Principles should determine funding share: UA

"Historical fixes" shouldn't govern how much university students contribute to their own education, says UA. Australia should move beyond an "arbitrary" approach to tuition fees and apply basic principles to decide just how much private funders - including students - should contribute to the cost of university teaching, according to the sector's peak body. Universities Australia (UA) told the base funding review that the taxpayer's share of overall higher education funding should be increased to 50 per cent, up from about 40 per cent at present. But the public-private share of base funding should be more nuanced, he said, with public funding reflecting the public benefit. CEO Dr Glenn Withers said this would require "complex calculations" of the public benefit from university education in different fields, and of the extent of private funding - not just from tuition fees but also from industry contributions, commercialisation returns and fee-for-service activities - in particular disciplines. It would also require decisions on what constitutes base funding - whether components such as research, infrastructure, scholarship, community engagement, student services and equity should be included as well as teaching and learning. But if it could be done, Withers said, it would constitute a world first - funding shares based on clear principles rather than arbitrary judgments. "It would be the first time anybody had done it in any country," he told ***Campus Review***. "Mostly you end up with rules of thumb, historical fixes and incremental change. This is an attempt to go back to basic principles, and that is hard." Withers said that so far, UA had established the underlying principle. "Our thinking has taken us that far - contributions to university cost should be based on assessments of public and private benefit. We are now trying to work our way through what that might mean for sub-components of that funding." UA cites 2004 research from American academic Walter McMahon in estimating that 50 per cent of the benefits of education accrue to the wider society, as opposed to private benefits realised through higher earning power. "This can serve as a reasonable benchmark for discussion of the public-private shares of higher education," its submission says. The benchmark can play out in tuition fees in three ways, it says: the "equal amount" approach, where private contributions constitute half of the average cost per place irrespective of the field; the "equal share" approach, where private contributions constitute half of the average cost calculated for each field; and the "adjusted charge", where contributions are adjusted by "a national benefit factor" reflecting the public benefit. The third approach is the tricky one, Withers suggested. "How much [do] you discount - or, indeed, add - for national priority or social dimensions? Do you say nursing is contributing more socially, and therefore should only pay 40 per cent?" Industry revenues should also be taken into account, he said - for example, large-scale funding of engineering courses by mining companies. "Therefore the students need only pay 40 per cent - that would be [a possibility] under the adjusted charge approach." And the components of base funding also come into the reckoning, he said. "Some might say students should contribute to the research component as well, because they benefit from the research links in universities." But public benefit is all but ignored under the current arrangements, the UA submission suggests. "In most areas of postgraduate coursework study, full-fee arrangements apply - this assumes a 100 per cent private benefit from such study," it says. "Similar problems exist [in undergraduate courses], which vary from an assumed 83 per cent private benefit in law, accounting, administration and economics to 19 per cent in science. Humanities, computing, built environment and 'other health' currently come close to a 50 per cent sharing of cost between student and government." Withers said public-private funding considerations were complicated, but he said the sector needed time to debate them. He said tight review deadlines forced interest groups to "rush to judgment" about tuition fees, resulting in varied views across the sector. "We just haven't had the opportunities for enough conversations. We would like to be able to offer the review more convergence in the sector on these matters - areas like cluster funding and postgraduate degrees. "There will be some [areas] where we simply won't get, as it were, an all-of-university view. But there will be others, I think, where we can narrow existing differences." The existing differences are stark. Innovative Research Universities says there should be no fee increases, and that the cluster-based fees should be replaced by an annual charge of around $6633 for every full-time student. The Australian Technology Network says the government should only authorise fee hikes of up to 10 per cent, and only if it increases base funding by the same amount. The Group of Eight wants the fee cap raised to a level which will "encourage price point competition between universities". Withers acknowledged that UA's view was "shamelessly open" compared with the positions of the other university groups. "We've got 39 universities to have the conversation with," he pointed out.