Tips from Down Under to make fees policy pay

Australia's experience of tuition fees means England has little to fear, writes Grant Harman.

The Labour government's income-contingent variable fees plan for English universities is moving inexorably closer to becoming law and - subject to parliamentary approval - will be effective from 2006.

The scheme is modelled on Australia's Higher Education Contribution Scheme, but Labor opposition in Australia is threatening to repeal reforms passed by the federal parliament in December that allow universities to increase their fees by up to 25 per cent from 2005.

That the proposed English reforms show striking similarities to Australia's 2003 legislation should not come as a surprise. Ministers and senior officials in the two countries talk regularly, exchange documentation and monitor initiatives and their implementation. The Australian quality assurance system is largely modelled on UK experience.

The Blair government's higher education reform package and the Howard government's reforms in Australia share similar rationales. Both assume that universities need considerable injections of cash to remain internationally competitive. They believe the only viable strategy is to seek increased contributions from students. These will be secured via an income-contingent loan system, so that no student will be required to meet their financial obligations until they are in good jobs. Increased fees will be combined with provisions to assist low-income groups.

In both countries, policy papers were written largely for the wider public rather than university audiences. Both proposals received angry responses from groups in the higher education sector, especially academics, students and some vice-chancellors. Yet heads of leading universities tended to be supporters.

Both governments introduced enabling legislation that was passed by narrow majorities. In Australia, the Nelson package was passed by the Senate in the Commonwealth Parliament in mid-December 2003 after concessions were made. In Britain, the higher education bill won a narrow margin at second reading after the largest revolt by the governing party since 1945.

But there are important differences between the packages. The Australian reforms allow universities to increase their Hecs fees by 25 per cent compared with the £3,000-a-year fee jump that English universities may choose. Australian universities also have the option of offering increased numbers of student places on a full-fee basis once they have filled their quota of government-supported places. This has generated considerable funds.

The extent to which increases in tuition fees are likely to affect student participation remains an issue in both countries. The Hecs experience is instructive. Research studies conducted by departmental officers and independent researchers indicate that Hecs has had little adverse impact on participation rates of students of low socioeconomic status, although there is some debate about particular findings.

A study by the Department of Education, Science and Training in 2003 explored whether Hecs acted as a disincentive to higher education and whether certain groups had been adversely affected by changes to the system. The evidence suggests that opportunities among those from a low socioeconomic background have increased in line with higher education expansion financed through deferrable Hecs charges.

Differential levels of Hecs repayment, introduced in 1997, may have deterred older students and, while the proportion of males from low socioeconomic background in the most expensive Hecs courses declined by 38 per cent between 1996 and 1997, this affected small numbers (about 100 people) in comparison with the size of the overall domestic student population (560,000 Hecs-liable students in 1997). Independent research clearly supports the view that the participation of disadvantaged students in higher education has improved.

A panel study by the Australian Council for Educational Research found that, in 1980, 13 per cent of manual unskilled workers' children in their study went to university. A decade after Hecs was introduced, and after increases in fees through differential charges in 1997, the proportion was 25 per cent.

Australia's 37 public universities must decide soon on Hecs fees for 2005.

So far, a dozen institutions have indicated the maximum 25 per cent increase in all fees, while a couple of regional universities have opted for more modest increases. Just one (Macquarie) has announced fee reductions for specific specialised research degree courses. But can universities that claim to be underfunded make fee reductions seem judicious?

Grant Harman is professor of educational management at New England University in Australia.