Month: May 2025

What is behind increased rates of upfront payment of fees and student contributions?

Andrew NortonLeave a comment

It’s been a while – seven years – since I took a look at higher education student decisions to take out a HELP loan or pay upfront. Since then we’ve had instability in upfront student contribution payment incentives and increased student debt salience, triggered by high-CPI indexation. Anecdotally some students paid upfront to avoid high indexation of the subsequent debt.

Student contributions & HECS-HELP

The direct incentive to pay student contributions upfront has been framed as a discount. If the upfront discount was 10% and the fee was $1,000 a person who paid upfront would incur a debt of $900. The Commonwealth compensated the university for the lost $100, but avoided holding debt that might go bad and paying interest on its own borrowings to finance lending the student $1,000. In recent years, according to estimates in the Budget papers, about 15% of each year’s lending is not expected to be repaid.

The size of the incentive to pay student contributions upfront has varied over the last 20 years. Any incentive was abolished in 2017, restored for 2021 and 2022 to get Pauline Hanson to vote for Job-ready Graduates, and then abolished again from 2023.

I am in the no upfront discount camp, as I believe most people who pay upfront will do so anyway, whether there is a discount or not.

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What’s in the 2025 funding agreements? – ‘Higher education courses’ block grants

Andrew NortonLeave a comment

In February I reported on preliminary university-level 2025 allocations under the Commonwealth Grant Scheme and estimates of student contributions.* These have since been updated to add money for FEE-FREE Uni Ready places and regional university study hubs. The revised funding summary is here.

This post looks at the underlying funding agreements for more detail on the ‘higher education courses’ part of CGS funding. As usual in funding agreements since 2021, the detail reveals a range of legal and policy problems.

A spreadsheet summary of higher education courses funding for 2025 is here.

The role of higher education courses funding

Higher education courses funding is intended, by the Higher Education Support Act 2003, to be a flexible block grant. Within their total funding envelope, expressed as the ‘maximum basic grant amount’ (MBGA), universities can move resources across coursework AQF levels and between fields of education, other than medicine.

Although higher education courses funding is supposed to be flexible, both Coalition and Labor governments have used ad hoc funding agreement conditions to restrict use of higher education courses money to purposes chosen by the government.

This has in turn led to the unlegislated concepts of ‘base MBGA’ and ‘total MBGA’. Total MBGA is actual MBGA under HESA 2003. Base MBGA excludes most ad hoc programs. Its purpose is to reduce expenditure on the higher education continuity guarantee and the current equity plan funding. If universities don’t meet the ad hoc criteria they get $0 for those non-delivered places.

Overall trend in higher education courses funding

To the surprise of universities the first-term Albanese government often treated them harshly. But Labor kept the former government’s promise to index higher education courses funding to CPI. That was 4.1% for 2025. They also kept the Coalition’s region-based funding increases. While there are complex financial flows in and out of higher education courses funding – discussed further in this post – it is up 6.1% between 2024 and 2025 to a total of $7,687,211,975.

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A blog url change to andrewnorton.id.au

Andrew Norton6 Comments

Since 2011 I have run this blog using the andrewnorton.net.au url. But recently I was informed by my domain supplier that ‘net.au’ domains are now reserved for businesses with a connection to Australia.

To me ‘net.au’ sounds to me like a generic website address, with ‘.com.au’ for businesses. But I am years too late to challenge the decision and I don’t want to set up an andrewnorton.net.au business. I therefore need to change the blog url.

Although I have never previously heard of ‘id.au’ addresses, they seem like the best option to avoid a future reclassification. So I will be changing to andrewnorton.id.au

At the moment andrewnorton.id.au redirects to andrewnorton.net.au but I will reverse this soon. The redirection will last until andrewnorton.net.au expires on 2 July 2025. If you get a broken link changing the ‘net’ to ‘id’ will get you to the right place.

Once the change takes place, people reading my blog on a feed will probably need to resubscribe. There will be ongoing issues with broken links. I hope that there will be no interruption for people being notified of a new post by email.

Update: In August 2025 a scam site bought use of andrewnorton.net.au. I am trying to get it taken down.

What do Australian governments owe international students?

Andrew Norton2 Comments

Gaby Ramia, a University of Sydney academic, has long written about international student issues, including their security and well-being. His latest book, International student policy in Australia: The welfare dimension, accuses successive governments of ‘policy inaction’ on international student welfare.

The book opens with what became an infamous statement by then Prime Minister Scott Morrison. When asked, in the early stages of the COVID-19 pandemic, about the plight of JobKeeper-ineligible international students, Morrison responded that ‘these [student] visas and those who are in Australia under various visa arrangements, they’re obviously not held here compulsorily. If they’re not in a position to be able to support themselves, then there is the alternative for them to return to their home countries.’

A transactional relationship between Australia and international students

As Ramia’s book shows, in itself the prime minister’s statement was unsurprising. While Australia has longstanding consumer protection policies for international students, it has not offered general welfare-state type benefits. International students self-insure against the adversities that welfare states cover. As a visa condition they are supposed to arrive with savings. They are required to take out private health insurance. Education providers must provide information about welfare and other services, but are not obliged to deliver them.

Over the last quarter century the government has, to extents that vary over time, also encouraged international students to meet Australia’s labour market needs. But there was never any intention that the government fund international student related services. The government offered an Australian education and access to Australia’s labour market, not Australian welfare state support.

Ramia, by contrast, thinks that the government should take more responsibility for the welfare of international students. This should start with public transport concessions where these are not already offered and access to Medicare.

Ramia’s book was completed before the government changed its mind on international students, and started trying to cut their numbers. That policy turn creates new issues about the relationship between the government and international students.

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