Necessity of University Reform in Australia

For a long time, Australia has been described as the “Country of Luck” and the “Land of Opportunity”, promising “a better life for every generation.” However, this narrative is gradually fading away from the speeches of Australian politicians.

More and more young people are realizing that this promise cannot withstand the test of time, and they find it difficult to benefit from it. Particularly with the increasing annual university tuition fees, the pressure on Australian youth to pursue higher education is growing. Recently, Duncan Maskell, the Vice-Chancellor of the University of Melbourne, joined forces with the Greens Party and student association to advocate for free higher education, which triggered a lively discussion.

/ Vice-Chancellor of the University of Melbourne called for free university education

Missed Benefits

In the 1950s, the Commonwealth of Nations initiated the Colombo Plan, aiming to cultivate professionals in underdeveloped countries in the Asia-Pacific region through international cooperation in the form of financial and technical assistance, education, and training programs. It was one of the world’s pioneering aid programs. Under this plan, a large number of Asian countries, including Hong Kong, sent students to study in Australia, and at that time, these students did not have to bear the burden of tuition fees. In 1974, the Australian Federal Government, led by Prime Minister Gough Whitlam, announced the implementation of free higher education policy and introduced the Higher Education Contribution Scheme (HECS), which eliminated economic barriers for children from low-income families, greatly promoting educational equity. President Maskell himself attested to being a beneficiary of free university education, as coming from a working-class background, it would have been highly likely for him to be unable to attend university if he had been required to take out a loan.

In 1979, the Australian government implemented a fee plan for international students, and starting from January 1986, full tuition fees were charged to overseas students. At that time, Australia’s study abroad industry officially transitioned from an aid program to a profit-generating industry. However, due to the affordable tuition fees at the time and the government’s welcoming attitude towards internationally educated students for immigration, it sparked an early wave of self-funded study abroad in Australia. It was also during that era that the number of international students in Australia began to rapidly increase. As for domestic students, in 1998, Prime Minister John Howard introduced the Youth Allowance, providing financial support to young people for studying and seeking employment. The allowance simplified the assistance process and reduced the financial pressure on young people. This system was popular at the time. By 2003, over one-third of university students in the country had received the Youth Allowance. However, the increase in the allowance was very low and did not keep up with the rising costs of tuition and living expenses.

In summary, the Australian government previously provided relatively lenient policies, allowing Australian residents to enjoy lower university tuition fees. However, over time, the policies have become increasingly restrictive, and the benefits enjoyed by Australian residents have diminished. Currently, the government has tightened the funding subsidy requirements for universities, and tuition fees for most universities are continuously rising. In this situation, the cost of university education for Australian residents has also increased significantly compared to the past. Additionally, many Australian universities have reduced the tuition fees for international students in order to attract more international and study abroad students, resulting in a significant proportion of international students occupying university enrollment quotas. In this situation, Australian residents need to compete with more study abroad students, which further increases their burden in pursuing higher education.

Why studying at University?

Education, especially higher education, is one of the pathways for us to acquire knowledge, skills, and abilities for career success and independence. Fair distribution of education contributes to creating an inclusive and equitable society. After a period of offering free university education in Australia in the last century, the introduction of university fees and HECS student loans in the late 1980s did not address the issue of enabling more students from disadvantaged and underprivileged backgrounds to access university education. The current Australian Minister for Education, Jason Clare, has explicitly stated that one of the main goals in the current review of higher education is to address the issue of underrepresentation of students from disadvantaged backgrounds in degree attainment.

The primary purpose of university is to produce qualified graduates who can contribute to valuable work in society. However, the job market in Australia has become highly competitive, with businesses increasingly preferring experienced employees. This poses a significant challenge for new graduates. In this context, Australian residents need higher qualifications to enhance their employment opportunities, which also increases the burden of attending university. In addition to tuition fees, Australian residents have to bear accommodation costs, food expenses, textbook expenses, and other daily expenses, all of which contribute to a greater financial burden. However, if we can take a long-term perspective and view the higher education industry not only as a revenue-generating sector but also as a long-term investment in cultivating talent for the future, we would have a different understanding.

