Hepi director: we could learn from Australian funding system

Policymakers urged to learn lessons from ‘advanced’ overseas model

April 24, 2014

Higher education policymakers in the UK should pay much closer attention to Australia’s funding system, which is “often ahead” of England’s, the director of the Higher Education Policy Institute has said.

Nick Hillman, who was special adviser to universities and science minister David Willetts from 2010 to 2013, was speaking ahead of the publication of a Hepi pamphlet he has written comparing student funding in England and Australia.

He said that Australia was the country with the most similar system to England’s, but Australian policymakers had typically paid greater attention to English developments than vice versa.

As an example, Mr Hillman said the decision, announced in chancellor George Osborne’s Autumn Statement, to uncap undergraduate enrolments in England had taken almost no account of the Australian experience of doing so in 2012.

Rather, it had been driven primarily by Mr Willetts’ pamphlet, published in October, marking the 50th anniversary of the Robbins report by praising its advocacy of undergraduate expansion and urging further expansion, he said.

“But the [policy] isn’t going to be implemented until the autumn of 2015, so it is not like there isn’t time to learn from Australia,” he added, noting that Mr Willetts visited Australia earlier this year.

Mr Hillman said that Australia had also been ahead of the UK in the debate around student migration. He said that after having similar debates about immigration, it had ended up “with a more liberal regime on things like [permission for] post study work”.

Mr Hillman suggested that the review of postgraduate funding announced by Mr Osborne in last month’s budget should examine Australia’s Fee-Help scheme: a branch of its income contingent loan system available to all students not enrolled on state-subsidised courses. The cost to taxpayers is minimised by a 25 per cent surcharge imposed on undergraduate borrowers.

Postgraduates are not charged, though Mr Hillman said any English version of the policy would require a surcharge if it were to be cost neutral to the government.

University Alliance chief executive Libby Hackett, who has written a longer analysis to accompany Mr Hillman’s, said Fee-Help should be seen as a “proof of concept” that a cost neutral loan scheme was possible. As well as postgraduates, she suggested it could also be offered to students at private providers and those studying second degrees at the same level as their first (known as ELQ students). She said that forthcoming University Alliance proposals for England’s funding system would set out a range of options to achieve cost neutrality.

She also praised Australia’s use of three different fee caps, based on the cost, returns and national priority of each course. This gave the government more control over where public funds were invested.

Ms Hackett said the lower proportion of student debt that had to be written off by the Australian government offered lessons for England.

It was achieved because student borrowing there was lower but also because repayment rates were higher once a similar earnings threshold was passed. It meant the balance between public and private contributions to the cost of higher education was more transparent, leading to a stronger “social contract” between students and the state.


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