Here is my speech from the ANU-UC forum on deregulation of student fees held at ANU on 2 June.
I won’t beat about the bush. I oppose fee deregulation, in itself and when coupled with the other reforms now being proposed.
On average universities will need to increase student contributions by about 30% from where they are now just to compensate for the Commonwealth reductions to course costs: that is, just to stand still. So expect about a 30% increase anyway.
But on top of that the only upper limit to domestic student contributions will be the international student fee level. I understand this was Ian Young’s proposal. It is entirely irrational of itself, being exposed to currency and world market considerations. And anyway, where a university models that it would gain more in domestic fees than it loses in international fees it will just put its international fees up to give it more headroom to gouge Australian students.
Now comes the real kicker. HECS or HELP debts on these higher fees will be subject to a lower repayment threshold and a real interest rate which compounds even when the student or graduate isn’t in employment.
In fact it is the combination of all these components that makes this the worst piece of policy I have seen in Australia in my 26 years here; and certainly in my 7 years as Vice-Chancellor, during which there have been 7 Education Ministers (although I might have forgotten one or two).
In summary, as I will explain, these changes, taken together, are; unfair, unethical, reckless, poor economic policy, contrary to the international evidence and being woefully explained, raising suspicions about how much thought has actually gone into them.
First, they are unfair generally because of the level of indebtedness all students might face, but particularly unfair on the disadvantaged, on women and on those who take career breaks or go overseas.
The disadvantaged don’t have parents who can pay off or reduce their HECS debt as the student goes along.
Women are particularly disadvantaged, as shown by Rebecca Cassells in The Conversation, see higher-education-changes-another-hit-for-australian-women-27370
These reforms are unethical. Nothing can ever stay the same, but it is unethical for a generation of leaders who largely went through university free, or with much lower student contribution levels, to impose this amount of hike on the generations coming behind them.
Fourteen of the 19 Cabinet ministers studied Law or Business at university, and 10 went to what are now Group of Eight universities. If a combined law degree goes up by 50% (which is at the lower end of predictions) then under these changes it would have taken 23 years to repay the HECS debt had they gone onto average earnings. Joe Hockey and Christopher Pyne would only have repaid their debts a couple of years ago.
These reforms are reckless. The worst aspect doesn’t stem from the Kemp-Norton report; but from lobbying by the Group of Eight. Even the Commission of Audit recommended a 12 month period of debate about fee deregulation.
Simon Marginson, one of Australia’s leading higher education scholars, has written that no government anywhere in the world has introduced a full-blown capitalist market in higher education, despite three decades of talk, because they realise the public good component of education would be destroyed. And that’s because they have thought about it. This Government hasn’t thought about it.
POOR ECONOMIC POLICY
Fee deregulation is poor economic policy, particularly from a conservative government’s perspective. Recent US research from Penn State University has found a significant negative correlation between changes in student loan debt and formation of small businesses.
THE INTERNATIONAL EVIDENCE IS AGAINST IT
And if anyone had taken time to evaluate fee deregulation they would see alarming evidence elsewhere. In the UK, which in some ways now has a scheme more favourable to the student than Australia will have, the Institute for Fiscal Studies has recently found that an average school teacher who has no breaks in their career will still not have repaid their debt by their early 50s.
In the US, student debt has tripled in the last 8 years and now exceeds credit card debt. It was the only kind of debt to keep growing during the GFC because these forces once unleashed cannot easily be contained again.
The reforms have been poorly explained. I won’t use up my five minutes on the Government’s communication ability, but never have I seen such confusion over who is affected and from what date.
IT IS ENTIRELY ON THE WRONG TRACK
So I think the reforms are entirely on the wrong track.
The Government and the Group of Eight have come up with an ideological solution in search of a problem. We have one of the best university systems in the world, and it is about to be trashed.
The ”taxpayer” is invoked regularly by the Government, but who actually knows if the “taxpayer” wants public institutions to be competing with each other like this? Maybe they would prefer public bodies to be differentiating and collaborating. This has been the experience in Germany, where the Government announced this year it would abolish tuition fees.
The reforms are on the wrong track because higher education is an investment in the economy, not a cost to it.
And they are on the wrong track because research should not be funded by students. If you want to engage in an arms race with the US and China over top-ranked universities – which this Government seems to want – then simply merge the Group of Eight into a single powerhouse institution that would shoot into the top 20. You could call it “The Australian National University”, save on 7 Vice-Chancellor salaries, and leave the rest of us alone.
I end with a challenge. The Group of Eight, chaired by Ian Young, has put out a media release expressing its unanimous support for deregulating tuition fees.
So in the spirit of feisty debating, Ian, tell me now what the ANU’s student contributions will rise to in 2016. You have advocated uncapping them, you wanted this change, you have had the most time to think about it, so tell the audience what the ANU contributions will go to in 2016 and if you can’t, why not?