Rising Costs and Growing Frustration
For the past five years, Australian university students have been watching their education costs rise with growing concern. The increasing financial burden has led to widespread frustration among students, especially those studying arts, law, and business. In response, the Senate is considering a bill proposed by the Greens that aims to reduce these high student contributions.
The bill seeks to reverse the increases introduced in 2021 by the “Job-ready Graduates” policy. This policy significantly raised the cost of arts degrees, which now exceed A$50,000. Despite its unpopularity, the bill faces significant challenges in passing through the Senate.
Understanding the Job-ready Graduates Policy
The Job-ready Graduates policy was designed to encourage enrollment in certain fields deemed “job-ready” by the previous government. It reduced student contributions for courses in teaching, nursing, engineering, and IT. However, it simultaneously increased fees for arts, business, and law courses, even though many graduates from these fields often take time to find suitable employment.
The policy also raised contributions for business and law courses despite their above-average graduate employment rates. As a result, three-year bachelor degrees in these areas now cost more than $50,000.
The Greens Bill and Its Implications
The Greens’ proposed legislation, led by Senator Mehreen Faruqi, would reduce the annual student contribution for arts courses from $17,399 to $8,164 and for business and law from $17,399 to $13,624. These figures reflect pre-Job-ready Graduate scheme rates adjusted for inflation.
However, the bill has several flaws. It does not account for the need to offset the reduction in student contributions with increased public subsidies. This could lead to a significant drop in universities’ revenue, making many courses financially unsustainable.
Constitutional Constraints and Government Resistance
The Senate cannot directly appropriate money, meaning it cannot authorise the use of public funds for higher subsidies to universities. This constitutional constraint limits the effectiveness of the Greens’ bill.
The current government, led by Labor, opposed the Job-ready Graduates policy while in opposition but has delayed taking concrete action to reverse it. In February 2024, the Universities Accord recommended urgent changes to student contributions. In November 2024, Education Minister Jason Clare mentioned that the new Australian Tertiary Education Commission (ATEC) would examine student contributions. However, the legislation establishing ATEC did not mention student contributions.
Clare has cited cost as a major reason for avoiding reforms. He stated that reversing the policy would be expensive and challenging. The Innovative Research Universities group estimates that a full reversal would cost the government $1.9 billion annually.
Possible Workarounds and Future Steps
While ATEC cannot directly advise on student contributions, it can examine total funding per student and advise on the Commonwealth’s contribution. This indirect approach could allow for adjustments to student contributions without explicit legislative changes.
Clare has used the proverb “eating an elephant one bite at a time” to describe his approach to reform. While this imagery may seem daunting, the government has already implemented other priorities, such as a 20% cut in student debt last year.
Incremental Reform and Alternative Solutions
An incremental approach to reform could be more feasible. Urgent action should be taken on student contributions for arts degrees, as current levels condemn many graduates to decades of repayments. Other decreases for degrees with better repayment prospects could be postponed.
To limit costs, increased student contributions for engineering and IT courses could be considered. Graduates from these fields typically have higher incomes. The Universities Accord recommended student contributions based on expected lifetime incomes, which aligns with this approach.
Conclusion
There is no perfect student contribution system, but there is room for improvement. Balancing fairness to students, university funding, and Commonwealth constraints is essential. While the path forward may be complex, a thoughtful and measured approach could lead to meaningful change.
