Higher education in Australia and Britain : what lessons?

Both Britain and Australia have seen rapid, inadequately funded, expansion of student numbers, and increasing central planning. To address these problems, this paper argues (a) that students should pay via a system of income-contingent loans for the private benefits they derive from higher education, and (b) that, within a government-ordained regulatory framework, universities should be free to set fees and student numbers. In the wake of the Dearing Report in 1997, Britain is making progress on (a) by introducing income-contingent loans to cover student’s living costs. If anything, however, it is moving backwards on (b) by introducing a flat-rate fee of 25 per cent of average tuition costs, abated for poorer students. Though laudable in its equity objectives, the government’s post- Dearing policy has serious problems: it brings in no extra money in the short run; is harmful to access; is inequitable in other ways; and faces serious administrative problems. In contrast, Australia got the design of loans right ten years ago, and the West Committee’s Final Report argues for greater freedom for universities to conduct their own affairs. Once more, Australia looks set fair to give a lead.