News & Events

Deregulation in Higher Education Conference

Written by Paul Koshy, NCSEHE Research Fellow

The recent Deregulation in Higher Education Conference focused on the impact of full deregulation in Australian higher education, with particular focus on three key themes:

1. Full fee deregulation, with likely implications for future charges
2. The impact of the proposed changes to HECS-HELP, and
3. The changing role of private higher education providers.

Speakers discussed these three themes in the context of how each would reshape Australian higher education in general.

Vice-Chancellor Professor Warren Bebbington of the University of Adelaide commenced proceedings with a partial answer to this question. He used the emergence of the University of California’s Merced campus as an example of how all institutions now needed to pay particular attention to the positioning of their offerings. All institutions must do this in view of their strengths and weaknesses and in the context of a world in which globalisation and technology are affecting the competitive landscape dramatically. A presentation by David Wright of the Higher Education Consulting Group showed how educational institutions are already doing this, drawing on experience from other sectors whereby market segmentation, positioning and partnerships are the key drivers of results.

The conference took place in the week following an announcement by the University of Western Australia (UWA) that it would be introducing a “flat fee” of $16,000 per annum for each of its five bachelor degree offerings. The announcement implied that the cost of a three-year degree is set to rise from $18,000 in 2014 to $48,000 in 2016. Presenters and delegates noted that this announcement would set the tone for much of what would follow in terms of fee-setting among Australia’s public universities. The Grattan Institute’s Andrew Norton observed that universities would set prices in view of their perceived missions. Group of Eight institutions such as UWA would have the best ability to implement premium pricing while prices at universities perceived as less prestigious would remain lower. Vice-Chancellor Professor Stephen Parker of the University of Canberra used some of his university’s own modelling to demonstrate the financial attractiveness of raising fees where an institution could afford to do so. A number of speakers pointed out that university degrees are perceived and valued on the basis of their price, which makes higher prices for all degrees more likely. Vice-Chancellor Professor Linda Kristjanson of Swinburne University called for an examination of the usefulness of a cap on undergraduate fees. She stated this would likely prohibit universities from engaging in ‘price gouging’ and the subsequent detrimental impact on the equitable access to degrees.

In this context, Professor Bruce Chapman of the Australian National University (ANU) examined the impact of the concurrent HECS-HELP changes, particularly the proposal to increase the interest rate applied to debt. He noted that this would have the effect of increasing the time taken by students on moderate incomes to repay their loans, and that where students spent extended periods out of the workforce, outstanding loan balances would compound more rapidly. To remediate this issue, Professor Chapman suggested adjusting the interest rate in order to make an allowance for time spent earning lower incomes or outside of the workforce. Alternatively, the introduction of a surcharge on fees would also increase the equity of repayment totals across all borrowers.

Two speakers, Larry Davies of the Australian Council for Private Education and Training (ACPET) and Adrian Marron of the Canberra Institute of Technology, discussed the impact of deregulation on ‘new entrants’ into sub-bachelor and bachelor degree programs. Private providers will be eligible for partial public-funding (70% of new cluster rates) under deregulation, and as such, both Davies and Marron agreed that these providers were in a position to alter established dynamics within the Australian higher education sector. Leaner cost profiles and a history of offering courses that are unique in the tertiary context mean that these providers have unparalleled flexibility in pricing and delivery.

The conference’s three themes underpinned a broader discussion of the sector’s future direction, along with some warnings. Roger Smyth of the New Zealand Ministry of Education sounded a cautionary note in view of his country’s experience with deregulation. New Zealand saw the reimposition of both student place quotas and caps on student fees within a decade of the removal of controls on both. Dr Michael Gallagher of the Group of Eight emphasised that the deregulation of undergraduate places was the final stage in a near 30-year period of change in the system. Deregulation has taken place everywhere else (e.g., international programs; postgraduate degrees) and has since become a necessary policy in view of ongoing resourcing needs across the sector. Deputy Vice-Chancellor Engagement Professor Todd Walker of Federation University and Vice-Chancellor Professor Peter Lee of Southern Cross University both highlighted the perils of open competition in undergraduate places; the advantages enjoyed by more established universities; and, in regard to both of their institutions, the unique challenges facing regional universities who have complex and multi-faceted missions.

The conference highlighted a range of issues that will come to the fore in the next three years as deregulation takes place and is assessed both inside and outside the higher education sector. Clearly there are a wide range of challenges that will need to be met, not least of all the student equity concerns surrounding the reforms.

Posted 7 October 2014 Posted in Editorial, General