University fees hiked to provide 40,000 new places

Australia’s federal government plans to double university fees for arts students and also raise them for those in commerce and law to pay for an expansion of nearly 40,000 places for new students.

But students who undertake in-demand courses such as teaching, nursing, mathematics, science and engineering will pay up to 62% less for their degrees.

Federal Education Minister Dan Tehan announced the changes in a national press club address on Friday 19 June.

Tehan said the new policy was intended to create more “job-ready graduates” but, when asked by journalists, he emphatically denied the changes were made because the conservative government had failed to have legislation passed to deregulate university fees in its 2014 budget.

Big drop in income

Universities are facing a huge fall in their annual revenues following a massive decline in the number of fee-paying foreign students. This occurred because of the coronavirus outbreak and tighter government restrictions on enrolments from overseas students.

Allowing universities to increase the number of these students, however, would also boost their budgets.

As well as increasing university places by 39,000 in the next three years, Tehan said the government would add to this by 100,000 places in the years up to 2030.

Federal grants to universities would maintain their real value by being indexed to inflation, he said.

Alarm and outrage

But students were alarmed and outraged when they learned the cost of undertaking law and commerce degrees would increase by 28% and for the humanities by 113%.

The amount students would have to pay for a three-year humanities degree would jump from up to AU$20,400 (US$14,000) to AU$43,500 (US$30,000); while law and commerce degrees could increase from AU$34,000 to AU$43,500.

Under Australia’s ‘study now and pay later’ system, students can undertake degree courses but defer the costs until they graduate and are earning enough to start repaying what they owe.

But the government’s latest plan means the costs a student has to pay will vary according to the course undertaken.

So the student contribution towards a degree will be reduced by 62% for those studying for degrees in agriculture and mathematics, with total savings of up to AU$18,000 across the life of a degree.

Students enrolled in teaching, nursing, clinical psychology, English and language degrees would enjoy savings of up to AU$9,300, while the cost of degrees in science, health, architecture, environmental science, IT and engineering could fall by up to AU$6,900.

In effect, the new policy would cut the overall government contribution to the cost of undertaking degrees from 58% to 48%, amounting to huge savings over the life of just one degree.

On the other side, however, student contributions would increase from 42% to 52%, allowing the government to pay for more student places without having to outlay more money.

Cut in costs or no change

Tehan said he expected that 60% of students would see a reduction or no change in their contribution as a result of the changes.

Medicine, dental and veterinary science students would be among those who faced no fee changes.

“Importantly, no current student will be worse off,” Tehan told journalists. “And no current student will pay an increased contribution. Their fee contributions will be ‘grandfathered’.

“The changes will address the misalignment between the cost of teaching a degree and the revenue that universities receive by ensuring that the student and government contribution together cover the full cost,” he said.

But he noted that the changes were based at a ‘unit level’ not a ‘degree level’, meaning that humanities students could avoid some of the higher costs of that degree by choosing electives from other disciplines such as mathematic, English, science and IT.

“We are encouraging students to embrace diversity and not think about their education as a ‘siloed’ degree,” Tehan said.

“So if you want to study history, also think about studying English. If you want to study philosophy, also think about studying a language. If you want to study law, also think about studying IT.”

Huge rise in demand

The government position is that it needs to meet the increased demand from Australians turning to higher education during a contraction caused by COVID-19, and from students born in the baby-boom of the early 2000s who are about to start university.

According to government figures, demand for university places from students in their last year of school is set to increase from 133,000 in 2019 to 154,000 in 2021.

But Tehan also pointed out that only four industries were expected to account for 62% of the employment growth in the next five years: healthcare, science and technology, education and construction.

Students still retained the choice and could choose a cheaper degree option in areas where there was expected growth in job opportunities, a “win-win” for students, he said.

“It’s common sense. If Australia needs more educators, more health professionals and more engineers, then we should incentivise students to pursue those careers. This does not mean fee deregulation. This does not mean AU$100,000 degrees.”

As well as boosting graduate numbers in areas where jobs needed filling, Tehan pointed to students in regional Australia gaining more opportunities for work.

Foreign students return

Under the government’s other plans, universities will begin offering some places for foreign students to return to Australia, with the hope of increasing enrolments in time for 2021.

The goal in this instance is to help universities avoid what some have called ‘an estimated AU$16 billion black hole’ caused by the effects of the COVID-19 pandemic.