for the services of the <a href="https://www.teqsa.gov.au/">Tertiary Education Quality and Standards Agency</a>. </p>
<p>The government also plans to charge higher education providers A$10 million a year to recover costs associated with HELP. We can only hope some of this is used to improve on the current very unsatisfactory public reporting of HELP’s finances.</p><img src="https://counter.theconversation.com/content/95510/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Norton has served on two government panels, the review of the demand driven system 2013-14 and the higher education expert panel 2016-17. The demand driven review role was paid. </span></em></p><p class="fine-print"><em><span>Glenn C. Savage receives funding from the Australian Research Council.</span></em></p>Education policy experts run through the major changes for education in Budget 2018 for schools, VET and higher education.Andrew Norton, Program Director, Higher Education, Grattan InstituteGlenn C Savage, Senior Lecturer in Education Policy and Sociology of Education, and ARC DECRA Fellow (2016-19), The University of Western AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/924862018-02-27T12:47:49Z2018-02-27T12:47:49ZSix ways to bridge the gap between rich and poor at university<figure><img src="https://images.theconversation.com/files/208068/original/file-20180227-36686-2faobv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Graduation day.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/portsmouth-july-20-graduation-ceremony-university-601347749">edella/Shutterstock.</a></span></figcaption></figure><p>Theresa May’s <a href="http://www.bbc.co.uk/news/education-43106736">year-long review of student funding</a> offers a real opportunity to solve the big problems around tuition fees and financial support at UK universities. </p>
<p>As part of our <a href="http://www.bath.ac.uk/education/research/projects/geographies-higher-education/">research</a> on how young people from different places and backgrounds transition into university, we spoke with more than 180 young people from across Scotland, Northern Ireland, Wales and each region of England, and analysed detailed student records to track the movements of half a million students who entered university for the first time, over recent years. </p>
<p>Here we present six suggestions, based on our findings, that could help make going to university a real option for students of all backgrounds. </p>
<h2>1. Lower the price of leaving home</h2>
<p>We found evidence from talking to young people that the poorest are often highly conscious of the cost of living at university. This can limit their university choices: some will rule out a university because of the high cost of accommodation. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/208057/original/file-20180227-36686-1rg4zuf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/208057/original/file-20180227-36686-1rg4zuf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=389&fit=crop&dpr=1 600w, https://images.theconversation.com/files/208057/original/file-20180227-36686-1rg4zuf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=389&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/208057/original/file-20180227-36686-1rg4zuf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=389&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/208057/original/file-20180227-36686-1rg4zuf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=489&fit=crop&dpr=1 754w, https://images.theconversation.com/files/208057/original/file-20180227-36686-1rg4zuf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=489&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/208057/original/file-20180227-36686-1rg4zuf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=489&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">UEA’s ziggurats: it costs to live on campus.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/23351536@N07/15016843422/sizes/l">kaysgeog/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<p>We found that young people in different parts of the UK had different attitudes towards the costs of study, which influenced their choices about going to university and whether or not to leave home. Our <a href="https://www.suttontrust.com/research-paper/home-and-away-student-mobility/">recent research for the Sutton Trust</a> revealed that disadvantaged students across the nation were least likely to leave their parents’ home, and there was some evidence that the rise in tuition fees strengthened this trend. </p>
<p>The government should consider either regulating accommodation costs, or providing funding that takes differences in cost into account – for example by weighting support according to the cost of accommodation at the student’s chosen university.</p>
<h2>2. Cater for commuters</h2>
<p>The number of students living at home while at university rose from 278,555 in 2007-08 to 328,675 in 2015-16. That means more students are commuting, but these costs aren’t accounted for in current packages of financial support. </p>
<p>Some institutions have more commuter students than others. London universities including the London School of Economics and Political Science (LSE), the School of Oriental and African Studies (SOAS) and St Mary’s University College Twickenham have all seen 10% increases in the proportion of their new undergraduate students who commute. Staffordshire University, Stirling University, the University of Cumbria and the University of East Anglia have also seen big increases. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/208060/original/file-20180227-36703-1n7n8cn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/208060/original/file-20180227-36703-1n7n8cn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/208060/original/file-20180227-36703-1n7n8cn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/208060/original/file-20180227-36703-1n7n8cn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/208060/original/file-20180227-36703-1n7n8cn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/208060/original/file-20180227-36703-1n7n8cn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/208060/original/file-20180227-36703-1n7n8cn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Joining the crush: London Underground.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/tompagenet/6850442869/sizes/l">tompagenet/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>Clearly, this requires tailored responses from the universities, based on their local geography and the types of courses affected. But there are some changes which could make life better for commuter students across the board. Rescheduling classes to avoid early starts (when commuting may be more difficult or expensive), having greater flexibility about office hours and considering forms of online learning could help. </p>
<p>These changes need to prioritise the needs of commuter students, without increasing workloads for lecturers, who are often already over-stretched.</p>
<h2>3. Help pay for transport</h2>
<p>There’s not enough support for students who commute. First-time students who live in university accommodation often live close by to essential academic and pastoral support services, such as the library, lecturers’ offices, study skills workshops and study spaces and facilities. But it’s harder for commuter students to access these services. </p>
<p>Transport should be subsidised for students who commute, in the form of petrol vouchers, car sharing schemes or extended subsidised bus services – whichever is suitable. An extended 18 to 25 student railcard could also offer students who have to commute during peak times the same one third discount, which currently only applies to off-peak fares.</p>
<h2>4. Admit there’s a diversity problem</h2>
<p>Universities <a href="http://www.bath.ac.uk/publications/diverse-places-of-learning-home-neighbourhood-ethnic-diversity-ethnic-composition-of-universities/attachments/Diverse-places-of-learning.pdf">are highly segregated</a> along the lines of race and ethnicity, and some universities are substantially less diverse than their surrounding areas. </p>
<p>For instance, the Universities of Birmingham or Leicester are substantially more ethnically mixed than similar institutions. But they are 10% less ethnically mixed than Birmingham City University, Aston University or De Montfort University. London’s elite arts and music colleges and institutes do not reflect the super diverse population of the capital. This stands in direct contrast to universities like the University of East London, London Metropolitan University and City, University of London. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/208064/original/file-20180227-36674-5u56aa.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/208064/original/file-20180227-36674-5u56aa.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=429&fit=crop&dpr=1 600w, https://images.theconversation.com/files/208064/original/file-20180227-36674-5u56aa.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=429&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/208064/original/file-20180227-36674-5u56aa.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=429&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/208064/original/file-20180227-36674-5u56aa.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=539&fit=crop&dpr=1 754w, https://images.theconversation.com/files/208064/original/file-20180227-36674-5u56aa.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=539&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/208064/original/file-20180227-36674-5u56aa.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=539&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Graduation day at the University of Bradford.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/atoach/11227914955/sizes/l">Tim Green aka atoach/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>There is no simple solution for dealing with the ethnic and socio-economic segregation of higher education. Oxford’s intake won’t echo that of Bradford (an institution with an ethnically diverse, working-class intake) any time soon. Too many vested interests mean that the most elite institutions will remain predominantly white and middle-class for the foreseeable future.</p>
<p>This should not prevent the work needed to make universities more diverse, which includes addressing the content of the curriculum, as well as perceptions about different courses and institutions. But we should not expect that the majority of working-class, ethnic-minority students, coming from families with no or little university experience, will want to move away for university. </p>
<h2>5. Bring back the bursary</h2>
<p>The lack of diversity in universities creates serious inequalities in student finance. In particular, it means that the greatest financial support <a href="http://www.mdpi.com/2227-7102/6/1/5/htm">is available to</a> the most academically-able disadvantaged students. In effect, bursaries are concentrated in the wealthiest institutions, with the smallest number of working-class and ethnic minority students. </p>
<p>It’s time to revisit the idea of a <a href="http://www.hepi.ac.uk/wp-content/uploads/2014/02/37NationalBursaryfull.pdf">national bursary system</a>. There’s also a clear desire among students to bring back maintenance grants on a universal basis, alongside additional means-tested support. Given we live in an era of substantial generational inequality, these moves should be seriously considered.</p>
<h2>6. Help universities reach out</h2>
<p>Efforts to help students from disadvantaged backgrounds to attend university are unevenly concentrated across the country. In particular, third sector outreach and social mobility charities are overly concentrated on London, despite attempts by some organisations to expand their efforts. </p>
<p>There’s a skew of cultural and economic resources and activities towards the capital, which directly affects outreach and widening participation activities. For example, funding for the National Collaborative Outreach Programme currently stands at <a href="http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2017-12-06/118007/">£60m a year</a> – less than the <a href="https://www.timeshighereducation.com/news/aimhigher-brought-down-by-coalition-axe/414416.article?storycode=414416">£78m a year</a> given to Aim Higher, which did a similar job on university outreach, just before its closure in 2010-11. </p>
<p>Government needs to act to address this imbalance. The return of a scheme like Aim Higher would do much to resolve the geographical imbalances in widening participation efforts run by charities which – despite <a href="http://www.thebrilliantclub.org/about-the-brilliant-club/our-strategy-the-path-to-outcomes/">notable successes</a> – have failed to fill the gap.</p><img src="https://counter.theconversation.com/content/92486/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael Donnelly receives funding from the Economic and Social Research Council (award no. ESN02121/1). </span></em></p><p class="fine-print"><em><span>Sol Gamsu does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>New research reveals that poorer students are less likely to leave home for university – and that has serious impacts on their experience.Michael Donnelly, Lecturer, Department of Education, University of BathSol Gamsu, Researcher, University of BathLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/879002017-11-23T11:41:56Z2017-11-23T11:41:56ZDavid Willetts interview: ‘We need a broader view of what constitutes a good university’<p><em>David Willetts was minister for universities and science in the coalition government from 2010 to 2014, when the cap on tuition fees was raised to £9,000 per year in England and Wales. In his new book, <a href="https://global.oup.com/academic/product/a-university-education-9780198767268?cc=gb&lang=en&">A University Education</a>, he provides a defence of that policy following intense recent debate about it.</em> </p>
<p><em>Willetts, who now sits in the House of Lords and is also the executive chair of the <a href="http://www.resolutionfoundation.org/">Resolution Foundation</a>, sees the fee rise as pivotal in increasing the number of people benefiting from higher education, a process he is keen to see continue further. But the book goes far beyond the tuition fee debate. It provides an engaging and authoritative guide to “the university” as an institution which aims to instil “values of pursuing truth through reason and evidence” – values of particular importance in the current context of “fake news” and populist politics.</em> </p>
<p><em>But while universities may share this overarching aim, Willetts also argues that we need to celebrate diversity in our higher education (HE) sector, rather than a single idea of what constitutes a top university. I sat down with him for The Conversation.</em></p>
<p><strong>Karen Rowlingson: You show, in the book, that university education benefits society as well as individuals. So should the funding of universities also be better balanced between society and individual students? Would one possibility be to reduce the fee and raise extra through general taxation and then change the repayment mechanism so that those on higher earnings pay more back?</strong></p>
<p>David Willetts: I think actually the way that you can reflect and put in public support is different and I identify the ways we do. First of all … we should meet the extra cost of higher cost subjects. Secondly, students who for whatever reason … may find it harder to benefit from HE, for example disabled students, students from tough backgrounds, there’s still some funding – not as much as there was – but there’s still some funding for the extra costs of those students </p>
<p>And then thirdly, writing off the repayments from people with low incomes… So I think that’s a well-designed, well-targeted way of using public resource to support people in higher education. </p>
<p><strong>But still the £9,250 a year fee is a very large share of the cost and is it fair that younger generations have to pay so much more for their higher education than older generations did?</strong> </p>
<p>I understand that argument. The good news is that I think most 18-year-olds do understand the reality that it is not an amount of money they have to pay up front. The real thing that matters is it’s 9% of earnings above £21,000 – of course that’s going up to 9% of <a href="https://www.theguardian.com/education/2017/oct/01/tuition-fee-repayment-earnings-threshold-rise-to-25000">earnings above a threshold of £25,000</a>.</p>
<p><strong>Is that something you agree with, changing the threshold?</strong></p>
<p>Well, I personally didn’t think that 9% on earnings above £21,000 was unduly onerous. It meant that if you were earning £25,000 a year you were paying back 9% on the final £4,000 so that was £360 a year, £30 a month. If there were resources available to help people in HE, increasing the repayment threshold would not have been my priority. It’s good that graduates are going to be paying back a lower proportion of their earnings, but as I say, I think one could have spent the money in other ways. </p>
<p><strong>You talk about graduate tax in the book and that’s one alternative that’s been suggested. What are your thoughts on that?</strong> </p>
<p>Basically what we’ve got is a repayable education voucher for HE. You’re given an education voucher and told, take it to the university. The university has to decide whether or not to admit you and then if you end up in a well-paid job, we’ll gradually reclaim it off you. I know the graduate tax is now back on the agenda, but it does have a range of defects. </p>
<p>First of all it brings the whole system back into tax and public spending. And it’s no longer the case that the individual is bringing the resource to educate him or her, instead it’s coming as public expenditure out of central government. My view is that has never worked to the advantage of higher education, it’s always ended up being at the back of the queue.</p>
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<p>Secondly, you will expect some people to pay back a lot more than the cost of their higher education … That means if I am studying economics at the LSE or law at Oxford and some others which we know about, there are now massive penalties for me to study in the UK rather than going abroad. You’re saying, by virtue of having done this course, you will be paying back a very large amount of money.</p>
<p>Thirdly, it doesn’t solve today’s funding problem. The big design question is do you collect it off current graduates? There’s nothing in the system that tells the Inland Revenue I’m a graduate, so you need some massive exercise, to do a sort of Doomsday Book exercise, to try and work out the people in the country who are graduates. … You can only roll it in for future generations, so once you say it’s for current students and their successors, it doesn’t solve a problem for about ten years.</p>
<p>The last Labour government, encouraged by Gordon Brown, looked at it very carefully and all the people who were involved in the debate then, including Andrew Adonis … concluded that a graduate tax is a bad idea. So I don’t think it’s a flyer. Labour tried to make it work. All three political parties when they’ve actually been in office have ended up with this model that we’ve got. </p>
<p><strong>When I talk to my own students it’s the level of maintenance support which is a key problem. What do you think we should do about that?</strong> </p>
<p>I completely agree with you … The pressure point is cash to live on while you’re at university. And in terms of access that’s the pressure point. When I was in office we increased the total amount of maintenance cash available for students and it’s gone up a bit more since. But … if there were any spare resource around, my priority would be more cash for students to help with their living costs while at university.</p>
<p><strong>You talk about the benefits of the current system in increasing the numbers going to university. Do you think there is any kind of limit to the numbers of people that should go to university?</strong> </p>
