The deregulation debate

Higher education is front and centre in the debate over the Federal Government’s budget. The Minister for Education, Christopher Pyne, has outlined a reform agenda which is probably the most significant in the history of higher education in Australia.

In these four brief videos I talk about what these education reforms will mean for this community and what ANU may look like in a deregulated environment.

Imagine the future

What does ANU look like in 10 to 15 years? What type of university do we want to be?

Changes in higher education

To understand how we reached this point we need to go back and look at what’s happened in the higher education space in the past decade.

Equity measures

Although I broadly support the Government’s higher education reforms there are a number of areas that need further consideration and debate.

Merit-based entry

It’s critical that entry to ANU be based on merit and student’s ability. Removing the barriers to entry is key to this.


Comment by Shaun Lehmann
May 29, 2014 @ 5:06 pm

Dear Vice-Chancellor Young,

I have a few points I would like to raise with regard to the ANU and the government’s proposed higher education changes. I offer my thoughts here as a stakeholder in the ANU in three capacities: as an alumnus, as a PhD scholar, and as a teacher.

Course diversity:

In one of the information videos available via your website, you mentioned that the decrease in dollars per student received by universities could have a negative impact on the diversity of courses on offer at the ANU – particularly where this relates to courses with small enrolments. This logic is sound, and you were right to argue against past governments reducing the funding that universities receive.

I am, however, concerned that a de-capping of fees may ultimately also have undesirable effects on courses with small enrolments. I moved to the ACT from WA to undertake graduate coursework studies in biological anthropology – a niche area of study that is only offered at the ANU. Biological anthropology has a dedicated, though small, student body and academic staff. I am concerned that without sufficient competition from other universities, the ANU may be in a position to essentially charge what it likes for courses like these. Students interested in this field will be faced with little choice but to comply with ANU fee demands, as their only other option would be to study overseas where they do not get the benefit of HECS/HELP. As biological anthropology is a largely academic field, many graduates do not stand to generate large sums after graduation. If fees are high, and the government succeeds in charging interest on HECS/HELP, then students could quite realistically go to the grave with a debt. I am glad you are opposed to the raising of interest in this regard.

Alternatively, if students are not willing to pay large sums, I can foresee programs like biological anthropology being let go as their retention would generate less revenue than taking more students in other areas. This would essentially result in the death of a discipline in Australia. This argument is of course naive of cross-funding of programs as I am not privy to how things work in that regard.

Course diversity is one of ANU’s strengths. I hope we will do our best to keep this as a strength without using monopolisation to unjustly levy fee hikes on small disciplines.

Equity and merit-based entry:

I applaud your stance on merit-based entry. It is well known that the ANU does not perform well with regard to participation from lower SES students. As you identify, ATAR entry is one of the main causes of this. In many ways ATAR is a better measure of SES than it is of academic ability. I am aware that moving away from such a system is difficult, but I would urge the ANU to reduce its emphasis on ATAR in favour of some other entry method that is less entangled with the benefits of wealth.

I am proud to say that I have been involved with teaching in the ANU’s social sciences associate degree program for two years now. The program seems to be working well, and the students I have taught are indeed diverse and, importantly, more often than not successful in their academic endeavours. Pathway programs like these are essential to addressing equity issues at the ANU, and I am very happy to hear that you agree.

Thank you for your time.

Kind regards,

Shaun Lehmann
PhD Scholar
BSc (BioMedSc) MBiolAnth Res Hons CELTA

Comment by Griff Ware
May 29, 2014 @ 5:23 pm

If it must be introduced at all, perhaps the higher HECS interest rate could be applied only at points in time that a person is earning enough to be required to pay back their HECS debt? And until that time, accumulate interest at a rate equal to one that applies under the current system?

Comment by Brendan
May 29, 2014 @ 6:11 pm

I understand university have to get money from somewhere in order to be financially sustainable. However, I don’t understand why the cost have to be shifted onto individual students. At least, I know from my experience finishing university it can be a burden for some. This is especially true when other things can interfere with certain decisions. I believe this to be true for many. Not all students will end up working in the area they intended. At least, some or most will wait for a long time for appropriate work opportunities or never enter proper employment. Not all students will end up earning the high salaries as mentioned by Christopher Pyne. It is believed that deregulation will increase fees in the short term, and if the modelling is correct, it will decrease over time. But how certain are we that these decreases will occur? in what time frames?

