University students should pay more, says the Grattan Institute
UNIVERSITY students are getting a bargain from taxpayers and should pay much more for their courses.
Policy think tank the Grattan Institute says people who do not go to university are subsidising those who do, and it was not clear what benefit was flowing to the public.
The institute's higher education program director, Andrew Norton, said subsidies should be paid only when they created public benefits that would not otherwise be generated.
He said this could save $3 billion a year and most students would take the course anyway.
"Graduates do well out of higher education," Mr Norton said.
"They have attractive jobs, above-average pay and status. They take interesting courses and enjoy student life. I think they are getting a bargain compared with their lifetime earnings potential."
Universities Australia chief executive Belinda Robinson said the proposal could increase fees by 50 per cent.
"While there is logic in attempting to identify the respective public/private benefit, the fundamental flaw in the proposal is the application of a very narrow and theoretical definition of public benefit," she said.
Mr Norton said medical and dental students received $20,000 subsidy each year but were "top of the pile in graduate earnings".
"Is it fair the taxpayer picks up such a large percentage of the bill when you look at the private benefit they gain from their degree?" he asked.
Taxpayers paid for 60 per cent of the cost of a university course, on average.
"Tuition subsidies ... merely redistribute income to students and graduates."
Higher Education Minister Senator Chris Evans said increasing fees would hurt poorer families and lead to higher debts.
"If the argument of the Grattan report were accepted it would see students carry $3 billion (more) a year in debt, and the Government withdraw its support for students in courses like nursing, humanities, performing arts, agriculture, dentistry, medicine, law and commerce," he said.
"We don't want a situation where students leave university, join the workforce and have debts that shadow them for years, preventing them from marrying, getting a mortgage, and developing their lives."
Source: http://www.news.com.au/money/cost-of-living/uni-students-should-pay-more-think-tank/story-fnagkbpv-1226443389860
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Reactions from university chancellors and economists - The Australian
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So, what does everyone think? I doubt many of us will disagree since we all have a vested interest in it. Would you be willing to pay more? Do you think we should pay more? Anyone want to play the devils advocate
I think the first issue here is how exactly do you define public benefit. Arguably, every area has some kind of public benefit otherwise it really wouldn't exist. We're talking about academics here not finger-painting.
It's true graduates do make more than non-graduates. Thats a gain for the economy though. Education rises productivity, which, even by the grattan institutes own admission is the only real way to raise the standard of living and improve the country. If you are making more, you are contributing more to the tax coffers anyway.
I'd argue it wouldnt save as much money as you think either. By reducing the amount the government kicks in (say you have to pay 14k for a science degree instead of like 7k), if HECS HELP still exists, everyone will just end up with a bigger interest free help debt. The government will have to carry this debt for a fairly long term as well whilst you pay it off. It's not really freeing up a whole lot of money like they'd suggest. Ultimately, the government will get it back from you but the loan bears 0 interest. They'd get much better value out of sticking it in something that bears interest or just spending it immediately in general revenue. So, i think its even sort of counter-intuitive their idea because the government will just end up carrying bigger loans.