Call to overhaul uni fees and end reliance on overseas students

Universities want the Albanese government to scrap fee changes designed to lower student costs for priority degrees and raise them for others, because they have forced them “to do more with less”.

Peak body Universities Australia argues revenue has been cut by an average of 6 per cent for each student place. It is calling on the Commonwealth to fully fund university research, saying the sector’s reliance on fees from international students to cover more than half the cost is unsustainable.

Universities Australia chief Catriona Jackson says the reliance on international student fee revenue to fund nationally important research must end.

The former Morrison government’s Job Ready Graduates fee changes – which increased domestic fees for fields of study such as humanities, law and commerce, and cut them in fields such as health and education – have ultimately reduced total funding to the sector and should be replaced, Universities Australia argues in a submission to the Albanese government’s universities accord panel.

Job Ready Graduates was intended to create an extra 39,000 university places without increasing Commonwealth funding, by encouraging students to enrol in courses for which fees had been lowered.

But the change has led to large overall funding cuts in fields including mathematics (down 17 per cent), science (16 per cent) and education (6 per cent). Total Commonwealth grant scheme funding to universities will decline from $7.6 billion in 2021 to $7.3 billion in 2024.

The cuts to revenue could crimp universities’ ability to provide places to the next generation of school leavers and to older people seeking to retrain, the submission warns.

“While domestic demand for higher education has softened, largely due to low unemployment rates, demographic growth over the next five years will drive an increase in demand for university places,” it states. “At the same time, the nation is facing a shortage of skilled workers. In this environment, policy settings should not force universities to do more with less.”

Universities Australia has also called on the Albanese government to scrap the “punitive” 50 per cent pass rule, which strips students who fail half their units of their Commonwealth-supported place.

Universities are reporting that people most likely to fall afoul of the “unnecessarily harsh” measure are first-year students from low-socioeconomic backgrounds.

“The 50 per cent pass rule is, therefore, not only ineffectual, but also at odds with the equity goals shared by government and universities,” the submission says.

National Union of Students president Bailey Riley said the union also wanted the repeal of the fee changes and the 50 per cent rule, arguing they both made higher education less accessible.

Most students base their study choices on career aspirations, not price signals, the National Union of Students says.Credit: Dave Tease

Riley said the fee changes were also ineffectual in their primary aim of influencing enrolment choice.

“We don’t believe students will choose their future careers based on how much debt there is in a course,” she said.

“We think students should have as much equity as possible in choosing a course, and this pushes them in a way that doesn’t inspire any sense of equity. University students are not benefiting from it in any way.”

The Albanese government’s universities accord is the first broad review of Australia’s higher education system since 2008, looking at issues including funding, access, affordability and matching education with skills needs.

Tuesday marks the deadline for submissions to the accord panel, chaired by Professor Mary O’Kane.

Universities Australia’s submission also calls on the federal government to work towards replacing the reliance on international student fees to partially subsidise research costs with a model that fully funds university research. The current model is vulnerable to economic shocks because revenue from fees can fluctuate wildly, creating a sovereign risk to Australia’s research capability, the submission argues.

Universities Australia chief executive Catriona Jackson said the nation’s ability to respond to challenges and opportunities would be measured by the standard of research and development universities perform on its behalf.

“If we want to be a serious research nation, we’ve got to fund research properly and quickly,” Jackson said. “Government funding is falling while the cost of doing research is rising, forcing universities to rely on international student fee revenue to support these vital endeavours. This is not sustainable.”

Coalition education spokesperson Sarah Henderson said the university sector “plays a critical role in driving Australia’s economic prosperity but faces little accountability for the $20 billion and more it receives annually in government funding.

“A key test for the Albanese government is to ensure that taxpayer funding is appropriately tied to university performance, and it is disappointing this is not reflected in [Universities Australia’s] submission … While we can be very proud of our universities, they must be held to account in the national interest when they deliver poor course quality and student outcomes, and thousands of research papers which fail to see the light of day.”

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