Universities reserved for the rich: The Liberals’ vision for education

Caitlin Doyle-Markwick examines what Abbott’s budget would mean for universities

The Abbott government proposes a radical overhaul of higher education in Australia in favour of a corporate, American style system that will see students paying for a far lower quality of education and saddled with debt for decades.

Some Senators, including Clive Palmer, have indicated their opposition to the changes. Education Minister Chris Pyne is now promising to compromise to get as much through as he can. He is being aided by the elite universities in the Group of Eight (G8), whose chair Ian Young last month urged the Senate to support the bulk of the changes, saying it would be a “great tragedy” if they were blocked.

The Liberals want the complete deregulation of university fees, an extension of government funding to private providers and increased interest rates on students’ HECS debts.

Deregulating fees will allow universities to charge students whatever they like. The elite universities will charge over $100,000 for degrees, with more lucrative degrees like medicine and law likely to cost as much as $200,000.

A cut of 20 per cent in government funding per student will see fees jump straight away as universities try to recoup the money. Vice Chancellor of Melbourne University, Glyn Davis, has said some fees will have to rise 61 per cent to fill the funding gap.

For the first time, the average student contribution per place will be more than the government contribution. Interest on HECS debts will also rise faster, with the introduction of market interest rates rather than inflation. This could increase interest from 2.9 per cent to as much as 6 per cent.

Under the current system, students are already paying off fees decades after they graduate, yet the income threshold for beginning to repay HECS is to be lowered by 10 per cent.

The Greens’ analysis of the reforms predicts that a University of Sydney teaching student could graduate with debt of $91,000. With a starting salary in teaching of $59,706, the graduate would take 43 years to repay a total of $181,000 after interest.

Elite universities

Far from a more equitable or accessible higher education system, the restructuring will create a two-tiered system divided between exclusive elite institutions charging huge fees, and under-resourced, teaching-only institutions for everyone else.

The elite G8 universities will be able to charge students a premium for studying there, raking in new income to pay for research, sought after academics and new facilities. This will allow them to provide a higher quality education for those that can afford it.

The Vice Chancellors of the G8, who have been pushing for fee deregulation for years, have consistently claimed that higher fees will not deter people. Students from low income backgrounds can take out a HECS loan to cover the fees, which they only have to repay after they have joined the workforce, they argue.

However, poorer students will undoubtedly be deterred by the extortionate fees that elite universities will now be asking, and levels of debt higher than ever before. Glyn Davis, a supporter of deregulation, has admitted it will be “a social experiment without precedent in Australia”.

The extra scholarships for low income background students promised in the reforms will not come close to offsetting this. The result will be that the elite universities become bastions of privilege, attended only by students from rich backgrounds who are willing to take on enormous debts or pay up front.

Education on the cheap

The non-elite universities will be squeezed. Unable to raise the same amounts of money from student fees and corporate sponsorship as the elite institutions, smaller regional and outer suburban universities like UWS, Newcastle or Victoria University will struggle to afford research and higher paid lecturers.

At the same time, with government funding to be opened to TAFEs and private providers, they will be forced to compete with cut-price operators for funding and students. Education Minister Chris Pyne said in an interview that he wants non-university higher education providers “to be an adrenaline shot of competition in the market”, in order to keep down fees. This may be true at the bottom end of the degree market, but the education students receive will suffer.

Pyne has also announced that he wants to remove the requirement for all universities to do research. He claims that this will “free” universities to put more resources into teaching.

This decision does not, however, represent much of a choice, with the funding squeeze pushing them to abandon research work, establish teaching only positions and increase staff casualisation. The lack of research funding will push the best academics out of the second-string universities and into the elite institutions.

Teachers who are unable to do research or even keep abreast of the latest research in their field will inevitably lack the depth of knowledge required to deliver a high quality education.

Furthermore, the new private providers will not necessarily be held to standard. Rather they will maintain much of their present content and slap the word “degree” on it in return for government subsidies. The rhetoric of “greater choice” in tertiary education is meaningless when the choices are dominated by substandard degree factories.

