In Australia, the federal government is being pushed to adopt sweeping reforms of its university funding model by the Universities Accord’s recommendations. As part of this initiative we are calling for a similar needs-based funding model to be introduced – similar to the Gonski funding model being used in schools. The changes are designed to ensure that we can respond to the increasing demand for people with tertiary qualifications across the workforce. Projections indicate that by 2050, 80% of Australia’s workforce will require these qualifications to maintain a globally competitive economic edge.
Of late, critics have hit hard over the existing funding paradigm, and stakeholders have spoken out. The indexation of student loans and the structure of their fees has been changed by successive governments over the years. These changes have sparked debates among various education advocates and political leaders, highlighting the urgent need for reform in the tertiary education sector.
Needs-Based Funding Model
The Universities Accord calls for a move to a needs-based funding model for universities. This model distributes funding in a manner similar to the Gonski model. It gives the highest funding priority to schools that serve more students who require more support.
Vermont stakeholders view this shift as critical. It will transform the lives of all students, especially those from disadvantaged backgrounds, through equitable access to a quality higher education. Australian Medical Association president, Danielle McMullen, called the financial help critical, adding that,
“It really is odd to exclude our medical students from the same financial help other students receive while expecting them to undertake practical placements, often in rural, regional and remote areas.”
This hope strikes a chord with everyone who feels that all students deserve to be well-prepared and supported at every stage of their education.
Recent Changes and Their Implications
In last year’s Budget, the Morrison government announced changes to the way that student loans were indexed. These changes came on the heels of the Morrison government’s significant re-allocation of university funding – through fee deregulation via the Job-ready Graduates program in 2021. Critics of the program have rightly called it a “cruel, punitive mess.” They demonstrate how it erects enormous obstacles on students’ paths to postsecondary education.
Recent reforms have been successful in raising the repayment threshold. Under the current terms, borrowers can make up to $67,000 per year before the income-driven plan requires them to begin repaying their loans. This change is an important first step in making the transition into the real world a little less financially daunting for graduates. Despite this, worries still exist about what such high indexation rates will do to students’ debts in the long term.
Mehreen Faruqi, the Greens education spokesperson, highlighted the ongoing burden of debt that many students face:
“Unless indexation is removed, students will be in this hamster wheel, always chasing their debts, which keep getting bigger and bigger.”
While the urgent challenge presented here is a testament to the current system’s unsustainability, it begs the need for additional reform.
Calls for Further Reform
Many independent politicians and education advocates are calling on the Federal Government to adopt more ambitious reforms to the poorly performing, costly tertiary education sector. Monique Ryan, an independent MP, stated that while cuts to student loans are a step in the right direction, they should not represent the final solution. She called for a more fundamental review of the way student loans and funding are structured in Australia.
Advocates are seeking caps on indexation rates, with suggestions ranging from 3% to more reasonable levels to protect students from excessive financial burdens.
“They should have been doing the work to get a new model in place over the last three years. What have they been doing on Job-ready Graduates for the last three years? There’s urgency here.”
The recent decision to pay students doing mandatory work placements is a step in the right direction. This shift is a huge step given the financial obstacles students pursuing critical in-field hands-on training. Critics such as Tegan Carrison are not shy about airing their alarm bells. They caution that leaving key disciplines out of the paid placements will prolong existing workforce shortages.
Arabella Hely, a student affected by these financial pressures, shared her experience:
These voices highlight the need for less piecemeal reforms and a more holistic approach that promotes accessibility and equity in Australia’s higher education system.
“I know I’ve had to drop down to part-time study to be able to support myself. So many people are dropping to part-time study or deferring completely.”
These voices underscore the urgent need for comprehensive reforms that prioritize accessibility and fairness within Australia’s higher education system.