The federal government framed its sweeping changes to university funding as a reprioritisation from arts to sciences to support the “jobs of the future”. But the details tell a very different story. While the package punishes arts students, it also deprives universities of the resources they need to teach STEM – science, technology, engineering and mathematics.
The government has been rightly criticised for undervaluing the contribution of humanities and social sciences (HASS) to the modern workforce. This HASS v STEM debate played into the Coalition government’s hands because it meant the wider impact of the changes was missed.
It is not about HASS v STEM. There are in fact few winners in the government’s package. The plan only makes sense as an attempt to shift the overall cost of university education from governments to students.
Most university students will either pay more, or the universities they study at will receive less money for teaching them. The biggest fee hikes will be felt by HASS students. However, despite the rhetoric from federal Education Minister Dan Tehan, per-student revenue for universities in key STEM disciplines will actually decrease.
In science and engineering, student fees will decline by $2000 per year to $7700, but the Commonwealth contribution will fall by even more, at $2760 per student. This represents a combined reduction of per-student revenue received by universities of 16 per cent in these disciplines. Universities also face the same level of per-student revenue decline in maths, where the increase in the Commonwealth contribution makes up less than half of the reduction in fees. Universities will even receive less income for any given nursing or teaching student.
The government may be hoping that lower fees will incentivise students to enrol in STEM courses. But reducing the revenue received by universities for science, engineering and maths students will stretch teaching resources, especially in expensive-to-run subjects. It may have a perverse effect: universities may actually be forced to limit enrolments in STEM due to constrained per-student revenue, and over-enrol where student fees are highest.
The Coalition’s plan will significantly reduce the proportion of government funding in the university system as a whole. This proportion is already low by OECD standards and has left universities highly exposed to the drop in international student revenue from COVID-19.
The shift in the funding mix towards student fees is most acute in the humanities and social sciences. Students studying subjects such as history, philosophy, and politics, as well as those enrolled in social work, law, economics and business degrees, will pay $14,500 per year in fees. These students will contribute 93 per cent of the cost of their university education, while the Commonwealth’s decline to 7 per cent will account for only $1100 a year.
Fee increases will raise the proportion of the university funding mix that is paid by students. Overall, the proportion of university teaching revenue covered the federal government will decline by at least 6 per cent to 52 percent. This hastens the long-term decline in per-student base funding in the sector and is close to the 50-50 funding mix the government hoped to achieve with its failed fee deregulation agenda.
Greater reliance on student fees at this time will create deep intergenerational inequities. Domestic demand for university is poised to increase as a result of a poor jobs market and former treasurer Peter Costello’s baby boomers reaching university age. Demographics and the COVID crisis were about to collide with the government’s prior decision to cap Commonwealth contributions to teaching.
The government’s solution is for young people to pay more for their university education while they also face the brunt of the job losses from the pandemic fallout. Bigger university debts will mean longer repayments that act as an effective tax increase for graduates. Student loan repayments now start at incomes of only $45,000 per annum – about half the average full time wage. Repayments on university debt tend to hit when graduates are trying to save for a home deposit or pay childcare costs, disproportionately impacting women who are the majority of arts graduates.
The Education Minister has claimed he will deliver more domestic student places in a budget-neutral way. The details reveal it is not possible to increase access to quality higher education without increasing per-student Commonwealth funding. There are good reasons for senators from the cross bench, along with Labor and the Greens, to demand just that.
A version of this piece was originally published in the Sydney Morning Herald on 22 June 2020.