Completion bonuses on the cards in university overhaul

Education Minister Jason Clare’s vision for getting more disadvantaged students into universities will be outlined in next week’s budget, with the government considering Gonski-style loadings for poorer and regional students and bonuses for the universities that retain them.

Structural changes to the higher education sector are next on Clare’s agenda after the Albanese government said at the weekend it would wipe $1200 from the average HECS debt and introduce $320 weekly payments for nursing, teaching and social work students on compulsory placements.

Prime Minister Anthony Albanese and Education Minister Jason Clare announced budget measures to reduce the financial burden of university during a school visit on Monday.Credit: Alex Ellinghausen

While those announcements are being pitched as cost-of-living relief for young Australians who have completed or are at university, Clare said next Tuesday’s budget would focus on students who had missed out on higher education in the first place.

His comments signal that the government will address recommendations from a review of universities that improve equity, including calls for a new funding model that allocates extra money to disadvantaged students.

But the immediate future of course fees – which were significantly increased for humanities degrees and made cheaper for others under the former Coalition government – remains in doubt as the government works towards long-term change.

A new statutory body tasked with setting prices and allocating university funding, called the Australian Tertiary Education Commission, is expected to form part of next week’s package, as the government reveals the first stage of its response to the University Accord review.

“The accord is about reforming the higher education system for the next decade and beyond … We’ve got to break down the artificial barrier between TAFE and uni to make it easier for people to move between the two,” Clare said on Monday.

“We’ve also got to break down the invisible barrier that stops a lot of kids from places like where I grew up [in western Sydney] from going to university in the first place to open those doors of opportunity. And you’ll see some of that in the budget.”

The major suggestion in the review to improve equity is to introduce needs-based funding, similar to the Gonski reforms for Australian schools, to increase the number of students from underrepresented backgrounds and their chances of success.

This would include additional funding for each underrepresented student – specifically First Nations students, those from the lowest socio-economic quartile, and students with disabilities – to cover the additional support they need to succeed once at university.

Special funding would also be provided for education delivered in regional and remote Australia, given the additional costs and equity issues involved. Universities that helped students facing the greatest barriers finish their degrees would receive a special “completion bonus” if they met agreed-upon targets.

Once established, the new higher education commission would take the first steps towards making this happen.

Higher education expert Professor Andrew Norton, of the Australian National University, said he expected the new commission to be announced next week.

“But the actual needs-based funding would be a job of the commission, rather than something [the government] can announce this year, because it will take time. That’s still some way in the future.”

Norton said one of the government’s challenges would be how it dealt with university fees in the meantime, given that the former Coalition government’s “job-ready graduates” fee structure – which charges arts students three times more for their courses than other students – is still in place.

The review recommended reducing student fees, “starting with students in humanities, other society and culture, communications and human movement”, to reduce the scheme’s worst impacts. Ultimately, it said, student fees should be based on projected potential lifetime earnings.

Universities Australia chief executive Luke Sheehy agreed it was a pressing issue. He welcomed the changes to HECS debts and placement payments but said institutions wanted changes to the job-ready graduates reforms.

Clare repeated on Monday that the Coalition’s scheme had failed its intended purpose of funnelling students out of humanities and into teaching, nursing and maths courses. However, he did not commit to repealing it.

“What we’ll set out in the budget are our top priorities about what we need to get started on right now,” Clare said. “But this is bigger than one budget. This is a plan for the next decade and beyond.”

Norton said there was an argument for delaying any tweaks to students’ university fees, given the new commission would be tasked with a “comprehensive reworking of the entire system”. The review also recommended a staged transition period to avoid unintended consequences.

“But I think the reality is, the longer we go on, the more people are accumulating debts they will find difficult to manage,” Norton said.

The review’s other recommendations to improve equity include improving access to income support, such as Youth Allowance, by expanding eligibility to part-time students and increasing the parental income-free threshold from about $58,000 to $69,000.

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