Coalition Government Changes to Higher Education

Uncertainty has shrouded the Coalition Government’s higher education policy since the Abbott Government’s 2014 proposal – which included deregulation of fees and 20% cuts to funding – failed to pass the Senate. This week, Education Minister Simon Birmingham has announced the changes that will form part of the Turnbull Government’s budget.


So what are the changes?


  • The controversial proposed policy to cut university funding by 20% and deregulate fees has been scrapped. In the announcement, the Coalition Government made ‘a guarantee that no student will pay a cent upfront for their higher education, students will no longer face fee deregulation and universities will not face a 20% cut to their funding.’


  • Instead, funding to universities will be cut through a 2.5% efficiency dividend from January 2018. This is expected to save the government $2.8 billion over four years.


  • Student fees will rise by 1.8% each year from 2018 to 2021, resulting in a 7.5% increase. This means students will be paying an extra $2,000 to $3,600 in total for a four-year degree. Taxpayers will continue to subsidise the majority of the costs of a degree, however the student share will increase from 42% to 46% and the government contribution will fall from 58% to 54%.


  • Permanent residents and New Zealand citizens will no longer be eligible to receive domestic (i.e. subsidised) fees. They will still have access to deferred fees via student loans.


  • There will be new scholarships for postgraduate courses.


  • $15 million will go towards establishing new regional study hubs.


  • From July 2018, the minimum income threshold for HELP loan repayment will be lowered from $55,000 to $42000. Repayments will be calculated on a sliding scale from 1% to 10% depending on income. This is a dramatic and unexpected drop, but has been compared to the New Zealand threshold of $19,000 and UK’s $30,000 by supporters.


  • Elements of university funding will be contingent on performance, such as requirements for admissions, financial transparency, student retention and student success.


In his announcement, Birmingham described the changes as ‘measured, modest and balanced.’ The government revealed in 2015 that it had $48 billion of unpaid student debt, with estimates that 25% will never be recouped. This policy is an attempt to reduce unpaid student debt and the Coalition Government claims it is estimated to save $2.8 billion.


So what are people saying?


The response has been overwhelmingly negative. Generally, the universities are shocked and against the funding cuts. Labor representative, Tanya Plibersek, argued against the changes, stating that they show the government to be ‘out of touch.’ President of the National Union of Students (NUS), Sophie Johnston, released a statement saying ‘Students can’t understand why this government continues to force students to pay for their budget … what we are seeing is a reverse Robin Hood – taking from the poor to support the rich.’ The NUS will be leading protests against the changes in Melbourne, Sydney, Adelaide, Perth, Canberra and Brisbane. The New Zealand Union of Students’ Associations (NZUSA) has called the changes a double standard, with Australian students able to access domestic fees in New Zealand, and urged the New Zealand Government to negotiate with the Australian government to remove this element. FUSA Student President, Jordon O’Reilly, has released his own statement:


FUSA is strongly against the proposed changes in this budget. Any cuts to our university funding directly affects the education of all students, however, these proposed cuts will hurt Flinders students even more so due to the high number of mature age, rural and lower SES students that attend our university. FUSA is also concerned that, at the same time the Government is going to force students to pay back more and sooner, they are also cutting penalty rates and issuing fake debt notices, putting students under further financial pressure. These proposed budget changes will only compound the already substantial barriers limiting access to university education and put current students at greater risk of dropping out because the cost, against all sorts of measures, is too great.


So what now?


Like the 2004 proposed changes, the Coalition government will need the Senate’s support to pass legislation bringing the changes into effect. If you are against the changes, the Adelaide protest will be on May 17, 3pm at Parliament of South Australia.