Election Watch is a guide to the 2016 Australian federal election run out of the University of Melbourne’s School of Government which aims to:
provide independent political analysis and debate;
explore the current state of Australian electoral politics;
provide a resource that delves into policies and issues;
present a suite of public events to include the community in election analysis.
Election Watch will publish articles of news and analysis; publish a ‘library’ of primary policy documents; and compile a resource of campaign advertisements.
TAFE Directors Australia (TDA) has welcomed the federal opposition’s plan to find savings from the poorly administered VET FEE-HELP loan scheme, with the overwhelming amount of funds flowing to private colleges.
A number of unscrupulous private colleges have taken advantage of the system, with some colleges referred to police and ASIC, after thousands of students did not complete courses and were left with large debts or qualifications of dubious quality.
However, TDA had not been consulted on Labor’s additional idea to cap VET FEE-HELP student loans at $8,000 per year. TDA expressed concern at the inflexibility this entails for varying levels of course style and scope.
The Australian Labor Party last week released its policy on VET FEE HELP reform.
Unfortunately, students and good quality training providers will be the victims of the unfair training loan caps announced. Labor announced it would impose a price, with no reference to market forces, of $8000 a year on the sector.
Across Australia every day when given a choice students are overwhelmingly choosing to study at private training colleges in their pursuit for innovation, flexibility and best practice.
The amount of $8,000 appears to be a totally random number and without evidence to support its selection. The release unfairly compares the cost of heavily subsidised TAFE training, where all infrastructure costs are paid by State and Territory Governments with those of private training providers.
See
What’s the objection to VET FEE-HELP cap? VET diploma fees almost trebled in a single year…..
The ALP’s proposal to cap VET FEE-HELP loans at $8,000 has been criticised as “arbitrary” and “too low”. People ought to read the policy before criticising it: it actually allows for an exemption when a higher fee can be justified.
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So what’s wrong with that? Providers ought to be allowed to charge unjustifiably high fees and sling the cost off to the taxpayer?
Here’s a couple of facts and figures to ponder.
Course tuition fees have increased from an average of $4,060 in 2009 to $14,018 in 2015 and average loans per student have more than doubled from $4,861 in 2009 to $10,739 in 2015. Most of this growth has occurred since 2012. For example, average tuition fees grew from $5,917 in 2012 to $14,018 in 2015
Information technology diplomas cost an average $18,735 a year, hospitality diplomas $16,982 and management diplomas $15,493.
By way of contrast, the annual domestic student fee for a university degree in law or commerce in 2016 is $10440.
The discussion paper on redesigning VET FEE-HELP released by the government also canvasses a cap as an option.
QED re a VET FEE-HELP cap? You might query the level of the cap as TDA has done but to just oppose a cap on principle, as ACPET seems to have done flies in the face of facts and recent history.
TAFE Directors Australia (TDA) has welcomed the federal opposition’s plan to find savings from the poorly administered VET FEE-HELP loan scheme, with the overwhelming amount of funds flowing to private colleges.
A number of unscrupulous private colleges have taken advantage of the system, with some colleges referred to police and ASIC, after thousands of students did not complete courses and were left with large debts or qualifications of dubious quality.
However, TDA had not been consulted on Labor’s additional idea to cap VET FEE-HELP student loans at $8,000 per year. TDA expressed concern at the inflexibility this entails for varying levels of course style and scope.
The Australian Labor Party last week released its policy on VET FEE HELP reform.
Unfortunately, students and good quality training providers will be the victims of the unfair training loan caps announced. Labor announced it would impose a price, with no reference to market forces, of $8000 a year on the sector.
Across Australia every day when given a choice students are overwhelmingly choosing to study at private training colleges in their pursuit for innovation, flexibility and best practice.
The amount of $8,000 appears to be a totally random number and without evidence to support its selection. The release unfairly compares the cost of heavily subsidised TAFE training, where all infrastructure costs are paid by State and Territory Governments with those of private training providers.
