An insidious outcome of the job ready graduate changes is the four to one gap between the charge for the highest cost units of study and the lowest.  This was an intensely political decision, to entrench a coalition view of how university should be paid for.

It is no surprise some education groups want to reduce the highest charge. It is strange if they argue that setting the charges is a non-political decision.

Rather, the new top band JRG created sets the incoming labor minister a great political challenge to among multiple calls for action. These, as always, will be tempered by fiscal realities.

The Higher Education Contribution Scheme was a means to get students to pay something, a contribution, post study.  It had a single rate, since that was easier to explain in expectation of the intense resistance to it, including from many people who went on to be Labor ministers. Later governments raised the rate before the coalition in 1997 created three bands, pushing the contributions up further.

The coalition then altered the language from contribution to loan. From the moral good of contributing, once employed, to cost of education, to a HELPing loan that good people pay off and bad ones do not. The protestant work ethic in full flourish.

Julia Gillard reworked many aspects of higher education but not the three-level student charge.  It was not a priority. The extreme JRG spread in the rates makes “letting current settings lie”: much harder for the new government.

But it will not be easy to fix. I assume those arguing that the historians of the future cannot pay the top rate are not suggesting that the arts faculties lose revenue. They want a reduced charge to be offset by an increased funding rate. That is either a use of scarce funds to no other gain than a lower charge for some – or better, but harder, an increase in the lower rates JRG introduced at the other end of its spectrum.

It will require challenging some disciplines.  It amazes me how little fuss there is about the business students. Why they can fork out the top rate but the historian cannot is beyond me.

More challenging, are those professions deemed nice and needing help to get anyone to enrol in them. Will the nurses and teachers and other lower rate disciplines wear a price increase?

I have long argued for a single rate, to let each person pursue its own interest, on the basis that society needs both a mix of graduates across all disciplines and for each person to be as productive as they can be.  Pragmatically it is set at the point needed to bring in the current amount of money. Idealistically, it is set lower than that.

It’s an argument. The point is that there is no objective, rational, answer to how much if anything should be charged for education. It comes back to values, and assumptions about how society should be structured.  I am surprised deans of humanities and social sciences could think otherwise – that setting student charges can be non-political.

Aligning charges to cost is one option. It begs the question of what the cost should be. It is again strange that the deans should agree that their fields should be permanently funded low.  In education I get the impression the cost essentially equals the available funds from permitted sources.  Price drives cost as much as cost drives price.

There is regular gabble about the split of public and private benefit. It is rarely defined in any lucid way. It is forced to make assertions about large sets of people as if they are all the same: there are arts graduates who make millions; there are doctors living under bridges.  I have yet to see any actual application of it that is not the outcome the writer desires dressed up as the logical answer based on the relevant inputs.  In sum, a lovely theory, apparently beyond application.

Others seek to assess the value the disciplines, a variant of public good. I gave up on that early when a learned vox pop of a roomful of economists told me that medicine was of more value than veterinary science. An ad hominem argument par excellence.

Coming back to the Labor challenge.  Despite all its shortcoming JRG is a ministerially driven beast. Amending the funding allocations can let more students enrol. Amending the act can alter the rates for funding and charges.  In 2020 IRU showed how a less extreme set of charges could produce the same overall saving for government and cost to students. It showed how a less extreme set of charges and no cut to government funding could produce a better outcome again.

There are a myriad other possibilities for the creative Labor minister with more positive outcomes in mind. And a big political challenge.

Conor King is Director of Tertiary Education Analysis


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