We Have To Find A Fairer Way

The Age

Monday March 27, 2006

Ian Young

THE challenge of identifying the appropriate mix of public and private funding of universities is crucial in determining the shape of higher education in Australia and ensuring an accessible and equitable system for students.

The release by the University of Melbourne of its discussion paper Growing Esteem has highlighted some critical issues for the future shape of Australia's higher education system. It proposes a lifting of the present cap on fee-paying domestic students.

At present, Australia's universities can enrol up to 35 per cent of their domestic student load in any course on a fee-paying basis. It is argued that by lifting this cap, institutions could expand their fee-paying load and release government-funded student places to be redistributed among other institutions.

It is far from clear that the University of Melbourne's proposal would lead to a desirable future for Australia's higher education system or for the nation more broadly.

The demographics of Australia are such that growth in the number of school leavers is flat and will soon start to decline. If a completely deregulated fee-paying system is introduced, elite universities will be able to demand fees from more students and to charge those students more money. This will allow these institutions to further build their resources and attract the best staff.

There will be a flow of talent from the less-resourced institutions to the elite universities. This will result in a much greater spread of inequality across Australia's universities than exists at present. It is, in effect, being proposed that Australia move to a two-tier higher education system of largely private elite universities and largely public mass-education universities.

It has been argued that access to the elite universities for the financially disadvantaged will not be restricted as the existence of the income-contingent FEE-HELP loan scheme and generous scholarship schemes will guarantee access to all students. Such statements make two very big assumptions. First, that it will be possible to offer extensive scholarship schemes, and, second, that the secondary education system prepares all students equally for university.

There is significant doubt that an extensive scholarship scheme will be financially achievable. Australian universities operate in a very different environment to that of the American Ivy League universities. In the US, scholarships can be afforded, since it is the enormous endowment provided by alumni that largely funds the university, rather than student fees.

The other significant issue is that students from poorer backgrounds are already disadvantaged when they attempt to enter university. There is a very strong correlation between socio-economic background and the Tertiary Entrance Rank of students. In effect, disadvantaged students under-perform at secondary school, and will struggle to demonstrate excellence in a scholarship scheme.

The present university system in Australia means there is a reasonable consistency of education quality across our universities. As a result, students who are disadvantaged because of their socio-economic background have the opportunity to overcome this hardship, as they have access to a wide range of good-quality universities.

In contrast, a more differentiated system would consign many of these students to the more impoverished second tier in this new system. In effect, the disadvantage that exists in our secondary school system will also have been institutionalised at the university level.

Many of Australia's top universities have built their reputations and facilities through 100 years or more of public funding. If deregulation of the type proposed is introduced then this historical advantage will allow these institutions to prosper at the expense of the whole sector.

A better approach is to consider improved funding to build a quality higher education system for our nation. Compared with most other countries, the expenditure by the Government on higher education as a function of GDP in Australia is low.

There is scope for further Government funding, although there is little Government enthusiasm for it. The graduate-tax HECS system is admired internationally as an equitable approach to distributing the cost of higher education between the user (the student) and the public (the taxpayer). Both benefit from such education.

If Australia wants to build a quality, equitable higher education system, it would be more rational to look at an expansion of government support coupled with a further lift in the HECS threshold. Such an approach would allow a degree of competition to develop between universities. In contrast, the alternative of a deregulation of the fee-paying system would create a two-tier system in which historical advantage would allow one group of institutions to prosper at the expense of others and hence enshrine a system of social disadvantage for students.

Professor Ian Young is vice-chancellor of Swinburne University of Technology

© 2006 The Age

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