Poorer students will not be excluded entirely from higher education. The government is overseeing a significant expansion of the number of students. However, this is not in the interests of equity or greater access to quality education.

Rather, the expansion is being carried out with a view to driving up the number of students with degrees or sub-degrees as cheaply as possible.

This is designed to meet the needs of Australian business and industry, which are increasingly demanding tertiary qualifications.

The Gillard Labor government removed the cap on student numbers, introducing a “demand driven” increase in university places, allowing universities to enrol as many students as they could.

The review of these arrangements commissioned by the Abbott government notes that, “In 2013, the equivalent of 577,000 full-time students received Commonwealth support in paying their tuition costs, an increase of more than 100,000 on 2009.”

But the government is unwilling to meet the costs of this expansion itself. Instead, the Liberals want to shift more and more of the costs onto students.

The US model

The Liberals’ vision of tertiary education closely resembles the US model. Pyne has expressed a desire to see a select few Harvard or Yale style universities emerge in Australia as a result of the proposed changes.

Elite universities in the US charge extraordinarily high fees, such as the $US54,000 a year at Harvard, and least $150,000 for a full degree.

The flipside of America’s “Ivy League” universities is that the vast majority of students, unable to attend these wildly expensive, exclusive institutions, are educated in teaching only or even online colleges where tuition costs can be less than $6000 a year.

The corporate university model in the US began to develop in the late 1970s, the beginning of the neo-liberal period, when cuts to public funding led universities to seek more revenue from student fees, philanthropists and corporate sponsors. Research in American faculties has consequently become beholden to corporate interests, particularly in medical, engineering and pharmaceutical fields.

Academic staff at American universities struggle to get by on short term contracts, limiting what they can research or teach, and salaries have been under pressure for decades.

While America spends more per student than anywhere else in the world, educational outcomes are worsening. In 2012, The Economist estimated that American students collectively held around $1 trillion in debt, with 17 million overqualified for their jobs.

Around 30 per cent of American students drop out before finishing their degrees, mostly for economic reasons. Students are increasingly opting for online courses to gain a degree as they are far cheaper, with online academies paying next to nothing for staff.

Many features of the American system can already be identified in Australian higher education.

Australian universities have also been moving online in recent years, a trend likely to continue. Ian Young, addressing the National Press Club in early August, suggested that smaller universities should stop “pretending” to be research universities and look at “strengthening online education”.

While VCs cosy up to corporate sponsors to fund flashy new projects, like Sydney Uni’s Michael Spence with millionaire John Grill, who established a $20 million Leadership Program at the university, they continue to cut courses, cut staff and enrol ever more students for higher fees.

The push to source alternative funding, mostly from student fees and corporate bodies, has given rise to a generation of university executives who act like CEOs and run universities like businesses.

Neo-liberal universities under Liberal and Labor

But the proposed changes to tertiary education are in fact an extension of a process underway in Australia since the early 1980s under both Liberal and Labor governments.

Australia’s brief experiment with free tertiary education ended in 1987 with the introduction of HECS under the Hawke Labor government. Fees have risen incrementally ever since, as public funding has been simultaneously gutted. The Gillard government cut another $80 million from universities in 2013.

Australia spends just 0.76 per cent of GDP on universities, compared to the OECD average of 1.12 per cent. Government funding now accounts for around only 45 per cent of overall university funding, down from around 90 per cent in 1981.

In 2011, 23 per cent of university income came from university fees, mostly from full fee paying international students.

The user-pays mentality and market logic at the heart of the Abbott’s budget has dominated the thinking of both major parties for the last 30 years. For this reason, we cannot rely on Labor to reverse this trend if they get into office.

Anger at Abbott’s changes is widespread and has been clearly demonstrated in the student National Days of Action, Bust the Budget and March in March rallies.

We need to unite students, unionists and all those opposed to Abbott’s budget to fight back the Liberals’ reforms, but also demand a more equitable university system and the restoration of public funding.


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