Top Of The Class: Pyne's Education Reforms Highlight A Looming Political Battleground

Education Minister Christopher Pyne has been busy of late.

As well as leading the government in the House of Representatives, Pyne has a radical plan to reshape Australia’s higher education system.

The Education Minister wants to slash 20 per cent from student funding, charge students higher interest rates on their student loans, and completely deregulate university fees.

Over the weekend, the voluble South Australian was out and about explaining the need for his university reforms.

Speaking on The Bolt Report, Pyne attempted to defend his radical plans by claiming that “we cannot have no reform to universities or they will slide into mediocrity.”

In the interview, Pyne refused to rule out reports in Fairfax that he would cut university research funding if the Senate won’t pass his reform bill, due to be introduced to Parliament this week.

“Savings do need to be found,” he told Bolt. “And the only savings measures that are available to the government are ones that aren’t legislated, which are ones like research.”

To say that sent a shiver down the spines of university Vice-Chancellors is something of an understatement. There was audible panic from university chancelleries, particularly in the research-intensive sandstone unis often known as the “Group of Eight” (Go8).

Cutting research funding truly would be a disaster for the sandstone unis. International rankings, like the prestigious system run by Shanghai’s Jiao Tong University, use research output as a key input metric. Big cuts to research will inevitably see Australian universities sliding down global league tables.

Melbourne University boss Glynn Davis, who knows a thing or two about politics, told The Australian’s Julie Hare that cutting research grants further (they were already cut in the May budget) “would be more devastating than any other one action: devastating to Australia’s reputation internationally, to our scientific workforce, to medical research”.

“It would be an extraordinary decision,” Davis said.

Others in the sector might just have had cause for the tiniest bit of schadenfreude upon hearing Pyne’s threat, though. The Group of Eight has been essentially the only supporter of Pyne’s changes. That’s because the sandstone unis have the most to gain from fee deregulation, which would allow them to hike up tuition fees to levels approaching prestigious US institutions.

But the support has been lukewarm. The sandstone VCs have internal problems of their own: there is widespread dissent amongst students and academic staff about the changes, and the University of Sydney, for instance, was forced by activists on its governing Senate to hold a town hall meeting to debate the changes last night.

Pyne’s threat of withholding research funding therefore looks like a gambit to bring the Group of Eight into line. With the support of Vice-Chancellors from this group, Pyne can split the sector and pretend he has at least some support for fee deregulation.

And lo and behold, the Group of Eight VCs are in Canberra today, in an attempt to try and negotiate on the bill with Pyne.

As usual with this government, the views of those most affected by the changes have not been sought. Pyne was dismissive of student concerns in his interview with Andrew Bolt, making a flippant comment that “we’re not exactly asking for their left kidney”.

Students and families faced with sky-rocketing fees for a basic tertiary education have a different view. So too do regional and suburban universities. These institutions lower down the international rankings and with less of the accumulated prestige enjoyed by their big city cousins, have far less leverage when it comes to raising fees.

This could see some universities dangerously exposed to deficits and job cuts should prospective students decide that they can’t or won’t enrol.

They will probably raise fees anyway, mind you: in the UK, where fees were deregulated a few years ago, nearly every institution in the country raised their fees, from Oxford and Cambridge right on through to the newest and least prestigious.

The scary thing about these reforms is just how radical they are, and how uncertain. New Matilda spoke to a number of higher education policy experts yesterday. None of them was prepared to predict the short or long-term impacts of the reforms.

Everyone we spoke to agrees that universities will immediately hike up their tuition fees. But beyond that, no-one really knows what will happen.

Will higher university fees deter domestic students from getting an undergraduate degree? Will the radical change force universities to cut courses, killing off unprofitable arts and science faculties? Could one or more regional universities go broke?

What about the implications for secondary schools? Could middle class parents, worried about the spiraling cost of higher education, decide to send their kids to the local high school, so as to save up for university?

The answer to all of these questions is a shoulder shrug. We simply don’t know.

Perhaps the most alarming aspect of Pyne’s reforms is the proposal to open federal funding and HECS support up to private colleges and institutions. This sets the scene for the wholesale entry of the private sector into Australia’s higher education system.

The domestic and international precedents for such a reform aren’t good. When Victoria opened up its vocational education and training system to private providers a few years ago, the result was a debacle.

The reforms, ushered in by the Labor government of John Brumby, were meant to expand vocational education by allowing private providers access to public subsidies.

What happened? Widespread rorting. With little regulation to protect students, unscrupulous providers rushed into the marketplace, luring unqualified students into courses with offers of cash bonuses, laptops and tablets. Enrolments exploded by 300 per cent, blowing out the state’s education budget and forcing the incoming Liberal government under Ted Ballieu to implement savage cuts.

In a chilling harbinger of a likely outcome under Pyne, Ballieu decided to cut funding to public institutions to make up the difference. There were wholesale job losses and campus closures in Victoria’s TAFE system. Private providers, meanwhile, continued to offer cheap, low-quality courses .

One prominent education researcher described the Victorian deregulation as a “lesson in how not to reform vocational education”.

Or perhaps you’d prefer to look at the American experience with deregulated higher education. A recent review by the US Senate – a body not known for its rabidly anti-market views – found that for-profit education in the US has been a disaster.

On average, just 17 per cent of revenue at private, for-profit institutions goes to teaching, while more than 20 per cent is skimmed off in profit. In some cases, graduation rates are less than 50 per cent, meaning that more than half their students drop out.

The University of Phoenix is a good example of how for-profit education operates in the wild. Long trumpeted by Australian ideologues such as Andrew Norton as a nimble innovator that paid “careful attention to the needs of its target market”, the University of Phoenix had a drop out rate of 60 per cent in 2012. Of those who completed its courses, 21 per cent defaulted on their student loan.

The University of Phoenix spends twice as much on its marketing budget as it does on teaching.

The wonder of it all is that the Abbott government is attempting such a massive reform in the first place. It gave no hint of these policies before winning office: indeed, both Abbott and Pyne ruled them out.

Speaking last February to the peak tertiary lobby group, Universities Australia, Abbott said that “a period of relative policy stability in which changes already made can be digested and adjusted to, such as the move to demand-driven funding, is probably what our universities most need now”.

The scale of the reforms proposed by Pyne are not well understood by the broader public, but if and when they do, they could well be a defining issue at the next election.

Labor certainly thinks so.

The ALP has launched a nation-wide campaign on university fees, clearly believing that it is the sort of issue that can swing votes in key middle-class electorates. With more than half of all school leavers going on to university, tertiary education is a mainstream issue in the way it wasn’t under the Howard government.