Besides, it is obvious that these changes is the gradual shift towards valuing our education as a means to only gain employment. But, isn’t education more than just gaining a job and repaying debt??

Comment by Arthur Marusevich
May 29, 2014 @ 8:23 pm

I am a full time JD student at the Law School. I pay upfront domestic fees because I am not entitled to FEE HELP or HECS due to my citizenship status. But I know what it means to work full time 7 days a week to be able to afford law school and living costs. I hope you get my point here.

Comment by Ed Wensing
May 29, 2014 @ 9:27 pm

Dear Vice-Chancellor Young
Thank you for taking the time to put those videos together and share your views with us about the pending changes to higher education in Australia.

Similar to Shaun Lehmann, I am also an ANU Alumnus and a PhD Scholar at ANU.
I welcome your commitment to embracing the pathway packages for the less well off students to be able to undertake their undergraduate studies at the ANU and I would urge you to make sure you include opportunities for Indigenous people to take up these opportunities. The reforms to higher education will have a significant impact on people’s ability to undertake higher education, and I agree with you, it should be based on merit and not on wealth.

In your videos you didn’t have much to say about the likely impact of the higher education changes on research and post graduate studies, in particular for PhD Scholars, present and future. I am keen to hear what your views are about whether there will be any impact on existing PhD Scholars

Kind Regards
Ed Wensing FPIA

Comment by Scott Lang
May 30, 2014 @ 7:37 am

Dear Vice-Chancellor Young

I agree that there are both concerns and opportunities with the proposed changes.

My concerns relate to access to university study for poorer students. As the first person in my family to go to University, I know scholarships are a good thing, but I think the real challenge is in showing people from low SES backgrounds exactly why University study is important both to themselves as individuals, and to society more broadly.

I did my undergrad business degree at Swinburne University while you were there, and participated in the IBL (Industry-Based Learning) program. This was a real wake-up call to me on several fronts; firstly, my Excel and Word skills were not up to industry expectations (because we had no PC at home at the time, so I knew only the basics), and because so much of the work was project-based and driven by intrapreneurs.

After this experience, I looked to find entrepreneurial classes but could only find one in the second half of 2007. It was the most relevant course I did in my entire degree.

So, I believe ANU should be making project-based and entrepreneurial subjects part of the core curriculum at bachelor level, not later on – as so much of the labour force needs people to have these skill sets. And I feel that people with business experience should have that experience counted towards entry into courses.

My main point here is that I think many students think that going to University is going to get them a “job”, and we need to get past that Industrial-era attitude. Universities should be helping us to develop the skills (regardless of whether we study music, art, anthropology, or physics) to help businesses and other organisations to solve problems on a project-by-project basis, and the skills to identify and market ourselves to do that.

My other concern is what happens overall in Australia to economic mobility. Table 6.3 in the paper at this link (http://www.nber.org/chapters/c7858.pdf) outlines a large difference between the USA and Australia in terms of the returns to education. The paper pre-dates the digital age, and makes me think that it may potentially be our award wages keeping the returns to education low relative to the USA. But it could also be that our HECS-HELP system is assisting economic mobility, which is why the gap between the well- and less-educated people in Australia is not as large.

If we move to a system where higher levels of interest are charged for study than currently exists, then I think we really do invite the possibility of far less economic mobility as a society. And this at a time when we need a highly skilled workforce!

While scholarships for study are a start, it is no use offering them if students cannot afford to live in Canberra due to either housing or other costs. The most brilliant students will struggle to study well if they do not get proper nutrition or rest when having to work long hours in part-time jobs to survive. So please consider making some of the scholarships inclusive of all costs of living.

Onto the positive side – I am currently studying a Grad. Dip in Graduate Studies, and I think this style of course is ideally useful to students going forwards. The onus is upon me as an individual to think about how each subject I choose from different disciplines will help me to innovate and to add value to an industry with ideas from other fields; whether that is as an employee, an employer, or a researcher.

I work full-time in a public-sector role, so the flexibility of being able to study subjects at night is really good. There are not many subjects to choose post 6pm, however – and if we wish to keep upskilling our adult workforce, this needs to change.

Thank you for the opportunity to comment.

