Higher education policy

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Higher education has not been a feature of the current election campaign. That is a problem.

There is a huge and unsustainable cross-subsidy in higher education in Australia. The subsidy is from international students to domestic students. In areas such as business, an international student can be paying three or four times as much as the university receives for a domestic student. Same seat, same lecture, vastly different price.

This cross subsidy has enabled successive governments to ignore their funding obligations to Australian universities. Australian students in undergraduate courses in business, arts or law simply do not pay the average cost of their education. As capacity constraints come into play – as they do in many business courses – Australian students do not even pay the marginal cost of their place.

Why is this a problem? Because Australian universities are competing in a highly competitive international market for education. We have been very lucky – in our geographic location, in our multi-cultural society and in the perceived intolerance of the US and Europe. But the GFC has led US and European universities to look more aggressively at attracting Asian students. And recent events, together with the ongoing debate about population and immigration, have undermined the view of Australia as a tolerant and open society.

Put simply, our competitors are playing hardball and we are throwing away our competitive advantages.

So two conclusions:

  1. whoever is in government after August 21 needs to address the funding shortfall in Australian tertiary education. We cannot expect China and India to keep underwriting our domestic students; and
  2. if you are an undergraduate HECS students and you are sitting next to a foreign fee paying student, turn to them and say ‘thank you’. After all, they are paying for your education.
5 Responses to "Higher education policy"
  1. It’s time for fee deregulation.  Federal Government budgets will be tight over the next few years due to the need to repay debt, so I expect little money would be forthcoming from Government.

  2. Another thing that could hurt Australian universities is the rise of the Australian dollar. Ten years ago when the AUD was buying USD 0.45 Australia (and New Zealand) were the cheapest places to get a native-English tertiary education. But with the AUD has doubling since then, I suspect that’s no longer the case.

  3. That’s what happens when you allow industry development policy (of Australian education) to dictate immigration policy: it eventually ends in tears.  Moroever, Australian educational institutions accepted overseas students that were clearly not up to the mark – simply to garner the revenue – and passed them when they should not have.  And so the local students might want to ‘thank’ their overseas student counterparts, but they also cynically understand the game.

    I agree that fee deregulation is the only way forward, in combination with equity based bursary arrangements.  It’s difficult to see the federal government fully funding higher education now: they have very used to the ‘free lunch’.

  4. To fix higher education you need to face the elephant in the room. University education is not worthwhile for most people. Mass university education has lead to a huge number (not 100%) of people wasting 3+ years doing bad degrees.  It’s distorted the high school curriculum to be strongly focused on university entry (not skills useful at University or even in life, simply getting a uni place) even though  less than 50% will even go to uni. Solution is to stop sending the average 18 yo into a learning environment that is not suitable for them.  Either the course content is too hard and they fail or the course had been made easy enough in which case it is of limited value. Send the most academic 20% to uni.  Give practically minded teenagers practical training (not abstract facts).

  5. The huge elephant in the room, which political correctness makes unspeakable, is that all these foreign students really kill the campus atmosphere and university experience. Anyone been to UNSW lately? What a dump!

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