<p>I don’t believe in government setting a target. So I don’t believe in the Blair 50% target [of people going to university] but I do absolutely think that in modern societies for deep social, cultural and economic reasons, the numbers going to university have increased, are increasing and ought not to be diminished. So if I look forward I see no reason why it should stop at 50%. </p>
<p>And also, this is a good thing, we’ve <a href="https://www.theguardian.com/education/2017/sep/28/almost-half-of-all-young-people-in-england-go-on-to-higher-education">achieved 50% for women</a>. We’ve not achieved 50% for men and so I think it would be good if men could catch up with the academic achievements of women. </p>
<p><strong>Should we move towards a more <a href="http://www.hepi.ac.uk/2017/07/20/new-report-calls-comprehensive-universities-improve-social-mobility/">comprehensive system of universities</a> that people could go to locally, perhaps?</strong> </p>
<p>I think the English model is distinctive and I think it’s a good thing that it’s distinctive. The idea of going away from home to university I’m sure goes back to the Oxford and Cambridge model and then this extraordinary 600 years when they were the only two English universities suppressing attempts at creating other universities. Not until the 1830s did we get any further universities in England. </p>
<p>Now one of the effects of that was to establish very clearly the idea you went away from home to university and it is a really important rite of passage, especially in England. And I think it’s a kind of managed transition to adulthood, it’s about the most powerful effective form that the modern Western world has got. </p>
<p>So I do understand the value of people leaving home to go to university. I wouldn’t want to see a situation where poor kids stayed at home and rich kids went away to university. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/195814/original/file-20171122-6016-1emfzm8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/195814/original/file-20171122-6016-1emfzm8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/195814/original/file-20171122-6016-1emfzm8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/195814/original/file-20171122-6016-1emfzm8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/195814/original/file-20171122-6016-1emfzm8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/195814/original/file-20171122-6016-1emfzm8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/195814/original/file-20171122-6016-1emfzm8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Other doors are available.</span>
<span class="attribution"><span class="source">www.shutterstock.com</span></span>
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<p><strong>You talk a lot about digital innovation in education … will that help mature students who are less likely to go to university now? And how do we reflect on that with the experience of the Open University at the moment which is going through a <a href="https://www.theguardian.com/education/2015/oct/20/open-university-strike-ou-regional-centres-moocs">really difficult time</a>, but which is digitally advanced?</strong> </p>
<p>I always kind of plead guilty on this, that one of the things in my time as universities minister that I most regret is the <a href="https://theconversation.com/part-time-students-feel-squeezed-out-by-universities-obsessed-with-teenagers-47447">decline</a> in the number of mature, part-time students. It was not the plan. What I thought we would achieve is by extending more fee loans to more mature students that they would take them out. But actually the evidence is that whilst the classic young person going to university to get their first degree understands and is comfortable with the graduate repayment scheme; that’s not the case for mature students … That’s where we both need technological innovation and we also need more funding. </p>
<p><strong>You challenge the predominant, uni-dimensional hierarchy of universities and suggest that we should recognise the strength of some universities outside of the Russell Group. Can you say more about this?</strong></p>
<p>One of the themes running through the book is that our understanding of what constitutes a good university is incredibly limited. When you look at the ones that get to the top of the conventional rankings, you do it above all by high-quality research and high prior attainment of your students. That is one model and it’s a good model. But my frustration is people think that means that if you’re a university that focuses more on teaching than on research and which takes students with lower priority attainments, that means you’re a less good university. It doesn’t. It means you’ve got a distinct and different mission. </p>
<p>So I’m trying to get people to have a broader view of what constitutes a good university. There are a range of ways of being world class and taking kids with lower attainment – pushing them forward and transforming their life chances with strong links to local businesses is a fantastic way of being a world class university. </p>
<p><strong>So how can we do that in practice? Shall we have different kinds of league tables?</strong> </p>
<p>Whatever the issues around the <a href="http://www.hefce.ac.uk/lt/tef/">Teaching Excellence Framework</a> (TEF) – and of course ministers have made clear from the beginning that it’s a kind of first go, it’s open to revision and amendment – the crucial prize of the TEF is at last we’ve got a league table that doesn’t have exactly the same structure as every other league table. Although it is very tough really to measure teaching, nevertheless I think as the big data revolution reaches HE we will have increasing opportunities to do so. </p>
<p><strong>Given that there are already many different universes serving different missions, do you think there’s a gap? If a new university were to be set up tomorrow to meet today’s needs, what would that new university look like?</strong> </p>
<p>The teaching of STEM [science, technology, engineering and mathematics] would be a very strong candidate because as there is public funding for the higher-cost subjects and STEM of course comes with higher cost, eligibility for that public funding has become a kind of barrier to entry for new providers in this area. And that’s particularly acute with medical schools which have very high costs and where hitherto there’s been a kind of restriction on the numbers of medical students and NHS-linked medical schools. There’s an Aston initiative on medical education, and I think Buckingham are trying to get into medical education. </p>
<p>And then on engineering there’s this <a href="http://www.olin.edu/">Olin model</a> which is a different approach to engineering that is willing to take on people who may not have got A-levels in maths and physics. That’s also very interesting. Engineering is a case study of why I care so much about broadening education and not having so much early specialisation. If you say in order to do engineering at university you have to have A-levels in physics and maths, you’re down to about 4% of teenagers being eligible to do engineering. If classics was still working on the basis you’ve got to have A-levels in Latin and Greek, classics would have died as a discipline in English universities, but was obliged to change it sort of as the A-levels declined. </p>
<p><strong>What about the idea of <a href="https://www.nesta.org.uk/sites/default/files/the_challenge-driven_university.pdf">challenge-led universities</a> which bring together disciplines across the STEM/non-STEM divide to try to tackle major problems globally and nationally?</strong></p>
<p>It’s not that I think that STEM is the only route to truth. The two cultures problem in England is acute, unusually acute, because of early specialisation. </p>
<p>I argue that universities have quite a high part of the responsibility for early specialisation because they’re looking for people who already know a lot about a very narrow range of subjects. [That is] such a contrast with America where the most popular single course specified when you apply for an American university is undeclared. </p>
<p>As soon as you think about a university recruitment system where the biggest single group of people applying are called undeclared, and you think through how a classic English university would operate if the biggest single category of students had not yet decided what they’re going to study, you realise the incredible power of the particular way we do admissions in England. </p>
<p><strong>How do you think Brexit is going to impact on universities?</strong></p>
<p>Well, I was a Remainer and there clearly are massive risks for universities from Brexit. On the research side … the fact that they’ve just started the FP9 discussions in Brussels <a href="http://www.researchresearch.com/news/article/?articleId=1371299">with no British representatives</a> around the table as they start shaping the research priorities for that next seven year programme in the EU is so dispiriting and frustrating.</p>
<p>For student recruitment, the evidence is a bit more complex because of course one of the results of Brexit has been a fall in the value of the pound. So that has meant we look cheaper if you’re coming from abroad. Now on the other hand, EU students may lose their access to loans but we don’t know that. You could imagine in the negotiations about the future long-term relationship that we say we will extend loans to British students to study in the EU in return for EU students having loans from their government, or from us, or some combination to come and study here. So I think that it is all up for negotiation and we must hope that we can signal that we’re open to students and academics from around the world.</p><img src="https://counter.theconversation.com/content/87900/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Karen Rowlingson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>As a minister in the coalition government, Willetts introduced £9,000 tuition fees. In an interview as he publishes a new book, he says the system is well-designed and fair.Karen Rowlingson, Professor of Social Policy, University of BirminghamLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/860062017-10-19T14:00:12Z2017-10-19T14:00:12ZMore and more young people are falling into debt – but it’s not their fault<figure><img src="https://images.theconversation.com/files/191048/original/file-20171019-1045-1vv28ed.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Paying the price.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/derwentliving/16800920641/sizes/l">Derwent Living/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span></figcaption></figure><p>The UK has a consumer debt crisis and it is young people, aged 18 to 34, who are most vulnerable. National unsecured debt – which includes credit cards, overdrafts and car loans – <a href="https://www.theguardian.com/business/2017/jul/31/fca-unauthorised-overdrafts-car-loan-market">has topped £200 billion</a> for the first time since the global financial crisis struck in 2008. But the concentration of debt, and the experiences of vulnerability, are not shared out equally. </p>
<p>Andrew Bailey, the head of the Financial Conduct Authority (FCA), <a href="http://www.bbc.co.uk/news/business-41627238">has warned</a> that there is a “pronounced build-up of indebtedness amongst the younger age group”. He was responding to the FCA’s <a href="https://www.fca.org.uk/publication/research/financial-lives-survey-2017.pdf#page=14">Financial Lives Survey</a> which showed that 55% of 18- to 24-year-olds and 63% of 25- to 34-year-olds are in debt, owing on average over £8,000. </p>
<p>These numbers alone are cause for alarm, and that’s before even considering the harms and vulnerability that over-indebtedness brings. Any debt organisation will tell you about <a href="https://www.stepchange.org/Portals/0/documents/media/reports/8_billion_challenge.pdf">the damage which debt causes</a> to mental and physical health. And yet so many young people are forced into debt, often before they start any meaningful form of work. </p>
<p>This problem should not be seen as a product of “binge” culture, and young people should not just be told to rein in their spending. Rather, this is a problem of affordability. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/191042/original/file-20171019-1082-22viwn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/191042/original/file-20171019-1082-22viwn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=402&fit=crop&dpr=1 600w, https://images.theconversation.com/files/191042/original/file-20171019-1082-22viwn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=402&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/191042/original/file-20171019-1082-22viwn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=402&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/191042/original/file-20171019-1082-22viwn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=505&fit=crop&dpr=1 754w, https://images.theconversation.com/files/191042/original/file-20171019-1082-22viwn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=505&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/191042/original/file-20171019-1082-22viwn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=505&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A house and a car? Keep dreaming.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/oscarfh/25088418294/sizes/l">Oscar F. Hevia/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<p>Rising housing costs; an increase in zero-hours contracts; inflation outstripping wages; the rapid rise in student loans – all of these issues are creating a cage of debt around young people. While the older generation retains financial security through assets (usually in the form of housing) and enjoys greater security in work, the younger generation is more likely to be exposed to the risks of <a href="https://www.thetimes.co.uk/article/landlords-refuse-to-rent-to-young-tenants-including-students-2f3lr35hk">private renting</a> and <a href="https://www.theguardian.com/business/2017/oct/17/sometimes-you-dont-feel-human-how-the-gig-economy-chews-up-and-spits-out-millennials">job insecurity</a>.</p>
<h2>How did it come to this?</h2>
<p>Amid the global panic arising from the 2008 financial crisis, the UK government propped up a failing banking sector with <a href="https://www.nao.org.uk/highlights/taxpayer-support-for-uk-banks-faqs/">£1,162 billion in support</a>. At this moment, the private financial crisis turned into a public state crisis. </p>
<p>Crises are usually defined by change, signalling an end to the unstable conditions of the past. Yet the enduring legacy of the financial crisis has been a transformation of the role of the state and public finances, which has left young people in an even more precarious position. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/period-poverty-why-one-in-ten-young-women-struggle-to-afford-pads-and-tampons-85715">Period poverty: why one in ten young women struggle to afford pads and tampons</a>
</strong>
</em>
</p>
<hr>
<p>Ten years on from the financial crisis, and eight years after the introduction of the welfare-stripping austerity agenda, one thing <a href="http://www.jrf.org.uk/blog/2012/08/financial-crisis-five-years-poorest-pay-price">still holds true</a>: it is the people who contributed the least towards the crisis who are paying the highest price.</p>
<h2>A raw deal</h2>
<p>As the UK government continues to pay back its own debts by cutting costs and squeezing out savings, it is really young people who are carrying the burden of debt. What’s worse is, they don’t really have a choice. </p>
<p>In the years since the crisis, fiscal responsibility has been transferred from the state onto the individual. In other words, rather than the state providing services to ensure a basic level of well-being for everyone, it’s increasingly up to individuals to pay the price for their own education, housing and health care. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/191041/original/file-20171019-1048-1kduah7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/191041/original/file-20171019-1048-1kduah7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/191041/original/file-20171019-1048-1kduah7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=460&fit=crop&dpr=1 600w, https://images.theconversation.com/files/191041/original/file-20171019-1048-1kduah7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=460&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/191041/original/file-20171019-1048-1kduah7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=460&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/191041/original/file-20171019-1048-1kduah7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=578&fit=crop&dpr=1 754w, https://images.theconversation.com/files/191041/original/file-20171019-1048-1kduah7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=578&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/191041/original/file-20171019-1048-1kduah7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=578&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Students protest against £9,000 tuition fees, London 2010.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/binaryape/5205333472/sizes/l">Binary Ape/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
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</figure>
<p>Nowhere is this clearer than in higher education; whereas the state once invested in the futures of the young, it now saddles university graduates with an average debt of <a href="http://www.moneyadvicetrust.org/SiteCollectionDocuments/Research%20and%20reports/Borrowed%20Years%2c%20Young%20people%20credit%20and%20debt%2c%20Aug%202016.pdf">£25,505 each</a>.</p>
<p>Even the government’s flagship apprenticeship scheme uses young people for cheap labour, with 18-year-olds paid as little as <a href="http://www.independent.co.uk/student/istudents/apprenticeships-government-promises-apprentices-disadvantaged-young-people-living-minimum-wage-a7539101.html">£3.40 an hour</a>. </p>
<p>All this means that, unless young people have the financial support of a parent, they are forced to rely on an increasingly punitive and complex benefit system or (more likely) be pushed down the pathway to debt. In these circumstances, it’s unsurprising that debt has become a “lifeline” for so many.</p>
<p>Debt is a major political instrument of control, and it should be seen as such. Individuals shoulder the burden of debt, but it is not an individual problem; it is a problem of society. It is no accident that the young are indebted in the way that they are: it is the product of years of neglect and a lack of investment by the state. The political choices of the UK government got young people into this mess. Now, political action should be used to help them out.</p><img src="https://counter.theconversation.com/content/86006/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alex Simpson has received funding from the ESRC.</span></em></p>Not-so-fun fact: more than half of 18- to 34-year-olds are in debt, owing over £8,000 each on average.Alex Simpson, Senior Lecturer in Criminology, University of BrightonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/795142017-06-15T13:43:35Z2017-06-15T13:43:35ZYoung South Africans aren’t apathetic, just fed up with formal politics<figure><img src="https://images.theconversation.com/files/174002/original/file-20170615-3453-tz20z0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Children marching on the
anniversary of the Soweto uprising.</span> <span class="attribution"><span class="source">EPA/Kim Ludbrook</span></span></figcaption></figure><p>South Africa’s youth-led movements such as <a href="https://theconversation.com/feesmustfall-the-poster-child-for-new-forms-of-struggle-in-south-africa-68773?sa=google&sq=fees+must+fall&sr=8">#FeesMustFall</a> and <a href="https://theconversation.com/south-african-student-protests-are-about-much-more-than-just-feesmustfall-49776?sa=google&sq=RhodesMustFall&sr=5">#RhodesMustFall</a> provided contrasting view to perceptions that young people are apathetic and disinterested in the future of their country. But the protests didn’t quite dispel concerns about their lack of political involvement, particularly during elections where there’s been <a href="https://businesstech.co.za/news/government/131652/this-is-the-biggest-reason-why-young-south-africans-arent-voting-next-week/">low youth voter turnout</a>. </p>
