World insight: Australia defers HE funding reforms as loan debt mounts up

Money for universities will be spread ever more thinly unless enrolment numbers are brought under control, says Warren Bebbington

May 10, 2016
Map of Australia
Source: iStock

After 18 months of heated debate, bold reform of Australia's higher education funding was deferred until at least 2018 in the nation's federal budget last week while public consultation takes place. 

Thus, the pace of policy reform has come near full circle for the Liberal coalition government, elected in 2013 proclaiming there would be no change for universities for at least two years. After less than a year, education minister Christopher Pyne surprised everyone with a comprehensive reform package, which would have thrown open Australia's much-admired public university student loans (HELP) to private colleges and preparatory courses, and deregulated fees.

This would have allowed each institution to set its own prices, to recoup income lost from a 20 per cent cut the government was determined to make to per-student grants. 

While vice-chancellors were near united in their support of deregulation, the proposal was pilloried by the Labor opposition and education unions for threatening young Australians with "$100,000 degrees". What followed was the most animated university policy debate seen in Australia since the 1980s. Pyne's flamboyant advocacy for reform was relentless, but not enough to persuade cross-benchers in the Senate, where the reforms were eventually blocked. 

With a change of prime minister in late 2015, Pyne moved to the science portfolio. His successor, Simon Birmingham, clearly sees politics more as the art of the possible. Birmingham's deferral of the package has deftly defused tempers, and the discussion paper he has released makes large across-the-board fee rises now seem less likely. 

At the same time, his manoeuvre navigates at least part of the Senate problem. A reform introduced without consultation or mandate was the complaint repeatedly voiced by independent senator Nick Xenophon, and given that Xenophon is predicted to hold the balance of power in the Senate after the coming election, public consultation during the election campaign seems calculated squarely to neutralise his objections. 

Birmingham's discussion paper, Driving Innovation, Fairness and Excellence in Australian Higher Education, is an insightful document. It recognises that two central problems face Australia in present higher education funding arrangements: the rapidly expanding cost of the sector, which for seven years has grown at twice the rate of the economy thanks to a “demand-driven” system in which limits set in the number of students the government would assist were removed; and the exploding national debt from unpaid HELP loans, currently increasing at A$1.7 billion (£866 million) per year, and projected to be nine times worse within a decade. 

On the latter – reducing the national HELP debt – the paper proposes, among other things, reducing the repayment threshold, which would bring Australian student loan repayment arrangements more in line with those in the UK and New Zealand. 

On the former – reining in the growing sector cost – the paper is more controversial. The 20 per cent cuts would proceed, with universities making up the income loss through "flagship deregulation", in which each university could deregulate a small cohort of high quality and innovative courses, and through raising student contributions from the current average of 42 per cent to 50 per cent of their course costs.

This would not be a draconian increase and would come after a decade with no increase in student contributions in Australia. Nevertheless, it has not been welcomed by student organisations.

Meanwhile, in Canada's budget this year, Canadian universities were granted C$2 billion (£1.1 billion) more over the next three years, recognising their changed circumstances and growing importance to the economy and the international innovation agenda.

In Australia, where conditions are similar, the Liberal budget has resolved a university funding change of the same quantum, just in the opposite direction: A$2 billion less, not more. Notably, in this the Labor opposition is little different from the Liberals, having itself projected cuts just as deep when in government

Sadly, there seems no will on either side of politics in Australia to address the root cause of the sector's cost expansion. This would mean bringing enrolment numbers back under control, through rethinking what might be a better approach than the “demand-driven” system to lifting the participation of the disadvantaged. Evidence that success at university depends more on effective preparation at schools than on eased university entry seems to be ignored. 

Essentially, both sides of politics seem resigned to seeing available funding spread ever more thinly – rather than focused on adequately supporting a finite number of students, chosen equitably from all parts of society as those with demonstrated aptitude to succeed at university. In Australia, shrinking per-student public support for universities appears here to stay.

Warren Bebbington is vice-chancellor of the University of Adelaide.


Write for us

If you are interested in blogging for us, please email chris.parr@tesglobal.com

You've reached your article limit.

Register to continue

Registration is free and only takes a moment. Once registered you can read a total of 3 articles each month, plus:

  • Sign up for the editor's highlights
  • Receive World University Rankings news first
  • Get job alerts, shortlist jobs and save job searches
  • Participate in reader discussions and post comments
Register

Reader's comments (7)

