The full force of the Abbott government’s ideological agenda has been unleashed on the university system and students.
$5.8 billion has been ripped out of the sector. Student fees will skyrocket under deregulation, students will pay higher interest rates on their HECS debt and pay it back earlier, postgraduate students will pay thousands of dollars a year in extra fees, and public universities will now be forced to compete with private education companies for government funding.
While deregulation of student fees and government subsidies to the private sector will drastically change the higher education landscape, the single biggest, direct cut is the scrapping of current HECS debt arrangements and the implementation of a new, regressive model for repayment.
Students will pay an extra $3.2 billion for university in the form of a lower repayment threshold (the amount one can earn before being required to pay back their HECS debt) and the charging of real interest rates of up to 6% on their debt. The latter change is perhaps the most insidious. Currently HECS debt earns interest only at the rate of inflation which is currently about 2.9 per cent. Charging real interest means an individual’s debt will continue to grow over the course of their working life, at a rate higher than wage increases.
The most perverse element of the change is that graduates on lower incomes, who take longer to pay back their debt, will end up paying more than those on higher incomes.
This is a regressive, user pays model for funding public education and the antithesis of what a fair, just and accessible system should look like.
The government will also cut an additional $1 billion from the contributions it makes to student fees. This means student fees will increase to offset that loss.
The budget estimates that by 2017-18 the average HECS debt will sit around $21,500 and take nearly 10 years to pay off. It predicts that almost one quarter of new debt will never be repaid. If increasing numbers of students will never be able to pay back their increased debts, it’s obvious the government has got it wrong.
However these figures are a vast underestimation. What they don’t include are the projected figures for average student debt after the introduction of fee deregulation.
Fee deregulation is code for jacking up student fees. Universities will be allowed to charge whatever they like – free from government caps. It will lead to the elite, well established Group of Eight universities such as the University of Melbourne, University of New South Wales and University of Sydney increasing student fees due to high demand for entry, while smaller universities would be forced to keep fees low to maintain enrolments.
Fee deregulation is another ideological imposition that has no sound evidence base. The argument is that competition between universities, like competition between supermarkets, will drive innovation and help students get bang for their buck. What the government clearly doesn’t understand is that universities already compete with others for student enrolments. This, alongside a genuine desire for knowledge, learning and research is already driving innovation in the university system – something the government commissioned Kemp-Norton review into Demand Driven Funding pointed out.
The logic for this argument totally collapses when you scratch beneath the surface and realise fee competition between universities will just not work. Regional towns across Australia don’t have multiple universities that can be forced to “compete” with each other. Regional universities like the University of Wollongong and the University of Newcastle are the only universities in those cities. Small and regional universities oppose fee deregulation because they know it will lead to elite institutions increasing their fees at their expense further widening the funding gap between the big, rich universities and those that play a crucial role in educating and employment tens of thousands of people in regional Australia.
The final, but perhaps most significant change is the introduction of private, for-profit education companies into the university market. For the first time private institutions will be able to access government funding for student places in the same way as public universities.
Australia is currently witnessing the result of a competitive marketplace for education and in both instances, the results aren’t pretty. The federal government spends more money subsidising private schools than it does funding the public school system. Our wealthiest private schools, subsidised by the public purse, have become bastions of the elite while the public sector, which teaches the vast majority of the most disadvantaged, has become starved of resources and education quality is suffering.
The vocational education and training system in Australia has also been pushed into a competitive environment, with publicly funded TAFE’s forced to compete with private, for-profit providers. Between 2011 and 2012 there was an enormous 20% increase in the amount of government funding to non-TAFE, private providers. Right now, 23 cents in every dollar governments are spending on VET is going to private providers. This is up from 11 cents in the dollar in 2008. TAFE students and staff are suffering from this loss as funding while the winners are the profit making companies that own private training providers.
What all these proposed reforms have in common is the fact that they are driven not by evidence, or a desire to improve teaching and learning, but by radical, free market ideology.
This ideology has failed students, teachers and parents when it has been imposed in our school system and TAFE. It’s time to draw a line in the sand and say that the market, as constructed by ideologues like Tony Abbott, has no place in public higher education.
The Coalition government has so far struggled to implement its previously planned $2.3 billion cuts to higher education. An alliance of students, staff and the broader community mobilised during the last election campaign to ensure that these cuts wouldn’t be passed through the Parliament. The lesson from that campaign is that we can stop these radical reforms, but we need to build support in the community. The Q&A protests made higher education a talking point amongst hundreds of thousands of Australians. These planned cuts will hit the almost two million Australians that currently have a HECS debt, one million students, tens of thousands of staff and everyone in our society who cares about skilling up our nation for the future. Our challenge, from today, is to mobilise all of those people into fighting these cuts.
Lee Rhiannon is the Greens Senator for NSW.