Labor has proposed an $8000 annual cap on the VET FEE-HELP loan scheme, which has provided hundreds of millions of dollars to colleges which have targeted vulnerable people, had abysmal completion rates and left thousands of students with huge debts, many of which won’t be repaid.
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Higher education spokesman Kim Carr said the cap would provide protection for students and reduce the call on the budget, as taxpayers are bankrolling unscrupulous private colleges under current arrangements. He said:
The average cost to providers is less than $4000, so there is still plenty of room for people to return a profit, but it’d be nothing like what we’re seeing with the $20,000 courses.
There would be an exemption on legitimate high-cost courses such as nursing and engineering following ministerial approval.
The current scheme allows students access to $100,000 in study loans, with no annual cap, to be repaid once they begin to earn more than $54,000 per year (although whichever party wins, that threshold is likely to be lowered).
The scheme, which lent $2.9 billion last year, has been gamed by unscrupulous providers.
Labor also intends to introduce specific mechanisms to push students into vocational courses that are connected to “national priority” skills. For example, Labor said students at private colleges were paying more than $32,000 for a salon management qualification — the same qualification is provided at a NSW TAFE for $6990.
Australian Council for Private Education and Training chief executive Rod Camm said the limit would be “too low”:
There will be high-quality organisations that won’t be able to deliver a course for that amount of money, so students will have to fork out their own funds to meet the gap.
However, there would be provision for an exemption on legitimate high-cost courses such as nursing and engineering following ministerial approval.
The average cost of a diploma almost tripled from $4814 in 2012 to $12,308 in 2014, government data shows.
Information technology diplomas cost an average $18,735 a year, hospitality diplomas $16,982 and management diplomas $15,493.
By way of contrast, the annual student fee for a degree in law or commerce in 2016 is $10440.
The Coalition has released a discussion paper on options to rein in abuses of the scheme.
4 May 2016 | The government has pushed consideration of proposed university reforms, including a 20% cut in funding, out beyond the election, until 1 January 2018. While it has ruled out full fee deregulation, it has released an options paper, to guide a consultation process, canvassing a range of alternative fee measures which would still see substantial fee rises. The 2016 Budget also sees an efficiency dividend of $1.2 billion on legislated dropped but the Higher Education Participation and Partnerships Program has been cut by $152 million to $553 million over four years. The Office of Learning and Teaching has been abolished, with the resulting $18 million in savings going to TEQSA and the Quality Indicators in Learning and Teaching website. The consultation paper presages changes to FEE-HELP, including dropping the repayment threshold from around $54,000 to something in the range of $40, 000 to $45,000. Over $2.5 billion dollars in unlegislated funding cuts remain on the books….[ MORE]….
4 May 2016 | The federal government has proposed a set of tougher measures to fix the VET FEE-HELP blow-out in a discussion paper released on 29 April. The minister for vocational education and skills senator Scott Ryan said the paper will pave the way for a full redesign of the scheme. The discussion paper catalogues the scale of malpractice by some providers, such as the targeting of low socio-economic status and vulnerable people with inducements to enroll and misleading potential students about their repayment commitments. It proposes a series of measures to improve the integrity of the system including minimum eligibility requirements for VET FEE-HELP, reductions in the lifetime student loan limit, a narrower range of eligible courses, a VET FEE-HELP ombudsman, and payments tied to compliance and student progression….[ READ MORE ]….
4 May 2016 | With international education worth nearly $20 billion to the Australian economy in 2015, the government has provided $12 million in the Budget to fund the National Strategy for International Education 2025 released on 30 April. In three parts, the strategy identifies international educationas one of five “super growth sectors” that will help complete Australia’s transition from a resource-based economy to a modern services and knowledge economy. The strategy aims to help grow the sector by 50% to 720,000 international students by 2025. A separate economic study indicates that international education supports over 130,000 jobs across Australian and delivers substantial indirect benefits to other industries such as tourism and retail….[ READ MORE]….
