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Universities in united stand over student debts

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Matthew Knott, Fergus Hunter

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Greens modelling predicts uni fee hikes

A new online calculator released by the Greens shows big jumps in course fees and loan repayments under proposed changes to higher education.

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The federal government faces blanket opposition from university vice-chancellors to its plan to increase the interest rate on all student debts and slash university funding, a survey shows.

The Fairfax Media poll of the nation's 39 vice-chancellors - who are divided on the question of fee deregulation - found a unified stance against applying an interest rate of up to 6 per cent to student debts and cutting the Commonwealth contribution to the cost of a degree by 20 per cent.

Interest rate plan: Vice-Chancellors united in their opposition to government's plan.

Interest rate plan: Vice-Chancellors united in their opposition to government's plan. Photo: Louise Kennerley

These measures have sparked criticism from university leaders who would otherwise have rallied behind the government's plan to deregulate university fees. Peak body Universities Australia is calling on the government to rethink both policies. Giving ground on these measures could help the government win broader support for its reform package, which faces a hostile Senate.

The sector is ramping up its lobbying efforts as two government-appointed working groups prepare to report next month with recommendations on the details of the reform package.

University of Technology Sydney vice-chancellor Ross Milbourne said: "I don't think any vice-chancellor in the country supports the move to increase the interest rate on HELP debt.''

Deakin University vice-chancellor Jane den Hollander said it was ''punitive and unfair'' to link the interest on student debts to the 10-year treasury bond rate rather than inflation.

''Compound interest will have many unintended consequences: the poor will acquire more debt, while others will be indifferent to course fees as they simply defer payment, never work or leave Australia,'' she said.

UNSW acting vice-chancellor Iain Martin said fee deregulation was needed to avoid an inevitable decline in the quality of Australian universities. But he added: ''We are surprised and concerned at the extent of the reduction in the government contribution to the cost of a degree, and the significant burden that will place on students.''

Professor Martin said student debts should remain pegged only to inflation, with no additional interest imposed.

University of Canberra vice-chancellor Stephen Parker, an opponent of fee deregulation, said the proposed changes were ''unfair, unethical, reckless [and] poor economic policy".

Victoria University vice-chancellor Peter Dawkins offered a set of ideas to improve the government's package including: indexing debts to inflation until students graduate; putting a cap on the size of student debt; and offering greater government subsidies to low-income students.

Flinders University vice-chancellor Michael Barber opposed the interest rate changes, saying: ''I believe students will end up with debt levels that are as high as America, and we don't want to see that here.''

Fairfax Media gauged the views of 28 universities through answers to a questionnaire and statements on the public record.

Education Minister Christopher Pyne said it was fair for graduates to repay their debts at the same rate it costs taxpayers to borrow the money, given most Australians do not attend university.

In a speech in Brisbane on Wednesday, Group of Eight universities executive director Michael Gallagher said the government's higher education reforms are ''not quite as radical as the demonisers of competitive markets in education allege''.

''My guess is that the detractors of micro-economic reform in Australia’s higher education industry will find themselves on the wrong side of history,'' he said.

''[The reforms] are logical, coherant, sustainable, equitable and inevitable.''

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69 comments

  • What was the reaction by Australia’s top eight universities, Go8?

    Commenter
    BarryJ
    Date and time
    June 05, 2014, 7:07AM
    • "...faces blanket opposition from university vice-chancellors to its plan to increase the interest rate on all student debts and slash university funding"

      The gov't has obviously upset the comfort zone of the chronically privileged and they don't like it.

      They need to learn that nothing in life is "free" & that someone, somewhere is currently paying for all this "free education". And by the way, the universities need to rationalise their degrees as they're training up an army of people for jobs that will never materialise. My friend just finished a degree in "museum studies" only to find that she can't land a job as there's only a handful of such jobs in the entire world with thousands trained up for each position.

      Commenter
      jess
      Date and time
      June 05, 2014, 11:26AM
    • @jess - Higher Education hasn't been free since Joe Hockey was at uni... so I'm not sure where you are getting that at. Are you saying we should make all education "paid" - from kindy upwards?
      Uni graduates exit with a HECS debt that they pay back. Their education benefits them (leading to more income tax being paid) and society (high productivity and more valuable output). Are you saying that they should pay significantly more for the privilege of contributing more to the economy?

      Commenter
      peter
      Location
      Sydney
      Date and time
      June 05, 2014, 1:49PM
    • @ Jess,

      Enough of the "nothing is free" crap, it is the line of the month from the LNP and nothing more.

      Pyne tells us that people with uni degrees earn more and are more employable than those without degrees. The commentators on the right of the debate tell us that the better paid pay most of the income tax take.

      Add the two together and it is common sense that better educated people earn more and therefore pay more tax so the government is the winner in the long run.

      Behind all the spin is LNP ideology and the children of the less well off are the ones who will miss out while their places are filled with full fee paying international students.

      Commenter
      Paul01
      Location
      Riverina
      Date and time
      June 05, 2014, 4:05PM
  • At least the big 8 have not taken a self interested stand on these issues as opposed to the question of fee de-regulation, although it is hard not to arrive at the conclusion that the reason they have stood with their lesser sized colleagues on this issue is that it doesn't involve their revenue streams.

    Commenter
    Lesm
    Location
    Balmain
    Date and time
    June 05, 2014, 7:17AM
    • What is this - resistance from educated people in cushy jobs ? Tony Abbott will fix that !

      Commenter
      adam
      Location
      yarrawonga
      Date and time
      June 05, 2014, 7:18AM
      • I am happy to subsidies people attending universities, its an investment.

        Commenter
        Johnny Thunder
        Location
        Planet Earth
        Date and time
        June 05, 2014, 7:26AM
        • Thank you Johnny Thunder!!! I've watched Christopher Pyne being interviewed lately on a number of tv shows, and wondered why nobody seems to be challenging him on this point. He keeps repeating the same thing - why should the Australian taxpayers, many of whom will never attend university, subsidise the fees of those who do? This makes me so mad! A lot of people attend university (me included) to actually help other people. Many people choose professions - doctors, social workers, researchers, teachers, nurses etc etc - that will benefit all taxpayers in the end. It seems to say more about him and his ideology - that people are only in things for themselves, to make as much money as possible, and for their own benefit. He obviously had his own self-interest in mind when studying for his law degree at Adelaide University!

          Commenter
          RobRoy
          Date and time
          June 05, 2014, 9:24AM
        • Both comments above have the most decent and realistic perspective on this debate. I want my taxes to pay for the best education and health services for all Australians, for the society I live in to be a smart, caring and socially responsible community for all its citizens. That is the real value we should aim for.

          Commenter
          LJanes
          Date and time
          June 05, 2014, 11:20AM
        • Yes, indeed, it is an investment. And every company in the land borrows money to invest in things that will pay off in later revenue. If a company doesn't have much debt, the management are sometimes accused of "running a lazy balance sheet". Yet, the "open for business" government say that, for them (with a AAA credit rating), all debt is bad, but our young people should take on massive debts...

          Commenter
          Phil
          Location
          Sydney
          Date and time
          June 05, 2014, 12:16PM

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