On Wednesday, Education Minister Jason Clare released a much-anticipated report on universities. This is the interim report of the Universities Accord review.

The review, commissioned in November 2022 and led by Professor Mary O'Kane, has been tasked with creating a “visionary plan” for Australian higher education. It is examining everything from university governance, to research, teaching, international students and student wellbeing.

But one area of great interest is what will happen to the fees students pay to attend university. For domestic government-supported students, these are called “student contributions”.

The government and the review panel are also emphasising equity of access to higher education and the report suggests major changes to how university funding works. These changes would be invisible to students, but the goal is more people from disadvantaged backgrounds enrol in university and complete their degrees.

Student fees are set to change (again)
The interim report confirms the Job-ready Graduates scheme for student fees be scrapped. This was introduced in 2021 by the Morrison government.

It was intended to steer students to courses that matched labour market demand (such as teaching or nursing) or other national priority areas (such as mathematics and foreign languages). Student contributions for these courses were discounted.

Other courses, notably arts degrees, saw price increases. The cost of most subjects more than doubled.

But this does not work. Along with other higher education policy analysts, I argue student contributions only have small effects on student choices. The main practical consequence is some students will be burdened with HELP debts that take decades to repay, if they ever are repaid.

The accord review panel agrees, noting:

the continuation of these current arrangements risk causing long-term and entrenched damage to Australian higher education.

Narrowing the list of alternative systems
The review panel has delayed any firm recommendations on what will replace Job-ready Graduates until its December 2023 final report, but some version of a multi-rate system looks set to return.

So what happens now? One option is to reverse the worst of Job-ready Graduates, and take arts students and others affected by high student contributions back to their old rates. But this would be a disappointing response for a review supposed to come up with “big ideas”. As the interim report observes, a simple reversal would “cost in the order of A$1 billion a year”.

Some university interest groups suggest going back to a flat student contribution rate, where every student pays the same fee. This was the system between 1989 and 1996. Students in longer degrees would still pay more, but the annual fee would be the same regardless of course.

Without fully ruling it out, the accord panel says this “risks unfair trade-offs”. Indigenous, regional, low socioeconomic status and female students would all pay more on average than they do now. This is because they are more likely to take courses that are currently discounted under Job-ready Graduates including nursing, teaching and agriculture.