The Guardian May 21, 2003

University funding & fee "reforms" reinforce privilege

by Bob Briton

Few could still doubt the militant (ruling) class-consciousness and bias of 
the Federal Government. While Federal Education Minister Brendan Nelson, 
may say that the funding and fee changes announced in last week's Budget 
will improve access and choice for the battlers in the community, the 
package actually puts university study further out of the reach of low 
income earners. The "reforms" also provide extra opportunities to wealthy 
students to take up uni places that would be denied them on the grounds of 

After overseeing $5 billion worth of cuts since taking office in 1996, the 
Howard Government last week announced $1.5 billion in new funding for 
universities for the 2004-2007 period.

At the same time, the Government will allow universities to increase course 
fees by up to 30 percent above the current fee charged under the Higher 
Education Contribution Scheme* (HECS).

Students currently studying law, dentistry, medicine and veterinary science 
may have their fees increased from $6136 a year to up to $8355 a year. 
Humanities students are presently committed to paying $3680 a year for 
their study. This can increase to a maximum of $5010 a year.

These fees are either paid upfront (with a discount) or through the HECS 
deferred payment scheme after completion of studies.

The Education Minister argues that universities will have to compete for 
students on the price and quality of their courses. He has suggested that 
some course fees might even come down.

However, none of the realistic commentators doubt that institutions will 
have to slug the maximum permissible fees because of the effects of the 
funding drought of recent years. Only teaching and nursing students are to 
be spared the fee increases.

The Minister is also making much of the increase in the income threshold 
above which students are expected to start repaying their HECS debt. This 
currently stands at the paltry figure of $24,365 per annum. The budget 
package proposes to lift this to $30,000, which is still a fraction of the 
ministerial incomes of Brendan Nelson or Peter Costello and is not likely 
to be a comfortable personal income in Australia in 2004.

By the way, both these staunch advocates of user pay services received free 
university educations!

Nelson is also quick to point out the introduction of a number of 
scholarships to help disadvantaged students. Most of these are for trifling 
amounts compared to the overall costs of tertiary education. The 
Commonwealth Education Costs Scholarship, for example, will give 2500 
undergraduate students $2000 a year for up to four years. The Commonwealth 
Accommodation Costs Scholarship will grant 1500 students $4000 a year. 
Increased fees alone will effectively wipe out the benefit of these 

By far the worst of the pro-rich measures adopted with the Budget package 
is the increase in the number of full fee-paying positions to be offered by 
universities. At the moment, only 25 per cent of the student places can be 
offered on this basis. This is to be increased to 50 per cent. These 
students will have to find fees at least double the amount due under the 
HECS arrangements. These degrees could cost more than $100,000!

Universities may be forced by economics to offer more full fee-paying 
positions at the expense of the publicly funded ones. Students with higher 
entry scores will lose out as their cashed up counterparts take advantage 
of the new two-tier education system.

The Minister has announced the introduction of a new federally funded loan 
system. The HELP scheme (please don't laugh at the acronym) will provide a 
"study now, pay later" loan of up to $50,000 towards the costs of a degree. 
Repayments will have interest levied at the rate of the CPI plus 3.5 per 
cent. The balance of cost of these $100,000-plus degrees will have to be 
sourced from loans on the open market.

Universities may as well hang up signs: "Poor kids need not apply". Older 
working class women and sole parents, in particular, can forget about 
returning to study with plans to re-enter the workforce.

Another nasty measure, directed at the National Tertiary Education Union 
(NTEU), is the promise of an extra $404 million in funding to be shared 
among universities that force their staff onto individual contracts and 
deny their rights to take industrial action.

The Minister is also looking into ways to prevent students from joining 
their union.

* * *
*HECS places in courses are allocated on the basis of merit, and are partially funded by government.

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