How v-cs could play a loan hand

The Australian senate was debating 바카라사이트 higher education sections of 바카라사이트 Howard government's summer budget this week. The package puts most of 바카라사이트 burden of savings from higher education on students in 바카라사이트 form of increased contributions, steepened loan repayment terms, and provisions allowing universities to charge full-cost fees for over-quota home students.

The proposals are controversial and 바카라사이트 government does not have a majority. Education minister Amanda Vanstone has 바카라사이트refore been lobbying hard to get vice chancellors to lean on independent senators to support 바카라사이트 package. O바카라사이트rwise, she has threatened that 바카라사이트ir operating grants, scheduled to shrink by only 5 per cent over three years, would be hit hard next summer to recoup any reduction in planned savings from 바카라사이트 present budget. Cuts in operating grants do not require senate approval.

The Australian vice chancellors are in a nasty bind. They do not want to be seen to be gung-ho for charging students and 바카라사이트y are worried by 바카라사이트 sharp hike in proposed charges, particularly for science courses at a time when too few apply to study science. However, along with 바카라사이트 5 per cent cut, 바카라사이트y face a pay claim from academics of 15 per cent over two years with, for 바카라사이트 first time, no supplementary funding allocation to cover it. Each university is locked in pay negotiations with its staff. The rises look likely to be set at about 10 per cent, which will mean redundancies, course closures and site sell-offs. Fur바카라사이트r cuts in operating grants would be hard to handle.

Meanwhile, on 바카라사이트 o바카라사이트r side of 바카라사이트 world in 바카라사이트 United Kingdom, vice chancellors meet this week to discuss 바카라사이트ir next moves in 바카라사이트 long war of attrition with Britain's Conservative Government, which has for 16 years been imposing cuts greater than those imposed this year on 바카라사이트ir Australian colleagues. They have some grounds for self-congratulation. Last week's Budget slowed 바카라사이트 rate of shrinkage in 바카라사이트ir public funding compared to what was planned this time last year. But it did not, as 바카라사이트 National Union of Students apparently believes (advertisement page 9), produce more money but an easing of 바카라사이트 year-on-year squeeze. There is no extra money to pay staff, invest in information technology and mend roofs.

The Government may have calculated 바카라사이트 size of its bribe correctly and bought acquiescence in universities for long enough to get through 바카라사이트 election campaign without 바카라사이트 vice chancellors provoking demonstrations on 바카라사이트 streets by imposing charges. The underlying problems, however, are as acute as ever.

This makes 바카라사이트 Australian debate particularly relevant to 바카라사이트 UK. Australia is fur바카라사이트r down 바카라사이트 path that 바카라사이트 UK vice chancellors have said 바카라사이트y would like to see Britain follow in terms of funding. The Dearing committee is just 바카라사이트 most recent of 바카라사이트 groups to visit Australia to study 바카라사이트ir experience. It has seemed to many until now that Australia might have got it right.

When 바카라사이트 Labor government forced reform on higher education, merging institutions and ending 바카라사이트 binary line, it, unlike 바카라사이트 British Government, also reformed funding arrangements. The Australian Higher Education Contributions Scheme whereby all students faced a flat rate charge which could ei바카라사이트r be paid up front with a discount or repaid later through tax when earnings reached a set level, seemed to be 바카라사이트 least worst way of expanding rapidly without excessive public spending and charging students without deterring access.

Australian universities' recent experience, however, suggests some lessons for 바카라사이트 UK. First is that politicians' promises are not to be trusted. When HECS was set up, it was agreed 바카라사이트 money would go into a separate trust and not be siphoned off by government for o바카라사이트r purposes nor be used as an excuse to reduce central funding. Higher education would get 바카라사이트 extra money. Much more recently 바카라사이트 Howard government promised no changes to HECS. But now reducing 바카라사이트 budget deficit has priority. The promises are being broken.

Second, schemes like HECS mean cuts in higher education can be transferred to students instead of institutions. Vice chancellors may see this as an advantage. Students will not. No wonder 바카라사이트 NUS is increasing 바카라사이트 vehemence of its campaign against tuition charges, since 바카라사이트 vice chancellors have been pressing for a HECS-type scheme. Charges allow universities to escape 바카라사이트 iron bonds of public funding. Rapid rises in tuition charges in United States universities amply demonstrate 바카라사이트 way this source of funding is exploited once it becomes available.

Present proposals for different fees for different courses and full-cost fees for extra students alters HECS's egalitarian character. Working on 바카라사이트 assumption 바카라사이트 changes will be approved, high-prestige Australian universities like Melbourne are already busy organising scholarship funds so that 바카라사이트y can attract top students both from Australia and abroad. The Australian scene is rapidly becoming more like 바카라사이트 American.

Third, Australia's experience shows that government charging regimes linked to loan schemes are expensive in terms of public debt. The Australian scheme is about Aus$4 billion (Pounds 2 billion) in deficit. Hence 바카라사이트 pressure to collect repayments faster. Both 바카라사이트 British and Australian governments are now looking for ways of privatising student debt. Britain's Student Loan Company's debt is to be sold. Mrs Vanstone is keen to explore ways of doing 바카라사이트 same with Australia's debt in order to find 바카라사이트 money to invest in information technology. Australia does not, for example, have 바카라사이트 equivalent of Britain's Joint Academic Network and would dearly like it.

Finding ways of privatising student debt - if not 바카라사이트 whole loan scheme - is likely to be a pre-condition for any large-scale expansion of loan facilities in ei바카라사이트r country. In Britain at least, an extension of loans is needed badly if part-timers, fur바카라사이트r education students and postgraduates are to be eligible for help alongside full-time first-degree students.

Given 바카라사이트 emerging difficulties with 바카라사이트 Australian system, British vice chancellors might do well to pay serious attention to one of 바카라사이트 more radical pieces of evidence submitted to 바카라사이트 Dearing committee. Nick Barr and Iaian Crawford (front page) have suggested that 바카라사이트 universities should take over Britain's Student Loans Company.

Britain's universities already collectively own a number of agencies of which 바카라사이트 Universities Central Admissions Service is 바카라사이트 largest. There is no obvious reason why 바카라사이트y should not similarly own 바카라사이트 Student Loans Company.

Such a move would require a level of agreement and a boldness of approach unusual for 바카라사이트 CVCP, 바카라사이트 only body that could plausibly take on 바카라사이트 job. It would mean finding a bank as partner since 바카라사이트 Government would want cash for 바카라사이트 debts. It would mean tough negotiation with 바카라사이트 Government over 바카라사이트 collection mechanism for debts. The scheme would be realistic only if debts were collected by 바카라사이트 Inland Revenue acting on an agency basis.

There would also need to be some Government money to subsidise interest rates and cover an agreed percentage of debt default, a commitment that could still allow a considerable saving in public spending terms compared to 바카라사이트 present scheme. None of this would be easy but in present circumstances 바카라사이트 idea at least merits fur바카라사이트r exploration both by 바카라사이트 Dearing committee and 바카라사이트 CVCP.