28 April 2016 | Ivan Brown, who ran one of Australia’s fastest-growing vocational colleges, Phoenix Institute, is being investigated for allegedly forging documents to reap more than $100 million in taxpayer funds. Federal Police search warrants say they have “reasonable grounds for suspecting” Brown, the made false documents or caused them to be made “with the intention to influence the Commonwealth to accept on-line students as genuinely enrolled and participating in training”. Meanwhile a report by the failed company’s administrator claims that the education department owes ACN $253 million for people signed up to courses of study. It also shows that ACN paid its brokers between 15 and 30 % of the value of its courses to the salesmen who recruited students – up to $12,000 per sign up.…[ READ MORE ]…
As we draw nearer the election, the findings of a recent ANU opinion poll ought to resonate with the politicians, as ANU vice-chancellor Brian Schmidt observes – particularly those given to characterising the “politics of equity” as the “politics of envy” (that being our observation, not Schmidt’s). It is unlikey to though: with the political class, only two polls count – Newspoll and the actual poll on 2 July.
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The ANU School of Politics & International Relations regularly conducts national telephone opinion polls on issues of political and social significance. The latest, the 21st in the series, was on the issue of tax and equity. Should we be worried about governments holding debt? Which areas of spending should have priority, and which can be cut? Should we pay more tax, or less? Is our tax system generally fair?
More Australians favour greater spending on social services than favour reducing taxes. If reducing government debt is the aim, cutting welfare payments is among the least popular options, according to this poll. Australians want more spending directed to health, domestic violence prevention, education, and disability and aged care. They want international companies operating in Australia to pay more tax here, but overall believe our tax system is moderately fair.
On education, around 80% thought the government should spend more money on education, just 2.2% of Australians polled nominated education as “the most important problem” facing Australia today. It ranked thirteen, way behind the economy and jobs (27.2%), just ahead of law and order (1.8) and somewhat ahead of taxation (1.2%) and the budget (1%), although at the levels of granularity involved, these rankings may not be entirely reliable.
What now? asks Gavin Moodie (RMIT) in The Conversation. While across-the-board full fee deregulation has now been dumped by the Coalition, fee deregulation of so-called “flagship courses”, first mooted in the Review of Base Funding in 2011 (with the significant qualification that such fees be capped at plus 50% above what they would otherwise be), looks a hot prospect for a re-elected Coalition government (as does a raising of the cap on other courses by some percentage). That is, of course, still moot: an incoming Labor government would be ostensibly committed to additional public investment in higher education. Whichever side wins will have its hands full, And there’s the likely prospect that whatever the colour of the government, it will not have a majority in the Senate.
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This year’s budget set us back to 2014. In the 2014 budget, the government announced that fees would be deregulated. While this was a toxic political move, it wasn’t toxic enough to be dumped from the 2015 budget, which was another lost year for higher education. While, this year, the government finally ruled out full fee deregulation, it is still contemplating uncapped fees for some courses in its higher education consultation paper. It has also dropped all the worthwhile proposals from 2014, such as extending the demand-driven system to sub-baccalaureate programs. .
Salutary lessons from overseas
High caps and deregulated fees
5 May 2016
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As we begin to address again the issues of university funding, the relative student contribution and student loans, it’s salutary to look to overseas experiences. In the England, the Cameron government didn’t fully deregulate fees, it merely tripled them. There are now real questions as to whether students are getting deal (“value fro money”). Meanwhile in the US, home of the $100,000 degree, the affordability of higher education is said to be a “crisis” and is key issue in the forthcoming presidential election campaign, at least from the Democrat side. And we would do well to heed the advice of Swinburne University vice-chancellor Linda Kristjanson
We should be wary of significant changes to the funding model which would detract from the egalitarian quality of Australian higher education.
A SECRET document snapped outside Downing Street has revealed the government believes its £9,000 tuition fee cap for students has been a failure.
The government file captured by a press photographer has shown many universities cannot justify charging the top-rate fee.
It also warned the UK “will never achieve” David Cameron’s pledge to double the number of students from poor backgrounds going to top universities.
