Why restrict students to government funded university places? Let them pay if they want.
Year 12s have already lodged their university preferences with VTAC. Some may have opted for full-fee courses as a back-up plan if they don’t get into a government supported place.
But these fee-places are criticised by the Australian Labor Party. Indeed, the ALP has promised to abolish fee-places should they be elected to government.
Yet is such an action warranted? And would it improve access to university education?
To find the answer we need to understand how the current system works. The most important feature of the present system is that there are a limited number of government supported places, and universities can only accept the amount of students negotiated with the government. Also, governments—both ALP and Coalition—are unwilling and unable to increase the amount of students that universities can take on board because of financial constraints.
As Andrew Norton, a former advisor to retired federal higher education minister David Kemp, notes:
“You do not need... an ENTER 99, or anything like it, to be able to complete an arts/law degree at Monash University. But you do need an ENTER of 99 to have been ‘clearly in’ for a HECS place in 2005. The reason for this is simple. The number of HECS places in this course, and every other course, is limited. There are various ways we could ration HECS places, but Monash uses what is, in effect, an academic auction in which, instead of bidding with money, you bid with marks. People who did very well in year 12 win in this process.”
Even if governments were to drastically increase expenditure on higher education at the expense of all else, student demand is difficult to predict and having a centralised government doling out money cannot ensure everyone who is competent enough to complete a university course will get past the quota system.
So the high Commonwealth Supported Place entry scores you see are the result of a poorly designed system unable to cope with student demand.
This is where fee-places come in. What fee-places do is alleviate this problem by allowing universities to take in more students who, although intelligent, may have missed out by a few points. If we only had Commonwealth Supported Places to get into university with, there would in all likelihood be far fewer people going to university.
However, having a limited amount of full-fee places is not, in itself, a solution. What if we changed the rules of the game entirely? What if, instead of governments dictating financial arrangements to universities, universities were privatised and allowed to run like businesses—competing for fee-paying students? Experience with competition in other industries suggests fees would lower and quality would improve. With greater university autonomy and a complete removal of ‘red-tape’ in higher education, Australian universities will hone their education product in response to student demand.
We must allow universities to expand supply in response to demand. Students should be able to pay for undertaking a degree -- perhaps through a bank loan -- rather than being dependent on a limited number of government funded places.
Originally published in the 2005 edition of 'The Witherbarian'.