Business council chief calls for overhaul of 'unfair' student loan system
All existing subsidies for tertiary education and the Help loan scheme should be replaced to encourage “lifelong learning” that does not discriminate between university or vocational education, according to the Business Council of Australia chief.
Jennifer Westacott will call for a new education funding system in a speech to the National Press Club in Canberra on Wednesday, warning that the current system distorts student choices between university or vocational education.
Students would get a new lifelong learning account, that would give them both a subsidy and access to an income contingent loan scheme.
Under the scheme a new national body would set the level of subsidies for courses, meaning some university students could face higher fees and lower subsidies from the government while vocational students could receive a higher subsidy.
A new income contingent loan scheme would replace the current system in which vocational education and training students can access up to $15,000 in loans while university students can borrow six times as much.
In notes of the speech, seen by Guardian Australia, Westacott says she wants to “restore the status of our neglected [vocational education and training] system”.
Westacott will say that tertiary education funding is “distorted, creates the wrong incentives and is basically unfair”, citing the fact that students in vocational training get less government support than university students in many industries.
She argues registered nursing students at university get a federal subsidy of $40,000 while the subsidy for enrolled nurse students in vocational training “depends entirely on where they live and the provider they choose”.
Westacott suggests it “stands to reason” students will pick the more heavily subsidised higher education qualification “even if they were better suited to the [vocational] course”, which was not in their interest or the national interest.
Westacott argues the bias in funding adds to a cultural bias in favour of university at the expense of vocational education in a system “overly focused on credentialising too many things as university qualifications”.
Westacott suggested the reforms could be achieved within the current funding envelope of $20bn, raising the prospect that the vocational sector could be pitted against universities for the current allocation of funds. She said it would “require compromise from everyone’s point of view”.
The higher education policy proposal comes ahead of a parliamentary sitting week in which the government’s proposed $2.8bn cuts in higher education funding and fee increases are due for debate.
The bill would impose a two-year 2.5% efficiency dividend on universities, lower the Help debt repayment threshold to $42,000, and increase fees by a cumulative total of 7.5% by 2021.
The bill is opposed by Labor, the Greens and the Nick Xenophon Team, suggesting the government does not have the numbers to pass it.
On Monday NXT’s education spokeswoman, Rebekha Sharkie, reiterated opposition to the current proposal and called on the government to undertake a “comprehensive” review of higher education, including the vocational sector and apprenticeships.
On schools funding, Westacott argued that Australia should stop “focusing solely on the quantum of funding rather than the outcomes we actually want to achieve”.
The Turnbull government increased schools funding by $23.5bn over 10 years with its Gonski 2.0 policy, as well as instituting a review by David Gonski about how to achieve better outcomes regardless of funding inputs.