Australia's top universities are urging the Abbott government to embark on the biggest shake-up to university funding since the introduction of HECS by removing government caps on student fees.
Letting market forces decide how much students pay for degrees would allow Australian universities to compete on quality with prestigious institutions such as Harvard and Stanford, according to Group of Eight (Go8) universities chair Ian Young.
The deregulation push, which is backed by Australian National University Chancellor and former deputy Labor leader Gareth Evans, comes as the Abbott Government finalises its response to a major review into university funding.
Professor Young said: “We should not be ashamed of thinking big – there is no reason the degrees offered by Australian universities shouldn’t match the best in the world.
“Removing arbitrary limits on fees would lead to a more vibrant and diverse university system and allow Australian universities to become truly world class.”
Professor Young, who is also Vice-Chancellor of ANU, said deregulating fees would allow universities to reduce class sizes, offer highly specialised degrees and boost investment in research.
Universities that increase fees should be required to offer extra scholarships to students from disadvantaged backgrounds, he said.
Students in equivalent degrees currently pay the same fees regardless of which university they attend.
Under the elite universities’ proposal the only limit on fees would be that income from domestic students – via government funding and student contributions – does not exceed the amount charged to international students in the same course.
International students typically pay far more than local students. Domestic Commerce students at the University of Sydney pay $10,000 a year while international students pay $34,000 a year.
Australian Catholic University Vice-Chancellor Greg Craven said the current funding system should not be scrapped to chase an “overseas nirvana”.
“The most important thing is not that you have the best university in the world but the best university system in the world,” he said.
“You don’t want to have one Rolls Royce and 12 clapped out commodores”.
Professor Craven said universities specialising in low-income degrees such as teaching and nursing would be less likely to benefit from any increase in fees.
Australian Technology Network of Universities executive director Vicki Thomson said technology universities have a long-standing opposition to complete fee deregulation.
“Australia will never have an Oxford or Cambridge or Harvard,” she said.
The University of Melbourne is Australia’s top-ranked university at 43rd place in the London Times global reputation rankings. Melbourne had an overall score of 6.2 compared to Harvard, ranked first globally with a score of 100.
Grattan Institute Higher Education program director Andrew Norton said he supported less regulation but warned that allowing students to take on more debt would pose substantial risks to the federal budget. The cost of unrecovered student loans is already forecast to be as high as $13 billion by 2017, he said.
The National Union of Students said: "Deregulating fees would enable universities to charge students through the nose for their education.
"Students already graduate with almost a decade's worth of debt to repay, and deregulating fees would only increase that debt burden."
A spokesman for Education Minister Christopher Pyne said: “We are committed to the best possible higher education system in Australia and to ensuring our universities are not left behind by our Asian competitors and other international universities.
“The government welcomes a debate over how to ensure our universities remain competitive.”