<p>So we asked young people what they thought about politics. Our research involved focus groups with South Africans aged between 15 and 25 years of age from very different backgrounds. Sampled areas ranged from the rural Eastern Cape, to peri-urban Orange Farm and middle class Kensington, a Johannesburg suburb, amongst others. </p>
<p>Our findings challenge the widely reported perception that young people in South Africa are despondent and don’t care about politics or their role as citizens. What emerged from our research was a picture of young people with strongly defined opinions and knowledge of current affairs. Many said they were involved in some kind of civic activity. </p>
<p>All of the participants expressed a distrust of formal politics. But they also said they have a keen interest in the future of the country and are staking their claim in forging that future, albeit in different and new ways. </p>
<p>What was clear from the research is that young South Africans are engaging with politics very differently to the way in which young people got involved in the <a href="http://www.sahistory.org.za/topic/june-16-soweto-youth-uprising">1976 Soweto uprising</a>. They have found new platforms and ways to share information, make their voices heard and ultimately be politically engaged on the back of growing internet based communication, especially social media. </p>
<p>In 1976 young people taught South Africa that they can’t be ignored. They are a powerful force that can shift the course of a country’s future. Today’s youth are no different. They are interested and engaged. </p>
<h2>Distrust of formal politics</h2>
<p>The people in our focus groups expressed distrust of formal political mechanisms such as voting, demonstrations, and membership of political parties. </p>
<p>Most indicated that they held little faith in the current leadership of the country. They found political leaders to be self-serving and disinterested in them and their communities. While they enjoyed watching parliament in action, this was because it provided entertainment value rather than serious content.</p>
<p>The discussions laid bare why many young people don’t vote. Most expressed alienation from all of South Africa’s political leaders. They said they didn’t know who they could trust or which political party would serve their interests. </p>
<p>As one put it:</p>
<blockquote>
<p>Well, there’s ANC, an old promising party who is no longer keeping its promises, then follows the DA which is led and dominated by white people and you’d think when they are in power they may neglect us and care for whites only and also there is Malema who we think is going to corrupt us, so you just think it’s better not to vote.</p>
</blockquote>
<p>They also said they didn’t see any point in voting given that there seemed to be little relation between what politicians said they would do versus what they actually did. A common sentiment is reflected in these quotes:</p>
<blockquote>
<p>What is the point in voting? Nothing ever changes anyway. </p>
<p>We are not going to vote either because it’s not going to make a difference.</p>
<p>Personally for me I would vote for a party that I have seen making the biggest difference but everyone is fighting in parliament and they are not going out and making the difference that they are supposed to. And when it comes to voting time then all the municipalities jump up and start to do what they were supposed to do. I think that’s the thing. We don’t know who to vote for because no one is making a big difference.</p>
</blockquote>
<p>This distrust and alienation often means that young people opt out of formal political processes such as voting and engagement with political parties. </p>
<p>But this should not be read to infer political disinterest and apathy. On the contrary, young people have found other ways to voice their opinions. </p>
<h2>Different approaches</h2>
<p>Social media is widely used, across the spectrum of youth interviewed, both to voice protest as well as to engage on issues they care about. And many said they have heated face-to-face discussions with their peers about key issues, particularly those affecting their own communities. All these approaches were more appealing, meaningful and accessible than political party membership and voting.</p>
<p>They also held very fervent issues-based views. The focus groups prompted heated debates about xenophobia and the role of foreign nationals in their communities. The participants also felt strongly about common challenges in their communities such as substance abuse, crime and teenage pregnancy. </p>
<p>Our research shows that young people are thinking about key issues in their communities and that they’re getting involved, particularly where issues affect them directly. The difference between this generation and the 1976 generation is that they’re doing so in non-formal ways. </p>
<p>The #feesmustfall campaign is a good example of this. It arose out of an issue that directly affected the lives of many young people. They did not feel that formal democratic processes served them, leading them to engage in a wave of protests driven largely by social media engagements across campuses. </p>
<p>Political parties trying to win the youth vote need to reconnect with where the majority of young people are, more so because young people will continue to form potentially the biggest proportion of the voter base at least until 2050. It’s time the country stopped stereotyping them as apathetic, disinterested and morally bankrupt and started engaging them in ways that are meaningful to them, and connect with the issues they’re interested in. </p>
<p>_This article was co-authored with Lauren Stuart, Thobile Zulu and Senzelwe Mthembu.</p><img src="https://counter.theconversation.com/content/79514/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>This study was funded by the University of Johannesburg's Faculty Research Committee and and University Research Committee as well as through a small grant made by Prof Valerie Möller of the Institute of Social and Economic Research at Rhodes University.</span></em></p>It’s time South Africa stopped stereotyping its young people as being disinterested and morally bankrupt and started engaging them.Lauren Graham, Senior Researcher at the Centre for Social Development for Africa, University of JohannesburgLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/784362017-05-26T23:34:05Z2017-05-26T23:34:05ZPoor and middle-income families need a better way than 529s to save for college<p>A college education is increasingly necessary for success in today’s economy. It’s also <a href="https://theconversation.com/explainer-the-us-student-loan-problem-and-how-we-got-here-32676">increasingly expensive</a>. </p>
<p>Americans with a college degree earn, on average, <a href="https://collegepuzzle.stanford.edu/?p=4551">US$1 million more over the course of their lives</a> than those without one. At the same time, the <a href="https://trends.collegeboard.org/college-pricing/figures-tables/average-rates-growth-published-charges-decade">cost to attend a four-year school</a> has been climbing 2 percent to 3 percent a year above the rate of inflation. </p>
<p>Unfortunately, American families are not saving enough to cover these rising costs. More than half <a href="http://nypost.com/2015/04/29/most-parents-arent-saving-money-for-kids-college-education">have no college savings at all</a>. Those that do typically don’t set aside nearly enough to pay for even one child to attend college for one year.</p>
<p>A few decades ago <a href="http://www.savingforcollege.com/articles/infographic-history-of-529-plan">Michigan tried to change this</a> by helping state residents save for college. This eventually morphed into the 529 plan. Yet after more than 20 years, <a href="http://www.gao.gov/products/GAO-13-64">only 2.5 percent of households have one</a>.</p>
<p>Part of the failure is a lack of communication, which is why most states celebrate “529 Day” on May 29 to try to raise awareness about this college savings option. The real reason so few families use them, however, is that 529s don’t actually make college more affordable. </p>
<h2>The college affordability crisis</h2>
<p>The rising cost of a college education – coupled with the lack of adequate savings – means that students are graduating with a <a href="https://theconversation.com/is-student-loan-debt-really-a-crisis-44069">great deal of debt</a>. </p>
<p>Total student debt <a href="https://www.federalreserve.gov/releases/g19/current/">rose to a record $1.44 trillion</a> in March, about $33,000 per borrower, more than double the level in 2008. </p>
<p>This has both <a href="http://www.cnbc.com/2015/12/08/the-long-term-consequences-of-student-loans.html">personal and economy-wide consequences</a>, from credit-ruining defaults and significant financial stress to impairing the ability to save enough to buy a home or retire. Money spent repaying these loans means less consumer spending, thus slowing economic growth. </p>
<p><iframe id="F3Ram" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/F3Ram/4/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<h2>529s to the rescue?</h2>
<p>Enter the 529. The plan’s name comes from section 529 of the U.S. tax code, which created it. </p>
<p>In 1986, before 529s existed, <a href="http://colofma.com/web_documents/2014_fall_529_2.pdf">Michigan</a> sought to help state residents deal with the rising cost of college by letting them prepay. A tussle over whether Michigan’s plans qualified for a tax exemption led Congress to pass section 529 in 1996, which exempted earnings in these plans from federal taxes. </p>
<p>Today all 50 states offer a 529 plan. Families can put after-tax income in a college savings plan that then grows tax-free. Arizona, Kansas, Missouri, Montana and Pennsylvania also offer state income tax deductions for money put into a 529 savings plan. </p>
<h2>Why 529s haven’t worked</h2>
<p>While their intention was good, in practice they’ve done little for those who need the most help paying for college. </p>
<p>For starters, half of families saving for college <a href="http://www.gao.gov/products/GAO-13-64">don’t even know 529s exist</a>, and those that do say they don’t understand them because the investment options are too complex. </p>
<p>More importantly, 529 plans are poorly designed to help low- and middle-income families. Their main selling point is their tax savings, but this doesn’t help families that don’t make a lot of money and thus don’t have a large tax liability. Savings in a 529 also <a href="http://www.savingforcollege.com/articles/five-things-to-know-about-529s-and-financial-aid">count against families</a> when they apply for financial aid, and there are tax penalties if the money is not used to pay for college expenses.</p>
<p>That’s why only <a href="https://www.federalreserve.gov/econresdata/notes/feds-notes/2016/saving-for-college-and-section-529-plans-20160203.html">0.3 percent of households</a> in the bottom half of the income distribution (under $56,516 in 2015) have 529 accounts, while 16 percent of the top 5 percent do. </p>
<p>In addition to all this, 529 plans <a href="https://www.treasury.gov/resource-center/tax-policy/tax-analysis/Documents/WP-113.pdf">cost the federal government</a> close to $2 billion per year in lost tax revenue for a benefit that mostly helps upper-income families. </p>
<h2>Ending the 529</h2>
<p>That’s why President Obama <a href="http://time.com/money/3676300/529-taxes-obama-state-of-the-union">proposed eliminating</a> the 529 tax break in 2015. He quickly dropped the idea, however, after encountering strong bipartisan opposition. </p>
<p>While it may have been bad politics to propose killing 529s without replacing them with something else, in our view ending the plans is the right thing to do. There are better ways for the federal government to invest $2 billion and make college more affordable.</p>
<p>One excellent way would be to increase the Pell Grant – currently $5,920 – which has been shown to <a href="https://www.americanprogress.org/wp-content/uploads/2014/01/PovertyAnniversary.pdf">increase college enrollment rates</a> for students who do not come from wealthy households. </p>
<p>Another option is to follow the example of New York, which <a href="https://www.ny.gov/programs/tuition-free-degree-program-excelsior-scholarship">recently made tuition free</a> at state public colleges for residents with household incomes below $125,000. A program in Tennessee provides free community college to all state high school students, which <a href="http://money.cnn.com/2015/09/18/pf/college/free-community-college-tennessee/">has significantly increased enrollment rates</a>. </p>
<p>In sum, 529 plans have failed to help low- and middle-income households pay for college. Instead, these plans benefit the financial industry (via the high management fees) and wealthy families that do not need the help.</p>
<p>It is time to replace them with something that will actually help make college more affordable.</p><img src="https://counter.theconversation.com/content/78436/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>More than half of American families aren’t able to save a dime to cover the cost of college, and the 529 college savings plan has done almost nothing to change that.Robert H. Scott III, Associate Professor of Economics, Monmouth UniversitySteven Pressman, Professor of Economics, Colorado State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/776162017-05-24T20:15:50Z2017-05-24T20:15:50ZLet graduates use super to pay off HELP debt faster<figure><img src="https://images.theconversation.com/files/169052/original/file-20170512-32588-nygg8e.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Those already working will face tax increases of 1%-2% of their income from 2018. </span> <span class="attribution"><span class="source">from shutterstock.com </span></span></figcaption></figure><p>If the Senate passes <a href="https://theconversation.com/federal-budget-2017-whats-changing-in-education-77177">budget reforms</a> for higher education, Higher Education Loan Program (HELP) repayments would start earlier, with a wider range of rates: 1% of income for those earning A$42,000, rising to 10% at $120,000. </p>
<p>To put this in context, in 2017 the Australian minimum full-time wage is about $35,000 and the <a href="http://www.abs.gov.au/ausstats/abs@.nsf/mf/6302.0">average full-time wage about $80,000</a>.</p>
<p>This is an alternative to the government’s 2014 plan to <a href="https://theconversation.com/the-best-compromise-for-help-loan-interest-rates-31727">charge real interest</a> on HELP loans, and a 2016 Grattan Institute proposal to apply a <a href="https://grattan.edu.au/report/shared-interest-a-universal-loan-fee-for-help/">15% loan fee</a> to new HELP loans.</p>
<p>The Grattan Institute has <a href="https://theconversation.com/explainer-how-will-the-changes-to-help-student-loans-affect-you-76977">mapped</a> the overall effects of the government’s 2017 proposal. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/169055/original/file-20170512-32602-jb2ysc.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/169055/original/file-20170512-32602-jb2ysc.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/169055/original/file-20170512-32602-jb2ysc.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=376&fit=crop&dpr=1 600w, https://images.theconversation.com/files/169055/original/file-20170512-32602-jb2ysc.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=376&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/169055/original/file-20170512-32602-jb2ysc.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=376&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/169055/original/file-20170512-32602-jb2ysc.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=472&fit=crop&dpr=1 754w, https://images.theconversation.com/files/169055/original/file-20170512-32602-jb2ysc.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=472&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/169055/original/file-20170512-32602-jb2ysc.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=472&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">HELP loan repayments if reforms are passed.</span>
<span class="attribution"><span class="source">Grattan Institute</span></span>
</figcaption>
</figure>
<p>Grattan’s Andrew Norton <a href="http://It%20would%20also%20make%20it%20easier%20for%20graduates%20to%20repay%20loans%20more%20quickly%20than%20required%20by%20the%20compulsory%20repayment%20settings.">supports it</a>, as does the Mitchell Institute’s <a href="http://www.afr.com/leadership/despite-15b-budget-injection-vocational-education-lacks-longterm-strategy-expert-20170511-gw2j35">Peter Noonan</a>. The new settings will curb the rising public cost of over $50 billion in outstanding debt. </p>
<p>Against this, Sharon Bell of the Australian National University warns of more <a href="http://www.theaustralian.com.au/higher-education/increasing-student-debt-load-puts-principle-of-access-at-risk/news-story/a834e5d83fca03d1c990c1fd754d8e6a">financial stress for students</a> with other debts to manage.</p>
<h2>Cash effects of new HELP settings</h2>
<p>If passed in the Senate (where views <a href="http://www.abc.net.au/news/2017-05-02/will-the-governments-university-funding-changes-pass-senate/8490662">range widely</a>), the changes would apply to existing HELP debtors already in the workforce. </p>
<p>The chart below shows the effect in round figures of these “tax increases” in 2018. It compares minimum annual repayments under existing and proposed settings.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/169051/original/file-20170512-32585-1ogul5b.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/169051/original/file-20170512-32585-1ogul5b.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/169051/original/file-20170512-32585-1ogul5b.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=316&fit=crop&dpr=1 600w, https://images.theconversation.com/files/169051/original/file-20170512-32585-1ogul5b.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=316&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/169051/original/file-20170512-32585-1ogul5b.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=316&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/169051/original/file-20170512-32585-1ogul5b.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=397&fit=crop&dpr=1 754w, https://images.theconversation.com/files/169051/original/file-20170512-32585-1ogul5b.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=397&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/169051/original/file-20170512-32585-1ogul5b.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=397&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Cash effects of faster HELP repayments (thresholds are rounded, payments are indicative only).</span>
<span class="attribution"><span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>There would be new payments at lower incomes in the $42,000 to $52,000 range. </p>
<p>In the $52,000 to $57,000 range, payments would be 1-2 percentage points higher. The same would apply in the $107,000 to $120,000 range. As the chart above shows, an increase from 8% to 10% at the $120,000+ level has significant cash effects.</p>
<p>The changes are both regressive and progressive. </p>
<p>At lower incomes in particular, a concern for many will be the cash-flow effect of new or larger repayments. Education Minister Simon Birmingham notes that the cash impact at the $42,000 threshold is about <a href="http://www.abc.net.au/7.30/content/2017/s4661955.htm">$8 a week</a>. But at $47,000 a 2% repayment would cost about $940 in a tax return, compared with zero at current settings.</p>
<h2>Should the government consider a super payment option?</h2>
<p>The lower thresholds may change in Senate negotiations. But if these are adopted the government should consider adding a <a href="https://theconversation.com/reforming-help-loans-combine-lower-repayment-thresholds-with-a-super-payment-option-57655">“super payment option”</a> that allows graduates to redirect up to 20% of compulsory superannuation contributions into HELP repayments.</p>
<p>This would help graduates manage the cash effect of higher HELP repayments. And those taking it up would confirm that their employers are complying with Superannuation Guarantee obligations.</p>
