In a Weekend Australian opinion piece attacking the government’s ending of undergraduate full-fee places at public universities, Glenda Korporaal says that
Far from creating a warm, multicultural glow, the over-reliance on foreign students has led to an undercurrent of resentment among many young Australians, who feel these students are depriving them and their mates of places at good universities (italics added)
In a reform of the last Howard Budget, universities no longer have absolute limits on the numbers of local students they can enrol. However, government policy still provides strong financial disincentives to take domestic undergraduates.
Up to 5% more than their quota number of student places, universities receive roughly the same as they would for within-quota students (ie the government subsidy plus the student contribution amount). Over that, they get the student contribution amount only. In most cases, international student fees will be significantly higher than either amount – twice as much or more than for within-quota students in some courses in the ‘good’ universities.
So now the key problem is less quantity constraints than price control. Australian students are not allowed to compete on price with international students. They are priced out of the market – not through prices being set too high, as the left supposes, but through prices being set too low.
But the 10 year experience of Australian full-fee undergraduate places being permitted suggests that their abolition will directly disadvantage only a modest number of students. About 40% of applicants miss out on their first-preference course, so the potential demand for above-quota fee-paying places is quite high.
Yet in 2006 (the last year for which figures are available), only 2.5% of Australian undergraduates were full-fee. This understates the proportion of Australian students who ever had a full-fee place, as some enrolled on this basis and then switched to HECS places. And some universities, for a mix of ideological and perceived lack of demand reasons, never offered full-fee undergraduate places.
However the relatively low number of full-fee students suggests that given the availability of cheap subsititutes – a HECS place at another university or in another course – most Australian applicants did not want to compete with international students if that meant doing so on on roughly the same financial terms. They were prepared to let international students outbid them. I don’t think this is good grounds for resentment, though I imagine it might be felt anyway.
Australian students should however resent foolish policies that prevent them enrolling in courses where there are places available. But the record suggests that the number of people directly affected by the policy bias against local students is fairly small.