Universities must wait another year for funding certainty - but there will be no deregulation of fees
May 04, 2016 | News | by The Learning Press staff
University fees will stay capped for all but a possible handful of elite courses, killing off the spectre of huge tuition costs under a deregulated system.
The budget has sounded the death knell for former education minister Christopher Pyne’s deeply unpopular deregulation proposals.
Pyne’s successor, Simon Birmingham, has instead released a discussion paper on how to fund the burgeoning higher education system.
While university vice-chancellors have been clamouring for certainty about how their funding will look post-2016, the minister will delay finalising a decision until after the election. New funding arrangements will now not kick in until 2018.
The discussion paper, titled Driving innovation, fairness and excellence in Australian education, says: “In response to community concerns about the perceived cost of potential higher education fees and evidence about the possible impact on student loans, the Government will not be implementing fully flexible course fees.
"Nevertheless, the government is committed to providing universities with additional flexibility to innovate, differentiate themselves and offer students more choice and higher quality offerings.
"To provide this ability, institutions could be given the freedom to set fees for a small cohort of their students enrolled in high quality, innovative courses."
The paper suggests those deregulated flagship courses could be overseen by a watchdog to ensure fees remain reasonable, with numbers set at a maximum yearly intake.
It is an idea which was first mooted in a 2011 university funding review commissioned and then binned by Kevin Rudd, which proposed that universities could charge higher fees for elite, high-demand courses but would need to partially or wholly fund those courses themselves.
Senator Birmingham’s review paper may be unequivocal about the ditching of wholesale deregulation, but it recommits the Government to a 20 per cent cut in the $10 billion higher education budget and an increase in the proportion of course fees a student will have to pay.
It states: “In finalising the legislative reforms, the Government will need to adjust subsidy and student contribution rates to meet the financial sustainability savings outlined in the Budget.
“Dependent on other structural savings or expense measures adopted as part of these reforms, options include:
A lowering of the threshold at which students are required to start paying back their student loans is on the table, as is the introduction of fees for loans - with the paper pointing out that Australia’s system is far more generous than others internationally.
It calls for views on ways to improve loan repayment and ensure sustainability of the system - including a higher rate of repayment for high income earners (the maximum is now eight per cent for $100,520 plus) and preventing retirees from accessing HELP funding for recreational degrees.
The paper states: “There is a clear need to reduce HELP expenses in order to preserve the scheme’s long-term affordability and viability.
“The Government has already acted to partly address this issue by requiring Australians resident overseas to make repayments on their HELP debts.
“The Government believes that with some further modest changes, student loans can remain affordable, will continue to represent a good deal for taxpayers into the future and, most importantly, will continue to underpin equitable access to higher education for Australians from all backgrounds.”