Fees tripled from £3,000 to the maximum price of £9,000 less than four years ago, after the Liberal Democrats failed to deliver on their manifesto pledge.
Thousands of students then took to the streets and rioted over the policy, which ministers claimed would only be a price cap that would apply to the very best institutions.
But since it was launched in 2012, almost all universities across the country have chosen to charge the top price.
The crisis of college affordability may not be solvable by the federal government: It has had much less control over tuition than state policies.
The nap pods that popped up recently at the University of California, Berkeley, may be exacerbating a problem they were designed to fix. Intended to help relieve student stress, the egg-like pods cost approximately $100,000 total. A significant student stressor at Cal is rising tuition, and while the pods add up to about $3 per student, paid for in student health fees, the symbolism is galling to students who will graduate with as much debt as the pods cost.
As the editors of The Daily Cal, the university’s student paper, wrote, students aren’t sleep-deprived because of lack of beds but “because of the overwhelming pressures they face.” More naps do nothing for mounting student fees, and the pods appear to ignore deeper structural reasons for student stress: The average Berkeley student leaves the school more than $17,000 in debt (the national average is $29,000, for public and private colleges).
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4 May 2016
A lecture on quantum physics
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During Canadian Prime Minister Justin Trudeau’s visit to Perimeter Institute for Theoretical Physics in April 2016, a journalist jokingly asked the Prime Minister to explain quantum computing. He called their bluff with a spot-on explanation.
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Ivan Brown, who ran one of Australia’s fastest-growing vocational colleges, Phoenix Institute, is being investigated for allegedly forging documents to reap more than $100 million in taxpayer funds.
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Federal Police search warrants say they have “reasonable grounds for suspecting” Brown, the made false documents or caused them to be made “with the intention to influence the Commonwealth to accept on-line students as genuinely enrolled and participating in training”.
Police raided the offices of Phoenix’s parent company, Australian Careers Network, in April in search of evidence of criminal behaviour. It seized documents relating to students.
Brown denies any wrongdoing.
They can get a search warrant for murder weapons if they like; it doesn’t mean a murder has been committed. They can put anything they want in a search warrant, it doesn’t mean any crime has been committed. It’s not proof of anything.
The details of the warrant came in an administrator’s report from Ferrier Hodgson, which was appointed to the company in March after the Commonwealth government froze funding to ACN.
The report shows the administrators believe that the education department owes ACN $253 million for people signed up to courses of study.
But the administration is complicated by five different legal cases, in addition to the criminal case. In one, the government is fighting Phoenix’s claim for a portion of the money its claimed to be owed. The Australian Competition and Consumer Commission is also in court alleging the company was guilty of false, misleading and unconscionable conduct in recruiting students. The ACCC is seeking repayment of $106 million.
The administrators’ report shows that ACN paid its brokers between 15 and 30% of the value of its courses to the salesmen who recruited students. More than 905 of students were signed to double diplomas – which gave them a $36,000 debt, suggesting brokers could earn almost $12,000 per sign-up.
What now? asks Gavin Moodie (RMIT) in The Conversation. While across-the-board full fee deregulation has now been dumped by the Coalition, fee deregulation of so-called “flagship courses”, first mooted in the Review of Base Funding in 2011 (with the significant qualification that such fees be capped at plus 50% above what they would otherwise be), looks a hot prospect for a re-elected Coalition government (as does a raising of the cap on other courses by some percentage). That is, of course, still moot: an incoming Labor government would be ostensibly committed to additional public investment in higher education. Whichever side wins will have its hands full, And there’s the likely prospect that whatever the colour of the government, it will not have a majority in the Senate.
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This year’s budget set us back to 2014. In the 2014 budget, the government announced that fees would be deregulated. While this was a toxic political move, it wasn’t toxic enough to be dumped from the 2015 budget, which was another lost year for higher education. While, this year, the government finally ruled out full fee deregulation, it is still contemplating uncapped fees for some courses in its higher education consultation paper. It has also dropped all the worthwhile proposals from 2014, such as extending the demand-driven system to sub-baccalaureate programs.
