Coalition to doff fee caps?

It’s mostly “me too” on higher education, but fees are emerging as a battle front. The coalition would consider deregulating university fees – as well as reintroducing full-fee domestic undergraduate courses – but has otherwise embraced the ALP’s post-Bradley reform agenda in its entirety. But experts have questioned the feasibility of either of these moves, casting doubt on the only major higher education policies that differentiate the Opposition from the government. According to analysis by the National Tertiary Education Union, the ALP and coalition differed on just five of 12 higher education and research policies it had nominated – the two about fees, as well as positions on academic freedom, student representation and the extent to which funding should be performance-based. But fees have emerged as the key battle front. “Because the nation’s public finances have been run into the ground by Labor, in the interests of fiscal rectitude the coalition cannot promise to maintain the real caps on HECS fees,” federal campaign director Brian Loughnane told the NTEU. “But we have no immediate intention to change them.” The ALP ruled out removing the fee caps or reintroducing full-fee domestic undergraduate courses – an option the Opposition supported, as expected. “The Coalition believes Australian students should have the same right as international students to invest in their own education,” Loughnane said. Fee caps have been one of the most divisive issues in higher education since the release of the Bradley report. Former Monash University vice-chancellor and Universities Australia chair, Professor Richard Larkins, sparked a furore shortly afterwards when he told a closed-door meeting with then education minister Julia Gillard that a demand-driven system wouldn’t work without price deregulation. This position was supported by university chiefs including a fellow-Group of Eight vice-chancellor, UNSW’s Fred Hilmer, and noted researchers including the University of Melbourne’s Professor Simon Marginson and Andrew Norton of the Centre for Independent Studies. Others took a different view. “This would move us out of the realm where we’ve been able to hold our hands on our hearts and say, no student suffers a disadvantage from not being able to pay up front,” Innovative Research Universities director Lenore Cooper told Campus Review at the time. The issue had divided the sector into three camps, suggested Universities Australia CEO Dr Glenn Withers. “The status quo, which is a fairly tightly administered system, a half-way deregulation which Bradley recommends, and some people validly want full deregulation of both price and quantity”. Last week, Norton said he hoped the Coalition would deregulate fees if it won government. But he stressed that it hadn’t done so when it controlled the Senate during Howard’s last term. “I’d be amazed if they announced it during a campaign generally characterised by near paralytic caution on both sides,” he said. Dr Gavin Moodie, policy adviser to RMIT University, agreed that “$100,000 degrees” were a bad look politically. But he said there were also significant policy impediments to deregulating fees, with governments standing to lose billions up front. Repayments under the Higher Education Loan Program (HELP) are capped at 8 per cent for graduates earning taxable incomes of $83,408 or more. They slide as low as 4 per cent for those earning $44,912, and nothing for those earning less. It could take a long time for graduates to repay the loans, but the government would be saddled with up-front fees that could exceed $30,000 per annum, Moodie said. “Income-contingent loans remove the price discipline on fees. If most of the debt remained unpaid there would be no loss to universities or graduates, but a big loss to government revenue.” But Norton said that if the international student market suffered a meltdown, the government would be left with three choices: big cutbacks, government bailouts or fee deregulation. “The latter is by far the best option,” he said. Norton argued that fee deregulation could be seen as a progressive move. “Those who go to high-prestige institutions presumably get a more valuable qualification than those who go to low-prestige institutions, but both groups pay the same. Under fee deregulation, students at high-prestige institutions would pay more of the value of their courses.” He said fee deregulation would increase diversity while keeping universities from going broke. “People who want small classes or other expensive types of education should be able to get them, if they are willing to pay the cost. “If we get only partial deregulation, it is likely that – as with the Nelson reforms – all institutions will charge the same and use the money to ease internal financial pressures rather than plan significant innovations.” However, Moodie said the Coalition could be more inclined to cut costs by reducing the discount for students who pay fees up-front, increasing the loan fee for FEE-HELP, or increasing the interest on HELP debts above the inflation rate. All three options would increase the cost of the loans, he said. Moodie also queried the viability of shadow education minister Christopher Pyne’s intention to reintroduce full-fee degrees in what will soon be a demand-driven system with no enrolment targets. “Does Pyne mean to reintroduce enrolment targets so that full fee paying students are those enrolled above the reintroduced targets? Or does he mean institutions to determine their own balance between HELP-paying and full fee-paying students? “This was a possibility under Howard, but the government was always clear that the publicly funded places had to be filled first. A few institutions were fined for enrolling full fee-paying students without filling their HECS places.” Moodie said he thought it was more likely that the coalition would adopt the Bradley recommendation to make student entitlements available to private providers. But both major parties have ruled this out, according to the NTEU analysis. The NTEU also found that the two parties were in lock-step in refusing to stamp out teaching-only academic positions or to guarantee base-load funding for universities. And it found both parties opposed changes that had almost universal sector support, including immediate action to address academic workforce development and the 10 per cent hike in base funding for teaching recommended by the Bradley review. Tags: Election 2010