Proposal suggests $10,000 annual fee for university degrees

A $10,000 annual fee for all university students should replace the contentious Job-ready Graduates Package that sent course fees skyrocketing, according to a controversial new proposal from a leading voice in the higher education sector.

Dr Mark Warburton, author of a new paper exploring replacement options for the much-maligned scheme, says the current payment model that led to Australia’s $50,000 arts degrees and undercut tertiary funding should be replaced by a single annual contribution across all fields by 2028.

The Job-ready Graduates Package, introduced by Scott Morrison’s government in 2020, upended university funding in an attempt to steer students away from the humanities through lowering the costs of degrees such as nursing and teaching.

Warburton’s proposal, presented at a seminar in Melbourne on Wednesday, instead calls for students to pay a single annual student contribution in line with the current average payment.

Under Job-ready Graduates, the average student contribution rate is $10,847 (the lowest is $4738 and the highest is $17,399) and about 65 per cent of students’ contributions sit above that number.

“If the current average contribution rate is considered too high for some students facing an increase, then it is way too high for [those] who currently contribute well in excess of the average rate,” Warburton wrote in an occasional paper released this year.

While distaste for Job-ready Graduates is almost universal, Warburton’s proposed replacement is also controversial. Some advocates say that students should pay in line with their potential income (with future high-earning degrees such as law paying more, and lower-paying professions like nursing paying less). Warburton says this is likely to disadvantage women.

“The incomes of many graduates increase as they get older, but this is far more pronounced in the case of men than in the case of women. Median income ratchets up around $15,000 for each five-year older cohort [for men]. This does not happen with women,” Warburton’s paper concluded.

“There is very little evidence to support the idea that it makes sense to set student contributions based on the lifetime benefits that students will gain from their field of study” because this fails to consider different labour market outcomes, he said.

“All fields of study have around 30 to 40 per cent of graduates who are high-income earners; most of them are men who have worked their way to senior positions. A sizeable proportion have incomes below this level,” he said. He noted, for example, that a suburban lawyer in a regional town differs significantly from a high-flying solicitor at a global law firm.

The Job-ready Graduates Package saves the government an estimated $1 billion per year on tertiary education but sent the price of law, commerce and arts degrees soaring.

Four years since its inception, Education Minister Jason Clare has characterised it as “failed” and “unfair” but has not repealed it.

Detested both by students for its astronomical fees, such as $87,000 for a law degree, and universities for the funding black hole it created, the model will remain in place until at least 2028.

Last month Clare declined to say whether Job-ready Graduates would be repealed before the 2028 election, saying it would be “complicated and expensive” to walk the controversial laws back. His office was contacted for comment.

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