In science and engineering, student fees will decline by $2000 per year to $7700, but the Commonwealth contribution will fall by even more, at $2760 per student. This represents a combined reduction of per-student revenue received by universities of 16 per cent in these disciplines. Universities also face the same level of per-student revenue decline in maths, where the increase in the Commonwealth contribution makes up less than half of the reduction in fees.
The government may be hoping that lower fees will incentivise students to enrol in STEM courses. But reducing the revenue received by universities for science, engineering and maths students will stretch teaching resources, especially in expensive-to-run subjects. It may have a perverse effect: universities may actually be forced to limit enrolments in STEM due to constrained per-student revenue, and over-enrol where student fees are highest.
The Coalition’s plan will significantly reduce the proportion of government funding in the university system as a whole. This proportion is already low by OECD standards and has left universities highly exposed to the drop in international student revenue from COVID-19.
The shift in the funding mix towards student fees is most acute in the humanities and social sciences. Students studying subjects such as history, philosophy and politics, as well as those enrolled in law, economics and business degrees, will pay $14,500 per year in fees. These students will contribute 93 per ceant of the cost of their university education, while the Commonwealth’s decline to 7 per cent will account for only $1100 a year.
Fee increases will raise the proportion of the university funding mix that is paid by students. Monash University Vice Chancellor Margaret Gardner estimates the proportion of university teaching revenue covered by student fees will increase from 42 per cent to 52 per cent. This will be the first time since university fees were reintroduced by Labor in 1989 that governments will fund a minority of university teaching costs.
Greater reliance on student fees at this time will create deep intergenerational inequities. Domestic demand for university is poised to increase as a result of a poor jobs market and former treasurer Peter Costello’s baby boomers reaching university age. Demographics and the COVID crisis were about to collide with the government’s prior decision to cap Commonwealth contributions to teaching.
The government’s solution is for young people to pay more for their university education while they also face the brunt of the job losses from the pandemic fallout. Bigger university debts will mean longer repayments that act as an effective tax increase for graduates. Student loan repayments now start at incomes of only $45,000 per annum – about half the average full time wage. Repayments on university debt tend to hit when graduates are trying to save for a home deposit or pay childcare costs, disproportionately impacting women who are the majority of arts graduates.
The Education Minister has claimed he will deliver more domestic student places in a budget-neutral way. The details reveal it is not possible to increase access to quality higher education without increasing per-student Commonwealth funding. There are good reasons for senators from the cross bench, along with Labor and the Greens, to demand just that.