An Uproar in Australia over a Proposal to Deregulate Tuition ; Push to Make Universities More Competitive Would Also Drive Up Fees in 2016

By Delany, Ella | International New York Times, June 2, 2014 | Go to article overview

An Uproar in Australia over a Proposal to Deregulate Tuition ; Push to Make Universities More Competitive Would Also Drive Up Fees in 2016


Delany, Ella, International New York Times


Changes proposed by the Australian government are intended to make universities more competitive. Critics say they will make undergraduate education more expensive.

When the Australian government proposed radical changes in the financing of higher education in its budget last month, it said the new rules -- to take effect in January 2016, if passed -- would make universities more competitive. Critics said they would make undergraduate education more expensive.

The changes would cut government funding per student by an average of 20 percent across the board, while freeing the universities to raise tuition without regulatory restraints.

They would also raise interest rates on student loans. The proposal calls for loan rates to be indexed to the 10-year bond rate, with a cap at 6 percent. Rates are now capped at the rate of inflation.

The income threshold for employed graduates to start to pay back their loans would also be lowered.

The government says the changes are needed in an increasingly competitive international education market.

"More competition between higher education providers would be good for students," Christopher Pyne, the minister for Education, said in a speech at Monash University in Melbourne last month. "If universities and colleges were able to compete on price, it would mean they must have a greater focus on meeting the needs of students. They would need to continuously improve the teaching and learning they offer to attract students."

Mr. Pyne said that fee deregulation was also needed to ensure that Australia remained competitive on the global higher education marketplace. "The current approach also limits what universities offer," he said. "Our best universities have limited prospects of competing with the best in the world and will be overtaken by the fast-developing universities of Asia."

Belinda Robinson, chief executive of Universities Australia, the umbrella organization for the sector, said that the changes would allow universities to make up for the drop in their public funding. "There has been very little ability for universities to address the shortfall because the fees that universities have been able to charge have been capped," she said. "With full fee deregulation, this will no longer be the case."

Critics of the changes, however, say that the government's real aim is to cut its own spending. "The government is trying to reduce its outlay by switching the funding incidence onto students," Prof. Bruce Chapman, from the Crawford School of Public Policy at Australian National University, said in an email.

Meanwhile, students enrolling in courses this year are facing an unknown tuition increase come January 2016.

It is unclear how much tuition might rise. Prime Minister Tony Abbott has conceded that fees might double. Professor Chapman said that elite universities might triple their fees, while tuition at lesser institutions might rise by 20 percent to 30 percent.

"The challenge right now is that universities are being asked to set fees in an unprecedented market environment," said Prof. Sandra Harding, the chairwoman of Universities Australia.

Professor Harding warned that universities could decide to match their domestic student fees with international student fees. "That's the only undergraduate market at scale that we have experience of," she said of international students.

As an example of what that could mean, annual tuition for undergraduate degrees in arts and law at the University of Sydney is now 7,452 to 10,085 Australian dollars, or $6,900 to $9,300, for local students. …

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