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KEY CHANGES
• Lower income threshold for starting HELP repayments
• Potentially higher interest rates on HELP debt
• Caps on university course fees removed
• 20 % of any increase in revenue from course fees must go towards scholarships for the disadvantaged
Budget frees unis to set own fees
Students will pay larger share of education costs, as expected. By Antonia Maiolo
Universities will have the power to charge what they like and public funding is set to drop, in a major overhaul of the higher education system.
Under the federal Budget that Treasurer Joe Hockey announced on May 13, graduates will also be hit with repayments on their Higher Education Loan Program( HELP) borrowings at a lower income threshold, and will pay higher interest rates on that debt. The changes will save the government roughly $ 3.4 billion over four years.
Starting in 2016 – 17, students will have to start repaying their debt once they are earning $ 50,638 or more a year; the minimum repayment rate will also be lowered, from 4 per cent to 2 per cent. Also, the interest rate on HELP debt will rise from 2 per cent to a maximum of 6 per cent, to“ reflect the cost of government borrowings”.
In its first Budget announcement, the Abbott Government also confirmed higher-education funding would extend to non-university institutions, making financial assistance available for people studying diplomas or degrees at private colleges or TAFEs –“ all registered higher education institutions, whether in the city or bush”. But the government will slash course subsidies by 20 per cent and students are expected to bear the burden of the additional costs.
This is projected to affect more than 80,000 students by 2018, at a cost of $ 820 million over three years. For every $ 5 universities receive in extra revenue from course fees, $ 1 will go towards a new Commonwealth scholarship scheme that will assist students from disadvantaged backgrounds.
The new measures will be applied from 2016 but arrangements for current students will remain unchanged until December 2020.
Education minister Christopher Pyne said rebalancing the Commonwealth’ s contribution towards course fees and allowing universities to set their own rates would enable institutions to“ substantially meet the growth in students undertaking study, and spread the opportunity of a higher education to more students”.
“ Universities will be able to compete to attract students because they will be able to set their own tuition fees for the courses they offer,” Pyne said.“ The Abbott Government will free up our education system to provide Australians with the best higher education in the world.”
Greens higher education spokeswoman senator Lee Rhiannon was critical of the Budget, however, saying that public universities would have to compete more directly with private institutions.
“ On top of it all, these changes making public universities compete with private, for-profit education companies for government funding will have disastrous consequences on already struggling students and teachers,” Rhiannon said.“ We’ ve already seen the devastating impact that forced competition from private providers is having on TAFE.”
There were more changes, too, including a $ 170 million cut in funding for the research training scheme, which gives aid to research students. However, the government will continue its investment in the National Collaborative Research Infrastructure Strategy and has reinstated its commitment to the Future Fellowships scheme, supporting mid-career researchers.
Go8 chairman professor Ian Young congratulated the government on its reforms and welcomed the restoration of funding for research infrastructure and mid-career researchers.
“ We especially welcome the Medical Research Future Fund, [ which ] will grow to $ 20 billion and provide an additional source of funding for health and medical research,” Young said.“ The Budget package is an integrated set of progressive measures that will enhance Australian higher education and research.”
Young also commended the deregulation of fees, which he said would expand education opportunities in a more sustainable way. He added that whilst students would make a greater contribution to the cost of their education, the changes would also put greater onus on universities to deliver the highest quality.
Belinda Robinson, CEO of Universities Australia, said,“ There has been very little ability for universities to address the shortfall because the fees universities have been able to charge have been capped. With full fee deregulation, this will no longer be the case.”
Whilst UA did express disappointment over the reduction of federal contributions to course fees, Robinson was pleased the government resisted some of the Commission of Audit’ s more severe recommendations in relation to HELP.“ The government has sought to keep higher education affordable and accessible,” she said.
Some university officials expressed concern, however, that the changes would limit access for some disadvantaged students. For example, Charles Sturt University vice-chancellor professor Andrew Vann said the fee hikes could deter regional students from entering study.
“ The proposed changes are a significant shift of cost onto students – from 41 per cent of the cost of their education to 52 per cent,” Vann said.“ What concerns us most would be the reduction in students studying at rural universities, taking us back to the days of rural workplace shortages, just as we are starting to build a sustainable supply.” ■
4 | campusreview. com. au