For five years, many Australian university students have been watching the amount they have to pay for their studies with alarm and despair.
In response, the Senate is considering a Greens bill to slash high university student contributions for arts, law and business students.
The bill proposes to reverse student contribution increases imposed in 2021 by the “Job-ready Graduates” policy. This includes doubling the cost of arts degrees – which now cost more than A$50,000 as a result.
Despite the unpopularity of the Job-ready Graduates scheme in the community, the bill is unlikely to pass the Senate.
Only the federal government can fix the problems created by Job-ready Graduates. And in the lead up to the next federal budget on May 12, it shows no interest in doing that.
Job-ready Graduates
The Job-ready Graduates policy cut student contributions in teaching, nursing, engineering and IT courses. It did so to encourage students to enrol in these degrees, which were deemed “job-ready” by the Morrison government.
At the same time, Job-ready Graduates increased student contributions in arts courses, where many graduates take time to find suitable work.
Student contributions also went up for business and law courses, despite their above-average graduate employment rates. Three year bachelor degrees in all these fields now cost more than $50,000.
Under the new Senate bill, proposed by Greens Senator Mehreen Faruqi, the annual student contribution for arts courses would reduce from $17,399 to $8,164. For business and law, the price would drop from $17,399 to $13,624. These are the pre-Job-ready Graduate scheme rates adjusted for inflation.
The flaw in the legislation
At a Senate inquiry into the bill this week, most witnesses – which included university leaders, union representatives and researchers such as myself – favoured student contribution reform.
But they were less supportive of the Greens bill as the way to improve matters.
The reason is the bill would cut student contributions without offsetting increases in public subsidies.
The total annual funding rate received by universities per full-time arts student – the student contribution plus the public subsidy via the government – would drop from $18,715 to $9,480. This would effectively halve universities’ revenue from arts students. Law and business funding would drop by 20%.
So, many courses currently on offer would not be viable on these reduced funding rates.
This policy flaw reflects the Australian Constitution’s constraints rather than the Greens policy. Under the constitution, the Senate cannot “appropriate” money, such as authorising the use of public funds for higher subsidies to universities.
The government’s resistance to change
Labor opposed Job-ready Graduates when it was in opposition, but in government it has delayed taking concrete action to reverse it.
In February 2024, the Universities Accord recommended “urgent” change to student contributions.
In November 2024, Education Minister Jason Clare said the new Australian Tertiary Education Commission (ATEC) would examine student contributions. But legislation passed in March 2026 to formally establish ATEC, did not mention student contributions.
Clare has implied cost is the main reason for avoiding student contribution reforms so far.
As he told the ABC’s Four Corners program in March:
I’ve said [the Job-ready Graduates scheme has] failed. I’ve also said it’s expensive to fix and not easy to fix.
The Innovative Research Universities group (which includes Flinders, Griffith and James Cook universities among others) estimates a full reversal of Job-ready Graduates would cost the government $1.9 billion a year.
A possible workaround
While the new Australian Tertiary Education Commission cannot directly advise on student contributions (what students pay to go to uni) it can examine the total funding per individual university student.
ATEC can also advise on the Commonwealth’s contribution to student funding. The total funding rate minus the Commonwealth contribution equals the student contribution. ATEC can therefore indirectly suggest student contributions.
Omitting student contributions from ATEC’s legislation may be a government own goal. It could end up with implied new student contributions that can be calculated with simple maths, but without the political protection of justifications provided by expert ATEC advice.
‘One bite at a time’
In explaining his approach to higher education reform, Clare sometimes uses the proverb of “eating an elephant” – something that is only possible one bite a time.
The imagery is off-putting, but the government has implemented other higher education priorities, including a 20% cut in student debt last year.
Perhaps there will be a first move on student contributions in next months’s budget, but no hints have been dropped so far. Having already suffered the political cost for resisting reform on student fees, the government may want to keep the budget benefits.
What could work instead?
My own submission to the current Senate inquiry proposed an incremental approach to reform. Urgent action should be taken on student contributions for arts degrees, as current levels condemn many arts graduates to decades of repayments which may never clear all their debt. Other student contribution decreases, for degrees with better repayment prospects, can be postponed.
To limit cost to government, I suggest increased student contributions for engineering and IT courses, which received discounts under Job-ready Graduates. Graduates from these fields have relatively high incomes.
The Universities Accord recommended student contributions based on expected lifetime incomes. If this principle is eventually adopted, these interim changes would move in this direction.
There is no perfect student contribution system. But we can do much better than now in balancing fairness to students, university funding, and constraints on Commonwealth funding.
Andrew Norton works in Monash University's Faculty of Business and Economics, which would lose money if the discussed legislation passed in its current form. He put in a submission to the Senate inquiry discussed in the article and appeared as a witness.
This article was originally published on The Conversation. Read the original article.