<p>The background here is that the recent Senate committee <a href="http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/SuperannuationGuarantee/Report/c03">inquiry</a> estimated that 2.4 million workers miss out on super entitlements due to underpayments by their employers. </p>
<p>And the Financial Services Council noted recently that many super fund managers assume younger workers are <a href="http://www.smh.com.au/comment/why-consumers-need-super-funds-that-work-for-them-20170508-gw00nb.html">“chronically disengaged”</a> and neither know nor care about their super balances.</p>
<p>Thus the “gig economy” meets the Super Guarantee. Financial Services Council CEO Sally Loane says that changes are needed for an <a href="http://www.smh.com.au/comment/why-consumers-need-super-funds-that-work-for-them-20170508-gw00nb.html">“Uber-ised” millennial workforce</a>:</p>
<blockquote>
<p>The competitive superannuation model the Financial Services Council has proposed – which we call Super 2.0 – offers consumers choice between funds, is competitive, flexible and fit for purpose for young Australians entering the workforce. This model can be contrasted with the status quo – our industrial model that encourages disengagement.</p>
</blockquote>
<h2>Cash-flow effects of super-HELP repayments</h2>
<p>The chart below shows the cash effect of letting graduates tap up to 20% of their 9.5% employer contributions under the Superannuation Guarantee to meet HELP debt obligations.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/169053/original/file-20170512-32578-14v4xgn.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/169053/original/file-20170512-32578-14v4xgn.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=343&fit=crop&dpr=1 600w, https://images.theconversation.com/files/169053/original/file-20170512-32578-14v4xgn.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=343&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/169053/original/file-20170512-32578-14v4xgn.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=343&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/169053/original/file-20170512-32578-14v4xgn.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=430&fit=crop&dpr=1 754w, https://images.theconversation.com/files/169053/original/file-20170512-32578-14v4xgn.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=430&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/169053/original/file-20170512-32578-14v4xgn.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=430&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Cash effects of using super to repay HELP loans.</span>
<span class="attribution"><span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>In most cases, doing so would more than cover the increase in payments under the new HELP settings. Graduates could repay debts faster as proposed, but with better cash flow than under the current repayment settings for 2018.</p>
<p>At an income of $42,000 a graduate could choose to meet their full HELP debt obligation that year with just over 10% of the superannuation contribution their employer should pay into their super fund.</p>
<p>At an income of $47,000, tapping 20% of employer contributions would not quite cover the HELP debt repayment increase. Nor would it do so at $120,000.</p>
<p>But at many income levels in between, graduates would actually be better off in cash terms than under the existing HELP settings for 2018.</p>
<h2>Should super contributions be used this way?</h2>
<p>Using <a href="https://theconversation.com/use-super-contributions-to-repay-student-loans-40759">super to repay HELP loans</a> is not a part of the budget measures now making their way through parliament. </p>
<p>The design risk is that such a policy may undermine the aim of compulsory super. Lower contributions translate to lower super balances on retirement. However, those under the age of 30 can reasonably expect to be in the workforce until the age of 70. There is ample time to reinvest in super.</p>
<p>For younger or cash-poor graduates, meeting HELP payments may be a better use of part of the super contributions made on their behalf. It would mean more flexibility to invest in other priorities: credit card debt management, business start-ups and home loans.</p><img src="https://counter.theconversation.com/content/77616/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Geoff Sharrock does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The government should add a ‘super payment option’ that allows graduates to offset the cost of their HELP repayments.Geoff Sharrock, Honorary Senior Fellow, Centre for Vocational and Educational Policy, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/771772017-05-09T10:44:08Z2017-05-09T10:44:08ZFederal Budget 2017: what’s changing in education?<figure><img src="https://images.theconversation.com/files/168527/original/file-20170509-20729-1ydpp2j.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Most schools will get a boost in funding, while universities will face cuts. </span> <span class="attribution"><span class="source">Mick Tsikas/AAP </span></span></figcaption></figure><p>The government is set to save A$2.8 billion over the five years from 2016-17 by reforming the higher education system. This includes a 2.5% efficiency dividend on the Commonwealth Grant Scheme in 2018 and 2019, and a 1.82% annual increase in student contributions to the High Education Loan Program from January 1, 2018 (a 7.5% increase over the forward estimates).</p>
<p>The minimum income to start repaying HELP debt will be lowered to $42,000. The repayment rate will increase with income, from 1% at the minimum threshold to 10% at A$119,882, the maximum threshold.</p>
<p>The government will save $181.2 million over the forward estimates by limiting eligibility for VET student loans to certain courses.</p>
<p>Funding for schools will increase by $18.6 billion over the next decade.</p>
<hr>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/168517/original/file-20170509-20747-icng31.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/168517/original/file-20170509-20747-icng31.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/168517/original/file-20170509-20747-icng31.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/168517/original/file-20170509-20747-icng31.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/168517/original/file-20170509-20747-icng31.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/168517/original/file-20170509-20747-icng31.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/168517/original/file-20170509-20747-icng31.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The government promises an additional $18.6 billion in schools funding over the next decade.</span>
<span class="attribution"><span class="source">Dean Lewins/AAP</span></span>
</figcaption>
</figure>
<h2>School funding</h2>
<p><em>Louise Watson, Professor of Education at the University of Canberra:</em></p>
<p>By retaining the architecture of the Gonski model and promising funding increases above inflation for the next three years, Malcolm Turnbull has taken Coalition schools funding policy back to the <a href="https://www.theguardian.com/australia-news/2017/apr/02/liberal-party-must-be-sensible-centrists-not-reactionary-malcolm-turnbull-says">sensible centre</a>. </p>
<p>To dispel any doubts about the government’s commitment to bipartisanship, David Gonski has been reappointed to advise on fine-tuning the system dubbed <a href="https://theconversation.com/gonski-2-0-is-this-the-school-funding-plan-we-have-been-looking-for-finally-yes-77081">Gonski 2.0</a>. </p>
<p>In all, 24 schools – <a href="https://www.theguardian.com/australia-news/2017/may/09/schools-hit-list-revealed-online-tool-shows-gonski-20-winners-and-losers">mainly Independent schools in Canberra and northern Sydney</a> – have been deemed “overfunded” because their income exceeds the Schooling Resource Standard (SRS). Although they can expect <a href="https://www.education.gov.au/sites/education/files/sch/calc/index.html">reductions in funding</a> over the next decade, $40 million is available for “adjustment assistance” to schools experiencing unreasonable hardship in the transition.</p>
<p>The government will give $125 million over five years to private school representative bodies in the states and territories to support “the implementation of the government’s reform agenda”. </p>
<p>Commonwealth capital grants for private schools will increase by 28% to an estimated $182.5 million per year in 2021. </p>
<p>Students considered disadvantaged will attract additional funding. A “location loading” will increase funding over the decade to schools in regional and remote areas by 5% per student per year, compared to the national average of 4.1%. </p>
<p>Funding for Indigenous education and for schools in the Northern Territory will also increase. Pre-school funding will increase by $429.4 million in 2018. New funding rates for students with disability are anticipated in 2018.</p>
<p>The government’s stated aim, in promising an additional $18.6 billion in schools funding over the next decade, is to bring federal funding for government schools to 20% of the SRS and federal funding for private schools to 80% of the SRS by 2027. </p>
<p>The SRS – to which federal recurrent funding is linked – will be increased at a fixed rate of 3.56% per year between 2018 and 2020. Thereafter, the SRS will be adjusted in line with a floating indexation rate that reflects “real changes in costs”. So from 2021, federal schools funding will be influenced by what costs are included in the SRS index and how much they change. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/168518/original/file-20170509-20747-xgyk8j.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/168518/original/file-20170509-20747-xgyk8j.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/168518/original/file-20170509-20747-xgyk8j.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/168518/original/file-20170509-20747-xgyk8j.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/168518/original/file-20170509-20747-xgyk8j.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/168518/original/file-20170509-20747-xgyk8j.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/168518/original/file-20170509-20747-xgyk8j.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Students interrupted Simon Birmingham’s speech on planned higher education reforms.</span>
<span class="attribution"><span class="source">Katina Curtis/AAP</span></span>
</figcaption>
</figure>
<h2>University fees and cuts</h2>
<p><em>Gwilym Croucher, Senior Lecturer in the Melbourne Centre for the Study of Higher Education, University of Melbourne:</em></p>
<p>The government has confirmed the package of changes it <a href="https://theconversation.com/higher-education-reform-small-changes-for-now-but-big-ones-to-come-76978">announced a week ago</a> with significant cuts. Students in particular will pay more, a lot more. </p>
<p>Student contributions will increase by 1.8% each year between 2018 and 2021 for a total 7.5% increase. This means they will pay 46%, instead of 42%, of the cost of their degree on average. </p>
<p>So, for a four-year course, this is an increase in total student fees of between $2,000 and $3,600. The government claims the maximum any student will pay is $50,000 for a four-year course, and $75,000 for a six-year medical course. </p>
<p>Apart from yearly indexation, this fee rise is only one of a few major increases since the ALP reintroduced fees in the late 1980s and will be smaller than the last time.</p>
<p>While few students will welcome the increase, the <a href="http://www.voced.edu.au/content/ngv%3A15411">evidence</a> from previous fee hikes in Australia is that it will not deter many people from study.</p>
<p>However, when combined with the lower HELP thresholds for repayment and higher repayment rates, the changes may make studying less attractive than in the past, and potentially prohibitive for some students.</p>
<p>Universities too will suffer a direct cut of $384.2 million over two years. This will come in the form of an “efficiency dividend” to the Commonwealth Grant Scheme of 2.5% in 2018 and another 2.5% in 2019. </p>
<p>While no university will go broke from the efficiency dividend, it forms part of a series of cuts. Combined with the changes to how grants are indexed, there is little doubt universities will receive less per student in subsidies in the future, and will have to do more with less.</p>
<p>The package averts the worst cuts from the previous minister’s attempts to deregulate higher education, but offers little in the way of a long-term vision to students or universities.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/168521/original/file-20170509-20761-h2rg8f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/168521/original/file-20170509-20761-h2rg8f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/168521/original/file-20170509-20761-h2rg8f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/168521/original/file-20170509-20761-h2rg8f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/168521/original/file-20170509-20761-h2rg8f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/168521/original/file-20170509-20761-h2rg8f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/168521/original/file-20170509-20761-h2rg8f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Students will have to pay back their loan earlier.</span>
<span class="attribution"><span class="source">Paul Miller/AAP</span></span>
</figcaption>
</figure>
<h2>HELP student loans</h2>
<p><em>Bruce Chapman, Professor of Economics at the Australian National University:</em></p>
<p>Budgets are always contextual and reactions to them will always be relative to alternatives. </p>
<p>The natural comparison of the 2016/17 changes to HECS-HELP is still the extraordinary 2014/15 budget plans of the previous education minister, in which there were to be initial outlay cuts of around 20%, the introduction of a real rate of interest on HELP debts, and the introduction of the facility for universities to charge any fee they chose. If that was a man or woman-eating crocodile, then this budget is a pussy cat.</p>
<p>For HECS-HELP, there is to be an increase in charges introduced over a three-year period, maxing out to 7.5%. This is not a big deal and will not affect student or graduate debt; in effect it will add about a year to how long people have to repay.</p>
<p>More significantly, the first income threshold of payment is to be reduced from the current level of about $55,000 a year to a new and much lower level of $42,000 a year. </p>
<p>But, importantly, the rate of collection of the debt will be cut as well, from 4% to 1% of income. This will mean that the effect on the majority of debtors will be small. </p>
<p>Most affected will be current part-time workers, and the increased obligation essentially means a faster rate of repayment, and not a major impost.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/168566/original/file-20170509-10994-11ewi5u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/168566/original/file-20170509-10994-11ewi5u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/168566/original/file-20170509-10994-11ewi5u.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/168566/original/file-20170509-10994-11ewi5u.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/168566/original/file-20170509-10994-11ewi5u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/168566/original/file-20170509-10994-11ewi5u.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/168566/original/file-20170509-10994-11ewi5u.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A new fund will support up to 300,000 apprenticeship, traineeship and higher-level skilled workers.</span>
<span class="attribution"><span class="source">from www.shutterstock.com</span></span>
</figcaption>
</figure>
<h2>Changes to VET</h2>
<p><em>Kira Clarke, Lecturer in Education Policy at the University of Melbourne:</em></p>
<p>Treasurer Scott Morrison framed his announcement of a new fund for skilling Australians by saying “skilled migration must be on our own terms”. </p>
<p>Appealing to public animosity towards a perceived reliance on skilled migration, the treasurer announced a levy on employers of foreign workers employed under a new temporary skill shortage visa. </p>
<p>Employers will be charged between $1,200 and $1,800 per worker employed under this visa scheme. It is anticipated this levy will contribute to $1.2 billion within the Skilling Australians Fund. </p>
<p>States and territories will be able to access the fund for the explicit purpose of supporting up to 300,000 apprenticeship, traineeship and higher-level skilled workers. </p>
<p>The treasurer’s language in announcing this new pot of money appeared to put the onus on states and territories to stimulate apprenticeship and traineeship opportunities. </p>
<p>Apprenticeship commencements <a href="https://www.ncver.edu.au/about/news-and-events/media-releases/apprentice-and-trainee-numbers-decline">have been in decline</a>, particularly in trade occupations. </p>
<p>This <a href="https://theconversation.com/australia-needs-to-do-more-to-arrest-the-decline-in-apprenticeships-47942">decline is part of a long-term trend</a>, and is compounded by the impact of the gig economy and the reluctance of employers and young workers to enter into four-year training relationships.</p>
<p>Part of a suite of announcements aimed at “Backing regional communities”, the budget also includes $24 million for Rural and Regional Enterprise Scholarships. </p>
<p>The budget papers indicate that scholarships will be available for up to 1,200 students, to support skills development and educational attainment. </p>
<p>While it is unclear whether $15.2 million allocated to establish eight regional study hubs in rural and remote areas will include enhanced access to VET, any increased access to VET programs for regional learners could be a positive step in addressing youth unemployment and lower educational attainment in regional areas.</p><img src="https://counter.theconversation.com/content/77177/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Louise Watson has received funding from every Australian state and territory government and from the Commonwealth government to undertake education research and has served on several government advisory committees.</span></em></p><p class="fine-print"><em><span>Gwilym Croucher is Principal Policy Adviser, University of Melbourne Chancellery and Senior Lecturer in the Melbourne Centre for the Study of Higher Education.</span></em></p><p class="fine-print"><em><span>Kira Clarke has received funding from the National Centre for Vocational Education Research (NCVER). </span></em></p><p class="fine-print"><em><span>Bruce Chapman does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Education experts discuss changes to schools and universities following the federal treasurer’s budget speech.Louise Watson, Professor and Director, The Education Institute, University of CanberraBruce Chapman, Director, Policy Impact, College of Business and Economics, Australian National UniversityGwilym Croucher, Senior Lecturer, Melbourne Centre for the Study of Higher Education, The University of MelbourneKira Clarke, Senior Research Fellow in Youth, Research & Policy Centre, Brotherhood of St Laurence, Honorary Fellow in Education Policy, Melbourne Graduate School of Education, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/769782017-05-02T04:44:29Z2017-05-02T04:44:29ZHigher education reform: small changes for now but big ones to come<figure><img src="https://images.theconversation.com/files/167438/original/file-20170502-17299-wyex8i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">There could be much bigger changes ahead for universities.</span> <span class="attribution"><span class="source">from shutterstock.com </span></span></figcaption></figure><p>The pre-budget announcement of <a href="https://theconversation.com/2017-higher-education-reform-cuts-to-universities-higher-fees-for-students-63185">changes to higher education funding</a> made by Education Minister Simon Birmingham last night includes an increase in student fees of 1.8% per year between 2018 and 2021, totalling a 7.5% increase over all. </p>
<p>This will equate to a rise in fees for Australian undergraduates of $2,000 to $3,600 over the course of their degree. </p>