Comment by Daniel McKay
May 30, 2014 @ 3:48 pm

There has been lot of huff and puff about the effects of fee de-regulation, particularly by some students – but it seems to me the debate isn’t where it should be. The two areas where it should be focusing on is how we can improve the quality of our education, and ensure equity of access. Rather than being reactionary, it seems more productive to explore what potential deregulation has to achieve. Whilst also recognizing and being honest about its limitations, and working on ways to limit those effects. If we move the debate in this direction then we can better collaborate on using those new resources to build a world-class education which stimulates enquiring minds and rewards curiosity: and is open to all those who have the requisite capacity and passion.

It would be good to hear more from the university, specifically how it intends to use those new resources in improving the quality of the education that it provides. I hope that it will take cues from some of the world’s most ancient and successful universities like Oxford, Cambridge and Harvard: now that we have the potential to really fund smaller class sizes and more personal, one-on-one and small group interaction with academics. Having a supervisions system, for example, would not only be unique to Australia, but lead to a more engaging, rigorous and collegial experience. Interactions with all researchers at the ANU, regardless of seniority and specialization should be intimately part of our experience here. The exchange of ideas, and discussion even between the novice and the expert should be mutually beneficial: if only because of what it can lead to. The mission to discover and the mission to teach those discoveries surely are the twin faces of the same coin. If we have this amazing opportunity, and the resources to capitalize on it – then it would be sad to see it pass by unrealized. My fear is that the university could, even for the right reasons – mistakenly pour all these new funds into research, neglecting undergraduates, and leaving them to their own devices with MOOCs and large anonymous classes.

As a student from rural Australia, schooled in an intimate and small educational environment – I can see that the spark and dynamism of genuine interactions between students and academics can be too easily lost in the madding crowd. You learn more when you can learn each others names. That’s not to say, that ANU doesn’t already have this to an extent – but the possibility of this being properly enabled with these extra funds, is just waiting to be fulfilled. My smallest classes at the ANU, which have had the most contact directly with academics have also been the most rewarding. If only because up close you can see them bristling viscerally with their passion for their work. But, even if at the end of the day I have to reduce my consideration back to dollars and cents, as a student, I am willing to pay more if that means that I can get access to a world class education. There have been a lot of concerns about cost, and they are serious issues, particularly the issue of debt: but like when my dad goes to buy a new tractor – sometimes you have to pay a bit more for quality, if at the end of the day you’ll be better off because of it. If undergraduate students are to be cash cows, to borrow another analogy from my rural background: I hope ANU rears us on a stud-farm, not a feed-lot.

The other issue, and one which I am glad to see that university is taking onboard is that of access to the university. The suggestion that pathway schemes be used, certainly is a good option: but I would suggest, not the only one. Nor should ATAR’s be the sole requirement for entrance. A person’s potential, their passion and capacity for application and momentum: can never be accurately captured, indicated or otherwise represented in the current ranking system. Given that it is further impacted on by socio-economic and other background factors it is a noxiously blunt instrument. Rather, it should be supplemented by other means, such as recognition of high performance in relevant school subjects and also with personal interviews – where the individual can demonstrate something of themselves. An unaffected passion for a discipline in science, law or the arts speaks more of their capacity for success in those areas, than an impersonal ranking which aggregates more things than merely their performance at school. For students from regional, rural and remote Australia this should be an especially important consideration for the university as it ponders how to make most of this new opportunity and new funding arrangements. As it opens its doors, it should do so to the most capable and most curious, regardless of their backgrounds – recognizing potential alone.

I can see the potential for the ANU to really do amazing things with the proposed changes: to provide an educational experience which is exceptional in Australia, but also the world. However at the same time, I can see the potential for this opportunity to not only be lost in a storm of misdirected fury at some of its limitations, but also misdirected focus on its possibilities.

Comment by Miriam Adams-Schimminger
May 31, 2014 @ 12:09 pm

How can raising the cost of something possibly inspire more people to do that thing?

We should be making university cheaper and more accessible for more types of Australians, not deregulating it so that people can profit.

University should be about many different kinds of people being involved in education, innovation, and research, not profit making.

Comment by Daniel Cotton
May 31, 2014 @ 9:44 pm

Dear Vice-Chancellor Young,

I am a current undergraduate student, with deep concerns about deregulation. I was glad to hear some of the points about equity you made in your videos, though I remain worried about the elitism that this system may produce. The finding by Bruce Chapman that fluctuations in HECS fees do not deter people from a university education – regardless of their socioeconomic status – is often cited to dispel this concern. I take it that this was what you were alluding to in “Merit-based entry”, but if I am wrong please do direct me to research that supports these measures. I do not understand the justification of generalising Chapman’s findings – and other assumptions surrounding HECS – to the current situation.

