Australian universities are preparing for one of the biggest shake-ups higher education has experienced since a Labor government reshaped the sector by consolidating universities and colleges of advanced education in the late 1980s.
Federal Education Minister Christopher Pyne appears to be preparing the ground to extend federal funding to for-profit universities and non-university colleges to create a United States-style system in Australia.
In a speech in London last week, Pyne said that "a new wave of deregulation was needed to stop Australia's universities falling behind the rest of the world". He said he was alarmed that only one Australian university, Melbourne, was in the top 50 in the world according to the Times Higher Education's World Reputation Rankings.
While seven Australian universities went backwards in the rankings last year, Asian universities were "storming up the leader board" and the top 10 were American universities, Pyne said.
"We have much to learn about universities competing for students and focusing on our students," he said. "Not least, we have much to learn about this from our friends in the United States [whose] college system offers students more choice, encourages competition and foments a culture of philanthropy."
Pyne's comments followed the release last month of a review of the higher education system by two of his right-wing warriors, Dr David Kemp, a former conservative education minister, and Dr Andrew Norton, a university specialist at a private Melbourne think-tank, the Grattan Institute.
Their report has generated alarm across the higher education sector at the implications its 17 recommendations have for the future of public universities.
Although it endorsed the introduction by the former Labor government of a 'demand-driven' university system that allows public universities to enrol as many students as they are prepared to accept, the report also recommended federal funding for private universities, technical institutions and other non-university higher education providers.
"The reviewers believe that extending the demand-driven system will expand opportunities for students, and lead to further innovation in courses and modes of delivery, and in the quality of teaching and graduates," the report states.
Pyne did not say what the government's response would be but indicated it was likely to adopt the recommendations in its 13 May budget.
"I can assure you unreservedly that the Coalition government will continue to take steps to set higher education providers free, provide them with more autonomy and challenge them to map out their futures according to their strengths," he said.
"We are at risk of being left behind. We need a renewed ambition and it must be bold... Our answer will be, above all, to set our universities free."
The main vice-chancellors' lobby group, Universities Australia, said adopting the plan represented a "huge gamble with potentially devastating consequences". Some of Australia's most influential vice-chancellors, however, backed the proposals.
"The review recommends a move in the right direction," said Professor Ian Young, vice-chancellor of the Australian National University and chair of the Group of Eight research-intensive universities.
"The Go8 supports the panel's call to extend and improve the demand-driven system. As the Go8 has been arguing for some time, Australia needs a more diverse higher education sector to meet growing and diversifying student demand.
"Greater diversity among providers will give students more choice, and will more effectively meet their differing interests and needs."
Technical and further education institutes and Australia's private education sector also welcomed the review but more alarm was caused when several of the top vice-chancellors also called to be allowed again, as they were under the former conservative government, to charge students fees as high as they believed the market would bear.
Fee regulation considered
Pyne is considering the call for a deregulation of fees. Another recommendation in the review was to change the present student loans scheme so outstanding debts from students who moved overseas or who died would have to be repaid, by the graduates themselves or from their estates if they were dead.
The National Tertiary Education Union, or NTEU, warned that if Pyne "caved into the demands" of the Group of Eight and some other university vice-chancellors and lifted existing caps on student fees, "then days of A$100,000 [US$93,000] university degrees will not be far off".
"If the government were to impose the same limit as that which currently applies [to the government's loan scheme] of up to A$120,000, then students could expect to pay around A$100,000 for a degree at some universities," said union president Jeannie Rea.
"As the NTEU has said from the start, it will be students who will bear the cost of the government's ideological obsession and blind faith in a market-based policy framework for higher education. Removing the cap on fees, even with a cap on borrowing, would simply increase the magnitude of that cost."
The union points to a situation confronting public Technical and Further Education, or TAFE, institutes in Victoria where the state government opened the vocational training market to private colleges.
In the competition for public grants, private for-profit colleges concentrated on popular and highly profitable courses, such as beauty and fitness courses, offering low fees and early completion of courses.
"This is a policy which has failed to deliver on its objectives and has resulted in policy instability, budget blow-outs, funding cuts to TAFE institutes including loss of public service provision, increased student fees, and a threat to the financial viability of standalone TAFE institutes, just to name a few," the union told a federal parliamentary inquiry into the technical and further education sector last week.
But with a market-obsessed federal government and all but one of the six state governments with the same views, the prospects of public higher education escaping unscathed seems remote.
Photograph: University of Sydney.
Gustavo Hawes on the University World News Facebook page
This is one of the worst things that could happen here. The American system is one of the sickest in the world and shouldn't be followed ever. We need to copy the German system.
Christopher Weir on the University World News Facebook page
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