The Higher Education Policy Institute
(HEPI) presented a new report recommending that policymakers in UK should pay
more attention towards the advanced university funding system of Australia.
Ironically, the Australian university funding system shares a number of
features of the UK system, but at much lower expense from taxpayer.
The
higher education finance policymakers are tempted to consider Australia for
inspiration and the reasons are obvious. According to recent findings, the
resource accounting and budgeting (RAB) charge or the amount of outstanding
student loan debt being covered by the taxpayer is likely to go beyond 45%.
The
Fiscal Studies Institute has put the figure at 43.3%. It suggests that for
every £1 loaned to students, 45p remains unrecovered. In sharp contrast, the
Australian standard tuition fee loans remains at 25 percent that can be said as
much healthier figure by all means.
This
may seem a valid reason to adopt the features of Australian tuition fee system
but there might be unintended consequences.
Australian fees are lower
One
of the key reasons for the Australian loan system to be so much cheaper is that
tuition fees in that
country are considerably lower than that in the UK. In
Australia, the maximum annual fees stand at £5,500, whereas in the UK, annual
tuition fees are £9,000.
Source: bit.ly/1iHhFqS |
The
high debt figures in the UK enormously decrease the chances of complete
repayment of graduates’ loans. The Australian government easily recover their
fee money because of lower debt levels.
In
Australia, the RAB charge gets further reduced by variation in the fees
according to subject. Tuition fees are generally lower for subjects that in
general deliver lower returns, while the subjects that produce high-earning
graduates have the highest fees.
However,
the emulation of Australian fee system in UK seems as a vague idea. Charging
the students fees according to their future earning rather than the actual cost
of degree, could worsen the socioeconomic inequalities if students who are from
poorer background and averse to the debt go for low-priced subjects that will
eventually offer them lower wages.
In
the UK, authorities have been mulling over a similar system, but with fees
associated with the institutions rather than the subject studied. This system
would suffer from the similar kind of problems, with students from unprivileged
backgrounds staying away from elite institutions with high tuition fees.
Taxpayers pay more
Moreover,
while the Australian system records lower taxpayer loss in regard to unpaid
tuition fees, the
taxpayers contribute considerably higher amount in the form
of teaching money in Australia.
Source: bit.ly/1knp2Bu |
If
the UK authorities really want to lessen the RAB charge, it could be done by
lowering the fees. If they want the RAB to be reduced to zero, they could do so
by emulating the pre-1998 system when there were no fees at all.
The
HEPI report also highlights on the removal of caps on the student numbers. The
UK presently has a fee cap system to rule the high cost of university system,
though the cap system is likely to be removed in 2015. However, Australia
removed it in 2008.
The
Australian experience has a number of positives. Universities in the country
have successfully met the high demand for places, with number of students
sharply increasing by almost 20% on average.
Although
there are many positives and few downside of the Australian experience, the UK
education system is different and the government should consider everything
before emulating the Australian universities fees system.
Article Source: bit.ly/1fohEsm