<p>The repayment threshold for Higher Education Contribution Scheme (HECS) will also be lowered. </p>
<p>These increased fees and faster repayment schedules for students will be accompanied by an “efficiency dividend”, which cuts funding for teaching by about 2.8% in 2018 and 2019 (equivalent to a A$380 million reduction in 2019).</p>
<h2>What does this mean for students?</h2>
<p>For students, this means that they will need to borrow more for an education, and will pay it back sooner. And the education they pay for will be delivered by universities under increased financial stress. </p>
<p>This is straightforward “no winners” austerity politics, <a href="https://theconversation.com/uk/topics/austerity-2893">common now</a> around the developed world.</p>
<p>The way the proposed changes were introduced to the public was particularly interesting, with the government sending out a <a href="https://www.education.gov.au/news/consultation-future-higher-education-reform-cost-of-delivery-report">press package</a> that included a <a href="https://docs.education.gov.au/node/43506">paper by Deloitte</a> on the cost of teaching (very technical reading) as well as a list of vice chancellors’ pay and links to building projects being undertaken by universities. </p>
<p>Clearly the scene was being set for a reduction in funding on the basis that universities are presently overfunded – yet the fee increases and funding reductions revealed later in the day were modest compared to expectations. </p>
<p>Fee increases starting at 25% had <a href="http://www.skynews.com.au/news/top-stories/2017/04/29/federal-budget-to-target-uni-fees.html">been speculated</a> on across the <a href="http://www.theaustralian.com.au/national-affairs/education/budget-to-lift-fees-for-university-students-scrap-funding-cuts/news-story/5725169a6df0dfbe5ed0b699b5408be7">national media</a>, and the proposed 20% cut to funding had been hanging over the sector since 2014.</p>
<h2>What the Deloitte paper reveals</h2>
<p>Analysis of the <a href="https://docs.education.gov.au/node/43506">Deloitte paper</a> makes interesting reading. A comparison with the conclusions drawn from it by government is particularly revealing. </p>
<p>For example, the ministerial release asserts that the Deloitte paper shows: </p>
<blockquote>
<p>[university] revenue has grown faster than costs – between 2010 and 2015 the average costs of delivery per student have increased by 9.5%, compared to per student funding growth of 15%.“</p>
</blockquote>
<p>Deloitte, however, specifically cautions that the cost of teaching figures from their earlier 2010 paper and the new 2015 data,</p>
<blockquote>
<p>cannot be compared as direct growth or decline in costs relative to funding over the five years to 2015, given the differences in the sample, and differences in cost collection approaches.</p>
</blockquote>
<p>Deloitte also warns: </p>
<blockquote>
<p>Similarly, caution should be taken in drawing inferences about the sufficiency of [Commonwealth Grant Scheme] funding directly from these [cost of teaching to funding] ratios.</p>
</blockquote>
<p>Yet the government media release accompanying the report was accompanied by talking points including that universities "have been pocketing taxpayer funds beyond the costs of their operations”.</p>
<p>The difficulty here, as Deloitte notes, is that, </p>
<blockquote>
<p>while not specifically stated in the Higher Education Support Act 2003, there is a general view that CGS funding is intended to cover some level of base research activity (which may be excluded from the definition of teaching and scholarship costs used in this study), and the cost of such research may vary as a proportion of teaching costs.</p>
</blockquote>
<h2>Impact on research and teaching</h2>
<p>What appears to be happening is that research is being uncoupled from teaching.</p>
<p>At present, universities are legislatively required to undertake research and to offer research higher degrees. </p>
<p>This is <a href="https://theconversation.com/civilisation-as-we-dont-know-it-teaching-only-universities-28505">not the case universally</a>, and is somewhat of an Australian quirk - a legacy of the Dawkins reforms a quarter of a century ago. </p>
<p>The Dawkins reforms transformed 19 universities and 46 colleges, often unwillingly, into 36 public universities. All were required to undertake research, which caused some angst against teacher-practitioners at the time.</p>
<p>Since then, the connection between higher education teaching and active research has become entrenched in Australian ideas of what a university education is. This is despite the heavy reliance of most universities on research-inactive sessional teaching staff for much of their course delivery.</p>
<p>Since Dawkins, the intensity of research activity had been extremely uneven across the sector, and costly for many institutions to maintain.</p>
<p>By uncoupling the funding for staff research time from expectations around what Commonwealth Grant Scheme funding is intended for, the scene has been set for a possible reconfiguration of the sector.</p>
<p>The <a href="https://docs.education.gov.au/system/files/doc/other/ed17-0138_-_he_-_glossy_budget_report_acc.pdf">discussion package</a> released is also telling. </p>
<p>The final paragraph of the final page before the concluding section foreshadows the potential for the biggest shift in higher education since Dawkins. Announcing a benign sounding “Review of the Higher Education Provider Category Standards”, the paper says that:</p>
<blockquote>
<p>The review will include public and stakeholder consultation around options to change provider categories, including the possibility of a teaching-only university category… It is expected that the government will consider the outcome of the review in the 2018–19 Budget context.</p>
</blockquote>
<p>So while the changes to fees and funding will be hard on students and universities – more job losses look certain, especially for the many institutions <a href="http://www.theage.com.au/victoria/up-to-115-jobs-cut-as-victoria-university-battles-financial-instability-20170310-guvlm6.html">already struggling</a> – the game-changers look set to be deferred until next year’s budget. </p>
<p>Will Dawkins’ large, research-heavy university sector be unpicked? What would teaching-based universities look like? Could the sector manage real institutional differentiation if it was forced to? </p>
<p>And the most important question is what all this might mean for our future students.</p><img src="https://counter.theconversation.com/content/76978/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Emmaline Bexley does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Hidden in the detail of the latest higher education reform package, there are talks of creating teaching-only universities.Emmaline Bexley, Senior Lecturer in Higher Education, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/635052016-08-04T05:17:04Z2016-08-04T05:17:04ZExplainer: how student fees are set for different university courses<figure><img src="https://images.theconversation.com/files/133023/original/image-20160804-12192-7qo6mk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Students pay between $6,256 and $10,440 for a university degree, depending on which course they choose to study.</span> <span class="attribution"><span class="source">from www.shutterstock.com</span></span></figcaption></figure><p>The issue of how universities are funded across their different courses has been an ongoing but unresolved debate over the past decade. </p>
<p><a href="http://www.smh.com.au/federal-politics/political-news/an-arts-degree-for-the-price-of-a-law-degree-universities-call-for-radical-rethink-20160801-gqigql.html">It has again come to the fore</a> as the Commonwealth government considers responses to its <a href="https://docs.education.gov.au/documents/driving-innovation-fairness-and-excellence-australian-education">consultation paper</a> for ideas about how best to reform higher education in Australia.</p>
<h2>How university courses are currently funded</h2>
<p>University courses are funded by the government at different levels through a government subsidy and a student contribution which, taken together, form the total price for each course.</p>
<p>The government subsequently recoups the student contribution through the higher education contribution scheme (HECS).</p>
<p>There are currently <a href="https://docs.education.gov.au/system/files/doc/other/2017_allocation_of_units_of_study_v2.pdf">eight funding clusters</a> for government across different course areas. </p>
<p>Student contributions are in three bands – A$6,349, $9,050 and $10,596 – which are matched to eight subsidy levels. </p>
<p>An additional loading is also available for enrolments in courses in regional campuses to reflect the higher cost of delivery in regional areas.</p>
<p>The total price paid for each course varies significantly. The humanities, law and commerce assessed as lowest-cost. Dentistry, medicine and veterinary science science are the highest. </p>
<p>In 2017, the funding clusters will include:</p>
<ul>
<li>$12,685 for law and commerce (subsidy $2,089 and student contribution $10,596)</li>
<li>$19,328 for maths and computer science (subsidy $10,278 and student contribution $9,050)</li>
<li>$33,405 for medicine and veterinary science (subsidy $22,809 and student contribution $10,596).<br></li>
</ul>
<h2>Why we have this system</h2>
<p>This funding system was first introduced in 1989 following an extensive analysis of relative university course costs. </p>
<p>It was an important reform as universities could be over- or under-funded relative to other universities based on their course and enrolment profile.</p>
<p>The new funding system was also introduced with HECS so that students, as well as taxpayers, could contribute to course costs (but only repay when they began to benefit from their university education). </p>
<p>HECS levels were initially set at a uniform $1,800 regardless of the course cost.</p>
<p>However, a major change was introduced in 1997 when HECS contributions were varied <a href="http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/Publications_Archive/archive/hecs">by grouping them into three levels</a> to reflect the likely private benefits to graduates from different courses (in terms of lifetime earnings) and the course cost. </p>
<p>Students in areas such as law and medicine have always paid more than students in areas such as arts, humanities and nursing as they are more expensive to provide. </p>
<p>But in some areas such as law and commerce, students now also contribute a much higher proportion of course costs than students in humanities, based on an assessed private benefits – even though the course costs are similar. </p>
<h2>Problems with the current system</h2>
<p>In 2008, The Bradley Review <a href="http://www.voced.edu.au/content/ngv%3A32134">concluded that</a> the different levels of funding across university courses in Australia “appears to bear little relationship to the actual cost of teaching or to any notional public benefits and that maximum student contributions per course similarly had no strong policy or empirical basis”.</p>
<p>The review recommended that further work be undertaken to achieve a “more rational and consistent sharing of costs between costs and discipline clusters as part of a broader review of the base funding of universities”.</p>
<p>The subsequent 2011 <a href="https://www.canberra.edu.au/research/faculty-research-centres/edinstitute/documents/HigherEd_FundingReviewReport1.pdf">Higher Education Base Funding Review</a> found that, while on average funding met the overall costs of teaching and scholarship across universities (but not the costs of research), several course areas were underfunded.</p>
<p>It recommended reducing the funding cluster from eight to five and shifting some courses to different funding clusters. </p>
<p>However, the then Labor government <a href="https://www.canberra.edu.au/research/faculty-research-centres/edinstitute/documents/HigherEd_FundingReviewReport1.pdf">did not act on these recommendations</a>.</p>
<p>The funding reforms announced by Minister Christopher Pyne in 2014 also proposed to reduce the number of clusters and to shift some courses between clusters. </p>
<p>But this proposal failed to pass the Senate along with the other funding reforms proposed by Pyne (including the <a href="https://theconversation.com/university-fee-deregulation-blocked-but-pyne-pledges-to-fight-on-38912">full deregulation</a> of the student contribution and a uniform 20% cut in the government subsidy).</p>
<p>The government’s consultation paper has <a href="https://docs.education.gov.au/documents/driving-innovation-fairness-and-excellence-australian-education">now also concluded</a> that the funding band rates do not reflect well the relative cost of delivering different courses. This results in cross subsidies between courses and, in some areas, cross subsidies to research.</p>
<h2>Outcomes of the governments higher education reform process</h2>
<p>In the consultation paper, the government has suggested undertaking a pricing review with the higher education sector overseen by an independent expert panel. </p>
<p>This proposal has been broadly supported in submissions from the sector including from <a href="https://www.universitiesaustralia.edu.au/Media-and-Events/submissions-and-reports/Submission-in-response-to-the-Government-s-Options-Paper-Driving-Innovation--Fairness-and-Excellence/Submission-in-response-to-the-Government-s-Options-Paper-Driving-Innovation--Fairness-and-Excellence#.V6LFQ5N95Bw">Universities Australia</a>.</p>
<p>The review could consider the overall funding levels, funding relativities and the differing private contributions by students.</p>
<p>However, a pricing review of this kind is not just a technical exercise. It cannot be undertaken in isolation from broader higher review objectives, issues and outcomes.</p>
<p>These include:</p>
<ul>
<li><p>The extent to which the government subsidy is for teaching and learning or includes a contribution to the costs of research (and if so, the level of that contribution).</p></li>
<li><p>The effect of the likely rebalancing of student and government contributions across all courses (to offset the <a href="https://theconversation.com/higher-education-gets-short-shrift-in-the-election-campaign-and-we-are-all-the-poorer-for-it-61509">20% reduction</a> in course funding factored in the budget forward estimates).</p></li>
<li><p>Evidence about differential student contributions in terms of costs and benefits.</p></li>
<li><p>Future infrastructure requirements and how that is to be funded.</p></li>
<li><p>How innovative but expensive partnerships between universities and industry to deliver internships and work integrated learning should be funded.</p></li>
<li><p>If the option to allow universities to set their own fees in designated flagship courses proceeds, should subsidies be reduced once fee levels exceed a set level?</p></li>
<li><p>Transitional issues that will arise if the funding clusters are reduced and/or courses moved between clusters.</p></li>
</ul>
<p>These are complex issues. But after almost a decade of failed processes to reform the current funding system, the government’s current consultation process, and any subsequent pricing review, must produce a revised system for financing universities in Australia that allows then to respond to emerging demands and improve the quality of outcomes for students in all courses.</p><img src="https://counter.theconversation.com/content/63505/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Noonan is employed by Victoria University. The University receives public funding through the system analysed in this article. He was also a member of the Expert Panel for the Review of Australian Higher Education (Bradley Review) and was closely involved in the development of HECS and the initial higher education relative funding model in 1989. </span></em></p>After almost a decade of failed processes to reform the current funding system, the government must produce a revised system that improves the quality of outcomes for students in all courses.Peter Noonan, Mitchell Professorial Fellow, Victoria UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/633842016-08-04T02:56:11Z2016-08-04T02:56:11ZShould students pay different fees for university courses?<figure><img src="https://images.theconversation.com/files/133015/original/image-20160804-12234-1shhkc4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Is it fair that students pay different amounts for university courses?</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/drewmaughan/7167211852/in/photolist-bVkQo9-9LmiXE-eiFpJj-4SSBov-2sFzwQ-2wqf9L-2sFyZd-aJv6Fv-8ez7rn-9Ja7ux-9HKKvF-4SWQuG-MqLgU-8ez7vH-nwiSwF-8eCpaJ-rvW5ok-8ez7CZ-8ez7HR-4ZXnLr-4SSBja-H4eJa-8ez7jr-5gbSM6-8ez7nH-6SwPv4-5REFia-bXFNnq-5Udbbb-5XbUce-549VU9-5XnAE7-e3JsjH-brFjgr-3ELkB-3ELky-uEBLeS-sb7jgR-nGZh1Q-uoB7P4-87RjCf-uoBz6H-uosNDw-uEBF2Y-uotaa1-uF4mRa-uF4irV-uF4BNV-uCJHYG-uEA2Eq">.SilentMode/flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p><em>Vice-chancellors in Australia are <a href="http://www.smh.com.au/federal-politics/political-news/an-arts-degree-for-the-price-of-a-law-degree-universities-call-for-radical-rethink-20160801-gqigql.html">calling for the government to reform</a> how student fees and funding rates are set for different courses.</em></p>
<p><em>University heads say the current system is outdated, too complicated and filled with anomalies.</em></p>
<p><em>Students currently pay higher fees for courses that lead to jobs with typically higher wages. But not all students find, or want, a job that’s within the same area in which they studied. So is this fair? Should all students instead pay the same amount for their university degree? Two education experts debate.</em></p>
<hr>
<h2>Students should pay different amounts for different courses</h2>
<p><em>Andrew Norton says:</em></p>
<p>Since 1997, Higher Education Contribution Scheme (HECS) fees or student contributions have differed between disciplines. </p>
<p>There are <a href="http://studyassist.gov.au/sites/studyassist/helppayingmyfees/csps/pages/student-contribution-amounts#2016">three different annual student contribution levels</a> – A$6,256, $8,917 and $10,440. </p>
<p>Which disciplines are allocated to each rate depends mainly on assumed future earnings, with the cost of the course playing a minor role.</p>
<p>So law and medicine, which typically lead to <a href="https://grattan.edu.au/report/graduate-winners-assessing-the-public-and-private-benefits-of-higher-education/">relatively well-paid careers</a>, are priced at $10,440 a year. Nursing, education and arts, with lower likely future earnings, are charged at $6,256 a year. And in the middle we have disciplines such as computing, allied health and architecture at $8,917 a year. </p>
<p>The rates were changed from the previous flat HECS charge, of about $4,000 a year in today’s money, to raise revenue for the government. </p>
<p>It reduced its public subsidies by an amount equivalent to the additional student revenue, leaving universities in the same financial position as before. </p>
<p>The government’s savings target could have been achieved by continuing with a flat fee, which would have meant that nursing, education and arts students paid more and law and medical students paid less. </p>
<p>But within a generally progressive system of government revenue-raising, it’s not clear that flat fees would be better. </p>
<p>Fees that differ according to discipline create a rough relationship with capacity to pay – a doctor can afford higher fees than a nurse, for example, because usually a <a href="https://grattan.edu.au/report/graduate-winners-assessing-the-public-and-private-benefits-of-higher-education/">doctor earns much more</a> over his or her career. </p>
<p>Differential fees are also more egalitarian in terms of the effort required to repay. Because <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6306.0May%202014?OpenDocument">hourly rates of pay vary between occupations</a>, a flat fee would take someone on $30 an hour twice as much time at work to repay as someone on $60 an hour. </p>
<p>The current system helps even out total HECS-HELP repayment times to a <a href="http://andrewnorton.net.au/2015/04/08/years-to-repay-student-debt-as-a-way-of-setting-student-contributions/">median of about 10 years</a>.</p>
