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Call for caps to curb fee hikes

The Australian     |    3 September 2014

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There are growing calls support for some mechanism, such as a price or loan cap, to limit excessive fee rises under fee deregulation.

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 Price capThe possibility of steep fee rises in a deregulated system are real, driven by long-term underfunding of the sector and the lack of price sensitivity among students due to ­income-contingent loans, according to a  number of commentators and some vice-chancellors.

Bruce Chapman, the so-called “architect” of HECS, has told The Australian that there needs to be a trade-off between equity and price sensitivity and that without price caps the debts students incurred to attend the most sought-after courses would become “very, very big”.

In the high-demand courses at established institutions you are very likely, over time, to have fees that are double or more.

Chapman says a cap on loans is his preferred option.

Advocates of full deregulation argue that competition from private providers will put downward pressure on prices while public universities won’t want to damage their reputations by price gouging.

The requirement for universities to allocate 20% of revenue from fees above the level to make up funding cuts will also act as a break on prices, they say.

But Victoria University head Peter Dawkins, who flagged the issue soon after the budget, said a price cap or a loan cap should be considered, a view that Swinburne University of Technology vice-chancellor Linda Kristjanson also has expressed publicly.

David Lloyd, vice-chancellor of the University of South Australia, said he  appreciated “the irony of regulating deregulation but it wouldn’t be prudent to simply move to … a system that can increase prices on whim, (which) would be quite economically damaging to Australia in the longer term.”

See
Getting higher ed reforms fit to fly

 

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