The Business of Universities: a three part report on the major issues facing the future of tertiary education in Australia.
Part 1. What happens to student debt?
The tertiary education system in Australia has undergone some significant changes in recent decades. It may even surprise some younger readers that a university education was once free. I don’t mean free in the sense that it’s free now and you pay later which is the current modus operandi, I mean that it was free. Full stop. If you studied at university, the Commonwealth Government would cover the costs of your education, and once you graduated you didn’t have a substantial HECS-HELP fee – in some cases, the size of a small home loan – looming over your head and reminding you of the two steps back you had to take before you could take one step forward.
The golden years of free education in Australia commenced during the Whitlam Governments time in office. In the early 1970s, the Whitlam Government abolished all university fees and made higher education more accessible to working class Australians. Prior to that, a higher education was something experienced primarily by the more affluent in society – unless you were lucky enough to be granted a scholarship – it was somewhat of an esoteric world, a lifestyle experienced by a small minority who had access to a large reserve of financial resources.
Gough Whitlam – as I am sure any rational-minded person would agree – could see the logic and more so, the potential in offering free education to the masses. In doing so, a free higher-education would enable more Australians to increase their level of knowledge and skill base and therefor be more employable and ultimately provide a greater contribution to the economy. It seems like a more productive, sustainable system, wouldn’t you agree?
Yet if we look at the current situation of tertiary education in Australia, it has– in the space of roughly fifty years from when the Whitlam Government abolished higher education fees – been completely flipped and now operates as a business, a business that has grown so large that it is now driven by one motive more so than the concept of education, and that is; profit.
Education has become Australia’s leading service export, generating more money than the tourism sector. It has grown so large that it is now the country’s third largest export overall, generating $28 billion in 2017/2018. Although such figures may be praised as positive news by economists and politicians alike, the current trajectory of Australian universities is not as healthy as the situation would like us to believe. In fact, the university system in Australia has become so uncertain, it is like an ever-expanding balloon, on one hand it is bound to pop, and on the other, it will lose the support from those who keep blowing fresh air into the system and eventually shrivel from the inside.
The primary concern is that Australian universities have lost sight of what they once represented and now operate under strict capitalist guidelines. Such tunnel vision has placed tertiary education in a very unfavourable situation, and as a result, there are key concerns that the Australian university system as well as the current government is failing to address.
Firstly, there is a substantial amount of public debt that has been generated using the HECS-HELP scheme. $54 Billion to be exact. It was under the Howard Government when student fees really increased. The Howard Government introduced the Three-Tier HECS Fee structure which charged students according to what they were supposed to earn once they entered a particular line of work. For instance, a student studying law would be charged a higher fee in comparison to an Arts student as they were expected to earn a higher income once they entered the workforce. As a result, a typical undergraduate degree can costs anywhere from $25,000-$30,000 for a Bachelor of Arts and upwards of $100,000 or more, for obtaining a degree in Medicine. The only saving grace that remains of the Three-Tier system is that you only have to pay back your HECS-HELP Fee once you begin earning more than $51, 957 annually, as of the 2018-2019 financial year.
So what’s the economic incentive for so much student debt? The answer; debt is good. Well its good for those in power, like politicians, and bankers because a university HECS-HELP fee is similar to a home loan, if you borrow money, you need to pay it back. Debt forces you into market compulsion, wherein you have to sell your time, to earn a living, to pay it back.
Most students enrol at university knowing full well the costs involved, and they proceed willingly because they have come to believe – or have come to be told – that a university degree is a stepping stone to a better, higher- paying future. However, it is safe to dismiss such belief as fallacy. Students are not guaranteed a high paying job upon the completion of their degree, and in many cases a degree is not the stepping stone to a better, higher-paying future.
As the following article will discuss, another issue confronting the tertiary education system in Australia concerns the credibility of the very education itself, because a degree is no longer as significant as it once was.