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FactCheck: will axing compulsory uni fees take $300 million away from services students need?

Scrapping student support fees will be “a $300 million hit on some of the most basic systems and amenities that make universities accessible and attractive to students.” - Kim Carr, former Labor higher…

Students services could be cut if the new education minister has his way. But what would this mean in practice? University students image from www.shutterstock.com

Scrapping student support fees will be “a $300 million hit on some of the most basic systems and amenities that make universities accessible and attractive to students.” - Kim Carr, former Labor higher education minister, press release, 25 September, 2013.

New education minister Christopher Pyne signalled last week that he would scrap compulsory student support fees as part of a range of proposed changes to higher education.

Pyne told the Australian Financial Review that the Liberal Party is:

…100% in favour of voluntary student unionism and we will move to abolish the student services amenities fee when it’s appropriate to do so.

Prime minister Tony Abbott has since backed away from these comments, saying that there are no immediate plans to scrap the fee.

Nonetheless, is former Labor minister Kim Carr right in saying the fee covers A$300 million worth of basic services in universities? And what does the fee cover exactly?

Universities may choose to make the student services and amenities fee a compulsory payment of up to A$273 for each full-time domestic student and a lesser amount for part-time students. This will rise to A$281 for full-time students by next year. (International students often have the fee included in the cost of their course and not as a separate charge).

The Liberal Party has sought to make the fee voluntary since the 1970s because it believes it has funded left-wing student organisations and their causes. It finally succeeded in 2005 after the Howard government secured passage of its “voluntary student unionism” legislation. This legislation made the fee no longer compulsory and individual students could choose to pay for services.

The Gillard government then secured passage of its own legislation in October 2011 allowing universities to reintroduce the compulsory fee.

The Higher Education Support Act (2003) specifically prohibits universities spending the fee to support a political party or election campaign. There are separate requirements for representing and advocating for the interests of students.

The act specifies 19 purposes which the fee may fund: providing food and drink, supporting sport and other recreations, clubs, child care, legal services, health and welfare, accommodation, employment services, financial services, insurance, debating, reading rooms, creative arts, media, study skills, advice and advocacy about internal rules, orientation, and meeting the special needs of international students.

These are the facilities and services which most students expect at a “full service” university campus.

Some student services such as the cafeteria and lounge are used by most students, but others such as counselling and welfare services are, by their nature, used by only a minority. Many students accept paying the fee as part of their membership of the campus community, but some are concerned about paying the fee because they don’t attend campus much or otherwise don’t use its facilities.

As for the revenue the fee brings in for universities, in 2008, consultations between universities and the government put the total revenue raised by the fee as at around $170 million.

But for a more current figure, we can make only a broad estimate using the data available.

So in 2012, public universities enrolled 627,425 domestic equivalent full-time higher education students. Approximately 345,000 of these students were part-time.

It’s important to note that part-time students can be charged more than their share. For example, a part-time student with 50% of the student course load could pay up to 75% of the fee, or $204 for this year and $210 by next year.

So calculating the revenue from this equivalent full time figure that combines part-time course loads, we get a figure of around $171 million based on the current fee, rising to $176 million on next year’s fee. But this figure is likely to be an underestimate because it undervalues the contribution of part-time students. Further, enrolments are likely to have increased in 2013 and to increase again by another few percent in 2014.

Another way to calculate would be to look at the number of full-time domestic bachelor students and part-time domestic bachelor students in 2012. Based on this calculation, we would see over $175 million in fee revenue on the 2014 rates. Add domestic post-graduates into the mix and your looking at more like $185 million. But this too would be an underestimate as it doesn’t include all domestic commonwealth supported students. As a ball park figure and as student numbers are likely to increase, $200 million in revenue is not inconceivable.

When The Conversation contacted Senator Carr’s office, they were unable to provide a specific source for the $300 million figure. Instead they referred us to a Financial Review article which claimed that “the total collected [from compulsory fees] in 2013 was likely to be closer to $300 million”, however this was only attributed to “sources”.

Verdict

It is true that scrapping the compulsory fee would reduce student services and amenities on Australian university campuses. They are, by and large, basic services that make universities accessible and attractive. But without official figures, the claim that these services amount to $300 million is hard to substantiate and could be an exaggeration.


Review

Senator Kim Carr’s central point that the removal of the student services and amenities fee will be detrimental to student services, such as counselling and childcare, is certainly supported by experience. When the fees were last abolished it had a serious effect on services, particularly at some regional campuses.

As the author rightly concludes, without official data it is hard to substantiate the claim that $300 million will be lost. Nonetheless, the impact will likely be significant for students at Australian universities if the compulsory fee is scrapped. – Gwilym Croucher

Ever seen a “fact” that doesn’t look quite right? The Conversation’s FactCheck unit asks academic experts to test claims and see how true they really are. We then ask a second academic to review an anonymous copy of the article.

You can request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link if possible.