I promise I'll get to the issue of the consequences of student debt tomorrow.
But I wanted to spend more time on the reasons for it (or the consequences of
not having it); why I think the power to charge students directly is so important.
It's not because I want students to pay more as such. I don't see this primarily
as an income distribution issue, and don't believe the working classes are subsidising middle class university students (as the taxation and expenditure statistics show, most taxpayers don't pay for all the services and benefits they receive, let alone someone else's university education.) I see it very much as an educational issue.
(By the way, I did not say that university councils, student unions, and your bargaining approach were worthy of bureaucratic interference. They are not. I
was merely making the point that I could at least see a problem; by contrast I didn't see why the Commonwealth felt a sudden urge to fund courses selectively,
dictate student selection principles, or create guidelines for so-called "fee exempt" scholarships. But the solution to these problems won't come from Canberra,
as my next paragraph went on to say.)
From: Carolyn Allport
To: Andrew Norton
Sent: Thursday, September 25, 2003 3:00 PM
Subject: Re: Put students in control
Dear Andrew,
I do not imagine our readers are particularly interested in an old debate around whether introducing vouchers is good or bad policy. And, we will probably continue
to disagree around those issues. What is at issue here are a number of changes brought forward by the Government - changes that affect staff and students, as
well as the community as a whole. The Government's package is in response to widespread acceptance by universities, staff, students, business leaders and community opinion
that something was wrong with our universities. Generally speaking all these voices said that 'the something' was inadequate funding. The real question is whether
the remedies proposed by Dr Nelson will take our universities forward in a productive and inclusive way over the next decade.
I understand that you see students as the principal actors in the higher education market, and naturally support policies and actions that provide them, as "consumers"
with the greatest degree of choice. Having studied economics myself, I also understand that the notion of perfect competition requires consumer sovereignty. However,
it is not only the student who benefits from higher education outcomes. And, of course, education has never been capable of being defined as a perfectly competitive
market, precisely because the student is not the only 'consumer' of the service of higher education. Industry benefits through increased productivity from higher
skill levels, including critical thinking and analytical and research capacities. Government benefits from higher taxes paid through the increased earnings of graduates,
and our communities benefit because of the wider impacts of research undertaken at universities. Universities are also usually the largest employer in many of
our regional centers. So, from a strictly 'imperfect market' point of view, we need to assess the package within this wider context.
The core element of the package relates to the new funding system. The proposal
is for Government to simply provide a subsidy for each student, with subsidies
varying according to discipline. Additional income for universities will come
from fees set by each institution. This is very different from current practice where Government provides funding based on an average amount per student that
is assumed to include some HECS money. This amount has been falling for over a decade. HECS fees for undergraduate students are currently set in legislation,
with post postgraduate course work and international students paying fees. This policy mix is supported by loans schemes, and the package does introduce new loans
schemes. In addition, the new policies propose to double the number of full-fee places. The trend is clear - less government places in the future and more full fee places. Is this the right approach to expanding participation for the future?
The AVCC has set a target of 60% participation by 2020. My fear is that the higher costs, and the lack of an appropriate level of subsidized places may mean
that we don't reach this benchmark. The key to this conundrum is to balance the high costs of studying with compensatory equity programs. Interest free loans
schemes and income repayment thresholds are examples. Full scholarships are often the common choice. Unfortunately in this package, what equity schemes are there
are only partial, and the threshold remains quite low. There was a justification under the original HECS scheme that students did not have to pay back their HECS
until they earned above average earnings (a proxy for private benefit).
Finally there remains skepticism in many universities around the country that they will benefit from the package. The dependence on ability to set "market prices" for fees does privilege larger, older and metropolitan institutions. Tomorrow I would like to discuss aspects of the package that impact on staff, particularly workplace relations.
Regards,
Carolyn
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Andrew Norton
Carolyn Allport
