A voucher scheme without private providers?

Today Julia Gillard put out a media release drawing attention to the release of the first semester 2008 enrolment numbers (it’s a disgrace that it has taken a year to get these statistics ready, but that’s another issue).

They show that there is strong growth in the private higher education sector, despite fees that are significantly higher for domestic students than in the public universities. Commencing Australian students were up 17% on 2008 in the private providers, but only 0.2% in public universities (in absolute terms, the public institutions still have 95% of the market). These numbers suggest that the FEE-HELP scheme, which enables students to borrow tuition fees, is having a large effect.

Yet though these market signals show increasing student interest in private higher education, Gillard’s voucher scheme is specifically restricted to public higher education providers. This significantly undermines the positive potential of student choice, since it restricts choice to institutions that by the history of the funding system tend to be alike: large, multi-faculty, bachelor-to-PhD level institutions, aiming (with widely varying degrees of success) to be research institutions. It’s Henry Ford’s Model T kind of diversity: you can have any colour as long as it is black.

No rationale has been given for excluding the private providers.
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