Why fee deregulation is flawed

The federal government’s proposed higher education reforms failed spectacularly in the Senate again last week. Before the government tries a third time to secure support for a policy that has been difficult to sell, it needs to learn from past mistakes in the tertiary education sector and think carefully about how to move forward.

Australians rejected deregulation because it wasn’t fair for all

The debate has advanced since the government’s proposed changes to university funding were first unveiled in the 2014 budget. The public is much better informed about the systemic underfunding of Australian universities.

It is also much more widely accepted now that fee deregulation of the kind proposed is likely to result in significant fee increases for students. The architect of the HECS system, Bruce Chapman, has consistently argued this throughout this long debate.

The potential for the proposed policy changes to be highly inflationary was evident immediately upon the unveiling of the package last May, when I wrote:

We do not support full fee deregulation for Australian undergraduate degrees. Full fee deregulation will inevitably lead to much higher fees for our students […] Our system of higher education should continue to encourage fees which are not out of reach for those capable Australians who aspire to university study.

Since that time, my university has made a number of contributions both to the public debate on fee deregulation and in the legislative process, warning the combination of uncapped pricing and unlimited HECS loans would be a recipe for significant price rises.

While the media often reported that vice-chancellors were “united” behind fee deregulation, a closer examination of the statements of many university leaders shows that this was not the case.

Though it might help, one didn’t need an economics degree to understand the potential for big price rises in a totally deregulated higher education market underpinned by generous government loans.

This helps to explain the public’s visceral reaction to fee deregulation. Higher education is strongly valued by the Australian public in a country that takes pride in giving everyone a fair go.

The public dug its heels in because it wasn’t at all evident that change of the radical kind proposed by the Australian government was either warranted or required. It is not surprising that crossbench senators listened and responded in the same way.

De-regulation for universities but re-regulation for vocational education?

We need to take a step back from the higher education debate and look at what is happening in vocational education – the other half of Australia’s system of tertiary education, which often commands less public attention.

It should not escape anyone that, even within the last fortnight, the federal government has been moving rapidly in two very different directions within the tertiary education sphere.

Education Minister Christopher Pyne has been pushing with incredible force the deregulation of higher education, with the total removal of fee caps for undergraduate degrees, the creation of unlimited HECS loans and the decision to open the gates to 130 private providers to compete alongside Australia’s 40 universities for public funding.

Meanwhile, Assistant Minister for Education and Training Simon Birmingham has been working just as forcefully to rein in the atrocious and exploitative behaviour of hundreds of private vocational education providers. These have been rapidly draining money from the public purse by taking advantage of generous HECS-style loans to lure students into overpriced VET courses.

Some of the stories of the students who have been squandered their education entitlements and been left in debt through the sharp marketing practices of these for-profit operators are incredibly sad. It is a national disgrace that we have let our VET system reach this point. I give credit to Birmingham for the action he is taking to restore some integrity to the system.

Can we learn from the mistakes that have so clearly been made in the deregulation of vocational education to inform how we proceed in higher education? We should not be furiously re-regulating in one domain just as we are trying to radically de-regulate in another.

This is why I agree with the call by the Business Council of Australia last week that we should lift our eyes above the silo of higher education to take a broader look at how vocational and higher education work together.

This is not to say that such a review will lead to the creation of a unified system of tertiary education, nor should this be the goal. However, a more comprehensive examination of the links between the two systems would be sensible. It is time to consider the contributions made by VET and higher education and to examine the policy settings that are most appropriate to support quality outcomes in both sectors.

The policy settings we determine must ensure that current and prospective students have access to affordable, quality education. This principle is the touchstone that we must use as the basis for any reform, remembering that the decisions we take will have lasting consequences for Australia’s future.

Written by Linda Kristjanson, Swinburne University of Technology. This article was originally published on The Conversation. Read the original article.

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