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January 8, 2007
A good higher education in Australia now costs students a lot of money. The days of a fully public funded higher education have long gone, replaced by tension between government funding and user-pays. Students leave university with a hugh debt: $50,000---$200,000 depending on the course. It's a heavy burden. How is HECS debt is affecting graduates' career choices, life and family choices? Is higher education becoming more middle-class?
So how much public investment should there be in universities and how much should students contribute, now that the national HECS debt is set to hit $13 billion? The ALP is not pushing this debate. We can, however, turn to Fred Hilmer, who has an op-ed on higher education in the Sydney Morning Herald. He says that though Australian universities are in a good position was built up over half a century of government funding and support, supplemented by student fees, they are not grasping the opportunities created by an increasingly globalised market for education. The warns that Australia is running the risk of a slide into mediocrity, with an underfunded and overregulated higher education sector. Hilmer says:
The Government is at a crossroads in terms of higher education policy. The choice is not between a fully regulated, fully government-funded system and an entirely deregulated, privately funded system. Neither is feasible. But what we have now is the worst of both worlds: increasing government regulation and declining funding.
Hence the key issue: how much public investment should there be in universities and how much should students contribute? Hilmer says that income from local undergraduate students is the largest single source of revenue for universities, and this comes partly from government payments for students - a fee subsidy - and partly from the students, via the Higher Education Contribution Scheme and the 25 per cent premium on HECS universities are permitted by regulation to charge.
Hilmer goes on to say that:
The government portion has been declining in real terms, as it is indexed at below inflation. The amount students can be charged is similarly regulated.The result is declining real income for universities from their biggest source of revenue. Philanthropy, while vital, cannot close the gap. ..... Nor can international students be expected to cross-subsidise an underfunded system. What is needed is a fundamental reappraisal of the funding model, not more regulation and more complex reallocation of inadequate funds. How much will government be prepared to pay, on what basis, and over what period? How much should students be prepared to contribute and how?
Hilmer does say that shifting more of the burden onto students is not the preferred option. In a real market with price competition, a university would be cutting its throat to overcharge for its product. The more likely scenario would be moderate increases with a percentage of students receiving fee waivers or scholarships on the basis of need or ability.
Notice how increased public funding is not even mentioned as a possibility by Hilmer. It is going to be steady increases in the price to be paid for the desired degree. Universities universities will push to make HECS higher because they argue that they are not funded sufficiently by government through indexed grants. That means the universities will push to shift more of the cost burden on to students.
Presumably, more and more struggling students in our capital cities will need to turn to welfare agencies such as the Salvation Army, now that the campus-run interest-free loan scheme, textbook and food subsidies were scrapped or reduced in response to the imposition of voluntary student unionism.
A good opportunity for the Rudd-ALP to come up with some interesting policy ideas now that it is committed to fighting market fundamentalism.
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And so we go on with our return to the fifties.
Degrees for the priviliged and the occasional brilliant poor studnet who can manage to gain a scholarship.
This is probaby the most shameful legacy we will carry forward from Howard's years.
We truly are racing towards the bottom now.