The federal government is reviewing the ‘base funding’ for universities. The ‘Group of 8’ universities (of which Monash is one) have put out a couple of proposals for reform. The first is that there needs to be ‘partial deregulation’ of student fees.
Student contributions should be partially deregulated to allow students to invest more. This will create more diversity in the sector. A more diverse sector will better meet the needs of a broader cohort of students.
This is a good idea. At present domestic Australian students are effectively subsidized by international students. I have commented on this before. As a long term strategy in a competitive international education market, the cross subsidy will be not be viable. So if domestic students want a quality university education then either they have to contribute more themselves and/or the government has to contribute more from tax revenue. Partially deregulating student contributions (e.g. like in the UK, allowing Universities to raise fees subject to equity considerations) would be a good first step to long term sustainable university funding.
The other idea is to have a regulator oversee the student fees.
A partially deregulated system should be overseen by an independent pricing regulator, operating at ‘arm’s length’ from Government, but empowered to provide binding advice on the cost and appropriate level of funding. The Australian Competition and Consumer Commission (ACCC) may be a useful model for a higher education pricing regulator.
This idea is – well – not good! The last thing that the University system needs is a price regulator treating it like a monopoly sector. I am happy to give any VC who supports this proposal a free lesson in regulatory price setting. (I did lots of it at the ACCC and am still doing it as a part time member of the Economic Regulation Authority of WA).
Universities in Australia are not and do not need to be treated like monopolies. There are 39 universities in Australia and allowing them to compete on an open basis will lead to student fees based on cost and differentiation of product. So the outcome of the ‘base funding’ review should be a map towards increased competition between universities and less price control. Having a regulator set prices for undergraduate degrees makes little sense, even as a strategy for transition to a more deregulated tertiary market place.