The Privatisation Of Higher Education: Pyne's Numbers Just Don't Add Up

In a September parliamentary debate on the subject of deregulation, Labor MP Chris Hayes accused education minister Chris Pyne of “saddling Australian students with a debt sentence whilst Americanising our universities.” Pyne responded by implying that Hayes was xenophobic for portraying America as “the bogeyman.”

When Australians decry Pyne’s proposal to deregulate Australian universities as “Americanisation,” they do indeed risk sounding jingoistic, ironically so given that criticism of deregulation is more commonly voiced by those on the left not known for espousing cheap nationalist rhetoric.

The NTEU, for instance, has been keen to promote the results of a poll whose language, for better or worse, taps into nationalist anxieties by showing that 55% of Australians oppose a more Americanised system of higher education.

I was educated at two American universities and taught at four others before moving to Australia six years ago to accept a position at an Australian university. I now hold dual citizenship.

When I encounter fears of Americanization, they are generally couched in benignly playful terms: for instance, when friends tease me about my use of “z” instead of “s.”

Yet it also assumes more malignant forms that appeal to a prejudicial we-don’t-want-to-be-like-those-Yanks segment of society.

So when I hear my fellow Australians reject deregulation as Americanisation, my dual perspective provokes me to smile at the apparent sloganeering, even as I know that beneath this convenient sound bite lies an inconvenient truth: under Pyne’s “reforms,” Australia is on the verge of imitating the worst rather than the best of American higher education.

Hayes is correct to bemoan Pyne’s blind acceptance of an American system of funding higher education that has resulted in student debt in excess of 1 trillion dollars, an amount that now surpasses credit card and car loan debt in the US.

I know this issue first hand. To paraphrase Cate Blanchett, I am the 'beneficiary' of a system of non-free tertiary education that has saddled me, and many other Americans of my generation, with large amounts of debt. For this reason, I recently helped found the National Alliance For Public Universities, whose charter seeks to resist the increased privatisation of Australian higher education.

The rationale for Pyne’s reforms is about as solid as the plastic sword that police confiscated in the government’s recent “terrorist” raids: lightweight enough to enable quick deflection of whatever criticisms are thrown his way, but too flimsy to do real battle.

Pyne doesn’t come armed with a weapon strong enough to slay his adversaries because he figures he can simply shoo them away with inanities about how “competition weaves its magic” to keep prices from getting out of control.

Yet he would do well to consider the fate of those for whom the magic of market competition has not worked: for example, Curtin University, which saw a decline in enrolments in 2005 when it was the only university in Australia that froze fees in response to the Howard government’s decision to permit universities to increase them up to 25 per cent. This is not surprising given that a number of American Universities were investigated for price fixing in the 1990s, practices that saw tuition skyrocket.

The failure of market magic is not the only inconvenient truth that Pyne attempted to obscure behind the curtain of his Aussie wizardry.

Pyne also told Hayes that “the United States does not have a higher education loan program.” Apparently those monthly payments that I and millions of other Americans make on our student loans are imaginary.

Pyne continued: “It does not bear any relation to the Australian system in how it supports its students.”

As in Australia, however, indebted former American students are eligible for income contingent repayments and deferrals, but this has not stopped student loan debt from reaching crisis proportions.

The Australian HELP system is not the “envy of the world” because nowhere else do students benefit from low interest rates and income sensitive repayment plans. It’s the envy of the world because of the correlation between quality and cost to the student.

While I approach the quality-measuring capacity of league tables with caution, Pyne is fond of invoking them in dubious ways.

For instance, he rejected Hayes’s concerns regarding increased student debt by telling Parliament that “the United States has 27 universities in the top 50 universities in the world. More than half of the top 50 universities in the world are in the United States. . . . Imagine if the Australian university system were as successful as the United States system.”

While the number of Australian universities in the top 50 is irrelevant to the topic of debt, it is broadly germane to the question of quality. At the highest rated Australian University according to the Times Higher Education World University Rankings, the University of Melbourne (33rd), students currently pay between $6,000 and $10,000 per year.

Yet one can attend a comparably ranked American university, the University of California, Santa Barbara, (37th) for more than $13,000 per year.

The University of Western Australia is the only university to reveal its new price tag of $16,000 per year should deregulation pass the senate. This represents an increase of between 58 per cent and 166 per cent depending on the course.

If Melbourne and the other G8s follow suit, then fees at Australia’s best universities will be higher than those at any of the University of California’s 10 campuses, four of which place in THE’s top 50.

If we follow Pyne’s train of “argument,” then he is asking Australian students to pay more for less (but fear not, competition will take care of that!).

With only one university in the top 50, Australia may appear to be at a disadvantage. Yet the US population is 13 times larger than Australia’s. It would take some serious market magic if deregulation led to Australia increasing its representation in the top 50 by an additional 26 unis, especially given that Australian has only 45 in total (the US has nearly 3,000).

Another reason to approach rankings with skepticism is that their results differ widely. The widely-cited QS World University Rankings place a more modest 18 American universities in the top 50 whereas Australia has just five. Per capita, Australia’s public universities perform better than the US.

That Pyne’s numbers simply don’t add up underscores the utterly ideological commitments that motivate his deregulation push. Private for-profit colleges stand to gain the most from deregulation, as they will now be eligible to receive government subsidies of 70 per cent of the amount that public universities receive.

Public funding of private colleges runs a serious risk of predatory behavior, practices which the American “bogeyman” has recently begun to penalise.

Only three weeks ago, the Obama administration released its “gainful employment" regulations, aimed at preventing private for-profit colleges from burdening students with excessive debt and few job prospects, due to the substandard education they provide.

If the Abbott government is so keen on imitating the American model, then perhaps the prime minister should have asked President Obama at the G20 summit why he has needed to step in to stop universities from rorting the system.

Imitation is flattery, except when the source you seek to copy has already recognized the error of its ways.