Given a binary choice of whether or not to go down the path of tertiary education, it is understandable that students do not decide to change their life plans (and not go to uni) in order to accrue smaller debts. Given the choice of which degree to choose (and thus which field to study to pursue, with implications for future job opportunities), it is understandable that students do not change their life plans (and do, say, an arts degree over a science degree) to accrue smaller debts.

However, given the choice of the same degree at two institutions, with widely varying costs, I believe a systematic difference *will* occur, where wealthier students will be more inclined to go more prestigious institutions with higher fees, and vice versa. An enormous debt means a lot more to someone who has to pay it off themselves than to someone whose parents will pay upfront fees anyway. Presented with the choice between a BA from UC and a BA from ANU that is twice the price, I know which I would choose. I really reject the idea that the HECS system resolves these issues.

It is strongly implied by these videos that the increased fees would result in a better education at more prestigious unis (such as our own). In the market based system, some unis would offer cheaper degrees, but surely this will mean the education is not to the same calibre. Indeed, if these degrees are to the same calibre, we should dispense with the higher fees altogether.

If we can accept these assumptions, then these changes will mean a systematic bias of “better” degrees (by which I mean the kind of degrees you refer to in your videos) going to wealthier students. I am very concerned by this. I do not think that the proposal of more scholarships goes far enough. More scholarships will make a difference for a select few students, which is fantastic. However, in the context of broad-level change, it does not go to the root of the problem, and is more of a “band aid” solution. Indeed, it has been labelled a ‘fig leaf’.

I understand that universities are going to need to increase fees in the context of this budget, and this is unfortunate for many students. However, doing it in a way that creates systematic disadvantage is the worst way. In this regard, I’m very happy to hear that you oppose the heightened interest rates. However, I would like to express my genuine concern that this system may be elitist to the point of furthering economic disparity. The links between neoliberalism and economic inequality are well known and evidenced; I am not trying to be alarmist. I applaud your assurance that academic merit should be the only requisite for entry, but remain concerned that this promise can be delivered.


Comment by Peter Vouzas
June 2, 2014 @ 10:19 am

Dear Vice Chancellor Professor Ian Young, I empathise and share your passion to better university in the light of uncertainty.
Perhaps the documentary “Ivory Tower” to be released may describe an unwanted reality here in Australia.

Nevertheless, caution to understand potential changes is what is desired.

Corporate type degrees world wide have already been outmatched by independent accreditation qualifications such as http://www.cfainstitute.org, http://www.cqf.com, http://www.prmia.org, http://www.garp.org, http://www.cpaaustralia.com.au, http://www.actuaries.asn.au, where competition is high and unlike (leading) universities their standard remains fiercely high where the examination process specifically avoids recycled examination questions.

As for research, as a tax incentive corporations should be encouraged to utilise and grow the facilities and human resources at universities, where university remain an intellectual think tank for our nation’s future.

As for the medical profession, apart from ability and money, a criteria to identify empathy into the professional medical association should be sought. The last thing you want is to be treated by doctor that directs your treatment as a series of testing intellectual property experiments devising ways how exploit the health insurance for maximum profitability, where you are ultimately looked upon like an automotive panel job.

In the 1960’s my parents left their families and migrated to Australia as it was the lucky country. They worked very hard knowing that a good health system, education and old age pension were a promised entitlement for all citizens.

It may be that the university system needs to return to an ability criteria for entry, independently of social economic background, where true hard working ability/talent is primarily sought. The big universities should function just like they did in the 1980’s and the rest return back to the Tafe system that was available at the time.

Our priority is to offer an education system to domestic students to address our unemployment concern and secondary is the need to tailor to the international arena.

Paying for one’s education is not a bad thing, but some degrees do not offer a high income remuneration where qualifications of such degrees offer a service to society (ie teachers, nurses etc). Perhaps a reversal of the HECS fees into one’s superannuation for outstanding service in society should be rightly rewarded also addressing pressing superannuation/pension concerns.

Thankyou for the opportunity to comment.

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Updated:  13 October 2014/ Responsible Officer:  Director, SCAPA/ Page Contact:  Director, SCAPA