Class could rule for next generation under higher education deregulation

Class could rule for next generation under higher education deregulation

While the deregulation of higher education fees did not get through the Senate this week, Education Minister Christopher Pyne has stated that he intends to persevere with "reform" of the sector.

Regrettably, the public debate focused almost entirely on the private economic good of a university education and the public good was accorded short shrift. While it is not disputed that there is a private benefit for graduates in terms of credentialism and the means of earning increased income, we should not ignore the role of the university as a site of creativity and research. Even the public good of investing in the knowledge economy, a key intergenerational good, has been accorded short shrift.

The public good of an educated citizenry generally contributes to the better working of democracy as well as enabling broader access to the professions and leadership positions. High fees encourage a reversion to a class-based society in which the professions and leadership positions are dominated by the offspring of the wealthy. This is by no means offset by "merit" scholarships as all the evidence shows that they favour middle-class students. What is more, such scholarships are funded by students, including the less well-off themselves, through the exaction of high fees.

Furthermore, the US experience of deregulation has shown that those students who pay the most for their education are likely to have the lowest earning potential. This is because lower ranked universities tend to emulate their competitors and raise tuition once a high fees regime is set in place by a market leader. This is based on the familiar myth that the higher the cost of a product, the better the quality. The marketing hype that proliferates in a competitive market tends to seduce weaker students into paying high fees for what turns out to be an inferior qualification.

Once a fees regime is set in place, fees invariably spiral upwards, not downwards, as the minister has suggested. Lower fees are associated with for-profit institutions that set out to undercut universities, but these "diploma mills" do not conduct research and tend to favour a lowest common denominator approach to teaching. A study of the privatising trends that I undertook in public university law schools in Britain, Canada, New Zealand and Australia showed that the imposition of tuition fees exercised a profoundly negative effect on what is taught, as well as how it is taught.


The investment in higher education is recognised as a public good elsewhere. Countries such as Ireland, Finland, Norway and Austria have retained free higher education. Both Germany and Chile have reverted from a fees regime to free higher education.

Why is Australia so out of step in its failure to recognise how crucial higher education is to the future? Public goods are precious and we should not readily subject them to the vagaries of the market, as the people of Queensland recently made clear at the ballot box.

While the current government is unlikely to revert to free higher education, there should at least be some reasoned debate about the relationship between higher education spending, including research, and other budget items.

Take defence, for example. We are told that Australia is to have a fleet of new submarines, which could cost up to $50 billion but no rationale has been put forward as to the need for them or how they are to be used; the entire debate has centred on who is to produce them. Now, the Prime Minister is in the process of sending 300 troops to Iraq, but at what cost? We also learn that $11 billion was spent on consultancies, including defence, in 2014, at the same time that far less costly public servants were being made redundant.

Had they been passed, the higher education reforms proposed that students themselves would be expected to subsidise university research by paying increased fees, even though the correlation between scientific research in the laboratory and high quality teaching in, say, the humanities or social sciences, would be virtually negligible. Expecting students to assume responsibility for contributing significantly to research as a quid pro quo for a university education would seem to be ethically dubious, although it is a matter that has received surprisingly little attention.

This is why a thoroughgoing inquiry is warranted. Minister Pyne might complain about the number of public inquiries into higher education in the past but none has dealt with deregulation, including the impact of "for-profits" on the sector, including the cost to the public purse. Such an inquiry would seem to be an essential step before even contemplating the full privatisation of our public university system.

Margaret Thornton is professor of law at the Australian National University and the author of Privatising the Public University (Routledge 2012).

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