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Higher Education Reform Must Proceed

As published in Campus Review, September 25, 2014.

Overall, the Higher Education and Research Reform Bill is a package of legislation that is critical if Australia is to have a world-class higher education system.

The HELP scheme, which is brilliant and the best scheme in the world but not as widely appreciated as it should be, means students will not have to start to repay their loan until they are earning $50,638.

The proposed adjustments in levels of the Commonwealth’s contribution mean Australian students on average will bear 50 per cent of the cost of their course, which they pay only when they earn.

Students in our public universities now contribute 40 per cent of the cost of their courses; however, these reforms also extend eligibility for support to a wider range of students, including those entering higher education through pathway diplomas.

We would consider it more equitable for students if the adjustment to CPI on HELP loans was retained, rather than imposing the long-term bond rate of interest, because students would pay only what it cost them. Still, these reforms, if passed, will enhance equitable access to a higher education system that is delivering across diverse institutions and is more responsive to the needs of students.

The changes will particularly assist students enrolling with non-university institutions, which now comprise about 10 per cent of enrolments in the sector, and introduce some equity into the higher education system for those students.

Most of the media comment has been focused on the challenges for public universities and we have seen extraordinary exaggerations of what higher education will cost in a deregulated environment.

Member institutions of the Council of Private Higher Education have indicated that whatever they receive in Commonwealth support for students will be passed on to students through reduced tuition and some have already indicated they will hold their 2014 tuition fees through 2016 if the reforms are in place.

The indications we now have from our colleagues are that the level of Commonwealth support offered from 2016 will generate quality bachelor degrees in education for about 10,000 a year, in health/physical education/psychology/nursing for $11,000–14,000 a year, humanities for $8000–12,000 a year, science for $17,000 a year and creative arts/design for $12,000–15,000 a year.

Commonwealth support for business degrees at $1263 a year will mean minor changes, with cost to the students ranging from $13,000 to $22,000 for more specialised programs.

As an example, Blue Mountains International Hotel Management School is planning to lower tuition fees from the current $74,400 to $70,600 in 2016. For a degree from a top-rated school, that includes two semesters of work experience remunerated at award rates in the international hotel industry, in a course that has 96 per cent progression rates and 90 per cent employment on graduation, this is surely a good proposition for a student.

 It does show that the total cost of these degrees, at $30,000–$70,000, and paid when they are earning, need not panic students. Non-university institutions tend to be teaching focused and concentrate on a few disciplines where they can deliver a good student experience and outcomes, with the assurance of higher education standards and TEQSA regulation.

Private providers still expect the lower end of the university market, which will receive 100 per cent of the value of Commonwealth support, to continue to offer cheaper alternatives but are confident in their value proposition. Large international private higher education operations are already well established in Australia and there is no incentive in these reforms for them to compete with the low-end universities on price.

Consideration of this legislation needs to focus on what delivers the best value and outcomes for students, not the survival of particular types of institutions. The system, as it is now and where it is headed, is simply unsustainable.

Some universities may increase fees in high-demand courses, whilst others will make strategic and pragmatic business decisions to raise some and lower others. The proposed deregulation allows all providers greater flexibility.

It is excessively cynical to suggest providers will gouge and burden students with fees and excessive life-long debt. Both universities and private institutions are very aware of their community responsibilities and reputational capital.

Besides, in a market, students can choose.

Whilst constantly overshadowed in the media by public universities, non-university higher education providers predate universities in Australia.

What now passes for university is a creation of the “unified system” in the by a Labor government in the late ’80s. That’s when much of what had once been private, or even TAFE, was swept into our large public universities, which are all theoretically research intensive.

Non-university providers are not a new phenomenon and public universities are not the only places that employ scholars.

We have sought recognition of the contribution the private sector makes to higher education for many years.

These reforms help to do that and also deliver equity for students, choice of course and diversity in institutional type.

Adrian McComb is CEO of the Council of Private Higher Education.

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