A blanket opposition to education funding cuts isn't the answer
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Version 0 of 1. The Coalition plan to save $2.4bn in higher education funding, first proposed by the Gillard government in April, is now in jeopardy as a result of Labor’s decision to heed calls from the Greens to block the legislation in the Senate. Half of the savings will come from imposing an efficiency dividend on universities and reducing discounts for early fee repayments, with another $1.2bn saved by converting student start-up scholarships into HECS-HELP style loans. The proposal has incensed student bodies and the tertiary sector union, who have launch campaigns against the cuts. Fears have been raised about an era of declining university quality and impoverished students with crippling personal debts. A more regressive policy would be hard to find, right? Well, not quite. Students do face genuine hardship while at university, but the progressive solution is to move towards a deferred payment model that is both more generous when students are cash poor, and more demanding of them when they are cash rich. After all, subsidising people to attain disproportionately high incomes – earning over $1.1m more than non-graduates on average – while expecting little in the way of private contributions is hardly spending money fairly. This is especially the case when we look at just who goes to university. Over half of students coming from the richest 10% of households enroll in university. For students coming from the poorest 10% of households, enrolment is below 10%. Worse, students from the bottom quarter of socio-economic (SES) households make up just 14.8% of undergraduates, rather than 25% which we would expect in a "fair" system. Once you consider that graduates disproportionately come from and go onto join the most well-off groups in society, it raises the question: is this the best way to help disadvantaged students? The HECS-HELP system we enjoy in Australia allows students to pay the cost of their education with an interest free loan that they do not repay until their annual earnings exceed a generous threshold. Currently, no student pays back their education loan until they earn over $51,309. To put this into context, after five years the average university graduate is making $75,000 annually, while the median full-time worker in Australia earns only $57,400. Effectively, HECS only requires you pay back your loan if you are in the top 60% of incomes. It is entirely reasonable that students contribute more towards their education when they are earning sums far greater than the average worker. So in turn, how can we encourage more disadvantaged students to earn a potentially life changing qualification? First we must appreciate that the real barrier to low SES higher education is low ATAR scores, not cost. Currently, students who score over 80 come overwhelmingly from high SES backgrounds. Student who score below 60 are twice as likely to come from a low SES background. This would suggest that the government would do well to redirect university funding into earlier years. Indeed, a new wave of education experts, including Nobel Laureate James Heckman, are arguing that the smartest way to boost social mobility is spending money before school even begins. The dividends early intervention programs provide are demonstrably greater than the superficially alluring option of lowering student debt. Not only will raising private contributions to fund more equitable programs, it will allow our universities to continue to offer a world-class education. Many of those campaigning against the mooted changes have repeatedly cited OECD figures showing Australia sits at the bottom of rich country public education spending, drawing the implication that this jeopardises the continued success of our tertiary system. This is highly disingenuous, as it ignores the role private contributions play in bringing Australian university investment to a level above the OECD average. Higher private contributions could also boost university teaching quality, which presently falls short of expectations. According to the latest Course Experience Questionnaire, only 60% of students are satisfied with the quality of the teaching they receive. Poor teaching impacts all students. However, low SES students bear a larger share of the pain as they are more likely to require extra attention. If a low SES student falls between the cracks, they are less likely to be caught. A promising way to raise teaching quality has been put forward by the Grattan Institute. In their report Taking University Teaching Seriously, it is argued that university teaching could be substantially improved by funding an additional 2,500 academics to specialise in university teaching. These positions could be funded through a 5% reduction in commonwealth tuition subsidies, just under $350 per student. This small increase in student fees to pay for better teaching would greatly benefit low SES students. Senator Lee Rhinanon has argued the the Coalition’s pending changes “will further exacerbate declining education quality and already struggling student welfare schemes.” This is only the case if we don’t wake up to the regressive nature of much of higher education funding. The progressive response should not be to give more money to the once and future rich. If Labor and the Greens are serious about social mobility, and not just middle class welfare, they should rethink their opposition. They should support reallocating funding toward more progressive policies such as early years education, and funding teaching positions that benefit low SES students already in university. The increase in private contributions to fund these reforms need not be large. Although it seems counterintuitive, this would be a more progressive step forward for our higher education system than blanket opposition to funding cuts. Our editors' picks for the day's top news and commentary delivered to your inbox each morning. |