Higher university fees loom for students

Students should expect to be hit with significantly higher uni fees under the government’s higher education platform.

Education Minister Simon Birmingham.

Students should expect to be hit with significantly higher uni­versity fees under the federal ­government’s higher education platform heading into the ­election.

A slew of heavyweight university vice-chancellors, speaking exclusively to The Australian on the sidelines of yesterday’s higher education summit in Canberra, said the policy was expected to shift costs away from the public purse on to students.

It is likely a 20 per cent funding cut, first proposed in the first Abbott government budget, will remain, with the shortfall to be covered by a shift to higher student contributions.

With Education Minister Simon Birmingham remaining silent on the exact proposals that could form part of the coming budget or election plan, speculation is mounting among university leaders and education analysts that a version of a reform package proposed by former education minister Christopher Pyne remains on the cards.

Senator Birmingham told a Universities Australia conference dinner on Wednesday that higher education reform was “necessary to support federal budget sustainability”.

He said: “We do need to reconsider the balance between public and private contributions and versus public and private benefits.”

Martin Bean, vice-chancellor of RMIT, said sizeable funding cuts and shifting costs to ­students were “absolutely ­plausible”. “I would be really surprised if that wasn’t one of the options they were fully considering,” Professor Bean said.

Greg Craven, vice-chancellor of Australian Catholic University, said universities could not ­expect to be exempt from addressing the government’s budget crisis.

“The university sector has to accept that any policy outcomes in higher education are going to take place in the context of fiscal stringency,” Professor Craven said.

“Could the sector cope with a 20 per cent cut? Not without a balancing item. Obviously one possibility would be to adjust the private-public balance.”

The 2014 Pyne reform package, with fee deregulation as the central plank, has effectively been on ice for a year after failing to get Senate support.

Senator Birmingham has been informally consulting with the sector on alternative models for the past six months.

Vice-chancellors widely expected an options paper flagging changes to the public-private split and possibly the modified fee dereg­ulation package to be released later this month.

However, a spokesman said an options paper “had not gone across the minister’s desk”.

Currently, the government pays an average of 60 per cent of tuition fees, while students pay the balance via income contingent loans, known as FEE HELP.

An inversion of the current 60-40 split would cover university budgets for a 20 per cent funding cut, said Andrew Norton, a higher education policy expert with the Grattan Institute.

“Given the government’s fin­ancial situation, universities are going to have to contribute to reducing spending. It looks very much like the 20 per cent cut is ­officially back on the agenda,” Mr Norton said.

“The big question is whether they cover the cost by increasing the cap on fees to cover the reduced government spending or whether they deregulate fees.

“Deregulating fees is the more expensive option because the extra fees will create additional costs under subsidies and increased bad debt on student loans.

“There is also a high political cost. Labor’s line about $100,000 fees is clearly resonating in the community.”

University of NSW vice-chancellor Ian Jacobs echoed the voices of many vice-chancellors yesterday, saying Senator Birmingham had given no indication there was any change in current government policy. “But deregulation is the wrong answer to the wrong question. The real question is how do we fund research adequately? Just shifting the cost from the government to the student leaves the current funding situation in stasis.”

Michael Spence, the vice-chancellor of Sydney University, said investing in research was investing in the future economy.

“Really smart countries like the US, Israel and the UK understand that and continue to fund research even in times of austerity,” he said.

Linda Kristjanson, vice-chancellor of Swinburne University, said the 20 per cent cut was a real option and it was too early to write off a form of fee deregulation.

“Deregulation is not off the agenda. This very much needs to be an election issue. The public cares about it, and we can’t let it drift,” Professor Kristjanson said.

The University of NSW’s Ian Jacobs agreed that a modified deregulation package was still on the cards, but said it “was the wrong answer to the wrong question”.

“The question is how to fund research properly. If we just shift the cost to students, it will leave the current funding situation in ­stasis,” he said.

Professor Bean said the implications for students should be paramount. “If that doesn’t translate for them into value for money, we’ve all got a problem.”