In today’s Higher Education Supplement, University of New England VC Jim Barber becomes one of the first non-Group of Eight VCs to raise questions about what happens when the supply of university places is deregulated, while prices remain at flat regulated levels. He fears that regional universities like his own will lose out as metro universities expand.
I have no sympathy for the old higher education system, run in the interests of institutions rather than students. We should not narrow students’ options so they have to end up at a regional university, if they want a university education at all. But nor should we deprive universities like UNE of the tools of competition, particularly on price.
The figure below, from a University of Melbourne analysis of international student fees, shows that regional unis have charged low fees to give themselves market share. Indeed, on average several of them earn roughly the same amount for an international as a domestic student (the figure also gives quite a few clues as to how the money is spent).
Barber’s solution, it will surprise nobody who has observed regional higher education politics, is another government handout – a $4,000 student contribution discount. The hapless taxpayer is spending enough on higher education already, and regional unis have to learn to deliver an attractive service rather than rely on handouts. But I certainly share Barber’s concern that a voucher system without price competition will have some unintended consequences that are in nobody’s interests.