Cuts and government values
As expected, the government added cuts of A$152.2 million over four years, or 22%, from the Higher Education Participation Program – which funds universities to bring in students from low socioeconomic backgrounds. It also cut $20.9 million over four years by closing the Office for Learning and Teaching, which supported scholarship on major improvements to teaching and learning.
All that remains is $4.5 million a year for good teaching awards. As valuable as these are, they recognise individual performance rather than disseminate good practice throughout the sector.
While the government has relegated the improvement of teaching and learning to universities, it has increased funding for co-operative research centres by $46 million, or 32%, by 2020.
This reinforces the view that while teaching and learning is universities’ most important role, in national policy, it is very much a second priority to research.
Running, jumping, standing still
Rather than announcing any changes, the government released a consultation paper on proposals for tackling many of higher education’s unresolved issues.
While the sector generally welcomes the belated consultation, as the government is moving the election forward to July 2, it doesn’t have any time before the election to progress any of the options it canvasses.
The government, from Tony Abbott to Malcolm Turnbull, has spent a whole term in higher education policy paralysis.
The reform options being discussed – deregulating fees for some courses
Nonetheless, the Coalition is still contemplating uncapped fees, initially for only some courses that would be proposed by universities.
The government’s consultation paper states that it is:
… committed to providing universities with additional flexibility to innovate, differentiate themselves and offer students more choice and higher quality offerings.
The paper suggests that giving:
… universities flexibility to attract additional revenue in courses where they have developed particular expertise would enable them to innovate and differentiate themselves and pursue their individual vision for higher education excellence.
While the government adopts from the 2011 higher education base funding review the term “flagship courses” for programs with uncapped fees, its proposals are markedly different from those recommended by that review.
It recommended that funding for flagship programs be increased by up to 50%, with the additional funding “met through a matched increase in both government and student contributions”.
In contrast, the consultation paper proposes that government funding for flagship programs be cut and that fees be uncapped and monitored by the Australian Competition and Consumer Commission, or be approved by an independent body.
If they don’t cause too many problems, the flagships will become a fleet of deregulated fees. The government will expose itself to similar problems that arose from 2009 when the then-Labor government relaxed conditions for the loan program for vocational diplomas, called VET FEE-HELP.
As successive governments found in trying to curb the runaway explosion of VET FEE-HELP loans, doubtful debt and scams, withdrawing concessions is much harder than granting them.
If a re-elected Coalition government manages to uncap fees for some programs from 2018 there should be a simple but strong mechanism for returning fees to their caps should the experiment go as badly wrong as many fear.
Ideas for how to reduced student loan debt
The higher education consultation paper has several proposals to reduce the cost to government of the Higher Education Loan Program (HELP):
introduce a higher contribution rate for high-income earners;
index repayment thresholds to a lower index;
introduce a household income test for HELP repayments;
restrict the availability of HELP loans or Commonwealth subsidies to those who have left the workforce permanently;
recover outstanding loan amounts from deceased estates; and
remove the HECS-HELP benefit, which reduces HELP repayments for education, nursing and other graduates working in a related occupation.
Before the budget, the government released a discussion paper on redesigning VET FEE-HELP, which proposes several measures to end the scamming of the program.
As a result of these measures, and the withdrawal of the decision to uncap fees, the government estimates that the proportion of new debt not expected to be repaid in 2017 is 18%. This is markedly down from the 21% estimated in last year’s budget and the 23% in the 2014 budget.
Gavin will be on hand for an Author Q&A between 11am and noon AEST on Thursday May 4, 2016. Post any questions you have in the comment section below.
With international education worth $19.6 billion to the Australian economy in 2015, the government has provided $12 million in the Budget to fund the National Strategy for International Education 2025 released on 30 April.
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The strategy actually has 3 parts:
The National Strategy for International Education 2025itself, which reflects a “whole-of-sector” approach and sets out a 10-year plan for further developing Australia’s position as a global leader in education and training. The national strategy is based around three pillars: “strengthening the fundamentals” (including improvements to student services and quality assurance), “making transformative partnerships” (which focuses on links at home and abroad, alumni networks, and visa policy), and “competing globally.”
