Education Minister Jason Clare conceded the current university fee scheme was not working. But he did not commit to scrapping it.

Education Minister Jason Clare conceded the current university fee scheme was not working. But he did not commit to scrapping it.Credit:Martin Ollman

University heads have been scathing of the program,which tried to funnel students into certain vocations by slashing fees for teaching,nursing and maths courses but hiking arts degrees by 113 per cent,and Clare also told the National Press Club this week that it has not worked.

But thousands of young people studying law,arts,commerce or economics will keep paying $15,000 a year,despite some of their peers paying $4100,as the government waits on advice about how fees should be restructured.

Clare on Wednesday said the scheme failed to deter people from studying arts – with more students enrolled today than there were several years ago – while universities stopped offering important vocational courses because they became more expensive to teach.

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But Clare did not commit to scrapping the scheme and said he had an “open mind” as to what comes next.

“I shouldn’t pre-empt that … Different groups have different ideas about whether you get rid of it altogether,whether you have different types of differentiation. Some eminent people who work in this area say that you need a model that makes sure that everybody pays off their HECS roughly at the same time,” he said.

Higher education expert Professor Andrew Norton said it was “very bad luck” for the students enrolled in humanities courses.

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“Every year someone is enrolled in this is having a long-term consequence for them,” he said.

“My view is the government could have legislated,even last year,[for cheaper arts degrees] to take effect this year. But to make it budget neutral would have required increasing fees for teaching and nursing students,so they’ve made a judgement that was politically too difficult.”

What the independent review said about the former government’s fee scheme

  • The package aimed to be ‘budget neutral’ but in fact decreased total base funding per equivalent full-time student by 5 per cent.
  • Base funding reductions to several priority fields (such as education,mathematics,science,engineering,nursing,psychology and allied health) have made teaching them financially unsustainable.
  • The attempt to incentivise students to move to fields of national priority and away from fields such as humanities has had little effect on student choice.
  • Student contributions have mainly led to some students incurring significantly higher debts that they are unlikely to repay in reasonable timeframes (if at all).
  • Increased student contributions are now at historical highs and are unfairly affecting female students and Indigenous students. This is considered untenable.

But he said student contributions and HELP debt remained the biggest practical and political issues for Clare. “There are 1 million students and 3 million people[with HELP debts]. It has electoral consequences.”

Universities Australia chair David Lloyd,also the vice-chancellor of the University of South Australia,said he “could not be more fulsome” in his criticism of the fee scheme.

“We’ve known all along that there are no market signals that are going to drive demand. Students should study what they’re interested in studying,things that they want to be passionate about,and follow the careers that those studies lead to.”

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Lloyd said he expected fees would transition away “from something which is fundamentally unfair” to something more equitable,but because the government this week extended its funding arrangement with universities until the end of 2025,the timeline for reform was not clear.

Sydney University vice-chancellor Mark Scott said almost all university vice-chancellors would agree the scheme had failed,but it would take time to reverse.

“It’s devilishly complicated to unpick that model,and then to come up with a new model that is fair and meets the requirements that you’d want,” he said. “We’re pleased to get the signal from the minister that important reform is coming in this area that we’re going to quickly abandon the very unsuccessful experiment.”

The policy –which has failed to drive students away from arts degrees – passed parliament with a single vote in 2020 and has had unintended consequences in the years since. Universities told the review it made teaching in several priority fields financially unsustainable,and it cut the total base funding for each full-time student by 5 per cent.

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The former government promised no existing students would be worse-off,but fine print legislation meant higher fees were eventuallypassed on in full to some students doing their honours ortweaking their course structure.

First-year arts student Angus McGregor said he understood the complexities of policy change,but thought that students with the most need should be prioritised for fee relief.

He also said the false perceptions around arts degrees should be addressed. “Arts degrees have become an easy thing to throw shade at,[but they] are very employable and useful. Soft skills and interdisciplinary skills are valued,” he said.

With Lucy Carroll

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