Higher Education Cuts: It’s Now That Counts

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The headlines were stark; $2.3 billion is be stripped from higher education to help fund the Commonwealth’s school funding reforms. $900 million will be taken from universities directly via an efficiency dividend, while the remainder will come from changes to the Student Start-up Scholarship and abolition of the HECS upfront contribution discount.

Student groups wasted no time capitalising on the shock and indignation; rushing to mobilise petitions and protests in opposition, doing everything possible to fan the flames of discontent.

Allowing neither time to consider the proposed changes properly, nor consultation with universities and students, they drew the predictable ideological battlelines.

Lost in their haste, was the realisation that some of the government’s proposal makes good sense.

The discount for upfront payments of student HECS contributions has long been an odd measure, one many students have questioned the value of. It benefits those who least need the support of the public purse and does nothing to aid university participation, student welfare or academic outcomes.

Not only making sense, some of the government’s proposal, specifically changes to the Start-up Scholarship, has the potential to benefit higher education students.

Yet that potential does not seem to be something they’re cognisant of.

The National Union of Students, whose mantra has long been to oppose any costs being charged to students, was quick to attach the ominous label of “student loans” to the changes. No doubt they’re hoping to draw comparisons with overseas examples, where students find themselves burdened with steep bills soon after graduating. Fortunately our system doesn’t work that way.

They’ve issued a blunt warning, echoed by the National Tertiary Education Union. Making the scholarships repayable will increase the financial burden on students and potentially discourage university participation. Or as the NUS posits – “Many will ask whether going to uni is worth it at all?”

It’s a disingenuous argument that poorly disguises its ideologically underpinning. Degree holders enjoy significant benefits in employment and earning potential, the latter, a premium of over $600,000 for the median male graduate compared to their Year 12 educated counterpart.

The argument ignores historical data, and the simple fact that the scholarship will be, like student HECS contributions are now, a small investment compared to the greater earning potential over a lifetime.

More importantly, it ignores where the real financial pressure for students exists – which isn’t in the future – but in the here and now.

Deferred debt plays a minor role in university participation, one that is shared with an individual’s subject interests and prior educational achievement. It plays no role at all in academic outcomes or student welfare.

What does affect these is the financial stress students face on a daily basis. The current Start-up Scholarship and support payments such as Youth and Rent Allowance are inadequate. The associated stress, and need to work longer hours to make up for the shortfall has a deleterious effect on student wellbeing and a demonstrated correlation with lower academic outcomes. It prompts prospective students to ask, not whether it’s worth pursuing higher education study, but whether they can afford to live while they do so? For some, particularly from lower socio-economic backgrounds, this will likely be the greater obstacle.

Not only should the Start-up Scholarship be transformed into a HECS-like loan scheme as the government proposes, it should be expanded, giving students the option to reduce the financial burden they face right now. This will deliver an immediate, practical and long-term benefit to students and to government.

The government though must not be allowed off the hook. While some of these proposed measures are sensible and offer potential benefits, cutting $900 million from university finances via the efficiency dividend risks undermining a sector already on the precipice. A sector that over the next decade it is predicted will become unviable, unless new, more sustainable models are developed.

How much larger will class sizes grow? How many courses will be cut? To what extent will the quality of teaching, research and student support decline? Inevitably the answers will not be good.

More importantly, higher education isn’t an individual investment; it’s a society’s investment in its future, in innovation, knowledge and security. It’s an investment that more than pays for itself. Cuts like this threaten that investment for short-term gains, while doing nothing to address the longer-term sustainability needs of universities.