University of Canberra Vice-Chancellor Stephen Parker sounds warning over student debt

University of Canberra Vice-Chancellor Stephen Parker sounds warning over student debt

An average female undergraduate who wants to be a teacher in Australia could quickly find herself graduating with debts of $50,000 or more, according to University of Canberra Vice-Chancellor Stephen Parker.

Professor Parker, who has been an outspoken critic of the Federal Government's plans to deregulate university fees, has written a submission to the Senate Standing Committee on Education and Employment in which he tones down his rhetoric in the interest of presenting a short and stark warning of the damage these reforms could do to Australia.

Professor Parker has been an outspoken critic of the Federal Government's plans to deregulate university fees.

Professor Parker has been an outspoken critic of the Federal Government's plans to deregulate university fees.

"In speeches and media articles over the last few months I have laid out my objections to the Higher Education Reform proposals, sometimes colourfully," he said.

"But in this submission, which I deliberately keep short and less colourful, I seek to emphasise the damage that these measures will do to future graduates, and indirectly Australian society, the unfairness to existing debtors of having the basis of their repayments changed after graduating, the inequitable nature of the proposals as between advantaged and disadvantaged people and the distorting impact that the reforms will have on some key professions such as teaching".


Professor Parker noted that various submissions to the committee had already referred to modelling by Universities Australia and the UC's National Centre for Social and Economic Modelling (NATSEM) which illustrates the impact will be felt most by those from disadvantaged backgrounds and by many of those graduates going into less well-paid jobs.

"If one is from a disadvantaged background one is less likely to have a family which can pay off or reduce one's HECS liability as one goes along; whereas I suspect that more affluent parents will want to do this, even if indirectly this translates into less willingness to pay independent school fees," Professor Parker said.

"If one goes into a less well-paid job, the consequences of taking time off for family reasons may be that one's graduate debt spirals out of control. And if the return to work is on a part-time basis, this will exacerbate the rise of the principal amount owing.

"If her university chooses only to replace the foregone Commonwealth Grants Scheme amount with higher tuition fees, a female science graduate going onto average earnings for female science graduates would not pay off her debt for 13.9 years – up from 8.4 years today.

"Total repayments will rise from $44,200 to $95,700: this is a truly staggering amount for a science graduate to contemplate. A typical female teacher will face a debt of $49,054 rather than the present $31,395. Naturally, if her university does more than just replace foregone Commonwealth revenue, the situation for these typical graduates will be worse."

Professor Parker said that while the present funding system for Australian universities was arguably unsatisfactory, and the so-called efficiency dividend announced by the previous Government was very disappointing, the package of measures now being considered by the Senate "does not provide the answers".

"Just restoring the previous funding levels and current indexation method (under the Higher Education Grants Index) would stabilise the situation. Australia has one of the best university systems in the world, from the elite to the community provider level. The fact that some of our universities can continue to rise in world rankings without these changes undermines any urgent case for the reforms based on arguments about global competitiveness."

He also criticised the Government for failing to disclose its plans for major reform prior to the 2013 federal election – when it promised "no cuts to education".

"For the Government so quickly to reverse these positions and propose reforms which go further than any government in the world has gone suggests that they have not been sufficiently thought through. I do not assert that the pre-election comments were deliberately misleading, but if the intention to contradict such assurances was only formed after the election this reinforces the conclusion that there has been far too little open consideration of alternatives, or modelling of consequences. The National Commission of Audit recommended up to 12 months' debate over arguably the most controversial proposal, fee deregulation, but this period of reflection has not been granted to us.

"Under these circumstances, I believe the whole set of measures should be taken off the table and considered further. Any fresh package should be put to the electorate at the next election if that is the Coalition's wish."

Emma Macdonald is a senior reporter for The Canberra Times.

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