<p>Current differences between the disciplines do need revising. </p>
<p>Engineering graduates <a href="https://grattan.edu.au/report/graduate-winners-assessing-the-public-and-private-benefits-of-higher-education/">on average earn more</a> than business graduates, but <a href="http://studyassist.gov.au/sites/studyassist/helppayingmyfees/csps/pages/student-contribution-amounts#2016">business students pay more for their courses</a> than engineering students. </p>
<p>A careful examination would probably reveal more anomalies like this. </p>
<p><a href="https://docs.education.gov.au/documents/driving-innovation-fairness-and-excellence-australian-education">A proposal</a> to link Australian Taxation Office and Department of Education data could give us a much better understanding of how earnings differ between degrees.</p>
<p>We have had more than three rates of student contributions in the past and perhaps we should again, if patterns of graduate earnings show this is justified. </p>
<p>Problems with the detail of current student contributions do not mean their broad conceptual basis is mistaken. </p>
<p>Charging HECS by discipline from 1997 shared the financial pain of reduced public funding more fairly than a flat fee system. </p>
<p>If we need to reduce per student funding again, getting some graduates to pay more than others will continue as the more equitable option. </p>
<h2>Students should pay the same fees for university courses</h2>
<p><em>Conor King says:</em></p>
<p>Student payments should primarily reflect the value of acquiring a degree, with the government payment ensuring university revenue reflects significant differences in the costs of delivery by discipline. </p>
<p>The case is put on the basis of student charges continuing to be limited to set amount(s) by government.</p>
<p>A single charge need not be set at the highest current point. It just has to be sufficiently high that, when combined with the government’s subsidy, universities can provide the education students require.</p>
<p>As it happens, the English system has a single common maximum (£9,000), which most universities apply to all students. The US public systems generally do not vary the charge by discipline. For example, <a href="http://admission.universityofcalifornia.edu/paying-for-uc/tuition-and-cost/">California has a system-wide tuition</a> and fee charge of US$12,240.</p>
<p>What Australia, or any modern society needs, is people with a wide mix of capabilities and knowledge. We want people to fulfil their potential, in a world where future employment is expected to change constantly, with the detail of the degree rapidly losing relevance. </p>
<p>The funding and charging structure should encourage people to do so, through supporting each discipline neutrally, letting individual choice drive course selection.</p>
<p>Various arguments are made for why some subjects should cost more than others. Mostly, these build on rationales put forward in 1997 to justify the fee increase. </p>
<p>One argument is that if a course costs more, then students should pay more for it. Why is that? We are not talking about the difference between a Mercedes and a Toyota, where the Mercedes performs much better than the Toyota on most measures of a car, and presumably costs a bit more to produce.</p>
<p>An agricultural science degree is not better than an engineering degree, and an engineering degree is not better than a business degree. They simply represent different areas of learning, each intended to give their graduates a solid foundation to apply in employment and in their future lives. </p>
<p>We should not reward or punish a particular preference by charging more or less for pursuing it.</p>
<p>The reality of the current fee schedule bands is that there is little connection between the cost of the course and the charge. </p>
<p>Business and law are moderately low cost to provide, but students pay the same as the high-cost health disciplines of medicine, dentistry and veterinary science. Nursing and arts lie together in the lowest band.</p>
<p>The second argument is that cost should reflect future earnings. </p>
<p>The initial disciplines in the highest band – lawyers and doctors, dentists and vets – were there because the government knew few would care if those students complained. </p>
<p>In reverse, nurses and school teachers were in the lowest band to avoid opposition to setting different rates, even though both provide good starting salaries but with limited options for progression. Future earnings were a diversionary tactic.</p>
<p>What rationale there was reduced considerably when business and accounting were moved to the top band in 2008, charging many more students the highest amount.</p>
<p>We know that within any professions, some people will work in legal aid or public health while others will be the high flyers in the corporate world. More prosaically, the majority will be suburban solicitors, accountants or GPs.</p>
<p>Assumptions about what jobs there will be or who will be the big earners may or may not hold true in the future. </p>
<p>What is more certain is that income tax will continue to be weighted to higher earnings. The tax system and the protection of HECS-HELP repayments being tied to income are the response to differences in future earnings, charging people based on what they achieve rather than their initial choice.</p><img src="https://counter.theconversation.com/content/63384/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The Grattan Institute private rates of return analysis referred to in this article was written when the Grattan Institute higher education program was funded by the Myer Foundation. </span></em></p><p class="fine-print"><em><span>Conor King is Executive Director for the Innovative Research Universities. IRU argued to the 2011 Base Funding Review that there be a single student charge and has restated the argument in response to the Coalition Government's Higher Education discussion paper.</span></em></p>Students currently pay higher fees for courses that lead to jobs with typically higher wages. But not all students find, or want, a job in their area of study. Should all students then pay the same amount for their university degree?Andrew Norton, Program Director, Higher Education, Grattan InstituteConor King, Executive Director, IRU, La Trobe UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/629852016-08-01T13:23:31Z2016-08-01T13:23:31ZUnderstanding the increase in university fees – and what it means for students<figure><img src="https://images.theconversation.com/files/132627/original/image-20160801-21010-1eqsnzh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Stokkete/Shutterstock</span></span></figcaption></figure><p>Some English universities clearly saw the vote by MPs in favour of the government’s proposed higher education reforms last month, as their cue to <a href="http://www.bbc.co.uk/news/education-36845106">increase undergraduate fees</a> in line with inflation. Because not shortly after the vote, a number of universities <a href="http://www.bbc.co.uk/news/education-36856026">raised their advertised fees</a> for 2017-18 over the current £9,000 cap. This has led to <a href="http://www.telegraph.co.uk/education/2016/07/20/universities-announce-hike-in-fees-above-9000-threshold">criticisms</a> that not only are vice-chancellors eager to raise fees, but also that they’re increasing them before they’ve been authorised to do so.</p>
<p>These criticisms have arisen because although Theresa May’s government comfortably won a vote last month supporting the <a href="https://hansard.parliament.uk/Commons/2016-07-19/debates/16071936000002/HigherEducationAndResearchBill">second reading of the Higher Education and Research Bill</a> – which aims to improve competition and choice in higher education – the Bill is not expected to finish its journey through parliament and become law until October. So it is easy to see why some people have claimed certain universities are being <a href="https://next.ft.com/content/28e33c0e-4e96-11e6-88c5-db83e98a590a">presumptuous</a> by raising their fees now.</p>
<p>Many universities are keen to have fee rises as soon as possible to prevent further declines in their revenue – which have occurred because the undergraduate fee was fixed at £9,000 in 2012, making its real current value about £8,500 because of inflation. But how much the inflation uplift actually is will be decided by HM Treasury – the government’s economic and finance ministry – meaning that universities cannot use their own inflation figures to inform their prices.</p>
<p>And while it is correct that universities will be able to increase their fees for the 2017-18 year, when introducing the Bill to the House of Commons, the new secretary of state for education, <a href="https://theconversation.com/dear-justine-greening-heres-what-you-should-do-as-education-minister-62514">Justine Greening</a>, made clear that universities will only be able to access these inflation-linked rises if they demonstrate they are providing “<a href="https://theconversation.com/why-universities-will-have-to-pay-more-attention-to-the-quality-of-their-teaching-47186">high quality teaching</a>”. </p>
<p>This means that teaching quality will be assessed according to the new <a href="https://theconversation.com/uk/topics/teaching-excellence-framework">Teaching Excellence Framework</a> (TEF) – a new process designed to measure and improve the student experience and teaching quality in higher education. So if universities can prove they are performing satisfactorily, they will be rewarded with the power to raise fees – but only by inflation. </p>
<h2>Performance-based fees</h2>
<p>In theory, the first year of the TEF will be a light touch exercise that all universities – whose books are in order – should be able to pass. And once they have done this, they can then raise the fees. It is in anticipation of this, that some universities have started amending their price lists already.</p>
<p>But linking TEF to fee rises in this way creates a predicament for universities. This is because fees are to be determined by TEF results, and universities have to wait until they’ve been through the TEF process to have the increases confirmed. So there is a reason to hold back on announcing fee rises. Yet, they need to inform potential students of the fee level before they apply, so they must advertise their prices as accurately as possible in advance. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/132629/original/image-20160801-19880-1h8uq2f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/132629/original/image-20160801-19880-1h8uq2f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/132629/original/image-20160801-19880-1h8uq2f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/132629/original/image-20160801-19880-1h8uq2f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/132629/original/image-20160801-19880-1h8uq2f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/132629/original/image-20160801-19880-1h8uq2f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/132629/original/image-20160801-19880-1h8uq2f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The majority of universities would be allowed to charge £9,250.</span>
<span class="attribution"><span class="source">Matej Kastelic/Shutterstock</span></span>
</figcaption>
</figure>
<p>This is important because it relates to another part of government’s higher education <a href="https://www.gov.uk/government/publications/higher-education-success-as-a-knowledge-economy-white-paper">reforms</a>: to ensure universities provide sufficient product information to <a href="https://theconversation.com/power-to-the-students-how-the-nature-of-higher-education-is-changing-60031">consumers</a> before they make their choice.</p>
<p>It also raises the question of who should decide undergraduate tuition fees. Universities being allowed to set their own fees in a free market was <a href="http://www.theguardian.com/politics/2010/oct/22/david-willetts-tuition-fees-cap/">ruled out</a> in the last parliament. And a proposal in last year’s <a href="https://theconversation.com/how-the-teaching-excellence-framework-will-work-50323">Green Paper</a> to transfer the power to set fees to ministers, from a vote of MPs in the House of Commons, has been abandoned. This means any future increases in fees above inflation will need the approval of parliament, as in the past.</p>
<h2>How fees work</h2>
<p>Here’s how it currently works. The government maintains control of undergraduate fees for domestic students because they’re a part of a public system of student finance. This is where students make a choice to go to university, but pay nothing. The government pays the fees to the university and gives the student an “income contingent” loan – which means after graduation, the government takes the money out of the graduate’s salary with the amount paid back each month dependant on the graduate’s earnings.</p>
<p>The government will not be able to collect all the money it paid out in fees – about 75% is recovered – because an increasing number of graduates don’t repay all the money loaned to them. This system means higher education is free at the point of use and the costs are equally shared between graduates and government. The large sums of money being lent out, and the fact some will never be repaid, means this system requires controls on fee levels to protect the system and public finances. </p>
<p>Add into a system such as this fees rising well above inflation and allegations universities have recruited students with promises of high graduate salaries which do not materialise, and you have a similar situation to the <a href="https://theconversation.com/explainer-the-us-student-loan-problem-and-how-we-got-here-32676">US</a> – where some argue higher education resembles a “<a href="http://www.huffingtonpost.com/thaddeus-mccarthy/higher-education-is-a-gia_b_7438866.html">Ponzi</a>” or “<a href="http://www.forbes.com/sites/sherylnancenash/2012/05/17/is-higher-education-a-giant-pyramid-scheme/#3282c1895d21">Pyramid</a>” scheme. So capping fees can be seen as a way of controlling graduate debt and preventing a similar situation arising in the UK.</p>
<h2>Fees of the future</h2>
<p>Following the new prime minister’s ministerial <a href="https://www.gov.uk/government/news/full-list-of-new-ministerial-and-government-appointments">reorganisation</a>, higher education policy (but not science) has moved into the Department for Education. Jo Johnson remains as the minister for universities and science, but is now based in two government departments. This is good for joined up government and policy continuity as it enables Johnson to implement the Conservative university reform agenda he personally developed. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/132631/original/image-20160801-21010-1j4g7kg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/132631/original/image-20160801-21010-1j4g7kg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=419&fit=crop&dpr=1 600w, https://images.theconversation.com/files/132631/original/image-20160801-21010-1j4g7kg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=419&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/132631/original/image-20160801-21010-1j4g7kg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=419&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/132631/original/image-20160801-21010-1j4g7kg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=526&fit=crop&dpr=1 754w, https://images.theconversation.com/files/132631/original/image-20160801-21010-1j4g7kg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=526&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/132631/original/image-20160801-21010-1j4g7kg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=526&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The government plans to allow ‘better’ universities to raise fees.</span>
<span class="attribution"><span class="source">Rawpixel.com/Shutterstock</span></span>
</figcaption>
</figure>
<p>And with the new government now in place, and the higher education reforms moving through parliament, the future of tuition fees looks much clearer. We can now expect to see annual increases in fees by inflation for several years to come.</p>
<p>So what this ultimately means for students is that increases in undergraduate tuition fees now look inevitable – even if only by inflation.</p><img src="https://counter.theconversation.com/content/62985/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Gunn receives funding from Worldwide Universities Network, the British Council (administering the Newton Fund), the UK Higher Education Academy, the United Kingdom Political Studies Association, the New Zealand Political Studies Association and the UK Quality Assurance Agency. Andrew Gunn concurrently holds visiting academic positions internationally.</span></em></p>Here’s why some English universities are raising their tuition fees again.Andrew Gunn, Researcher in Higher Education Policy, University of LeedsLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/610242016-06-20T13:43:27Z2016-06-20T13:43:27ZSouth Africa’s youth speak out on the high cost of finding work<figure><img src="https://images.theconversation.com/files/126726/original/image-20160615-14057-ju5s0e.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Young people understand the value of education but find fees prohibitively high in a context of widespread unemployment and low incomes.</span> <span class="attribution"><span class="source">REUTERS/Mark Wessels </span></span></figcaption></figure><p>The voices of the youth are often neglected in discussions about the problems they encounter in finding work. Unemployment is one of the biggest challenges young people face globally. But the absence of young voices on the subject stands in the way of understanding and solving the problem. </p>
<p>Youth unemployment in South Africa is a problem – and it appears to be getting worse. Between 2009 and 2014, the share of 15- to 34-year-old youth in the working population of the country <a href="http://www.statssa.gov.za/?p=6395">fell</a> from 42.6% to 39.8%. And in the first quarter of 2016, the unemployment rate (including only active job-seekers) for 15- to 24-year-olds was about 55% – <a href="http://www.statssa.gov.za/publications/P0211/P02111stQuarter2016.pdf">up 5%</a> on the previous year. </p>
<p>The <a href="https://www.uj.ac.za/faculties/humanities/csda">Centre for Social Development in Africa</a> at the University of Johannesburg conducted research among employed and unemployed 18- to 25-year-olds in five of South Africa’s nine provinces. It focused on their experiences of unemployment, employment and job-seeking. </p>
<p>The research, to be published soon, will hopefully amplify the voices of youth and thereby inform more realistic interventions to combat a serious developmental problem. Youth insights point to issues that are rarely considered in policy making circles. Three are highlighted in this article:</p>
<ul>
<li><p>the problem of accessing higher education;</p></li>
<li><p>the costs of looking for work; and</p></li>
<li><p>exploitation.</p></li>
</ul>
<h2>Higher education</h2>
<p>Young people understand the value of education, particularly higher education. But, as recent <a href="https://theconversation.com/south-african-student-protests-are-about-much-more-than-just-feesmustfall-49776">student protests</a> have shown, the cost of a university education is prohibitively high in a context of widespread unemployment and low incomes.</p>
<p>As one of the survey respondents, from Orange Farm in the Gauteng province, said:</p>
<blockquote>
<p>Without skills you are nothing, matric [South Africa’s school-leaving certificate] is nothing, so that’s why I am here now because I do not have skills.</p>
</blockquote>
<p>When students were awarded bursaries or loans by the <a href="http://www.nsfas.org.za/content/">National Student Financial Aid Scheme</a> to attend university, it was common for these only to be paid out months after the academic year had started. But costs like transport, books, and registration and residence fees had to be covered immediately. Because their families were not in a position to support them financially, such students were at risk of dropping out of university.</p>
<h2>The costs of finding work</h2>
