An unclear contribution to broader society and a generally strong private result means graduates should pay more for their courses, according to a report released by the Grattan Institute.

 

The report found that higher education subsidies are expected to cost taxpayers around $7 billion by the middle of this decade, yet the value of return is murky at best says Grattan Higher Education Program Director Andrew Norton.

 

“Graduates do well out of higher education. They have attractive jobs, above average pay and status. They take interesting courses and enjoy student life,” Mr Norton said.

 

“Given these large benefits, and with the HELP student loan scheme in place, most students would take their courses regardless of the size of the subsidy.”

 

“Tuition subsidies therefore merely redistribute income to students and graduates. The general public – particularly those who do not go to university – are worse off.

 

The report proposes that subsidies should be targeted towards promoting courses that have a clear public benefit, and that any subsidy should only be paid when they create public benefits that would not otherwise be created.

 

For example, a public health course whose graduates produce clear public benefits should be subsidised if it would not otherwise attract enough students, Mr Norton said. 

 

The report predicts that the removal of non-socially beneficial subsidies would have no ill effect on promoting students from low socio-economic backgrounds taking up higher education.

 

The report concludes that a ‘carefully managed’ reduction in tuition subsidies could yield savings in the order of around $3 billion by 2016-17.

 

“Given the substantial private benefits of higher education, supporters of tuition subsidies need to explain why the public money would not be better spent elsewhere,” Mr Norton said.

 

The full report can be found here (.pdf)

http://grattan.edu.au/static/files/assets/c944a917/162_graduate_winners_rerport.pdf