Focusing on the facts of higher education reform

Media Release
  • Minister for Education and Training

The Turnbull Government has welcomed the release of a Senate inquiry report recommending the Parliament pass reforms to higher education to ensure the system is sustainable and student-focused. 

Minister for Education and Training Simon Birmingham said the report recognised the need to reform Australian higher education to drive better results for students and better value for money for taxpayers.

“We want to give students more choices and to get the most bang for taxpayers’ bucks out of universities,” Minister Birmingham said.

“I welcome today’s report from the Senate Education and Employment Legislation Committee for highlighting the realities of the need to reform Australia’s higher education system. 

“Our reform package gets the balance of funding between students, universities and taxpayers right, is fundamentally fair and ensures every Australian has the opportunity and support to study.

“Students will still not face upfront fees and will, on average, pay back less than half the cost of their degree.

“Student retention and outcomes have stagnated, there’s around $50 billion of student debt with a quarter not expected to be repaid, taxpayer funding for universities has increased at twice the rate of the economy and per student they’ve seen a revenue increase of 15 per cent while costs have only grown by 9.5 per cent.”

The Turnbull Government’s comprehensive higher education reform package includes:
•    Enshrining the Higher Education Participation and Partnerships Program in legislation and better targeting it to students from disadvantaged backgrounds who face additional barriers to study
•    Making admissions standards and entry pathways more transparent for students
•    Better distributing postgraduate coursework places to institutions where students want to study
•    Funding growth of 23 per cent over the forward estimates
•    Overhauling the student HELP scheme to address the $50 billion of unpaid debt to taxpayers and better balancing the costs of a degree from 42 per cent to 46 per cent for students and 58 per cent to 54 per cent for taxpayers
•    Extending Commonwealth support to approved sub-bachelor courses so more students have more choices in their education
•    Tying 7.5 per cent of each university’s funding to performance metrics

Minister Birmingham said despite some of the alarmist claims from some, including the Labor Party, taxpayers expect their money to be used as effectively as possible to give students the opportunities they need to succeed. 

Claim #1:          Universities will need to close campuses or fire staff
“Our plan delivers an increase of 23 per cent in teaching funding over the forward estimates. Business and industry would be thrilled with that sort of projected revenue growth yet some in the universities debate dream up doomsday scenarios from their extra taxpayer money,” Minister Birmingham said.

“Our plan delivers higher real per student funding than even just a few years ago, with continuing record numbers of total students, so it’s clear that universities can succeed within these reforms.”


Claim #2:          Universities can’t be any more efficient
“Average funding per domestic student for universities increased by 15 per cent between 2010 and 2015, while over the same period the cost for universities to deliver courses increased by only 9.5 per cent, according to independent analysis from Deloitte,” Minister Birmingham said.

“Efficiencies clearly exist.”

Claim #3           The new HELP repayment thresholds will discourage students from studying at university
“For income earners on $42,000 a year, we’ll be asking for $8 a week for a graduate to repay their student loan. It’s the equivalent of a couple of cups of coffee,” Minister Birmingham said.

“Our reforms guarantee that no student will have to pay a cent of their fees upfront and that taxpayers will still subsidise the majority of the cost of a degree.”

As the architect of the student loan program, Professor Bruce Chapman has said: “The evidence is now overwhelming that changes to the level of the charge, or other aspects of HECS-HELP, such as the first threshold of repayment, have no discernible effects on student behaviour or choices.”

Claim #4           Charging fees for enabling courses will discourage disadvantaged students from studying
“We’re expanding the demand-driven system and the taxpayer-funded student loan program to sub-bachelor courses where they translate into further qualifications and align with industry needs while ensuring that enabling places go to the institutions with the best record of helping students succeed,” Minister Birmingham said.

“There’s no upfront cost for those courses and those students will be treated exactly the same as their peers doing other courses at university where the student loan program applies.”  

Claim #5           There’s no clarity about how the postgraduate scholarships scheme and performance funding will work
“We’re overhauling the current postgraduate system where the Commonwealth allocates which universities get how many taxpayer-supported places and giving students the power to choose where they want to study,” Minister Birmingham said. 

“There’s around 4,000 unused postgraduate places currently which is why our postgraduate scholarships will ensure students are selected on merit and are empowered to determine where they want to study rather than being driven by arbitrary, historical allocations and university business models that have paid no heed to student choice.

“As with our postgraduate scholarships, we’ve also been clear we will work with the higher education sector to deliver a performance-based funding system and trust Australia’s best and brightest minds in our universities will work cooperatively on the design of a fair and effective student-centred system.

“Our reforms will continue our strong support for the value of higher education to Australia both as our third largest export industry worth $23.6 billion, but more importantly as a knowledge industry building capabilities in individual Australians and our nation.

“I look forward to continuing discussions with my Parliamentary colleagues about how these reforms can deliver improved choices, financial sustainability and accountability to Australia's higher education sector.”

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