The government has unveiled a higher education deregulation agenda in Tuesday’s budget, including continuation of the demand driven system in public universities.
In a major shake-up, universities, TAFEs and colleges will be able to set the tuition fees for their courses from 2016. This is estimated to save the government A$1.1 billion over the next three years.
The government will also provide financial assistance to students studying diplomas, advanced diplomas and associate degrees, as well as bachelors degrees. This is estimated to affect more than 80,000 students by 2018, at a cost of $820 million over three years. Universities will direct 20% of the new revenue raised from this to Commonwealth scholarships for disadvantaged students.
Government funding toward a new students’ course fees will be reduced by up to 20% and indexed at CPI. Loan fees for FEE-HELP and VET FEE-HELP will be removed.
Rolling expert responses follow
Changes to higher education
Bruce Chapman, Director, Policy Impact, Crawford School of Economics and Government at ANU
These are radical changes to the way in which domestic students will be charged for higher education. There is now real capacity for institutions to very significantly increase fees, particularly the Group of Eight universities. This means that we can expect to see domestic fees increase both significantly and rapidly from 2016. How fast and by how much we just can’t know. However it would be unlikely for universities to increase them above international student fee levels, which are currently about two and a half to three times higher than domestic fees.
It is important to stress that this is a world first and no-one is able to say with any authority what, exactly, will happen in respect of fees and student access. It is however a safe bet that all institutions will increase their charges because not to do so would cost them money. The changes are good for private providers who will have access to HECS-HELP without too many constraints.
Critically, the government has maintained the essence of HECS and that is a very good thing. This will hopefully mean that access for all students and particularly disadvantaged students should not be too much affected.
Tim Pitman, Senior Research Fellow, National Centre for Student Equity in Higher Education at Curtin University
The budget changes to higher education are in the areas expected, but not in the ways expected.
As anticipated, the student contribution will rise but more than predicted. The Commission of Audit recommended an average rise of 14% but the government has opted for at least 20%. The exact amount will depend on how much additional universities charge because again as previewed, from 2016 universities will be able to set their own fees in a deregulated market. So the 20% rise is based on the assumption universities don’t raise their fees. Technically the rise could be lower than 20% if fees drop due to competition but this is extremely unlikely.
For every $5 universities receive from additional fee revenue, $1 will be used by the government to create new Commonwealth Scholarships to “expand opportunities for students from low socio-economic backgrounds, indigenous students and students from regional Australia”. The crucial word here is “new” – if they are truly additional to the financial support currently available to disadvantaged students and not just replacing existing schemes, and if they are appropriately designed, they could make a real difference to increasing access for these student groups.
Research is a winner with the continuation of the Future Fellowships Scheme beyond 2015, which the previous Labor government did not commit to. However, the number of fellowships on offer will be approximately half previously awarded.
Higher education will also probably benefit from the $7 Medicare co-payment, with $5 going towards a “medical research future fund”. The key question will be whether the creation of this fund represents a genuine increase to medical research or whether it will be used to reduce other research funding in the future and indeed whether the money will be spent on public or private-sector research.
Brian Schmidt, Distinguished Professor at ANU
When you deregulate, you are opening up some very radical restructuring of the sector and I don’t know where we will end up. It is very much a case of “hold onto your hats”. A critical question will be whether in the future the government decides to cap the maximum amount a student can borrow under HECS, which they appear to be saying they won’t. If this is the case then future debt may become unsustainable and that would break the HECS scheme. That would be a tragedy.
I’m very glad to see the Future Fellowship scheme return, however I do not understand the logic of restricting them to Australian researchers. This is a piece of policy that helps ensure a brain drain rather a brain gain.
Ed Byrne, Vice-Chancellor of Monash University
For students, the crucial thing is that the income contingent loan pool will be retained. The payment of student loans when the income hits a reasonable threshold, is to me, the single crucial equity factor.
I think there are people from low socio economic backgrounds that could be dissuaded from entering university through higher debts. It is therefore crucial that the measures they have said (scholarships) assist students in those situations.
Graeme Turner, Emeritus Professor, University of Queensland
The 2014 budget is taking the higher education sector into uncharted territory. One imagines that a deregulated market for university fees cannot be good for students from lower socio-economic backgrounds but, as Bruce Chapman says, no-one really knows what the social effects of this will be. It is certainly true, however, that this will bring us much closer to a privatised higher education sector where those with the greatest ability to pay will receive the greatest benefit. It would be surprising if there was not a serious political objection to the implications of this initiative; there is every reason to see it as a measure which will increase inequities of opportunity.
It is not clear how this initiative will affect enrolments across the sector, nor how it will affect particular areas of study - law, the humanities, social sciences and so on. However, if we want the sector to provide the skills, knowledge and training the nation requires, there is no reason to believe that the market is the appropriate mechanism to ensure that this happens. Education, like health, is one of those areas where the principles of the market do not necessarily work in the national interest. In these areas, we do not all enjoy the same levels of access and opportunity: we don’t choose our parents’ socio-economic status and we don’t choose to be sick.
The impact on schools
Stewart Riddle, Lecturer in Literacies Education at University of Southern Queensland
The “efficiency dividends” (read as: funding cuts to do more for much less) being imposed on ACARA (Australian Curriculum, Assessment and Reporting Authority) and AITSL (Australian Institute for Teaching and School Leadership) point, if not as an overt statement, then certainly as an inclination to the Commission of Audit’s recommendation for federal divestment of responsibility for education policy, leadership and funding back to the states, turning the clock back 30 years.
The general framing of education across school and tertiary sectors in tonight’s budget points to an unsurprising continuation of the Coalition’s policy position of moving support from the public sector to the privatisation and marketisation of education in Australia.
As with Medicare, don’t be surprised when co-payments for public schools crops up in the near future.
David Zyngier, Senior Lecturer, Faculty of Education at Monash University
The budget has pulled funding from programs such as the Australian Baccalaureate, which was designed to support students who would be moving from one state to another such as families of defense and related personnel, and the Australian Curriculum, Assessment and Reporting Authority (ACARA).
It has reinvested funds in areas unrelated to school education while finally killing Gonski for good by only funding for the next for minimal years while continuing programs that support private education.
The Government will provide an additional $245.3 million over five years (including $1.5 million in 2018‑19) to continue the National School Chaplaincy Programme until December 2018. This is additional money to support the work of the church instead of employing skilled and accredited social workers and counsellors.
They’re also providing more money to funding for Australian Government Quality Teacher Programme (AGQTP)$6.8 million in 2014‑15 to specific non‑government schools for the additional costs associated with boarding and educating Indigenous students from remote communities. This is another bonus for private education as more than 80% of indigenous students attend public schools