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Federations Magazine Article
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Democratization with Rising Student Debt

Democratization with Rising Student Debt BY Deryck M. Schreuder

From their very beginnings all great federations
embody split institutional genes: those which work
towards a common constitutional recognition of
regional pluralism and those which represent the
powerful environmental factors driving and shaping
their operating character. As in long-term marriages,
a certain ‘mystery’ surrounds their uniqueness, endurance and
language of discourse.
Just as the Australian federation as a whole has moved from
being highly decentralized at its formation in 1901 to becoming
one of the world’s most centralized federations in 2001, so the
fate of the country’s universities has been an indicator of the
flows of federal power.
Before 1901, Australia was composed of separately founded
and self-governing colonies within the British Empire. (The
Canadian model was rejected as being too centralized.) Each
colony ran its own government under the
Crown, and these arrangements, of course,
included basic services such as education
and health, including universities. These
colonial arrangements simply carried over
into the new federal nation after 1901. The
former colonies became states of Australia,
and educational matters remained within
their jurisdiction. Universities would belong to the states – their
founding stakeholders – and would be publicly funded and
governed by state legislation.
Then in 1974, the reforming federal Labour Government of
Gough Whitlam legislated to take over the operations of
Australian universities, in the national interest. Yet the “takeover”
was actually qualified, and a federalist form was retained.
The developments of 1974 had long been foreshadowed by a
growing federal involvement in university affairs since the heyday
of the Liberal Menzies government two decades earlier.
Issues of funding, student support and research allocation were
at the heart of this significant development.
Federal “Takeover” Left Some Control to States
In addition, the changes of 1974 preserved key aspects of state
ownership of universities, in a form of pragmatic federalism
that was smart politics but represented complex policy that
continues to this day. The federal government has become the
overwhelming funding source for higher education institutions
and providers of student support. The Higher Education Support
Act of 2003 (HESA ) is the latest formulation of that support.
Today, a significant dimension of the 1901
arrangements is still in place. The legislatures
of the states continue to be the accreditors of
new universities and the custodians of the university
laws of establishment and governance.
These ancient dimensions of the dual
Australian system – national financing and
local governance – even survived the veritable
revolution brought to higher education by Labour Minister Joe
Dawkins’ White Paper of 1988.
As a key member of the Hawke-Keating government of
1983-95, Dawkins carried out a revolution, namely the massification
of an old elite system, which, alongside a more debatable
allocation of the national research dollar, remade Australian
higher education. Massification meant the opening up of university
access, resulting in an increase in university enrolments
to at least half of the university-age population.
Dawkins Ended “Universities for the Elite”
Most decisively of all, he ended the divide between the colleges of advanced education and the older university system, thus
doubling overnight the number of higher education providers,
from about 19 public universities to the current 38 (plus three
private facilities). Even Dawkins’s critics applauded those moves.
And that legacy endures: about one-fifth per cent of Australians
have acquired a bachelor’s degree, a 250 per cent increase since
1996, and the student population has jumped to nearly one million
including nearly 250,000 fee-paying overseas students.
A funding revolution underpinned the changes of the age
called “the user pays.” The federal government argued that a
university experience was not just a public good but a private
benefit. The Higher Education Contribution Scheme (hecs)
was introduced along with massification. This ingenious
delayed-student-fee regime was based on equitable notions
that higher education would be ”free at the point of entry,” but
would then be claimed back in the form of student debts owed
on an income contingent basis after graduation. An average
graduating hecs debt is now $10,500 Australian ($8,751 U.S.)
and the income threshold for repayment is $39,825 Australian.
Some fee-paying students owe more than $50,000 Australian
under a new scheme called fee-help.
The entrepreneurial university has also arrived in Australia.
Many major Australian universities today draw less than 25 per
cent of their budgets from the federal government, with the balance
mostly taken from fees, charges and international
In short, the strong centralizing impulses in Australian federalism
since the Second World War have become ever stronger.
Making it Work
There is one key consultative mechanism that makes this current
and peculiarly Australian system work by ensuring that all
the policy gears engage. That mechanism is the Ministerial
Council on Education, Employment, Training and Youth
Affairs, or mceetya.
Significant policy changes bearing on the universities have
to win the assent of mceetya members. The states have the
ability through their numbers to veto federal initiatives, while
the federal government has the purse strings to make things
Assuring Quality
mceetya members are the major stakeholders in the Australian
Universities Quality Agency, or auqa. This agency is an independent
corporation reporting to mceetya, with a board of
directors nominated by mceetya, the federal government, the
university sector, plus the non-self accrediting providers, businesses
and the community.
And the Federation itself is still on the move. An impassioned
Sydney Morning Herald editorial of March 10, 2007 – titled
“States of disarray: it’s time to fix the federation” – argued for major
constitutional reform. It said that in a quest for votes, politicians
had “created a ham-fisted patch-work of shared responsibility,”
not least in the area of educational policies. But whether that will
happen, what impact it will have on universities and what
improvements it will bring, remains to be seen.
Democratic federal systems are among the glories of the
Western liberal tradition. They are also human creations which
have small regard for symmetry, let alone simplicity, as they evolve
the politics and policies of their pluralistic modern nations.