Monash VC calls for fee deregulation in universities

As they get more crowded, Australian universities want greater control over the fees they charge. AAP/Julian Smith

Giving universities the power to charge more for their top courses would ensure they could offer a “premium” education - but it should not be allowed at the expense of low-SES students, Monash University Vice-Chancellor Ed Byrne says.

Speaking at the Higher Education Summit in Melbourne this morning, Professor Byrne said that by deregulating fees at universities, the Government would “allow them to play to their strengths and lift education quality across the board”.

Universities could charge higher fees for their best courses to boost quality and specialisation. “With higher fees, the universities would be able to provide a more intensive educational experience, to make sure that the teaching spaces were absolutely state of the art, to make sure that student satisfaction and employability were high, to make sure that the staff who taught the students were highly qualified,” Professor Byrne said.

His comments add to growing calls by Australian vice-chancellors for more control over the amount they charge per course.

But there would have to be careful consideration of equity, Professor Byrne said: “Delayed payment of fees - the way it’s done at the moment - the government would have to be willing to act as a banker for that, in the way it’s done with the HECS system. There would also have to be quite a significant number of scholarships also, so that there’s no possibility of people from an underprivileged background being put off by the increase in fees for some courses.

"I believe that the current situation is that we have domestic underfunding of university education, especially at undergraduate level. One is government funding, and the other is in a very carefully controlled way to allow some increase in the private contribution. In the present climate, it seems almost inconceivable that there’s going to be a significant increase in government funding per place. That therefore leaves us with some increase in private contribution as the only realistic way in which we could achieve covering of domestic university education costs in the near future.”

The Labor Government has repeatedly ruled out fee deregulation, but a Coalition Government is expected to be more sympathetic to the idea.

In a speech to the National Press Club earlier this year, Universities Australia chair Professor Glyn Davis said that because the Government had uncapped university places this year, it was irrational to continue regulating course fees. He described the paradoxical system as “the love child of Milton Friedman and Vladimir Lenin”.

“If we are to have an open market, then universities must be able to compete, at least to a reasonable extent, on price.”

Professor Byrne agreed, but said fee deregulation would have to be “carefully thought through so as to avoid what happened in the UK when they did it there - initially, when the fees were uncapped, all the universities just charged the maximum amount. It’s been corrected now, but that was a complete waste of time because all it did was transfer university costing from the public to the private sphere.”

He rejected the suggestion that fee deregulation could lead to a two-tier system whereby wealthy universities charged more and regional universities were forced to offer discount degrees to attract students. “I wouldn’t call it a two-tier system. I’d call it an appropriately differentiated system, with any number of levels within it. The well-balanced education system at university level in a western country now needs quite a degree of differentiation.

"I think the Americans have a lot to teach us in this regard. It’s just unsustainable to have a system where every university aspires to do exactly the same thing as the next one. Sure we do have some things in common. But there’s so much opportunity to improve our excellence by letting each institution play to its strengths - being the best regional university, being a superb technical university, being a great research-intensive university, and so on. If we’re going to do that, then the financial structure needs to differ.”

There was concern in the business community that since places had been uncapped, universities would be tempted to over-enrol students in cheap courses “as a way of securing funding for their institution rather than developing the workforce capability for Australia to remain competitive on a global stage”, Professor Byrne said.

This year, following the move to fully uncap undergraduate places, there was a sharp rise in the number of students with lower ATAR scores who received offers to study at university. In education degrees, 52.1% of offers went to school leavers with an ATAR score below 70. In information technology, people with ATAR scores below 70 accounted for 51% of offers.

“At the moment, with uncapping of places, some universities that traditionally take students with somewhat lower ATAR scores have been quite squeezed, because they’ve had no opportunity to differentiate the price of their offering,” Professor Byrne said. “If prices also were differentiated, it would allow those universities to compete on a much more equal footing.”