Andrew Norton gets it right when he criticises Bruce Chapman’s arguments that course prices should be regulated rather than set by Universities themselves. Demand curves for higher education slope downwards and there is competition between Universities. What is more, it is patently unfair for students to pay the same price for a course regardless of University reputation. It is unfair because their job prospects are, in fact, different and there are peer effects.
When it comes down to it, the issue for higher education has always been how to convince the Australian people to give more funds to it. The amount coming through the tax system is appropriately limited because the private benefits from higher ed are diffuse. And the amount coming directly from students (or their families) is limited by an inability to let price discrimination and innovation emerge in the system.
Bruce Chapman solved the key market failure — liquidity and access — with the HECS system. One of the benefits of that is that we can devolve more to Universities to do the rest. We should let that happen.