Nelson and Costello’s plans for Higher Education: bad for all, worse for women

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Campus protest against corporatisation. Photo from International Union of Students.

The outcome of the recent review by Federal Minister for Education Dr Brendan Nelson, Higher Education at the Crossroads, is a 10-year plan for tertiary education which will complete the reintroduction of tuition fees and transform universities from institutions of learning into corporations managing the bottom line. Nelson and Federal Treasurer, Peter Costello, both received a free university education. And, as it turns out, so did I. They are hypocrites, but I don’t begrudge them their education — tertiary education should be freely available to all with the demonstrated ability to learn. 

Education is already a lucrative export industry, second only to mining. Degrees are a commodity and students, we are told, are the consumers. If the plans announced in the Federal Budget are implemented, things are set to get worse — much worse. But it is not too late to stop the Government in its tracks. 

Free education ends.  I was the first person ever in my working class family to go to university. I commenced study at LaTrobe University in 1977 and graduated four years later with a Bachelor of Arts and a Diploma of Education. But by the time my youngest sister followed in my footsteps, also in pursuit of a teaching qualification from LaTrobe, the brief window of opportunity had closed. She graduated with a hefty debt, spent years working on short-term contracts and receiving no holiday pay before recently winning a permanent job in a country high school. What happened?  

In 1974, with the introduction of the Tertiary Education Assistance Scheme, tuition fees were effectively abolished. The result was a huge increase in the participation rate of working class students, women, those from non-English speaking backgrounds and mature age students. Women’s participation jumped from 35.5% in 1974 to 44.4% in 1983. I was one of them. The capitalist system required an educated workforce. A Higher Education system pitched to an elite minority could no longer cut it. Australia’s universities threw open their doors. 

But by 1990 the economic growth cycle had ended and governments everywhere began implementing neo-liberal policies centred on moving economies into the global market, widespread privatisation, user-pays cuts to services, the driving down of wages and attacks on working conditions. Corporations still needed an educated workforce, but also wanted to pay less tax and get lots of taxpayer-funded subsidies. So students are now made to personally fund the mass education that employers require.

This process began when the Keating Labor Government introduced the Higher Education Contribution Scheme (HECS). This scheme is based on students studying now and paying for their education later, when they have a job. Those wealthy enough to pay up front get a discount. Under successive Coalition Governments, the contribution required of students has gone up and up. Then a category of full-fee-paying overseas students was introduced. Next, “in order to be fair,” full-fee-paying places for local students crept in. Then HECS was again increased, this time in order to “reduce the gap” between what students with limited HECS places and those with full fees had to pay. Over the last decade there has been a gradual shift in the allocation of university places from those with the ability to learn to those with the ability to pay. 

Bad for all. Our Universities: Backing Australia’s Future is the official title of the series of measures announced in the May budget.  It is a disaster for all students, but will impact particularly harshly on women, the working class and other traditionally disadvantaged groups. 

The plan opens the way for the deregulation of university fees. This will rapidly lead to the emergence of a two-tier system. Prestigious universities and popular courses could cost up to 30% more. Students with limited funds will find themselves choosing courses based on what degree they can afford to study. Fees are set to rise for all students. The National Tertiary Education Union (NTEU) estimates that all universities will have to set fees at 10% above the planned 2005 HECS charge, simply to maintain current levels of operating income. 

The number of full-fee-paying places in universities will double — 50% of all undergraduate places will be allocated to students paying up-front fees.  These students will be able to access a student loan scheme called HELP (Higher Education Loans Program). This scheme will be capped at $50,000 and, unlike the current HECS, will attract a 3.5% rate of interest. It will also be adjusted in line with the Consumer Price Index, like the current HECS scheme, which means the real interest rate will be closer to 6.5%. Postgraduate students, who already pay full fees, will now also be subject to this interest on their loans. 

The Government’s plan sets universities up for a voucher system with the introduction of a five-year “learning entitlement.” This scheme in effect means that students who win a publicly funded place — one which requires the payment of partial fees rather than full fees — must complete their course by their “learning entitlement” deadline or else start paying full fees. For students enrolled in five-year degree programs, repeating a single subject will attract full fees. 

For many students a $50,000 HELP loan won’t suffice, as they may be required to fund part or all of a full-fee-paying undergraduate place, units completed outside of their five-year learning entitlement, and any post-graduate study. 

Australian students already pay the third highest tuition fees in the world! The tertiary education sector has been starved of funds, the result of the Federal Government reducing its contribution by 23.1% since 1995. The pressure will be on universities to charge what the market will pay. Australian universities already rely very heavily on tuition fees, getting 36% of their income from this source. Only private universities in the U.S. get more of their revenue from student fees. 

The Howard Government’s scheme is similar to one introduced in New Zealand in 1992. The Government deregulated fees and introduced student loans. Fees have since spiralled, and the level of student debt has had serious social consequences. Many are permanently leaving New Zealand to avoid repaying massive debts. Those with outstanding student loans are frequently denied bank loans. This impacts on the ability to buy a house or set up a business — and is a factor cited by many women making decisions about if and when to have children. The New Zealand Government was forced to write off interest for low-income students after repayment periods stretched to 17 years for men and 51 years for women! Even without interest, men are still expected to take 15 years and women 29 years to clear their student debts! 

