Australia must ignore vested interests and seize chance for change

Review of the demand-led system right to address the “sameness” that bedevils Australian higher education, argues Warren Bebbington

April 17, 2014

The review into Australia’s demand-driven higher education system has reported, and every parent and student in the land should be excited about the reforms that education minister Christopher Pyne has on his desk.

The options students have for university, the information to help them choose, how they prepare to get in, and how their study is funded are all targeted for huge change.

Quite simply, higher education in Australia could be transformed into the most dynamic system in the world. It would have the rich variety of the US university landscape but without the crippling debts that American students suffer.

This should be the focus of a fundamental community-wide debate. Where and how will our young people study in the future in this country?

Yet the debate has been largely contained thus far, and has taken place in terms incomprehensible to the average person. Even worse, some of the most influential academic voices seem intent on preventing Australians ever benefitting from what is proposed.

In the US, nearly half of all students do not go from high school to a public university of the Australian type, but instead attend teaching-only undergraduate colleges offering only Bachelor degrees. Without research programmes, these colleges do a first-class job of teaching: through small classes and an intense extra-curricular programme. Students have an unforgettable, utterly life-changing educational experience.

But are these little more than exclusive finishing schools for the wealthy? On the contrary, they vary immensely in their audience and mission, from liberal arts academies for high-achieving young women in the north-east to proud colleges focussed on lifting the aspirations of the poorest blacks in the Deep South. Indeed, this huge array of highly-individual undergraduate colleges is one of the glories of American higher education.

Such institutions are scarcely possible in Australia currently. The government would not subsidise them, nor allow students to use HECS/HELP loan scheme to help them pay their fees ¾ fees that would in any case need to be higher than Commonwealth regulation allows.

Under the reforms on the minister’s desk, such colleges would likely start appearing across Australia, and with Commonwealth subsidy and HELP, would be within reach of any student.

The Kemp-Norton Review of the Demand Driven Funding System, commissioned by the minister, would extend Commonwealth subsidy and HELP to private colleges and universities. It would provide students with much better information to help them choose the right one and it would spark a profound evolution of our higher education landscape.

But the review’s recommendations have generated anguished outcry from our public universities. It seems for some vice-chancellors, “demand driven” means only that government should demand everyone is driven into the present public universities. The sameness which bedevils Australian higher education, where we all try to be comprehensive research universities, would simply go on and on.

The arguments being advanced to stop all this have a self-interested ring to them. The reforms would encourage “dodgy operators”, we are told, who lack academically qualified staff or research capacity.  Yet in South Australia the three principal non-public universities are Carnegie-Mellon, University College London, and Torrens (part of the global Laureate University network). Not exactly “dodgy operators” lacking in qualified academic staff.

And the fact that some might eschew research is exactly the point: in the US nearly 3,000 colleges and universities do just that, many with outstanding teaching as a result.

The reforms might damage our international reputation for quality in higher education, according to other prominent critics.

Yet has the same variety in the US undermined its standing as the world’s leading centre of quality university education? Hardly.

Most revealing is that the same universities that last year wanted to dilute the oversight of the Tertiary Education Quality and Standards Agency, the Commonwealth’s regulator of universities, now want to be sure it remains all-powerful so it can strangle any private college or university aspiring to access a reformed funding system.

Is paternalistic regulation the way forward? Students in the US are hardly repelled by the variety of largely unregulated choice they have: they simply learn to use consumer advice and rankings to choose an institution carefully and sensibly. Better information to help Australian students in their choice would soon spring up in the new environment.

The real fear, it seems, is that a reformed environment would not damage our elite universities, but might undercut the very mass-entry institutions that have contributed to expanding enrolments in the past few years. But is that likely? More probable is that private colleges would compete in commercially-viable fields with mass and elite universities alike.

Every elite university with a business school, for example, would soon be challenged by cheaper, possibly quicker and even better-delivered private business courses—and that would strike at the financial heart of the elite university financial model as it currently stands, where the business course surplus subsidises the research. The resulting competition would generate a race to quality, innovation and efficiency — just what Kemp-Norton wants. How dreadful would that be?

One thing is certain: deregulation could not stop at student volume and college type, it would need to embrace price as well. For we could hardly have meaningful competition if some universities could set student fees and others hadthem fixed centrally from Canberra. Indeed, the public universities would need the flexibility to adjust their fees ¾ up or down ¾ to survive. Kemp-Norton stopped short of making a recommendation on this topic. It will inevitably need addressing as part of the overall package.

The review has set out a bold new vision that should attract the attention of every family with future students. They see greater access to universities for students from all backgrounds, much greater choice of education, better information to help them choose and a more equitable subsidy and loan scheme to support the cost.

It would be a shame to see such an inspirational possibility sink through lack of public interest.

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Reader's comments (1)

Liberalisation of the demand-driven system may indeed lead to further improvements in the Australian higher education sector, but for it not to damage the "so-called" elite universities, it would need to be accompanied by a further change, which is the strengthening of infrastructure support for research at Australia's leading research universities, which is what happens in the US. Stephen K Smith

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