Australia is a high-tax country. Even if someone earns a pre-tax income of 100,000 AUD, they may end up with only 70,000 AUD after taxes. The more you earn, the more taxes you pay. Therefore, for graduates burdened with high student loans, even if they choose a high-paying job, their disposable income after tax and repayment is significantly reduced. It may be more advantageous to opt for a vocational education program with lower or even no fees, without the enormous pressure of repayment after entering the workforce. Once the government implements free university education, students can freely choose the subjects they are interested in without being deterred by the prospect of significant future debt. In the short term, the government would need to increase investment and reallocate fiscal expenditures. However, in the long run, the positive impact of having a larger number of university-educated individuals in the country on future income is likely to outweigh the costs, as human capital is often priceless.

Reform is Imperative

Making undergraduate education free once again may sound like a radical idea, but it is not a radical concept globally, and Australia has fallen far behind many other countries. An analysis conducted by the Organisation for Economic Co-operation and Development (OECD) last year revealed that the average annual cost for Australian university students is around 5,000 USD, while in France, Belgium, and Germany, the annual average cost is less than 250 USD. Countries like Denmark, Finland, Norway, Sweden, Chile, Poland, Latvia, Estonia, and Turkey offer free education to their residents. Even Australia’s neighbor, New Zealand, offers free education for the first year. It is evident that the tuition pressure faced by Australian students places them in the “first tier” among developed countries. Considering the inflation factor, it’s no wonder that the National Union of Students is advocating for the implementation of free education.

Of course, attending university is not the choice for all Australian residents. Some professions do not require higher degrees but practical experience and skills. Therefore, for these Australian residents, whether university education is free or not is not crucial to their livelihoods. The Australian government has gradually realized this issue and is beginning to allocate more funds and resources to vocational skills training to meet the demands of the future job market. This year, Australia will offer 180,000 free spots for  Technical and Further Education (TAFE). These free courses are part of a joint effort by state and federal governments, with priority areas including nursing, technical fields, hospitality, and construction. However, vocational education is different from higher education. The education level of the population is an important aspect in measuring a country’s human capital stock, as well as a significant indicator of social development and civilization. Investing in human capital through education and technological advancement is an inevitable path for any responsible government.

Data shows that in the fiscal year 2018-19, Australia’s expenditure on university education accounted for only 0.65% of GDP, a figure significantly lower than the OECD average expenditure of 0.9% among 38 countries. The past three years, marked by the COVID-19 pandemic, have had a tremendous impact on Australian universities. Since the moment Australian universities closed their borders to international students in 2020, they have faced the biggest crisis in their history. Higher education funding is severely lacking, with the industry heavily reliant on revenue generated by international students. This is undoubtedly unsustainable. Today, with the rapid rise in living costs, the increased cost of university education may mean that more and more Australians are unable to obtain a university degree due to exorbitant tuition fees. Recent government estimates indicate that by 2025, 52% of jobs will require a degree. The worst-case scenario is that the cost of obtaining a degree becomes a barrier to acquiring one, further widening the wealth gap in society. If the government wants to prevent this scenario from unfolding, it must take effective measures now to curb the worsening situation.

Changes of the social positioning of University education

University reform needs to start from the social positioning of university education, which clearly requires social consensus. Therefore, political parties need to present a set of appropriate views for today’s society. The recent provision of free 3-year-old preschool education by the Victoria State Government, aimed at assisting dual-income families, has received social recognition because the high cost of early childhood education significantly reduces the willingness of low-income female workers to work. Similarly, when introducing university fees, society expects higher income returns from university graduates, which seems to lack persuasiveness in today’s Australia.

Due to the relatively low initial incomes of university graduates in the first few years after graduation, the debt owed to the government for attending university cannot be repaid within those initial years. For women, entering the stage of marriage and child-rearing is already a setback to their career development. By the time their children grow up and they return to work, many of them lack competitiveness. Meanwhile, their government student debt continues to increase due to inflation, making them unable to feel the advantages brought by university education. In addition, with the advancement of technology and society, many people have to pursue another degree around 10 years after graduation to maintain their advantage in the workforce or change their career development. In other words, they have to invest again to increase their value. Many people have begun to understand that studying at a university is a continuous investment rather than a personal asset.

When society changes its expectations for university education, the willingness of individuals to make such investments will be considered based on real benefits. If the government fails to keep up with the changing social attitudes, university education will become a high-input, low-output endeavor, resulting in a majority unwilling to invest or many individuals obtaining government loans for education without intending to repay the debt. In the end, there will be a large number of bad debts in university loans, with the government bearing the losses.

Today, this has become a problem in the system. A significant portion of university loans is believed to be unrecoverable. If this continues, Australia’s university education system will fall into chaos and inefficiency. It is believed that now is the time for society to undertake reforms.