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Leaders warn of soaring cost
Conference speakers predict the price of a degree will rise more than the government projects. By Antonia Maiolo
Graduates will struggle to pay back student loan debts, as course fees are expected to balloon above what the government indicated, higher education stakeholders have said.
Speaking at a seminar in Melbourne, economist Bruce Chapman, the architect of the HECS-HELP system, said outstanding student debt would exceed the level the federal Budget implied under a deregulated fee system.
He told the conference that the price increases were expected to hit the hardest at Go8 universities and in elite courses where the demand and entry scores are high. He estimates that to complete some courses, students can anticipate paying about $ 100,000.
These courses include law, medicine, veterinary science, dentistry and some business courses.
“ After a year or two, I expect most course fees to be close to the international cap,” he said.
Chapman said one of the“ unintended consequences [ of the new system would be ] that the amount of debt that doesn’ t get paid goes up”.
Under the Coalition’ s plans, caps on university course fees would be removed, giving institutions the power to charge what they like, with a lower income threshold for starting HELP repayments and potentially higher rates on HELP debt.
Chapman said with the fee rises and applied interest rates, students would get to the end of their working lives with“ very high debts” – particularly those who are unemployed for a period of time, work parttime, or take time off to care for children.
“ Forty per cent of female graduates … won’ t pay their debt in full,” Chapman said. He added that taxpayers would be forced to pick up the tab for the fees that will go unpaid by graduates.
Deakin University vice-chancellor Jane den Hollander also spoke at the conference, which was aimed a discussing how Australia will finance higher education. She said the current propositions“ feel unfair”.
“ I think fees will rise and I think unless the Senate does something we are going to a different system – a system that looks inextricably like the United States,” den Hollander said.“ That leaves me sad.
“ The saving grace in Australia for fees going up has of course been HECS-HELP, as it’ s now called – the great protector.” She called HECS deferment, with repayment linked to subsequent income, one of the greatest Australian innovations and said“ the new system of aggressive interest no longer affords confidence or protection” for students.
“ Besides reducing the government funding contribution and introducing a so-called simpler set of clusters, the government has also decided to fiddle with a system that has served us very well,” den Hollander said. She believes students will complain about fee increases.
She said, however, that there are lessons Australia can learn from the US in terms of how to finance this new system, including looking at where the funding of the top 50 universities in America comes from. She said the bulk of contributions for American institutions come from“ phenomenal government investment” and the private
sector, which is attributed to“ astoundingly jaw-dropping philanthropy”.
Whilst she said Australia needs to look towards private funders – including philanthropy and crowd-funding methods – she also said nowhere had it been recorded that increasing revenue from students improves quality or rankings.
Professor Steven Schwartz, CEO of the Council for the Humanities, Arts and Social Sciences agreed, telling audience members at the seminar that he doesn’ t believe fee increases will lead to better quality in higher education.
“ Unless something dramatic changes, students will gain no additional value for the additional money they’ re going to be required to pay,” Schwartz said.
He gave the example of Oxford University in England, where there was a 300 per cent increase in student fees“ but we did exactly the same thing we did the year before”.
“ The whole rationale for making students pay more for their higher education is the financial benefit they are supposedly going to receive,” he said.“[ The government’ s ] rationale is going to be severely undermined if those material benefits are never actually achieved.”
Education minister Christopher Pyne previously said this budget was securing the future of higher education by creating more opportunities for students in low socioeconomic and regional areas, extending Commonwealth funding to TAFEs and private colleges as well as making some investments in the research sector.
“ In higher education we are acting to ensure Australia is not left behind by the rapidly improving education systems in Asia,” Pyne said.“ This reform package will ensure that our higher education system as a whole is better resourced.” ■
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