Just checked on the SLC website: "All outstanding loan amounts are written off on death" in UK, so I'd suggest a correction to this article.
Thanks.
I am Armando Taylor, a private money lender. I give out loans with an interest rate of 2% per annual and within the amount of $1000.00 to $500,000,000.00 as the loan offer. 100% Project Funding with secured and unsecured loans are available. We are guaranteed in giving out financial services to our numerous clients all over the world. With our flexible lending packages, loans can be processed and funds transferred to the borrower within the shortest time possible. We operate under clear and understandable terms and we offer loans of all kinds to interested clients, firms, companies, and all kinds of business organizations, private individuals and real estate investors. Just complete the form below and get back to us as we expect your swift and immediate response. EMAIL:(armandotaylorloanhome@gmail.com) Attention!!! Do you have a bad credit? Do you need money to pay bills? Do you need to start up a new business? Do you have unfinished project at hand due to bad financing? Do you need money to invest in some area of specialization which will profit you? We offer the following loans below, personal loans[secure and unsecured] business loans[secure and unsecured] combination loans students loans consolidation loans and so many others. Phone Number+18157974394 1. Full Names:………………………. 2. Contact Address:………………….. 3. Loan Amount Needed:……………….. 4. Duration of the Loan………………. 5. Direct Telephone Number:…………….. 6. Monthly Income:…………….. Email (armandotaylorloanhome@gmail.com) Best Regards, Mr Armando Taylor.
I am Armando Taylor, a private money lender. I give out loans with an interest rate of 2% per annual and within the amount of $1000.00 to $500,000,000.00 as the loan offer. 100% Project Funding with secured and unsecured loans are available. We are guaranteed in giving out financial services to our numerous clients all over the world. With our flexible lending packages, loans can be processed and funds transferred to the borrower within the shortest time possible. We operate under clear and understandable terms and we offer loans of all kinds to interested clients, firms, companies, and all kinds of business organizations, private individuals and real estate investors. Just complete the form below and get back to us as we expect your swift and immediate response. EMAIL:(armandotaylorloanhome@gmail.com) Attention!!! Do you have a bad credit? Do you need money to pay bills? Do you need to start up a new business? Do you have unfinished project at hand due to bad financing? Do you need money to invest in some area of specialization which will profit you? We offer the following loans below, personal loans[secure and unsecured] business loans[secure and unsecured] combination loans students loans consolidation loans and so many others. Phone Number+18157974394 1. Full Names:………………………. 2. Contact Address:………………….. 3. Loan Amount Needed:……………….. 4. Duration of the Loan………………. 5. Direct Telephone Number:…………….. 6. Monthly Income:…………….. Email (armandotaylorloanhome@gmail.com) Best Regards, Mr Armando Taylor.
AFFORDABLE LOAN OFFER Hi, What are your financial needs? at unity loans We give loans to a low of $ 2,000.00 to a maximum of $ 100,000,000.00 lasting comfort, ranging from 1-30 years at a very low interest rate of 3%. (1)You need a business loan? (2)You need a personal loan? (3)Want to buy a car? (4)Want to refinance? (5)You need a mortgage? You need a huge capital to start your business proposal or expansion? Have you lost hope and you think there is no way out, and financial burdens still persists? Please do not hesitate to contact us for possible business cooperation Contact us by yahoo mail:unityloaninvestor@yahoo.com
Do you need a loan? if yes We offer loan at low interest rate of 2% and with no credit check, we offer Personal loans, debt consolidation loans, venture capital, business loans, education loans, home loans or "loans for any reason. this is your real opportunity to avail a loan we won't let you down, for more information do contact us via email unityloaninvestor@yahoo.com
I am Armando Taylor, a private money lender. I give out loans with an interest rate of 2% per annual and within the amount of $1000.00 to $500,000,000.00 as the loan offer. 100% Project Funding with secured and unsecured loans are available. We are guaranteed in giving out financial services to our numerous clients all over the world. With our flexible lending packages, loans can be processed and funds transferred to the borrower within the shortest time possible. We operate under clear and understandable terms and we offer loans of all kinds to interested clients, firms, companies, and all kinds of business organizations, private individuals and real estate investors. Just complete the form below and get back to us as we expect your swift and immediate response. EMAIL:(armandotaylorloanhome@gmail.com) Attention!!! Do you have a bad credit? Do you need money to pay bills? Do you need to start up a new business? Do you have unfinished project at hand due to bad financing? Do you need money to invest in some area of specialization which will profit you? We offer the following loans below, personal loans[secure and unsecured] business loans[secure and unsecured] combination loans students loans consolidation loans and so many others. Phone Number+1 412-329-4367 1. Full Names:………………………. 2. Contact Address:………………….. 3. Loan Amount Needed:……………….. 4. Duration of the Loan………………. 5. Direct Telephone Number:…………….. 6. Monthly Income:…………….. Email (armandotaylorloanhome@gmail.com) Best Regards, Mr Armando Taylor.

Have your say

Log in or register to post comments

Most Commented

James Fryer illustration (27 July 2017)

It is not Luddism to be cautious about destroying an academic publishing industry that has served us well, says Marilyn Deegan

Jeffrey Beall, associate professor and librarian at the University of Colorado Denver

Creator of controversial predatory journals blacklist says some peers are failing to warn of dangers of disreputable publishers

Kayaker and jet skiiers

Nazima Kadir’s social circle reveals a range of alternative careers for would-be scholars, and often with better rewards than academia

Hand squeezing stress ball
Working 55 hours per week, the loss of research periods, slashed pensions, increased bureaucracy, tiny budgets and declining standards have finally forced Michael Edwards out
hole in ground

‘Drastic action’ required to fix multibillion-pound shortfall in Universities Superannuation Scheme, expert warns