Sorting out the books - how will we pay for universities in future?

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Sorting out the books - how will we pay for universities in future?

Breadcrumbs

Wednesday 22 June 2016

The political battle around how to pay for higher education continues. The May 2016 federal budget and the lack of detailed policy in this election campaign means more uncertainty for universities, at least until 2018.

But, the budget did bring some relief for students. The government has ruled out deregulating fees. That means no fee changes for a further year and for current students no increases for the remainder of their degrees.

No such relief for Vice Chancellors who still have to find ways to meet rising costs and deal with Treasurer Scott Morrison's funding cut of $1.4 billion to higher education over the next four years.

Student finance under the microscope

Partial deregulation does remain on the table though. The government is looking at allowing universities to uncap fees for so-called “flagship degrees”. These would be degrees identified by a university themselves with fees subject to external scrutiny. This idea is part of a discussion paper, titled, “Driving Innovation, Fairness and Excellence in Australian Higher Education,” released by Education Minister, Simon Birmingham.

The discussion paper is looking at how student loans are levied and repaid based on proposals suggested to the government in a report from the Grattan Institute. The Grattan proposals include lowering the repayment threshold from $54,126 to around $42,000 for students to start paying off their HECS and HELP loans and increasing the loan repayment rate for graduate's on higher incomes.

The paper also looks at how to reduce unpaid loans. Currently, the government lends $7.8 billion a year in student loans and expects one fifth of that will not be re-paid. It proposes a household income test for HELP payments, restricting the availability of HELP loans or subsidies for those who have left the workforce permanently and possible recovery of student loan debt from deceased estates.

Quality education still the bottom line

The discussion paper pushes out possible changes and future decision making until well after the July election when the political landscape, including the make up of the new Senate, is known.

The Labor Party wants to maintain existing funding to higher education and keep current student payments. Despite the funding debate, all sides of politics recognise universities as engine rooms for Australian innovation and future economic growth.

And, despite the financial responsibilities for students, a degree remains crucial to quality employment outcomes with graduates still well in front with higher incomes over the course of their lives.

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