<p>Youth face many more immediate challenges in their search for work, including the costs of looking for work and filling out applications. </p>
<p>There are no functional job centres where relevant, up to date information about job openings and job advice can be found. Most youth find this information on the internet or in newspapers. They also often have to use the internet and computers for job applications. Few have these resources at home, so they are forced to use (sometimes distant) internet cafés. </p>
<p>In addition, many employers demand paper applications, which entails the costs of printing, copying, certification and postage.</p>
<p>A Cape Town respondent spoke of the cost:</p>
<blockquote>
<p>It was in June or May this year I applied for a job, right, but the cost was to go to the post office to post those application forms. I think it cost me, like, R23. It was an envelope, a brown envelope plus photocopies. I think it was R50 with transport to town.</p>
</blockquote>
<p>The general finding is that these job-seeking resources and services are inordinately expensive for people without regular income, and this limits the frequency with which they apply for positions. </p>
<p>In addition, young black South Africans typically <a href="http://www.cssr.uct.ac.za/sites/cssr.uct.ac.za/files/pubs/WP283.pdf">live far</a> from where jobs are located. This makes it expensive to travel to interviews or apply for jobs in person. A return trip is in the region of R30-R40 (about US$2-$2.63). For working people, this may mean spending more than a third of their monthly income on travel. For those hunting work, the costs are prohibitive.</p>
<h2>Exploitative practices</h2>
<p>A third and particularly disturbing finding is the exploitation of work-seekers’ vulnerability. Respondents repeatedly spoke of fraudsters advertising nonexistent jobs, soliciting payments for processing applications or for pre-job training. </p>
<p>These often large payments are made to what appear to be legitimate and professional employers or agencies advertising on the internet, in newspapers or by text message.</p>
<p>According to a respondent from the North West province,</p>
<blockquote>
<p>I also got a message. Last year. That guy told me, at least give me R2,500 and I will give you a job at the mine. I said, “Wow! I’ll see what I can do …’</p>
</blockquote>
<p>When applications are made in person, gatekeepers like human resources managers and secretaries frequently solicit bribes to ensure applications are considered rather than discarded:</p>
<blockquote>
<p>Where are you going to get money to bribe this person? You are not working, you are looking for a job and you are expected to pay before even getting your name in the company’s books … Where are you expected to get the money from? You don’t have the bribe money, you are out. – East London respondent</p>
</blockquote>
<p>Several young women and men also spoke of being asked to perform sexual favours to improve their chances of securing a job. A respondent from Johannesburg said: ”… there was a guy there and he said I am cute and if am willing to do some little things for him he can definitely give me a job.“</p>
<h2>The need for intervention</h2>
<p>The costs of looking for work often lead to the perverse outcome where job-seekers, having fallen into debt to meet these costs, find themselves worse off than before and even unable to pay for basics like food. Many respondents told us of tensions and strained relationships and, less frequently, trouble with moneylenders.</p>
<p>While young job-seekers were mostly not deterred from trying to find work, these obstacles point to the need for sustained, local-level and accessible interventions – informed by young people. Some feasible interventions include:</p>
<ul>
<li><p>universities and financial support agencies improving the efficiency of their administrative operations to ensure prospective students are paid loans and grants timeously; </p></li>
<li><p>employers simplifying the job application process. They could, for example, stop demanding onerous documentation like hard copies; </p></li>
<li><p>government (and others) opening accessible and functional job centres where authentic information can be accessed at a low cost. These should include subsidised application-related resources like access to the internet, printers and certification facilities; </p></li>
<li><p>job-seekers being able to access publicly-funded travel subsidies; and </p></li>
<li><p>law enforcement agencies cracking down on job fraudsters and extortionists.</p></li>
</ul><img src="https://counter.theconversation.com/content/61024/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Zoheb Khan received funding from the Department of Labour to conduct this research.</span></em></p>The huge problem of youth unemployment in South Africa appears to be getting worse. New research will hopefully amplify their voices and inform more realistic interventions to combat the monster.Zoheb Khan, Researcher, University of JohannesburgLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/600312016-06-09T10:19:13Z2016-06-09T10:19:13ZPower to the students: how the nature of higher education is changing<figure><img src="https://images.theconversation.com/files/125740/original/image-20160608-3509-718bty.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Robert Kneschke/www.shutterstock.com</span></span></figcaption></figure><p>A large majority of UK undergraduates are satisfied with their university course, according to the results of an annual survey of 15,000 full-time students. But the <a href="http://www.hepi.ac.uk/2016/06/09/students-demand-better-value-money-nine-10-students-not-want-higher-fees/">2016 student academic experience survey</a> found perceptions of “good value for money” are in decline, indicating that students are becoming more demanding. </p>
<p>This year, only 37% of students felt they get value for money at their university, compared to 53% in 2012. And 86% do not want to see higher student fees, even where an excellent experience can be demonstrated.</p>
<p>Measuring the student experience is a central theme in the Conservative government’s new higher education <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/523546/bis-16-265-success-as-a-knowledge-economy-web.pdf">white paper</a>, where students are regarded as consumers. The proposed reforms include the creation of a new industry regulator, the Office for Students (OfS), with a remit to act in the interests of students by ensuring competition and choice as well as assessing quality and standards across higher education. </p>
<p>But the reforms go much deeper than merely rebranding a sector agency – they involve several serious measures designed to give students, as consumers, much greater control.</p>
<h2>Putting excellence into practice</h2>
<p>This can be seen in the creation of a <a href="https://theconversation.com/uk/topics/teaching-excellence-framework">Teaching Excellence Framework</a> (TEF), which will give more power to consumers by helping applicants make a more informed choice. The TEF results seek to provide comparable information on the quality of teaching at different universities, which has not been available in the past. </p>
<p>Asking universities to report on the quality of their teaching, the support they offer students and the employability of their graduates not only provides information for consumers, it also encourages universities to make performing well on these issues a much higher priority. </p>
<p>Following consultation on a <a href="https://theconversation.com/how-the-teaching-excellence-framework-will-work-50323">green paper</a>, the full TEF has been moved back one year to allow lessons to be learned from a pilot year. Allowing universities to make additional above-inflation increases in undergraduate fees based on TEF results has been moved even further into the future. This means large variations in fees between universities won’t emerge for several years.</p>
<p>New metrics are being developed for later years of the TEF, including a new dataset using tax records to show actual <a href="https://theconversation.com/what-your-choice-of-degree-means-for-your-future-earnings-57760">graduate earnings</a>. Pilots within certain disciplines will be undertaken to help the TEF drill down to the level of individual subjects. </p>
<h2>Fast tracking</h2>
<p>The white paper is accompanied by two technical consultations. The <a href="https://www.gov.uk/government/consultations/teaching-excellence-framework-year-2-technical-consultation">first</a> deals with the details of the TEF, explaining how it will eventually be extended to taught postgraduate courses, for example. The <a href="https://www.gov.uk/government/consultations/accelerated-courses-and-switching-university-or-degree-call-for-evidence">second</a> explores the viability of two other schemes to increase student choice: accelerated courses and switching universities.</p>
<p>Accelerated or <a href="http://www.topuniversities.com/student-info/choosing-university/fast-track-degree-programs">fast-track</a> courses are typically <a href="http://www.independent.co.uk/news/education/higher/university-challenge-does-a-two-year-degree-make-more-economic-sense-2037887.html">two-year degrees</a>, where a traditional three-year degree is completed in two years by attending over the summer. The government wants the higher education sector to offer more flexibility and appreciate that all students may not want the standard three-year undergraduate experience.</p>
<p>Since <a href="http://www.independent.co.uk/student/into-university/applying/are-two-year-degrees-the-future-796034.html">their introduction</a>, the demand for two-year degrees has remained relatively small; although this may be because the current choice of courses available is quite limited. Accelerated learning <a href="http://www.theguardian.com/education/2010/aug/03/vince-cable-two-year-degrees">has been criticised</a> and <a href="http://www.tandfonline.com/doi/abs/10.1080/03075079.2010.520698">questioned</a> by those who argue it means fewer opportunities for reflection that fosters a better understanding of a subject. Two-year degrees have been condemned by <a href="https://www.ucu.org.uk/media/3722/UCU-policy-briefing-Two-year-degrees-Feb-10/doc/ucupolicybrief_2yrdegrees_feb10.doc">campus trade unions</a> who describe them as “<a href="http://www.bbc.co.uk/news/10195353">sweatshops</a>” for university teachers.</p>
<p>The government also wants to see how the <a href="https://theconversation.com/should-it-be-easier-for-students-to-switch-university-mid-degree-59714">process of switching</a> universities could be made easier. The TEF results may be useful for applicants who are yet to make their choice, but they aren’t useful for students already studying whose personal circumstances <a href="http://www.telegraph.co.uk/education/universityeducation/11390399/University-students-facing-unlawful-course-changes.html">or course</a> may have changed if they cannot easily “vote with their feet” and go elsewhere.</p>
<h2>Power to switch</h2>
<p>The government wants a system where the money follows the student, enabling students to switch universities rather than being locked into one place. To make this work, they envision a “credit transfer market” where students can take credit from their existing university to another that better fits their current needs.</p>
<p>Even if the number of transferring students was small, a credit transfer market would increase the power of students as consumer by challenging the entrenched idea that university choice is a “one-off purchase”. Another reason the government wants to do this is because it foresees a situation in the new marketplace where some providers may close down. Ensuring the stranded students affected can complete their degrees elsewhere needs to be considered.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/125744/original/image-20160608-3492-16dlm03.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/125744/original/image-20160608-3492-16dlm03.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/125744/original/image-20160608-3492-16dlm03.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/125744/original/image-20160608-3492-16dlm03.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/125744/original/image-20160608-3492-16dlm03.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/125744/original/image-20160608-3492-16dlm03.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/125744/original/image-20160608-3492-16dlm03.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">In the US, switching course is common.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/shawncalhoun/11360545156/sizes/l">shawncalhoun/flickr.com</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span>
</figcaption>
</figure>
<p>In the US, <a href="http://www.collegetransfer.net">student transfers</a> are the norm, and the numbers are on the rise. A <a href="http://nscresearchcenter.org/signaturereport9/">recent report</a> found that over one third of students who began their studies in 2008 transferred to a different institution at least once. Out of these students, almost half changed their institution more than once. But the US context is quite different to English higher education. For example, the Wisconsin system of community colleges and universities is one entity where credit has common currency and students move from associate to bachelor degrees. </p>
<p>Yet Australian higher education, which is more comparable, shows how it is possible to make transfers between universities easier by having <a href="http://www.aqf.edu.au/aqf/about/what-is-the-aqf/">a national framework</a> and more visible and straightforward policies within each institution. </p>
<p>The reforms show the government’s resolute determination to achieve greater competition and choice in higher education. These are reforms that seek to shift the balance of power to ensure the higher education sector delivers what students wish to receive, rather than what universities wish to offer.</p><img src="https://counter.theconversation.com/content/60031/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Gunn receives funding from Worldwide Universities Network, the British Council (administering the Newton Fund), the UK Higher Education Academy, the United Kingdom Political Studies Association, the New Zealand Political Studies Association and the UK Quality Assurance Agency. Andrew Gunn concurrently holds visiting academic positions internationally. </span></em></p>What students want is becoming more important than what univerisites want to teach them.Andrew Gunn, Researcher in Higher Education Policy, University of LeedsLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/584262016-04-27T20:12:08Z2016-04-27T20:12:08ZFederal election 2016: higher education policies to watch out for<figure><img src="https://images.theconversation.com/files/120259/original/image-20160427-1327-2qxsiv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">What should government and students contribute towards university degrees?</span> <span class="attribution"><span class="source">from www.shutterstock.com</span></span></figcaption></figure><p>In the lead up to the 2014 election, the then opposition leader <a href="http://www.liberal.org.au/latest-news/2013/02/28/tony-abbotts-address-universities-australia-higher-education-conference">Tony Abbott pledged</a> that universities would be subject to “masterly inactivity” if the Coalition won the election. </p>
<p>He was almost right: universities and their students have now suffered three years of government not making a major change to how higher education is resourced.</p>
<p>Higher education needs certainty for the future, with clarity for the coming decade about the balance of government and student investment. </p>
<p>The 2016 election is likely to feature two distinct approaches to how to resolve universities’ revenue pressure to deliver the teaching and research expected of them.</p>
<h2>The Coalition’s approach</h2>
<p>The Coalition’s policy preference is clear: </p>
<ul>
<li>contain government expenditure over time;</li>
<li>use flexible student charges to ensure universities have the needed resources;</li>
<li>extend the system to all higher education providers aligning funding and quality regulation systems.</li>
</ul>
<p>However, it is yet to release an updated proposal for its higher education reforms. </p>
<p>The <a href="https://theconversation.com/budget-should-give-universities-more-flexibility-on-student-contributions-56733">2016 budget</a> is expected to announce some of the government’s revised position but likely not the whole policy. </p>
<p>These will mostly be positions: legislation to implement changes will have to wait for the new parliament.</p>
<p>The challenge is that the fiscal restraint the government wants is in conflict with addressing the public reaction to the current policy position of a deep cut to base funding and substantially higher student payments.</p>
<h2>What Labor wants</h2>
<p>The Labor policy emphasises the need for additional public investment. Its commitments to date would maintain current funding into the future, rejecting the proposed cuts to core funding from both sides since 2013. </p>
<p>Labor now needs to commit additional funding beyond that to meet its policy ambition of an effective publicly funded university system backed by current levels of student payments. Some of this may come from in its election research policy statement.</p>
<p>What will not feature in election debates is how to assist universities position themselves for the future as modes of education keep developing but the underlying product remains the same. </p>
<p>Five issues will dominate discussion:</p>
<h2>Who should go to university: is open demand funding the right approach?</h2>
<p>The pressure remains on funding all interested students who meet university admission requirements. The direct cost of the Gillard policy is now largely met, with future growth in student numbers incremental. </p>
<p>There remains lingering sentiment that universities should only be for the brightest on the assumption that that was once the case. </p>
<p>The future reality is that it is <a href="https://theconversation.com/ideas-for-australia-degrees-are-more-necessary-than-ever-before-but-the-rewards-arent-as-great-56912">hard to be employed</a> without a vocational, education and training (VET) or higher education qualification.</p>
<h2>What should government and students contribute?</h2>
<p>The rationale is clear for government to support higher education through directly funding universities and advancing money for students’ payments with the students to repay later in their lives. </p>
<p>It ensures that all Australians can gain the post-school education and training they need to underpin their future employment. The return to government is higher personal earnings which stimulates economic activity and taxation revenues.</p>
<p>There is endless discussion about the balance between the direct and indirect investment. One consequence of the election outcome will be an endorsement either to increase the student contribution and constrain the government (Coalition) or hold the student contribution to current levels and increase the government (Labor).</p>
<h2>Getting HELP student loans right</h2>
<p>There is growing pressure to alter the Higher Education Loans Program (HELP). HELP is still often called HECS which refers only to student payments in publicly supported university places, which now comprise around 57% of HELP only.</p>
<p>The Parliamentary Budget Office <a href="https://theconversation.com/higher-education-policies-could-result-in-big-increase-to-federal-debt-experts-respond-57216">has highlighted</a> that funding for HELP is not counted against the main budget since notionally the funds are a loan and asset for government. </p>
<p>Its hyperbolic extrapolation that much of the advance for students is not repaid ignores that for the base HECS-HELP program those advances mostly replace previous direct government payments.</p>
<p>The real options to tighten HELP are those <a href="https://theconversation.com/is-lowering-the-student-loan-repayment-threshold-fair-for-students-56814">Andrew Norton has proposed</a> which would make repayment kick in at lower incomes, but not as low as between 1998 and 2005, and try to recoup more from those overseas or who die. These amend the detail without harming the scheme.</p>
