Higher education in Australia will rise in price

Higher education in Australia may rise in price by 30-60% to current prices. The reduction in funding from the federal budget in 2016, announced by the government, will lead to a deficit in university funds of at least 30%. The cost of popular programs in some universities, especially in such prestigious ones as Sydney and Melbourne, is likely to rise in price much more.

Master's degree will also require additional costs.First of all, this concerns those who do not have enough own funds to pay for their education. The interest rate on the government student loan (HELP - Higher Education Loan Program) is now pegged to the 10-year government bond rate (at 6%), rather than to the consumer price index (currently 2.9%).

So far, the government and universities are in no hurry to clothe upcoming changes in numbers. However, an internal analysis carried out by the two institutions, as well as a survey of the higher education market, provides a clearer picture of the big picture. The only thing that can get cheaper, and this largely depends on the competition, is a higher education program without a degree (with a diploma). From 2016, for the first time, they will be partially financed from the budget.

The increase in fees will not affect those who are already studying - for current students, the fee is frozen until 2020, as well as postgraduate programs.

Universities had to take up calculators after the federal budget announced a 20% cut in subsidies, a change in the student loan interest rate (HELP) and a new scholarship program.

While universities await how the Senate will react to the proposed changes. Whether they will be approved and what changes may undergo in the process is a big question.As already mentioned, the cost of a master's program, according to preliminary calculations, will increase by 30-60%.

However, there is an upper limit for higher education prices.International students already pay the full cost, so this level can be considered the limit above which it makes no sense to raise fees for Australian citizens. However, nothing can prevent the university from increasing fees for foreigners, and after that - for local residents.

But here the laws of the market come into play. Tuition prices in Australia for overseas students are already so high, and if they are raised even more now, the demandon educational services for foreigners will fall.

As you can see from this Business Insider chart, higher education in Australia is slightly cheaper than in the US, but living costs are higher:

Australia is the most expensive country for international students, according to an HSBC study. The total average cost of tuition and living exceeds $ 38,000 per year.This amount includes $ 25,375 for the university and $ 13,140 for accommodation. At the same time, in the United States, education costs about the same - $ 25,226, and living costs are lower - $ 10,479.

Thus, in order to maintain its position in the global higher education market, Australia needs to control price increases. Otherwise, why go to Australia when you can get the same degree in the US for less money? This factor also constrains the cost of training for local residents. Universities will not charge more Australians than foreigners.

However, we must not forget about the significant fall of the Australian dollar against the US (with the approval of the Federal Reserve Bank), which will also have a big impact and open up the opportunity for price increases for foreign (and possibly local)students.

Australia's higher education system comprises 37 public, four private universities and 131 other institutions of higher education.

Ian Young, rector of the Australian National University (ANU), tentatively estimated the increase in the cost of training programs. The government is currently reimbursing about 60% of the cost of higher education.In connection with budget savings, expenses under this item will be reduced by 20 percentage points, that is, by about a third. Universities will have to increase their tuition fees by an average of 30% just to cover the underfunding. “There will be no limit to this amount as long as it does not exceed the fees that the university charges from foreign students in the same discipline,” says Ian Young. - I strongly doubt that admissions from local students will reach the level of prices for foreigners. This will certainly not be the case in postgraduate programs, for which prices are relatively free. "Currently, students pay approximately 41% of the cost of education.After the changes, their share will grow to 52%.

If, after increasing the percentage paid by students, the university's income rises, the university will have to give 20% of the additional income to the scholarship fund.itanother barrier limiting price spikes.Universities will have to budget for the loss of a fifth of their additional earnings.

For postgraduate programs such as MBA, which can cost $ 75,000, universities can set fees themselves. “I think that in the foreseeable future, it is likely to be expected to increase to $ 18,000 per year,” notes Ian Young.

Moreover, there is a wide variation in costs depending on the university. At the University of Sydney, the price of daytime tuition for local students in 2014 was $ 10,085. International students paid $ 40,400 in just one year.The difference between these amounts is the cost of earning a law degree from the University of Sydney. At Melbourne the costsome of the postgraduate programs correspond to prices for foreigners. A four-year doctorate in law cost an average of $ 156,992 in 2014, and a three-year program cost $ 114,816 on average.

Glyn Davis, Chancellor of the University of Melbourne, in a letter to the teamthe university said: "It is impossible to resolve the controversial situation with the future payment (of diploma programs) until the final approval of the package of reforms in higher education and its funding in the Senate. "Nonetheless, preliminary analysis from the University of Melbourne revealed an “exceptional” financial gap for the university after the budget sequestration. To cover the funding gap, the university will have to raise rates for social sciences programs by 45%, natural sciences by 54%, and 61% in engineering.This translates into an increase in the cost of engineering education from $ 24,000 to $ 38,000. "There is nothing new for the students to get paid," Davis said.

According to the National Tertiary Education Union of Australia, its experts' preliminary analysis of minimal growth in value is in line with the findings of ANU and the University of Melbourne. According to the Union's calculations, the smallest increase in prices will be 33%, and this will only be enough to compensate for the decrease in budget funding and the introduction of a new scheme for financing scholarships at the expense of student fees. In addition, the abolition of the marginal cost of education may lead to the fact that the cost of some areas will exceed 100,000 dollars, especially in medicine, law, engineering, management and commerce.Higher medical education, the union calculated, could rise in price from $ 60,000 to $ 83,000-180,000 per year.