Saturday, November 28, 2020

The official student newspaper of Methodist Ladies' College

40% of university students to pay more for their degree

By Mia Booth, Year 10

If you clicked on this article, you may be wondering what is in store for your future. Perhaps you have already heard about the proposed changes in the Job-Ready Graduates Package, headed by Federal Education Minister, Dan Tehan. If so, the title ofthis article most likely left you with an inkling of trepidation.

How will these changes affect my future? Will I be one of the students whose education comes with a greater price tag? Do these changes mean a tertiary qualification is no longer a financially viable option for me?

Do not fear, the aim of this article is to quell some of your immediate concerns and to translate some of the legislative jargon used to propose this package in the House of Representatives! By the end, you will have the knowledge you deserve and a far better understanding of how your near future will be impacted.  If you’re in a rush, scroll down to skip our explanation and find out exactly how much you will pay for your tertiary education.

Alt Text: Dan Teehan, Education Minister, leading the charge on a revolutionised university fee subsidisation system – Source: Dominic Lorrimer, Sydney Morning Herald, November 2019

First of all, Australia is practically leading on the world stage when it comes to their university funding system.  The HELP HECS-debt system means that you will not lug around cumulative student debt loans of up to $45k AUD until you’re 30, nor will you be asked to pay your fees up front. The exception to this is if you are an international student. But that’s a whole new ballgame.

The Australian Government’s university subsidies are incentivising young people to pursue tertiary studies. This in turn has benefits for the Australian economy because these students will be more likely to gain entry to the workforce with a university degree under their belt. The subsidy works so that students receive a fee place, known as a Commonwealth Supported Place (CSP). This program assists financially challenged high school graduates to undertake studies in their dream undergraduate course.  Rather than paying back their loans in full, students work off their debt in small increments and only once they reach a certain income level. When the students reach the compulsory repayment threshold, a monetary value that increases every year with inflation, the debt gets systematically removed from the student’s bill. Last year the compulsory threshold was $45, 881.

Under the new Job-Ready Graduates Package, this incentive to pursue further study is by no means being thrown out the window. The change that is being made is to the size of the subsidy the government is willing to hand out to prospective students. The subsidy size will vary from degree to degree, with the largest loans going to students who choose to study courses that develop skills in high demand and that are predicted to generate more jobs in the future. In other words, students who choose to study courses that develop skills that are currently sparse in the Australian workforce, primarily in STEM and caregiving fields, are being offered a cheaper education.

Conversely, increased spending in courses that produce scarce skillsets will be offset by cuts to other courses that are less directly tied to industries expected to experience high job growth in the future. These mainly consist of liberal arts degrees that develop skills which have not been predicted to specifically result in high job growth. Students who choose this type of study will ultimately end up paying more for their education. In other words, it doesn’t benefit the federal government to assist people to earn qualifications that don’t boost the economy as much!

The Job-Ready Graduates Package promises 12, 000 new university places across Australia. Additionally, it will also redistribute funding and places amongst universities, with regional institutions expected to experience the most handsome gains. In fact, it is predicted that regional universities will experience a 3.5% growth in the number of places available, equating in up to 6, 000 more places being offered. Chairwoman of the Regional Universities Network, and Vice-Chancellor of the University of the Sunshine Coast, Helen Bartlett, said that “if 6,000 more students from regional, rural and remote NSW, Victoria and Queensland attended RUN [Regional Universities Network] universities, an additional 690 jobs would be generated and $122 million more contributed to real GDP”. This only further illustrates the potential for economic growth which could be derived from this package.  

Regional universities will also receive $400 million in government support over the next four years to “increase opportunities for regional and remote students to attend university and to lift investment in regional university campuses”. This aspect of the Job-Ready Graduates Package has been met with criticism by educators who believe that this spending on regional universities at the cost of other universities is exorbitant and ill-justified.

Recent modelling released on September 29th by Professor Mark Warburton from the LH Martin Institute at The University of Melbourne, suggests that Victoria’s largest 2 universities, Monash University and the University of Melbourne, are expected to lose over $17 million and $4.6 million AUD in revenue by 2024. It predicted the state’s less academic tertiary institutions, like La Trobe and Victoria University, are set to profit hugely from the proposed changes to funding.

Warburton also questioned the usefulness of incentivising courses by loans, claiming that “there is little empirical evidence to support the proposals”. This view was corroborated by La Trobe university lecturer in careers and employability learning, Jason Brown, who claimed that the so-called “price signals” proposed by the government in effect would not be a suitable motivator to encourage enrolments in specific tertiary study. “What we’ve seen in the last few decades is that students are price-insensitive to courses… where there have been changes to fees in the past, it hasn’t had much of an impact” says Brown. The comments made by sceptics of this package signal that these changes to funding lack the potential to meet the goal they seek to achieve, channelling more graduates to growth areas.

Specific study areas which will be negatively targeted by the proposed changes include law and commerce degrees at a 28% increase in fees. In general, arts degrees are predicted to be struck with a 113% increase in fees. The Job-Ready Graduates Package proposes price cuts to students pursuing degrees in study areas which the federal government claims “better align [with] Commonwealth funding to emerging labour market priority areas” such as agriculture (- 62%), teaching (- 46%), nursing (- 46%), IT (- 20%) and languages (- 46%). See full table of fees below.

Table representing fee changes to all study areas — source: The Guardian Australia, June 2020

This rejigging to university subsidies was justified by Education Minister Dan Tehan on the basis of current projections predicting that the healthcare, science and technology, education and construction industries are expected to account for 62% of Australian employment growth in the next five years. Based off current enrolment numbers, it is estimated that 60% of fee-paying university students will experience the same or decreased fees.

However, many experts believe that penalising 40% of this cohort for their choice of study may disproportionately disadvantage students from lower socio economic backgrounds who may no longer be able to follow their passion if degrees are not a financially viable option. Professor Sarah Maddison, Deputy Dean of the Faculty of Arts and Co-Director of the Indigenous-Settler Relations Collaboration at the University of Melbourne, suggested that such fee changes based off faculties that are “elitist and wrong”. The Australasian Council of Deans of Arts, Social Sciences and Humanities expressed in a statement that the proposed packages may unnecessarily stigmatise arts degrees as unemployable and “drive students away from courses in humanities, arts and social sciences”, potentially damaging “the long-term financial wellbeing of students” by swaying their choice of further study.

Having been passed in the House of Representatives on the 1st of September, the controversial Job-Ready Graduates Package is likely to be voted on in the Senate before the 2020-21 Federal budget is announced on the 6th of October. Unsurprisingly, Labor and Greens Senators have blocked the motion, whilst Coalition, One Nation and various independent Senators have all expressed support. In order for the Job-Ready Graduates Package to pass, the Government will likely need support from key crossbenchers Jacqui Lambie or Centre Alliance’s Stirling Griff, as the proposed changes will rely on one crossbencher’s vote to pass. Both Senators have yet to reveal where they stand on the package and Senator Lambie’s spokesperson said that she will need to go “over the report with a fine-toothed comb and [consider] all aspects very carefully”.

Indeed, the future higher education opportunities in Australia may be sealed with only one vote, the question of financial viability vs individual choice whittling down to one pivotal ‘aye’.

Update

The university funding bill was passed on Tuesday 6th October. As predicted, the bill was blocked by Labour, the Greens and most independent senators, and its proponents came down to the Liberals and One Nation. The future of higher education opportunities thus indeed came down to one pivotal aye: namely, by one centre alliance senator Stirling Griff.

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