The Australian International Education 2025 (AIE2025) market development roadmap, which is the product of both extensive consultations within the sector and research from Deloitte Access Economics. It provides a 10-year market development framework for Australia’s education exports, including “game-changing” strategies to build scalable, collaborative networks of education providers, attract capital to fuel the sector’s expansion, and target key markets abroad.
The Australia Global Alumni Engagement Strategy 2016-2020outlines a five-year plan to strengthen and engage Australia’s foreign alumni with the broader goals of enhancing the country’s diplomatic access and influence and building trade and investment links.
In launching the strategy, minister for tourism and international education senator Richard Colbeck highlighted that international education has been identified as one of five “super growth sectors” that will help complete Australia’s transition from a resource-based economy to a modern services and knowledge economy:
To achieve this, we must build on our existing education, training and research strengths, to deliver high quality, innovative products and services to students that meet or exceed their expectations. This will enable us to withstand increasing competition and sustainably grow our market share, whilst maintaining the quality for which we are renowned.
The strategy was described as “a step in the right direction” by members of the former Coordinating Council for International Education, who were consulted in the early stages of the strategy’s development.
Accompanying the strategy is a report by Deloitte, The value of international education to Australia, commissioned to raise awareness of the importance of international education to Australia. The report identifies nearly $1 billion in additional benefits that international education delivers to the Australian economy, beyond the $19.6 billion in export income already reported by the Australian Bureau of Statistics. Deloitte indicates that international education supports over 130,000 jobs across Australian and delivers substantial indirect benefits to other industries such as tourism and retail.
The federal government has proposed a set of tougher measures to fix the VET FEE-HELP blow-out in a discussion paper released on 29 April. The minister for vocational education and skills senator Scott Ryan said the paper will pave the way for a full redesign of the scheme.
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The discussion paper catalogues the scale of malpractice by some providers, such as the targeting of low socio-economic status and vulnerable people with inducements to enroll and misleading potential students about their repayment commitments.
The paper reveals that a small number of VET FEE-HELP providers dominate the scheme. In 2015, ten providers accounted for more than half of all VET FEE-HELP loans.
It also reveals that a small number of courses draw a large proportion of VET FEE-HELP funding.
The paper notes it is “not uncommon” to observe significant differences in course prices for students accessing VET FEE-HELP compared to those accessing a state and territory government subsidised program for the same qualification.
VET FEE-HELP costs reached $2.9 billion in 2015, with private providers accounting for $2.46 billion or 84% of the total.
The discussion paper proposes a series of measures to improve the integrity of the system:
The application of minimum eligibility requirements for VET FEE-HELP recipients.
Reducing the lifetime student loan limit from $99,389.
Placing a fundi g cap on the scheme overall and
Prioritising VET FEE-HELP funding to courses that align with industry needs or lead to employment outcomes.
Providing better information for VET FEE-HELP eligible students before they enrol.
Establishing a VET FEE-HELP ombudsman.
Redesigning the regulatory oversight of VET FEE-HELP, giving the Commonwealth more power to tie payments to compliance measures.
Consideration of different payment tests around student engagement, progression and completion.
The possibility of existing providers needing to reapply.
The VET FEE-HELP scheme, introduced by Labor, was demand driven, uncapped and had insufficient student protections in place. The original scheme opened the floodgates to shonky training providers and predatory brokers to take advantage of the system.
Labor’s spokesperson Sharon Bird said the VET FEE-HELP discussion paper offers no new solutions to stop the unprecedented waste of taxpayers’ money occurring in the VET sector. It recommends many of the amendments which Labor moved to implement in late 2015 and which the government voted down. She said as a result the rorts will continue until such time as a new Parliament deals with any legislation.
The government has pushed consideration of proposed university reforms, including a 20% cut in funding, out beyond the election, until 1 January 2018 and it has ruled out full fee deregulation. It has released an options paper, to guide a consultation process, canvassing a range of alternative fee measures.