Worse for women. Just as the changes in the 1970s resulted in an immediate increase in women’s participation in Higher Education, the proposed changes will impact on women’s choices today. When HECS was introduced, participation by students from low-income backgrounds fell by 12%. The Women’s Department of the National Union of Students (NUS) predicts that “women from low-income backgrounds will either struggle with this 30% increase on their loans, or take a ‘discounted’ course, presumably one which a university is struggling to fill because it does not have good employment prospects or is under-resourced.” 

Students currently graduate with a HECS debt of between $11,000 and $30,000. Women currently take three times longer to pay off their HECS debt than men. Ninety-three percent of men will have paid off their debt by the time they are 65, compared to only 77% of women. 

The facts are that women face discrimination in the workforce and that jobs traditionally performed by women are woefully under-paid. To put it in dollar terms, the average starting salary for a male graduate is $37,000 — $2,000 more than the comparable figure for women.  For postgraduates the gap is even wider, with starting salaries for women being just 76% of those paid to their male colleagues. Even if a woman gets a HECS place for an undergraduate degree, the postgraduate degree will attract full fees, and if she needs to take a loan, it will now attract interest. When it comes to repaying the two loans, under the new scheme, the graduate is required to pay off the HECS debt prior to commencing repayment of the interest-bearing HELP loan! 

Double jeopardy. Mature-aged women, mothers, women from rural areas, women with disabilities and Indigenous women cop a double whammy. 

Those with children frequently face the challenge of funding childcare while studying. A review by the Melbourne University Students Association has calculated that even with full Childcare Benefit payments and other university-based assistance, childcare can account for more than 20% of a student’s weekly expenditure. 

The Government’s plan removes the $31.20 per week Pension Education Supplement for student pensioners over the summer months — a callous kick in the guts for disabled and sole parent students. The introduction of a small number of scholarships targeting Indigenous students and rural students will not overcome the barriers these students face. The scholarships are $2,000 a year, and the Commonwealth Accommodation Scholarships for those who have to move to study are $4,000 per year. Both are counted as income for calculating a student’s entitlement to Youth Allowance or other benefits. 

The scholarships for Indigenous students are pathetic and cannot have any meaningful impact. The average income for Aboriginal and Torres Strait Islanders is $14,000 a year — 30% below the rest of the population. How can Indigenous families pay huge fees? How long will it take Indigenous women graduates to repay their HECS debts? In 1998 the Howard Government changed Abstudy to “align it with mainstream payments.”  The result? A massive 95% of Indigenous students in Higher Education were negatively affected — most received reduced payments, some lost payments altogether. Indigenous enrolments fell 18% from 1999 to 2002. In the big picture, a $2,000 per year scholarship for the “lucky few” is the modern day equivalent of flour, sugar and tea rations. 

Ideologically driven. Treasurer Costello claimed that his budget provided more money for Higher Education,  based on a “new funding model.” But analysis by the NTEU shows that any “new money” is directly linked to universities implementing “workplace reform,” aimed at busting the NTEU and forcing university workers onto individual Australian Workplace Agreements. 

Workers will be worse off under individual contracts than collective agreements. Most women in the Higher Education sector are in lower-paid jobs, and many are part of the 150,000 strong casualised workforce. Dr Caroline Allport, President of the NTEU, argues that if collective agreements are eliminated, there will be a system of stars while the majority will not get a decent wage. So-called Voluntary Student Unionism is also part of this plan. University Councils will also be forced to restructure and reduce staff and student representations. 

We can turn the tide. As the full implications of this attack become more widely known, anger levels will rise. We can build a movement capable of stopping Nelson and Costello’s plan. There are already some very hopeful signs. 

Among activists within the NUS and NTEU, there is a strong worker-student solidarity. This needs to be broadened on campuses. History shows that the Government will try to implement its plan by pitting one group against the other, and campus organisers must be ready to counter this. 

NTEU members are agitating for the union to start preparing a campaign of industrial action. This will be important. The June 2003 NTEU Policy Bulletin calls on members to develop campaigns involving students and the local community. Although the NTEU focuses exclusively on lobbying, such campaign committees can provide a base to build and push for stronger action. 

Students and NTEU members within the Socialist Alliance have formed a joint caucus which has a significant role to play. The caucus launched a monthly newsletter called Red Pen which is available from Nick Fredman (nfredman@scu.edu.au). A fightback forum is also being planned in Melbourne for August. 

Stopping the passage of Our Universities: Backing Australia’s Future needs to be the business of every union.  The Government uses populist rhetoric in an attempt to convince workers who don’t have a university degree that they should not have to pay taxes to fund rich university-educated fat cats. A few facts can soon demolish this divisive tactic. 

User-pays simply widens the gap between the haves and the have-nots. If we’ve don’t reverse this Government’s agenda for Higher Education, universities will once again become elite institutions. The Government’s funding priorities are completely wrong. This budget will result in more funding going to private secondary schools than to the whole of the public tertiary education system. There is no additional funding for the grossly under-funded vocational education and training system. Costello has plenty of money to provide increased funding to ASIO to spy on us and for the military to go to war, but won’t even pay rent assistance to students receiving Austudy. 

We also need to expose a few myths about the taxation system. When the GST is included, the Howard Government is the highest-taxing government in Australia’s history, collecting 24.8% of GDP. But our tax system is more regressive than ever. Workers, university-educated or not, are paying a bigger share of the tax burden, and the corporations who benefit from this education contribute little. A campaign to demand that company taxes be immediately restored to 49% to fund education for all — not just the rich —could unite students, parents, workers in Higher Education, Indigenous activists, feminists and unionists everywhere. 

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