HELP wanted: higher education needs reform

By Christopher Kounelis. First-year Bachelor of Arts student majoring in Politics & Philosophy and member of the Melbourne University Liberal Club.

The Liberal Party has been unfairly derided over its attempt to reform Australia’s higher education sector.

As a University of Melbourne student, it has become difficult to cross the campus without being swamped with leaflets condemning the Liberal Party’s changes to higher education.

Among the rhetoric is the co-called heartless, highbrow Liberals and their cuts to university funding, or witnessing wild rallies campaigning against the $100,000 university degree ‘debt sentence’ to which students will supposedly be subjected.

Amidst all the furore, it can be easy to forget that the Liberal Party has always been a fierce advocate for higher education.

In fact, it was Australia’s longest-serving (and Liberal) Prime Minister, Sir Robert Menzies, who first revolutionised the higher education sector. He nearly tripled the number of Australian universities over his 18-year tenure of office, and strove to give the university system the competitive edge it desperately needed.

Additionally, it was former Liberal Education Minister, the Hon Dr David Kemp, who implemented essential reforms that sought to expand access for students applying for postgraduate study.

More recently, there are two pressing issues surrounding tertiary education that are of major concern: (a) long-term sustainability of the HECS-HELP loan scheme and (b) university fee deregulation.

Sustainable HELP loans

The Australian government directs a significant part of the Budget toward improving the quality of teaching, services and infrastructure at universities and technical colleges around the country. It’s not realistically possible to maintain a high-quality education system without a prudent and affordable funding model.

There are various subsidies and loans designed to relieve students of the financial burden of their education, such as the Commonwealth Grant Scheme (CGS), which helps subsidise tuition fees, and the Higher Education Loan Programme (HELP), which assists students with repaying their debt by issuing interest-free loans. It is no secret that Australia offers one of the most generous loan schemes in the world.

Nonetheless, there remains the problem of debtors failing to meet their repayment. The Grattan Institute estimates almost four million Australians have been issued student loans since 1989. While this has made tertiary education more accessible to young Australians, many have either failed to repay what they owe or have taken far too long to repay it. Indeed, student fees constitute almost 20% of public university funding, amounting to nearly $6 billion per year. Moreover, the report also finds that while the annual median fee for bachelor-degree courses ranges from $21,000 to $28,000, many domestic students still opt for more expensive courses at top-tier universities, despite being more reluctant than their international counterparts to pay a large prestige premium for entry.

The report recommends a practicable solution to this live issue. That is, lowering the current threshold for repaying HELP loans from $54,126 to $42,000. This would, in turn, compensate for vocational students earning less than the current threshold, and the number of students repaying their debt would surge by approximately 50%.

The estimated $500 million a year in repayments would be better directed at students in need of financial aid rather than those who could comfortably afford to pay their fees upfront. A similar model has been successfully implemented in other countries such as the UK and New Zealand, where demand for tertiary education remains as high as ever.

Although the Turnbull Government has yet to commit to any specific proposal, the Minister for Education, Simon Birmingham, recently welcomed the Grattan Institute’s suggestion on delivering sustainable higher education funding.

Responsible deregulation

The other burning issue in the higher education sector is university fee deregulation. Currently, tuition fees are capped, but a Liberal Party plan would allow tertiary institutions to set their own fees.

Despite fierce opposition from colleagues, Glyn Davis, Vice-Chancellor of the University of Melbourne, has been a staunch advocate of university fee deregulation.

In 2015, he argued that “graduates are the primary beneficiaries of tertiary education, and HECS ensures only those who earn a return on their degree pay back some of the cost.” Davis’ assertion is reinforced by NATSEM research that shows that students who complete a bachelor’s degree are almost $1 million better off over their lifetime than someone who has only completed Year 12.

Similar sentiments were expressed by Greg Craven, the Australian Catholic University’s Vice-Chancellor. Craven said, “universities must be able to set their own fees […] otherwise we cannot fund vital national research, the international perception of Australian higher education will decline, and students will get an education that is admittedly cheap but increasingly nasty.”

The ripples of the former Gillard Labor Government’s ill-conceived demand-driven system, which saw places for domestic students at universities uncapped, were immediately felt throughout tertiary institutions across Australia. The reforms led to an upsurge in costs for universities, which could not make any accommodations by adjusting their fees accordingly. ATAR requirements began to plummet, and with it, inevitably, the quality of teaching and the value of university degrees. The government has even floated the idea of a partial deregulation of fees as a means to ensure the continuation of a sustainable and fiscally responsible HECS-HELP loan scheme.

All things considered, the higher education sector is simply crying out for reform and the Liberals have a logical and prudent outlook on higher education.

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