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The 2016 Budget also sees an efficiency dividend of $1.2 billion on legislated dropped but the Higher Education Participation and Partnerships Program has been cut by $152 million to $553 million over four years. The Office of Learning and Teaching has been abolished, with the resulting $18 million in savings going to TEQSA and the Quality Indicators in Learning and Teaching website.
The deferral of the university reforms, pending the outcome of a consultation process, is chimerical, intended to neutralise, as far as possible, university funding and student fee subsidies as an election issue. As quite clearly set out in the options paper, a re-elected Coalition government can be expected to enthusiastically pursue its agenda of reducing public funding to higher education and shifting a greater proportion to students, merely by means other than those originally proposed by Christopher Pyne.
As stated in the paper, in finalising legislative reforms the government will need to adjust subsidy and student contribution rates to meet the financial sustainability savings outlined in the Budget. Over $2.5 billion dollars in unlegislated funding cuts remain stubbornly on the books, despite having failed twice to pass the Senate in this term. The options presented for the next term, “dependent on other structural savings or expense measures adopted as part of these reforms” (which provides a little wriggle room as to the precise form of reform), are:
reduce the Government’s contribution by 20% on average, as first proposed in the
2014-15 Budget
a “small” reduction in the government grant per student, and a “small” increase in the maximum capped student contribution that institutions may charge, such that students and taxpayers contribute equally to the cost of higher education courses (on average).
Sounds a lot like the last plan, with the meaning of “small” being in the eye of the beholder.
In giving universities the “flexibility to innovate”, the paper refers approvingly to the notion of “flagship courses”, as originally proposed in the report of the Review of Base Funding in 2011. Under this scheme, universities would be:
….given the freedom to set fees for a small cohort of their students enrolled in identified high quality, innovative courses. This would deliver the benefits of differentiation, excellence and innovation among universities while giving certainty to all Australians that they could still access fee capped places.
As to non-flagship courses, while fees would not be fully deregulated, they could be partially deregulated by a substantial lifting of caps: and it would need to be substantial (50% or more?) to allow for the emergence of the innovation and differentiation between universities which purportedly drives this reform agenda (rather than budget issues).
Still, blessedly perhaps, graduates are certain to have somewhat more time to pay down their student debt. The consultation paper presages changes to FEE-HELP, including dropping the repayment threshold from around $54,000 to something in the range of $40, 000 to $45,000. There’s also some likelihood of the introduction of a hefty loan fee. The paper notes that, currently, HECS-HELP loans have no loan fee, while FEE-HELP undergraduate loans and VET FEE-HELP loans attract a 25% and 20% fee respectively. While the government has previously proposed to remove the loan fees to create a level playing field for students and providers in all sectors, the paper notes that “charging a loan fee for all loans would provide an efficient mechanism to help defray the costs of running HELP”:
….a loan fee of 20% as currently applies to VET FEE-HELP would enable the Government to recover most of the costs associated with debt not expected to be repaid. It would similarly provide for greater equity and reduce the cost pressures for undergraduate FEE-HELP students but with a greater increase in costs for students in Commonwealth supported places.
As Conor King of the IRU suggests, take a look at Andrew Norton’s (Grattan Institute) proposals for a useful guide to what is possible, including recovering debt from deceased estates.
The 2014-15 Budget proposed a number of measures to expand opportunity and choice for students, including the extension of Commonwealth support to all undergraduate courses at all registered higher education providers and the uncapping of places in sub-bachelor courses at public universities. While these reforms are still provided for in the Budget, extension to non-university providers is seemingly off the agenda, “noting that growth in enrolments has continued to increase at non-university providers despite the absence of Commonwealth funding” (which won’t matter as much, if at all, if a loan fee is introduced for FEE-HELP and fees hiked). It’s also looking that uncapping places in sub-bachelor courses is unlikely in the near future.
The government is appointing an expert panel to advise it on reform options.
Written submissions can be made until 25 July 2016.
