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University Rankings Question Need for Deregulation

Only a fortnight after UNSW Vice-Chancellor Professor Fred Hilmer criticised government bureaucracy and fee regulation as restrictive, newly released university rankings have shown Australian universities are performing better than ever.

The latest Academic Rankings of World Universities places 19 of Australia’s 37 universities in the top 500, the third highest number of universities in the list.

Chris Evans, the Minister for Tertiary Education said the results come from proper investment in universities.

“This is an outstanding result when you consider the top two countries have significantly more universities than Australia,” he said.

Professor Hilmer used a speech to the National Press Club in July to press for fee deregulation, citing tight budgetary conditions and increased enrolments.

According to Professor Hilmer, the financial situation of universities needs to be addressed urgently. In an opinion piece for the Sydney Morning Herald, Professor Hilmer wrote that the strong dollar and increased competition had put income from international students at risk, a revenue source universities have increasly become reliant on to cover gaps in government funding.

Recent Australian Bureau of Statistics figures showed income from international students fell by a 19% last year, although a majority of the falls were attributed to vocational training institutions and universities outside of the Group of Eight.

Last year UNSW posted an operating surplus of $7.9 million from revenues of $1 billion.

It is anticipated that any move to deregulate fees would most benefit Group of Eight universities, of which UNSW is one.

Professor Hilmer’s remarks come as the Innovative Research Universities (IRU), a body of seven universities founded in post-1960’s tertiary expansion programs, said increases in student fees could break the HECS system.

The IRU estimates currently 20% of HECS debt won’t be repaid as graduate earnings remain below the threshold. A fee increase in the United Kingdom has led the government to assume between a third and one half of student debts.

“At what point is it simplest to pay the funds directly,” the IRU statement read.

Professor Hilmer argued that degrees with higher graduate incomes should be charged at a higher rate.

But the IRU said this claim ignored the realities. “For many the issue is that as charges rise the more work years they will be subject to the HECS surcharge. Rather than ten years for repayment, standard times will blow out to fifteen or twenty years.”

The “Graduate Winners” report published by the Grattan Institute argued fees should increase, because private benefits through higher incomes were larger than public benefits. The report said the HECS student loan scheme meant enrolment figures would not drop.

However, a recent fee increase in England has led to a clear drop in university applications, according to the Independent Commission on Fees.

English school-leavers are entitled to government-backed student loans that are required to be repaid once graduate income reaches £21,000 ($31,566).

The increase in fees has seen an 8.8% drop in applications compared to last year. The Commission found no fall in enrolments of Scottish and Welsh students. Scottish universities are free for students from Scotland, whilst Welsh fees are capped and were not increased.

The Commission’s findings follow a survey by the National Foundation for Educational Research, which found tuition fees and overall university costs were the factors most likely to deter applications.

Judy Brookman, Director of Communications at UNSW, told Tharunka Professor Hilmer strongly questions the claim that there is evidence that deregulating fees would lead to a drop in participation.

Kylar Loussikian