Where to now for the Higher Education bill?

This morning the government revealed the details of the higher education reform package it is taking to parliament.

As anticipated, the legislation closely mirrors the announcement on budget night. There is to be fee deregulation with a requirement that 20% of net revenue be set aside for equity scholarships. This 20% is the from the revenue raised after taking into account what was lost in the funding cuts.

Students’ loans through the HELP scheme will be indexed at the 10-year bond rate from 2016 but with no loan fee and no cap on the amount students can borrow. The Commonwealth Grant Scheme rates have the 20% cut applied through the new funding tiers. The Research Training Scheme will receive the 10% cut but with the potential for universities to charge a fee to compensate.

Grandfathering will work as announced on budget night, with a published fee maximum for current students until the end of 2020 or when they finish study, whichever comes first.

But there were some important new details revealed. Sub-bachelor places, such as associate degrees, will be funded at the same rate as bachelor degrees.

Non-universities, private providers, TAFEs and other non profits will only be subsidised at 70% of the rate offered to universities for similar degrees. This is to recognise the role universities have in undertaking research and public engagement, which may not be a part of the activities of other providers.

Eligibility for non universities to the Commonwealth Grant Scheme will be based on registration with the regulator, TEQSA (Tertiary Education Quality Standards Agency), and a signed funding agreement with the Commonwealth. This differential in funding makes the rules for which institutions are defined as universities, all the more crucial.

So where to now for the government?

This legislation, while expected to pass the House of Representatives swiftly, will likely not make it through the Senate in its current form. The opposition could send to committee for review, prolonging the negotiation further. It could well be the end of the year (or into 2015) before students know what their choices are.

As has been widely reported, there is strong opposition to much of this package. Very unpopular, aside from the cuts, is the real interest rate on HELP debt. This highly regressive policy change would be a prudent thing for the government to remove if it is committed to the cuts and associated deregulation. While there would be a cost involved in changing the basis of loan indexation, various schemes have been proposed to minimise the imposition on the budget.

There have been calls for money for regional and other providers to support transition to the deregulated system, but the legislation does not contain provision for this.

The quicker parliament agrees on the details of public support for higher education, the better for students and their universities. Uncertainty erodes confidence in the higher education system, and nobody benefits from that.