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Issue #1646      July, 9, 2014

Uni policies flawed

The Minister for Education Christopher Pyne has dismissed modelling of the impacts of deregulating university fees and imposing real interest on student debt undertaken by the National Centre for Social and Economic Modelling  (NATSEM).

A spokesman for Mr Pyne said the NATSEM modelling suffered from the “same terminal flaw” as previous modelling by the Greens and the National Tertiary Education Union (NTEU), among others.

Mr Pyne has now dismissed modelling of the impacts on student fees and student debt as result of his proposed deregulation of university fees and the imposition of real interest on student debt undertaken by the NTEU, the Greens, Universities Australia, the National Centre for Student Equity at Curtin University, and now NATSEM as being flawed.

It seems that Mr Pyne and his advisors are trying to discredit any modelling that show his new policies will lead to increasing fees, mounting student debt and inequitable impacts on women and others that take career breaks. Maybe, just maybe, the modelling is actually correct and it is Mr Pyne’s policies that are fatally flawed and which should be discredited.

That the increased fees used in the modelling were at the ‘high end’ of any likely increases, despite the fact that they had claimed they had not undertaken any modelling of likely fee increases.

While the NTEU cannot speak on behalf of modelling undertaken by other organisations including the Greens or NATSEM, we can reassure readers that these criticisms of the NTEU modelling are totally unfounded. The NTEU modelling makes it glaringly clear that all of the estimates are undertaken in current 2014 dollar values. That is the modelling assumes zero inflation or no increases in prices or wages. Therefore, any criticisms about not taking into account projected increases in nominal income demonstrate a lack of understanding of basic modelling and therefore are totally unfounded.

In relation to the second, that is that the increases in fees used in the modelling (which in the NTEU’s cases was $75,000 for a three year accounting degree) we would simply refer to the prices universities currently charge international students for these degrees which vary between $60,000 to $90,000 which is showing that his policies will result in a skyrocketing of the cost of attending university.

While Mr Pyne might claim that the nature of the international student market will be fundamentally different to a deregulated domestic market, we would point to the fact that Bond University currently charges domestic undergraduate students $95,000 to undertake three accounting, arts and similar degrees and $317,000 to do a medicine (surgery) and $127,000 to do law. We would also point out that Navitas is currently charging domestic students between $20,000 and $23,000 for a one year pathway program which in most cases is equivalent to first year at partner universities.

In other words, the prospect of there being many degrees with price tags of $100,000 degrees is not unrealistic at all. This would be especially the case if the modelling was based on 2020 prices.

The NTEU would suggest that it is the Department’s modelling which assumes that some will graduate with debts of $30,000 or $40,000 which is flawed and unrealistic. Even allowing for the current capped fees and expected inflation (three percent) between now and 2020 more than half the degree would cost in excess of $30,000. If you allowed for the 20 percent reduction in public funding then there would be very few degrees that would cost less than $30,000.

Next article – Burying Sydney’s public rail network

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