<h2>Should we fund education and research separately?</h2>
<p>There is agreement across the parliament - Coalition, Labor and The Greens - that university research must link much better to research end users - business, government and community bodies. </p>
<p>The government’s <a href="https://theconversation.com/turnbull-seeks-ideas-boom-with-innovation-agenda-experts-react-51892">National Innovation and Science Agenda (NISA)</a> offers incentives for businesses to engage with universities and other research bodies. The challenge is how well business and investors respond.</p>
<p>NISA also improves the incentives for universities to support industry driven research. </p>
<p>It is less clear that Labor supports these changes, and quite clear that senator Kim Carr doubts the capacity to assess the value of research for end users in a system that can balance excellence in research for Australia.</p>
<p>The sleeping giant of research funding is the question of where government funds the salary for academics who research. </p>
<p>Right now it is funded through the Commonwealth Grant Scheme, the base government grant which most assume is an “education” grant. </p>
<p>But the question is clear: should education and research be fully split out and if so, how?</p>
<h2>Impact of international student recruitment</h2>
<p>The government’s revised international strategy is set to be released just before the budget as the government clears outstanding business before the election is formally called. </p>
<p>One aspect to watch for is whether the various elements to support international research and innovation engagement are drawn together better, to balance the standard emphasis on student recruitment.</p>
<p>There is broad support for the international education role of universities but it also draws out latent concerns about foreign nationals being in Australia, arguments that they supplant Australian students and longer term take not create jobs.</p><img src="https://counter.theconversation.com/content/58426/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Conor King is Executive Director for the Innovstive Research Universities which advocates for its member universities.</span></em></p>Increasing the amount that students pay towards their degree is likely to be on the cards of higher education in this year’s election.Conor King, Executive Director, IRU, La Trobe UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/567332016-04-03T20:08:06Z2016-04-03T20:08:06ZBudget should give universities more flexibility on student contributions<figure><img src="https://images.theconversation.com/files/116740/original/image-20160330-28445-1dbbite.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Should students pay more towards their degree?</span> <span class="attribution"><span class="source">from www.shutterstock.com</span></span></figcaption></figure><p>The Australian government is committed to making inroads into its <a href="http://www.budget.gov.au/2015-16/content/myefo/download/MYEFO_2015-16_Final.pdf">A$36 billion budget deficit</a> in the forthcoming May budget. </p>
<p>Universities and students will not escape unscathed. </p>
<p>While the <a href="https://theconversation.com/education-minister-says-uni-fees-wont-change-for-2016-48432">2014 fee deregulation plan</a> was shelved late last year, the 20% reduction in tuition subsidies is still baked into the budget forward estimates. The government is not likely to walk away from this and will be under pressure to provide universities with the means to recover at least part of the budget cuts. </p>
<p>The most likely option for the government at this stage is to increase the student contribution limits.</p>
<p>These currently range from <a href="http://studyassist.gov.au/sites/studyassist/helppayingmyfees/csps/pages/student-contribution-amounts">$6,256 to $10,440</a> per year. This represents on average about <a href="https://theconversation.com/fact-check-what-do-students-contribute-to-their-own-degrees-27280">40%</a> of the cost per student to the university.</p>
<h2>May budget - what to expect</h2>
<p>The government may well look to other ways of further shifting the costs of higher education from the taxpayer to the student in the May budget. This could include changes to Higher Education Loan Program (HELP) debt repayment arrangements such as higher interest rates, <a href="https://theconversation.com/is-lowering-the-student-loan-repayment-threshold-fair-for-students-56814">lower repayment thresholds</a> and recovering debts from <a href="https://theconversation.com/chasing-unpaid-student-loans-could-save-government-800m-25321">deceased estates</a>.</p>
<p>Students and many universities would decry such cost shifting as they always have, but their arguments don’t stack up. </p>
<p>It is true that government funding of tertiary institutions in Australia is ranked low by international standards, yet the quality of our system is much more highly ranked – <a href="http://www.universitas21.com/news/details/186/u21-ranking-of-national-higher-education-systems-2015">10th out of 50 in fact in 2015</a>. So it is not clear that relatively low government funding is holding us back.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/116867/original/image-20160331-28459-12dgw9w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/116867/original/image-20160331-28459-12dgw9w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/116867/original/image-20160331-28459-12dgw9w.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/116867/original/image-20160331-28459-12dgw9w.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/116867/original/image-20160331-28459-12dgw9w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/116867/original/image-20160331-28459-12dgw9w.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/116867/original/image-20160331-28459-12dgw9w.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">‘Even if the student contributions were to double it would still be the best rate of return a young person is ever likely to get on an investment.’</span>
<span class="attribution"><span class="source">from www.shutterstock.com</span></span>
</figcaption>
</figure>
<h2>Why students should pay more</h2>
<p>More importantly, a greater student contribution makes sense on grounds of equity, good resource allocation and quality of education.</p>
<p>A university degree increases lifetime earnings <a href="http://grattan.edu.au/wp-content/uploads/2014/04/162_graduate_winners_report.pdf">by about A$1 million</a> on average, or <a href="https://theconversation.com/fact-check-what-do-students-contribute-to-their-own-degrees-27280">75% more than for non-graduates</a>. </p>
<p>So even if the student contributions were to double it would still be the best rate of return a young person is ever likely to get on an investment.</p>
<p>The current 60% government contribution toward the cost of education is a subsidy from people who have never had the opportunity of a university education. </p>
<p>Next time you go into a shop to buy a pair of shoes, try explaining to the full-time shop assistant why they should pay more taxes for the lucrative investments of students from privileged backgrounds. </p>
<p>Yes, the shop assistant should pay something to account for the positive spillovers that higher education provides to other people in the workplace and community. But why a 60% taxpayer contribution? A cut to, say, 40% or 50% would surely be reasonable.</p>
<p>The current student contribution limits are price caps and, like other price caps, they tend to hurt the people they are intended to help: low socio-economic status (SES) students. </p>
<p>The reason low SES students get hurt is that universities restrict places in some courses by imposing high academic entry scores, and it is the low SES students who disproportionately miss out on places. They are <a href="https://docs.education.gov.au/system/files/doc/other/review_of_the_demand_driven_funding_system_report_for_the_website.pdf">less likely</a> to finish Year 12 and are less likely to have a high ATAR score than high SES students.</p>
<p>Universities have an incentive to shift resources to fee-paying international and post-graduate courses and to restrict Commonwealth-supported places for domestic students in some courses at least.</p>
<p>We see this in courses where universities ration places using academic entry scores that are way above what is necessary to ensure that only academically prepared students get in. </p>
<p>Despite bonus schemes and alternative pathways, low SES students are still <a href="https://www.tasa.org.au/wp-content/uploads/2012/11/LacroixCChestersJ.pdf">disproportionately excluded</a> by high academic entry criteria.</p>
<p>Increasing the price caps (student contribution limits) would therefore increase supply of places in some courses, which would improve access to low SES students. </p>
<p>Would they pay? Yes. A <a href="http://ec.europa.eu/education/library/study/2014/cost-sharing/comparative-report_en.pdf">nine-country study</a> has shown that fees have little or no effect on the proportion of low SES students in universities – and not all those countries have the fee-HELP scheme that blunts the demand response to higher fees. </p>
<p>Also, nothing else we’ve done seems to have had much effect on the proportion of low SES students in Australian universities. This has <a href="https://theconversation.com/who-goes-to-university-the-changing-profile-of-our-students-40373">barely shifted over the past 15 years</a> despite the 2008 <a href="http://apo.org.au/resource/review-australian-higher-education-final-report">Bradley Review </a>lifting of enrolment caps and a plethora of retention schemes targeted at low SES students.</p>
<p>Allowing the student contribution to increase would also improve the student experience. Smaller classes, better equipment, better support services and better academic staff can all improve quality but at higher cost. If these investments can be recouped through higher student contributions, they are more likely to go ahead.</p>
<p>We should not presume that all universities will always increase their student contributions to the limit for all courses. </p>
<h2>Taxing universities</h2>
<p>Fears of price gouging in response to partial fee deregulation are unwarranted. </p>
<p>First, competition will restrict price gouging to some extent and will challenge universities to pick their price point and tailor packages of tuition to that price.</p>
<p>The international student market, for example, is highly competitive and universities compete on price and product differentiation.</p>
<p>And if that doesn’t work, policies are available to restrict price gouging by, for example, shifting some of the cost of unpaid HELP debts back to the universities to encourage them to factor this in when setting their prices. </p>
<p>We could require universities to pay a percentage of total unpaid student debt arising from their courses. This would force universities to carefully consider the affordability of their fees.</p>
<p>The last-resort policy response to price gouging is to tax universities that abuse their monopoly power in the same way as we impose special taxes on mining companies.</p>
<p>This would be better than restricting places through price caps. Then at least students from disadvantaged backgrounds would not be turned away from prestige institutions by unnecessarily high academic entry standards.</p>
<p>There is no need for $100,000 university degrees. But some further price flexibility would be good for disadvantaged students and for the quality of the student experience across the board.</p><img src="https://counter.theconversation.com/content/56733/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ross Guest has received funding from the Office for Learning and Teaching (OLT). The views expressed here are the author's personal views which may not reflect the views of the OLT or Griffith University.</span></em></p>In the May Budget, the government may look for ways to shift the costs of higher education from the taxpayer to the student.Ross Guest, Professor of Economics and National Senior Teaching Fellow, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/497552015-10-27T04:12:47Z2015-10-27T04:12:47ZFree university education is not the route to social justice<figure><img src="https://images.theconversation.com/files/99648/original/image-20151026-18440-gcbssy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">South African student protesters make their feelings clear: education is a right and should be free.</span> <span class="attribution"><span class="source">Reuters/Mike Hutchings</span></span></figcaption></figure><p>“Free education in our lifetime” is the campaign slogan many students have adopted in the recent protests across South Africa against university fee increases. The country’s higher education minister is among those who have replied that, although free education for all university students would be the ideal, it is economically unfeasible right now.</p>
<p>But is it true that in an ideal world higher education would be free – that is, be fully funded by the state? More to the point, would higher education be free in a just society?</p>
<h2>Taxes shouldn’t fund an elite few</h2>
<p>Proponents of free university tuition are right to point out that higher education is a public good. Having well-trained doctors, lawyers, teachers, accountants, managers, engineers, journalists and civil servants around benefits us all. And the critical reasoning skills cultivated by humanities subjects like economics, African studies, classics, political studies and philosophy enhance civil society’s ability to hold government to account.</p>
<p>But it would be naïve to think that school leavers are flocking to the groves of academe in <a href="http://www.dhet.gov.za/DHET%20Statistics%20Publication/Statistics%20on%20Post-School%20Education%20and%20Training%20in%20South%20Africa%202012.pdf">ever increasing numbers</a> out of a sense of civic duty. Higher education is not just a public good. It is also an individual good for those who pursue it.</p>
<p>For one thing, many students find their subject intrinsically interesting and rewarding. At its best higher education is a mind-expanding experience. Just as importantly, once they have successfully completed their degree and entered the job market, graduates have an enormous competitive advantage over those who have no letters after their name. A good university degree can open the way to high-status, high-income job opportunities.</p>
<p>But while everyone pays tax of one kind or another, <a href="http://www.statssa.gov.za/publications/P0318/P03182013.pdf">far fewer</a> than half of South Africans will receive a university education. Currently less than 15% of those over the age of 20 have received a university education - though fortunately that figure is set to rise. Surely it is not fair that the intrinsic rewards and competitive advantage conferred by higher education should be fully funded by taxpayers when only a minority enjoy them.</p>
<p>There are far stronger arguments for making high school education or health care free at the point of use. Everyone can expect to need health care, and <a href="http://www.ci.org.za/depts/ci/pubs/pdf/general/gauge2014/ChildGauge2014_childrencount_education.pdf">almost 100%</a> of South Africans receive some high school education.</p>
<p>So the principal objection to free university tuition is not that it is unfeasible, but rather that it would be unjust. It would be a form of exploitation of the masses of the people by a degree-toting élite. Those of us who embrace the goals of equality and social justice must be far less coy about pointing this out.</p>
<h2>Exploring the options</h2>
<p>I’ve argued that its status as an individual good means higher education should not be fully funded by the state. Equally, its status as a public good means it should not be fully funded by student fees. To the extent that higher education is an individual good, the individuals who benefit from it should pay for it; to the extent that it is a public good, it should be paid for from the public purse. </p>
<p>One can argue about what the exact ratio ought to be, but a 50:50 split between public funding and student fees is an obvious benchmark to begin from.</p>
<p>The recent fee protests have starkly reminded us that many students and school leavers simply cannot afford university fees at their current levels. It would be irresponsible to play down the troubling predicament in which many poorer students find themselves. However, this is not a problem with the current funding model (who pays, and how much). Instead it is a huge problem with the current payment system (how they pay it, and when).</p>
<p>Could full fee payment at the beginning of, or during, a degree be the answer? No. It is evident that making all students pay up front for university tuition would be unfair. This system would tend to exclude talented young people from poorer backgrounds. It would also lead to inefficiency, as society would not benefit from the contribution which its gifted, but less economically advantaged, young people could have made.</p>
<p>What about low-interest government loans to students? These potentially come with problems. The risk of defaulting on a large loan years down the line is one which a poorer student, or their family, will rationally wish to avoid. And loans most certainly do not remedy the unfairness when they are too small. Some National Student Financial Aid Scheme <a href="http://www.nsfas.org.za/NSFAS/STUDENTS/LOANS">loans</a> don’t even cover the full costs of tuition.</p>
<p>Yet student loans can form the basis of a fair payment system. They can do so if they are sufficiently large, and if one aspect of the public contribution to higher education is to eliminate the risks ordinarily bound up with taking out a loan.</p>
<p>This can be achieved by making no part of a student loan repayable until the graduate is earning above a certain threshold amount. The rate of repayment can be accelerated as the graduate’s salary increases. If the graduate’s earnings never rise above the threshold amount, their entire university costs will be for the public account.</p>
<p>This payment system has been successfully introduced in the UK and Australia, and South Africa’s National Student Financial Aid Scheme already embodies it to a limited degree. It ensures that no student pays for the competitive advantage conferred by higher education until and unless it has actually translated into higher relative prosperity for them.</p>
<h2>Fairness is key</h2>
<p>In South Africa, fairness in higher education funding does not require an overhaul of the funding model to eliminate student fees, as many students and their supporters insist. Instead, it requires progressive reform of the current payment system. </p>
<p>At the least, the National Student Financial Aid Scheme must increase the size of its loans, broaden its coverage and raise the threshold earnings level at which repayment kicks in. This is currently set at R30,000 per year. These measures would ensure that no school leaver could rationally be deterred by the payment system from pursuing higher education.</p>
<p>This expansion of the loan scheme would of course require an initial capital investment. There are a variety of ways in which this could be financed. For example, if earlier generations of university graduates paid proportionally less than today’s students for the benefits they received, it would make good sense to impose a special tax on them.</p>
<p>In the medium to long term, South African higher education needs both a fair funding model <em>and</em> a fair payment system. In constructing and maintaining these, we must bear in mind a key insight of modern social democratic politics: full public provision is not always the route to social justice.</p><img src="https://counter.theconversation.com/content/49755/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>George Hull does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>As South Africa’s students call for free university tuition, it’s worth asking whether higher education would be free in a truly just society.George Hull, Lecturer in Philosophy, University of Cape TownLicensed as Creative Commons – attribution, no derivatives.