Getting higher ed reforms fit to fly

 Swinburne Newsroom    |    25 August 2014


Linda K2 Professor Linda Kristjanson, vice-chancellor, Swinburne University of Technology proposes five key changes to the federal government’s higher education package – including a maximum cap on student fees and moderating proposed changes to student loans interest rates. 



One of Swinburne University’s subject strengths is aviation, and so when our researchers see an interesting new aircraft design one of the first things they ask is: will it fly?

That’s the question that confronts anyone considering the higher education reform package that formed part of the recent federal budget.

Will it give Australia a better educated and higher-skilled population? Will it give us higher quality research to prevent disease, create better products and solve pressing social problems? And will it do these things whilst encouraging innovation and providing better value for money? Will the deregulated system work? In other words: will it fly?

Like passengers boarding a new plane, we all have a stake in hoping the engineers have got it right. And as academics we have a responsibility to be evidence-based in our assessment of the Government’s reforming intentions.

So let’s look at the blueprints of Government’s higher education reform plan, which includes deregulated fees, market-priced student loans, a 20 per cent funding cut per student, and public funding for private higher education colleges to promote competition and choice. Will it fly?

In the wind-tunnel of market theory, the answer might be a yes. But as every aviation graduate knows, in real environments unforseen complications always arise and straightforward theory has a way of becoming problematic, sometimes fatally.

In the higher education sector the complications are many. Australia will only get full value from its higher education investments if two very complicated issues are factored in: quality and equity.

Reduce the quality of what we are able to offer and the investment loses its worth. Make it too unaffordable and you contravene the essential principle of merit and begin to sacrifice human talent. In the absence of quality and merit, the very idea of the university begins to lose its meaning.

Whether it’s the prohibitively high and socially-selecting fees and debt in the United States, or the recent scandals over exploitative private colleges in the United Kingdom, there is indeed much evidence to suggest that the Government’s reform package may be inherently unstable.

But can we give it back its flying trim? I believe we can.

It was heartening last week to hear Education Minister Christopher Pyne signal that he is open to compromise on a number of matters to secure passage for the government’s reforms. With Clive Palmer taking such a firm stand, he may not have much choice. But it’s just possible this could work to the Government’s advantage and, as Mr Pyne put it, allow him to get 80 per cent of something rather than zero per cent of nothing.

Many have already suggested the need to revisit the idea of effectively doubling the interest rate on student’s HELP loans. Easing back on that will help, but today I want to suggest five other changes for the Government to consider that would keep the objectives and the essential framework of its policies intact.

First, instead of totally deregulating fees in one go, the Government could start slowly, with a new maximum cap, to reassure Australian students and their parents that fees won’t reach the frightening levels some are predicting. A sensible upper limit on annual fees would take scary numbers like $100,000 off the table, keep potential fee rises within bounds the public may accept, and therefore make progress politically possible.

Next, the removal of any limit on the HELP debt an individual can amass is a poorly understood but potentially very problematic aspect of the Government’s package. To address this, the Government could set a maximum HELP balance to remind universities that raising fees will eventually hit their enrolments by exposing their students to immediate costs. Sensible banks don’t let their customers go in over their heads and neither should governments and universities.

Third, the Government should put in place safeguards against the possibility—sadly realised elsewhere—that new entrants to the higher education market could reduce quality through rorting of the system.

I suggest two things here: initially limiting the non-university providers to diplomas and associate degrees only, extending this trial to full degree qualifications should the trial prove a success; and ensuring that all higher education providers are subjected to proper regulation by giving the higher education regulator, TEQSA, sufficient resources to do its job properly.

And finally, the Government should make an unequivocal statement about exactly who will be subject to these new arrangements, because the widespread confusion over whether students already enrolled will have to pay more is making the package a harder sell than it should be.

Whatever happens, it is fundamental that as a nation we continue to invest in and support great teaching and research. We can’t afford to be left behind as other countries ramp up their spending to create higher education systems which rival our own.

What I am suggesting here is not a wholesale rejection of the principles underlying the Government’s package, but a means of staging their introduction to give them space in which to develop.

Call it a trial, or perhaps a wind-tunnel test. If the reforms pass as I have proposed, we will end up with fees that have been set by the market, universities that can play to their strengths, new providers entering the marketplace, and voters more willing to give it a fair go.

In other words, by staging the implementation of the package’s most significant elements, the Government can ensure it gets off the ground rather than remaining in the policy hangar as yet another untested design. Let’s make these changes and see if it flies.

This  opinion piece was published in the Australian Financial Review on 25 August 2014.
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