By Marcia Devlin

The Australian federal government has proposed a budget package that is bad news for higher education. It proposes to: reduce commonwealth funding of programs by a blanket twenty percent and allow universities to charge fees (which they will have to do to make up for the government contribution reduction). Of the ‘profit’ universities make, that is, any portion above the twenty percent that is to be cut from commonwealth funding that universities might choose to charge, the proposal is that one-fifth of that must be set aside to fund scholarships for disadvantaged students.

Australia has the Higher Education Contribution Scheme (HECS) where students pay a proportion of the costs of their study. They can take out a loan with a marginal rate of interest and aren’t obliged to start paying it back until they reach an income threshold. The budget package also proposes to apply a real rate of interest to the HECS loans students take out to pay the now increased fees.

Modelling by Ben Phillips at the University of Canberra indicates that Continue reading →