To Australia, where big things may be afoot.  One thing about Australian higher education politics is that they tend not to do small reforms, regardless of which party is in power.  Where undergraduate fees are concerned, it looks like there might be another big shift, so let’s look at the current state of play.

Here’s the first thing you need to understand about undergraduate fees in Australia: they don’t work like fees anywhere else in the sense they are not really controlled by institutions, nor are they actually paid by students.  Government sets the “fees” (or rather “contribution”), students sign an agreement to fork over a portion of their income via the tax system after finishing school to repay the contribution to government, and then government forwards the amount of the contribution.  So, institutions don’t really control fees at the undergraduate level, and fee income technically comes from government rather than individual students (it’s a different story for graduate and international students).

Here’s the second thing you need to know about fees and fee policy in Australia: when they make changes to the system they don’t screw around, and the changes are made based on big – really big – principles rather than micro, short-term electoral considerations.  Consider:

• In 1989, the Labor Government of Bob Hawke decided that it needed to introduce a user-pay principal if the government itself was to also increase funding from its own sources.  So, quick as daylight, a flat, universal fee/contribution of $1800 was introduced and then the fee was indexed to inflation.
• In 1996, the Liberal government of John Howard decided that, on further reflection, a single flat fee didn’t make sense given that different programs had both different costs and different rates of return.  As a result, they brought in a three-band system, which tried to tie program fees to costs (in theory, the three bands mostly delegated lecture-based programs to band 1 at $3300/year, laboratory-based programs to band 2 at $4700/year and clinical programs to band 3 at $5500/year). There were some exceptions where returns were out of line (fine arts was left at the cheapest band, below cost, while business and law were put at higher bands than their cost structures suggest).  Rates were pegged to inflation, though there was a one-time 25% hike in 2005, which affected all disciplines except nursing and education. It was felt that keeping fees low in these disciplines might encourage more students to take them up – thus creating a four-band system.
• In 2014, the Liberal Government of Tony Abbott came up with the wildest idea yet: full-on de-regulation.  Let institutions charge whatever they want and make a genuinely competitive market.  This idea lasted a couple of months before political reality returned as students and families recoiled at the prospect of “$100,000 HECS debts”.  This never came to pass, but it was fully within the Australian tradition of “make huge changes to tuition schemes.”
• In 2020, the “Jobs-Ready Graduate” scheme (JRG) was introduced.  This had a whole bunch of measures in it, but where tuition was concerned, the idea was to set tuition by program according to how the government of the day valued each discipline.  In effect, it was the old three-band system, except one band was added, fees were dropped substantially for students in preferred disciplines – in Agriculture and Maths by 60%; teaching, nursing, clinical psychology, English and languages by 46% and science, health, architecture, environmental science, IT, and engineering by 20%.  Fees were also increased substantially in other areas: by 25% in law and management and about 100% in humanities and social sciences.  Pretty clearly this was an attempt to use fees as a way to influence student choices, but since HECS mediates the impact of fees (which is what it is supposed to do!) , it turns out that fees don’t really change students’ subject preferences (see a longer presentation of this study’s results here).

(For those wanting more detail on Australian policy in this area, Andrew Norton’s recent publication on this topic, From Private to Public Benefit: the Shifting Rationales for Setting Student Contributions is a must-read)

Now, Australia has recently changed government, with the Labor Party returning to office after a nine-year spell in opposition in May of this year.  Part of their platform was the creation of a new “Universities Accord”, which was vague but played on the perception that the Abbott/Turnbull/Morrison governments of the previous decade were hostile to higher education and that Labor would be cuddlier.  We still don’t know exactly what this Accord will consist of, but that’s fine – neither does Labor!  In fact, in classic Australian style, the new government is turning over the development of a new policy to a group of “Eminent Australians” who, after public input and consultations will advise on such issues as “funding and access, affordability, transparency, regulation, employment conditions and also how universities and TAFEs and other higher education and vocational education providers and training institutions work together”. 

(Don’t you wish Canadian governments operated this way?  Ever?  Dealing with sectors in the whole rather than just making minimal piecemeal reforms and governing by slogans?  So jealous.)

So, clearly, fees are going to come into play here.  I have no insight whatsoever as to where this might end up, though one suspects that a fee policy coming from a bipartisan committee is likely to be more incrementalist or at least less likely to be driven by a “big idea” than previous changes.   Instead, it might simply be driven by more practical concerns about what kind of package can achieve broad political support. 

And, remember: that package isn’t just about fees: the Accord covers a whole bunch of things, including the total amount of funding available to institutions, so while there might be some re-jigging of relative tuition costs between programs (such as taking humanities and social sciences out of the top band), it’s quite possible we might see total student contributions increase.  Certainly, Australian tuition fees in the lowest band are quite small by international standards (they’re about 50% of what they are for equivalent disciplines in Canada) and could stand to be raised.  Certainly, if you asked me whether it would be better to keep tuition low in fields like English and Nursing, or to introduce a genuinely useful need-based system of loans and grants for student living costs (an area where Australia lags the rest of the world by a country mile), I know I’d answer the latter.

In any event, Australia – periodically at least – the site of some of the world’s most interesting higher education policy debates.  Keep your eyes on Canberra.