High Tuition, High Aid Hits Australia

Prominent university says government's proposal to deregulate tuition will allow it to give scholarships to a third of its students; critics say Sydney's plan will help it cream students from other universities.


October 29, 2014

The University of Sydney has pledged to create a fairer and more diverse institution if the Australian government’s higher education reforms succeed, using extra money gen­erated by higher tuition fees to vastly expand its scholarship program to give one-third of undergraduates financial aid.

Vice Chancellor Michael Spence said this week that the deregulation of fees would allow the ­university to double the current $80 million scholarship program, which includes funding from government schemes, private donors and university money.

This, in turn, would allow the university to become fairer and enroll a more diverse student population. The university is the main destination for the city’s well-heeled school leavers, with poor students making up less than 7 percent of its cohort.

Spence said: “I would like this university to reflect the demographics of society as a whole.”

Legislation for the federal government’s higher education reforms package is due to be debated in the Senate this week, with a Senate inquiry report into the reforms also to be released tomorrow. Under the ­reforms, universities can set their own fees, but 20 percent of additional revenue raised above current levels must be channeled into a national scholarships scheme.

Spence said his intention was for Sydney to contribute significantly more, but could not say how much. Modeling by the university, based on undergraduate fees of just less than $16,000 a year, found it could have about 9,000 of its current undergraduate enrollments of 27,300 on some form of scholarship, from a small living allowance to full board and tuition and payment of student loan debt on graduation. Fewer than 700 undergraduates are now on equity-based scholarships.

“We are not just concerned about the disincentive effect of higher fees on students coming to university, but also the potential debt issue for people going into public good but low-paid careers (such as nursing, teaching and ­social work),” Spence said.

He said the chance to offer more equity-based scholarships was a small step toward the much-lauded “need-blind” scholarship model that functions in the Ivy League universities. At Harvard, for example, 60 percent of undergraduates are in receipt of financial aid.

Education Minister Christopher Pyne said the move was “exactly the sort of expansion of opportunity and equity that the government’s reforms will make possible.”

“It will allow more students to go to university from disadvantaged backgrounds than ever ­before,” he said.

Questions From Scholars and Students

Andrew Norton, a scholar at the Grattan ­Institute think tank, questioned the university’s rationale, saying it might provoke dismay among the two-thirds of students who were paying higher deregulated fees.

“The policy seems to be that extra fees paid by two-thirds of its students will fund cash handouts and debt reductions for one-third of its students,” Norton said.

“This isn’t going to help convince most prospective students that potentially much higher fees represent value for money.”

Why the university would offer to pay off student loans, rather than just charging lower fees, was not clear, he said.

Tim Pitman, a research fellow with the National Center for ­Equity in Higher Education, at Curtin University, said Sydney’s move was laudable but would not find favor among regional universities, which would view it as poaching the best and ­brightest, in much the way that Harvard and Yale University's decisions several years ago to extend their "no loan" policies to families earning more than $180,000 struck some competitors as a high-end form of merit-based financial aid.

“The regionals are concerned about brain drain. But as a person interested in equity, it’s about the students and they should go wherever is best for them,” Pitman said.

The National Tertiary Education Union questioned the University of Sydney's math. The union's president, Jeannie Rea, said that to extend financial support to one-third of its 27,000 undergraduates, the university would have to raise fees to more than $20,000 a year, up from a current average of $8,000.

“For the two-thirds of students who do not receive a scholarship, they will be paying $12,800 on average more than they are under the current arrangements,” said Rea.

Pyne, the education minister, said his reforms would lead to an increase in the number of people receiving a “free education ... through commonwealth scholarships earned on the basis of merit.”

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