Less faint than no price signals on what students pay

The federal government’s new fees will not cost business and humanities degrees out of the undergraduate market

“The true price changes are far less than they appear to be, highlighting the potential of there being quite muted or even zero consequences for student discipline choices,” father of HECS Bruce Chapman and Gaurav Khemka (both ANU) conclude in a new paper.*

They analyse the increase in the cost of courses the government does not like over students’ working lives to find, the maximum hit to weekly disposable income for people in the highest income categories is $6.40, “but much lower than this for median earning graduates.” Overall, they estimate, costs generally of the order of 0.5% and never higher than 0.83% of the (discounted) present value of lifetime incomes.

A male humanities graduate in the tenth percentile of average weekly earnings will be down $1.55, a same-income business grad will be short $1.02.  Grads in the 90th percentile will pay variously $6.38 a week more (humanities) and $2.66 (management and commerce).

Lowest earning women will pay nothing more in either discipline group. Top earners similar figures as men.

There are also low impacts for people with degrees the government approves of – top earning maths grads will score $5.50 or so.

“Once the HECS–HELP collection arrangements and the impact of discounting on lifetime income are taken into account, what appears to be radical with the government’s major price changes will in effect be quite slight for graduates,” they write.

* Bruce Chapman and Gaurav Khemka, “Understanding recent HECS–HELP price misunderstandings” Australian Journal of Public Administration 2021, 1-17