Tuesday, June 10, 2014

An Uproar in Australia Over Proposal to Deregulate Tuition


                                    An Uproar in Australia Over Proposal to Deregulate Tuition
                                                  The New York Times collated 
Changes proposed by the Australian government are intended to make universities more competitive. Critics say they will make undergraduate education more expensive.
When the Australian government proposed radical changes in the financing of higher education in its budget last month, it said the new rules — to take effect in January 2016, if passed — would make universities more competitive. Critics said they would make undergraduate education more expensive.
The changes would cut government funding per student by an average of 20 percent across the board, while freeing the universities to raise tuition without regulatory restraints.
They would also raise interest rates on student loans. The proposal calls for loan rates to be indexed to the 10-year bond rate, with a cap at 6 percent. Rates are now capped at the rate of inflation.
The income threshold for employed graduates to start to pay back their loans would also be lowered.
The government says the changes are needed in an increasingly competitive international education market.
“More competition between higher education providers would be good for students,” Christopher Pyne, the minister for Education, said in a speech at Monash University in Melbourne last month. “If universities and colleges were able to compete on price, it would mean they must have a greater focus on meeting the needs of students. They would need to continuously improve the teaching and learning they offer to attract students.”
Mr. Pyne said that fee deregulation was also needed to ensure that Australia remained competitive on the global higher education marketplace. “The current approach also limits what universities offer,” he said. “Our best universities have limited prospects of competing with the best in the world and will be overtaken by the fast-developing universities of Asia.”
Belinda Robinson, chief executive of Universities Australia, the umbrella organization for the sector, said that the changes would allow universities to make up for the drop in their public funding. “There has been very little ability for universities to address the shortfall because the fees that universities have been able to charge have been capped,” she said. “With full fee deregulation, this will no longer be the case.”
Critics of the changes, however, say that the government’s real aim is to cut its own spending. “The government is trying to reduce its outlay by switching the funding incidence onto students,” Prof. Bruce Chapman, from the Crawford School of Public Policy at Australian National University, said in an email.
Meanwhile, students enrolling in courses this year are facing an unknown tuition increase come January 2016.
It is unclear how much tuition might rise. Prime Minister Tony Abbott has conceded that fees might double. Professor Chapman said that elite universities might triple their fees, while tuition at lesser institutions might rise by 20 percent to 30 percent.
“The challenge right now is that universities are being asked to set fees in an unprecedented market environment,” said Prof. Sandra Harding, the chairwoman of Universities Australia.
Professor Harding warned that universities could decide to match their domestic student fees with international student fees. “That’s the only undergraduate market at scale that we have experience of,” she said of international students.
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As an example of what that could mean, annual tuition for undergraduate degrees in arts and law at the University of Sydney is now 7,452 to 10,085 Australian dollars, or $6,900 to $9,300, for local students. For international students, annual tuition is 33,360 to 40,000 dollars.
Some courses would be affected more than others, Prof. Glenn Withers from the Crawford school, said in an email. “Subsidies are down by as much as 50 percent for media and 15 percent for law and business, but up 11 percent for the humanities and by 25 percent for mathematics, for example. Resultant fee differences will also reflect differing market conditions for the various disciplines,” he said.
Higher tuition may push more Australian students to shop abroad for their undergraduate education, according to Professor Withers.
“Australian domestic students have been much encouraged recently to gain study experience abroad. The increase in domestic fees will accelerate this movement,” he said. “Greater global mobility and integration may be one, perhaps unintended, beneficial consequence of this greater domestic fee deregulation.”
Glyn Davis, vice chancellor of Melbourne University, noted that the higher education marketplace was already globalized. “High-achieving Australian students are courted by Ivy League and Russell Group universities and some choose to do part or all of their university education abroad,” he said, referring to elite universities in the United States and Britain. “The global mobility of students appears likely to continue to grow.”
Still, some may be turned off higher education altogether, Professor Withers warned. “The absence of loans for living expenses and the chance of noncompletion, the requirement for larger loans given subsidy cuts, and the dangers of compounding interest if not earning enough for payback all will deter many, especially the least advantaged,” he said.
There may also be a drop in midyear entry numbers this year. “Not being able to inform students of the fee implications of their programs is almost certain to give pause to students who might otherwise enter university mid-2014, particularly mature-age students,” said Professor Harding.
The proposals have met a mixed reception from university representatives.
The Group of Eight coalition of top colleges has called the government plan an important measure to position the Australian higher education sector for the future. “These historic reforms reconcile access and quality, and make growth affordable,” Prof. Ian Young, the chairman of the group, said in a statement last month.
In contrast, a letter to faculty and students from the University of Adelaide’s vice chancellor, Warren Bebbington, described the proposed changes as unfair.
“My interest in these reforms was to see Australian students in the coming years have a much wider choice of the types of degrees, as found in the U.S. but without the U.S. burden of crippling student debts,” he said. “In fact, it is starting to look as if the student debt burden for many under the proposed reforms might well be worse than in the U.S.”
Students held widespread protests against the proposals on campuses and in cities last month, and Universities Australia has called for implementation to be delayed, saying the planned timetable allowed insufficient time for proper preparation. The legislation has not been introduced in the Australian Parliament, but some senators have already said that they intend to block the measures.
“A reasoned and sensible approach to a developing marketplace just cannot be achieved immediately,” Professor Harding said: “As events in the recent past have shown, undue haste and poor execution pose grave risks to even the soundest policy intent.”
                                       
 An Uproar in Australia Over Proposal

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