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COPHE Urges Budget Reform to End Unfair Fee

A Letter to The Hon Malcolm Turnbull MP, Prime Minister of Australia, from COPHE CEO Simon Finn

Dear Prime Minister,

The 2017 federal budget provides an opportunity for your government to implement a critical equity reform in Higher Education. 

Currently this inequity greatly disadvantages Australian citizens who undertake undergraduate awards at institutions other than the 37 public universities. Approximately 50,000 Australians are disadvantaged in this way.

As you know, undergraduate students at a public university can access commonwealth supported place and are able to access student loans through HECS HELP.  Students at other higher education providers, where their course is not commonwealth funded, access loan support through the FEE-HELP scheme.

Students reliant on FEE-HELP loans are charged a 25% ‘loan fee’; Students supported through HECS-HELP do not pay this fee.

This inequity creates a financial disincentive for students to study in a non-commonwealth funded course and treats students differently based on the nature of their education provider.

Since 2003 governments have maintained the inequity. Prior to 2011 the loan fee was 20%, with the Rudd government raising the fee to 25%, and thus increasing the inequity faced by FEE-HELP recipients. (See attached cost comparisons)

This critical inequity needs to be addressed urgently.  Australian Higher Education students deserve a level playing field and seek government support that enables them to study at their education provider of choice without financial penalty.

COPHE believes that this inequity is the most important current issue of reform needed in  higher education funding.

Australia has 37 publicly funded universities. There are approximately 120 non-publicly funded higher education providers all of which, like the public universities, are regulated by the Tertiary Education Quality and Standards Agency. These providers enrol approximately 10% of higher education students, are closely attuned to market demand and many provide courses not available through public funded places including in music, hospitality, theology, art and design.

The Council of Private Higher Education has campaigned for many years for a level playing field for Australian higher education students.  In addition to abolition of the loan fee inequities, COPHE has supported proposals to extend commonwealth funded places (CSPs) to all Australian undergraduates.

COPHE continues to support the expansion of CSPs and believes that wide scale sector reform of higher education funding is necessary to deliver the education needs and employment demands of future generations.  COPHE strongly supports the finding of the Bradley Review of Higher Education (2008) that ‘the public-private divide is no longer a sensible distinction’ as a driver to that reform.

COPHE continues to look forward to wide scale higher education reform as an agenda of government. We recognise however, the fiscal environment framing the 2017 federal budget and the government’s statements regarding the need to reduce expenditure.

In light of this COPHE acknowledges that more reform work may be necessary to enable expansion of CSPs to remove the public-private distinction and introduce a level playing field in funding models for all higher education students.

Notwithstanding this, COPHE believes that the introduction of a single income contingent loan scheme that removes the loan fee inequity is the single biggest higher education priority for the 2017 federal budget.

Public University v NUHEP: Student costs comparison examples 

Social Sciences (2016 per EFTSL):

 

Commonwealth Contribution

Student Contribution

Annual Course Cost

Public University

$10,127

$6,256

$16,793

HEP

$0

$15,648

$15,648

 Student Contributions – Three Year Degree 

 

Student contribution

Loan Fee

Total Student Contribution

Public University

HECS HELP loan

$18,768

$0

$18,768

HEP

FEE HELP loan

$46,944

$11,736 (25%)

$58,680

 Humanities (2016 per EFTSL): 

 

Commonwealth Contribution

Student Contribution

Annual Course Cost

Public University

$5,724

$6,256

$11,980

HEP

$0

$15,648

$15,648

 Student Contributions – Three Year Degree 

 

Student contribution

Loan Fee

Total Student Contribution

Public University

HECS HELP loan

$18,768

$0

$18,768

HEP

FEE HELP loan

$46,944

$11,736 (25%)

$58,680These examples show the cost impacts on students at public universities and non publicly funded higher education provider (HEP) for social sciences and humanities courses. 

These examples show the cost impacts on students at public universities and non publicly funded higher education provider (HEP) for social sciences and humanities courses.  

QILT data indicates students choosing to study at HEPs do so to choose particular course offerings, delivery context, and the learning community.  In making this choice, students meet the costs of course delivery.

These examples demonstrate the inequity applied by government student loan schemes through a loan fee charge of $11,736 applied to HEP students through FEE-HELP.

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