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Should we follow the German way of free higher education?
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Should we follow the German way of free higher education?

Against the international trend, Germany has announced it will abolish tuition fees and higher education will once again be free for its citizens. Could the same happen in Australia? In a shortlived experiment…

University in Germany is free for all citizens, why isn’t it free for us? Pabkov/Shutterstock.com

Against the international trend, Germany has announced it will abolish tuition fees and higher education will once again be free for its citizens. Could the same happen in Australia?

In a shortlived experiment, Germany’s public universities - funded by state (Länder) governments - introduced fees in 2005. But as early as 2008, following public outcry, individual states started backtracking. The last two of the Länder still levying them will phase them out this year.

Fee-reversal could happen in Australia. We have only one government funding 37 public universities, compared to Germany’s 16 Länder funding more than 100. But perhaps the question for Australia is: should higher education be free?

The UN International Covenant on Economic, Social and Cultural Rights supports the implementation of free higher education on the basis that higher education should be equally accessible to all. But free doesn’t necessarily mean equal.

What’s the point of having a free education if only a few can access it? Or if the quality of higher education is sub-standard? On the other hand, what if a country charges high student fees, but ensures that anybody needing financial support gets it?

Australia’s history with free higher education

Serious attempts to support poorer students into university began in 1944 with the Commonwealth Reconstruction Training Scheme. As well as ensuring people had jobs in the post-war economy, it was a deliberate social engineering attempt by the Curtin-Chifley government to encourage people from working-class backgrounds – mostly men - to study.

Prime minister Robert Menzies expanded the system into the merit-based Commonwealth Scholarships scheme. Between this and state-based teachers’ scholarships, a majority of university students from the late 1950s to the early 1970s did not pay fees. However, the overall student demographic remained urban, middle class and white.

When Whitlam made education free in 1973, it still didn’t help many more students from more diverse families go to university, though mature-age women did benefit. The practical difference under Whitlam was offering income support for students. The introduction of HECS in 1989, however, shared the cost of higher education more evenly between government and the student.

Australian higher education is now fairer and more accessible than it was previously. Nonetheless, participation is still unequal for many groups of Australians, such as for Indigenous, regional and disabled students.

A comparison of higher education systems

A comparison of OECD data shows Australia compares favourably to other nations, with an above-average participation rate of 38%. Compared to other fee-charging nations, our government contributes well under the average of $12,298 and student fees are about $700 more than the average. Only 3% of Australian students receive fee support, compared to the average of 29%. However, that does not take into account HECS-HELP, which allows the student to defer payment of fees until he/she is employed and earning a relatively decent wage.

Eight of the 22 countries analysed (selected based on whether sufficient data is available) provide free higher education. Their governments invest on average $14,387 per student per year, compared to an average of $13,094 for all countries. On average, 30% of their population has a tertiary qualification, compared to 32% for all countries analysed. These countries provide free higher education for their citizens without making it too exclusive, nor dramatically increasing public expenditure.

It is not possible to directly compare access for disadvantaged students as there is no universal definition of “disadvantage”. However, the overall participation figure does give an indication of how likely it is that disadvantaged students are gaining access.

Data were sourced from the OECD 2013 education indicators at http://dx.doi.org/10.1787/eag-2013-en. Amounts are shown in Australian dollars, adjusted for purchasing power parity (http://www.oecd.org/std/purchasingpowerparities-frequentlyaskedquestionsfaqs.htm). Annual cost to student from Table B5. Annual public spend per student Table B3.4. Those with fee support (Table B5.2) refers to percentage of students receiving partial or full tuition fee support via scholarships or grants. Population educated (Table A1.5a) refers to proportion of 25-64 yos with a tertiary qualification. ‘dna’ means data not available or cannot be used for statistical purposes. ‘na’ means not applicable.

While this data shows it is possible for a government to provide free, quality, mass higher education, it also suggests higher rates of participation are only possible with a co-contribution from the student to offset the cost of providing more places. In Australia’s case the government could be contributing more and the student less.

The future of free higher education in Australia

A return to free higher education would come at great cost, as it would involve dismantling the immense structure and economy of HECS-HELP, which have been in place for a quarter of a century. In contrast, Germany has managed to return to free education in great part because tuition fees were relatively low (about $1,500) and introduced only eight years ago.

For Australia, abolishing HECS would involve the same scale operations as abolishing the GST. And making it free might even increase inequality, if the supply of university places was limited in order to pay for it. Free higher education might be desirable but fair and equitable higher education is essential.

Join the conversation

24 Comments sorted by

  1. Jack Ruffin

    logged in via email @hotmail.com

    Education is a great way to equality of opportunity in Australia, but only if it is free. Entry fees limit children from poorer families. They deserve an equal access to this opportunity to build a better life.

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    1. Tom Orren

      Retired Teacher

      In reply to Jack Ruffin

      Couldn't agree more Jack and the freer the better. The true value of education can only be realised when it is made available to ALL.

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    2. Jeff Payne

      PhD in Political Science and Masters in Public Policy

      In reply to Jack Ruffin

      The figures, Jack, as I've always suspected, would suggest that this myth is not true. The U.S. has some of the highest rates of tertiary education at 41% but famously lacks social mobility. Countries like Denmark (33%), Norway (37%) and Sweden (34%) have comparable levels of population with a tertiary degree but have much greater social mobility. I suggest education is a necessary but not sufficient cause of social mobility. This is actually an important conclusion if true. Education is constantly justified on the grounds that it creates equality of opportunity but, if this is not true, then that justification rings hollow. As I've said on other conversation streams, having an education is actually a justification for class. A myth to underlie substantive inequality. It is just that left, right and centre have fallen for it.

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    3. Ian Austin

      Lecturer in International Business

      In reply to Jeff Payne

      The thing that struck me when I lived in Singapore was how many high quality professionals I came across from Denmark, Norway and Sweden who had never set foot inside a university, but instead started their climb through free polytechnic education linked directly to a company/enterprise. University is clearly viewed in these countries as just one of several lanes on a highways to success for their citizens, whilst in Australia too much emphasis seems to be placed on university places.

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    4. Ken Alderton

      PhD student, former CEO

      In reply to Ian Austin

      This multiple 'highway" system is a feature of the tertiary education systems of a number of Eurpoean countries including Germany with its Fachhochschulen (FH, university of applied sciences) systems. These grew out of a debate in the 1960s about producing better qualified people for Gernam industry while maintaining the intensely practical nature of the company apprenticeship schools. Australia had the same debate which resulted in the rise of TAFEs and CAEs . The major difference was that the Europeans gave these universities of applied sciences the same staus as other universities where the TAFEs and CAEs were accorded second level status.
      My experience with professionals from these stream, mainly in engineering and management, matches yours.

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  2. Nick Fisher

    Programmer & Analyst, pt student

    I'm sorry but I find the actual data and arguments in this article to be seriously lacking in detail, there is a table with a vaguely defined percentage of the population educated and a mix of very different countries (eastern european countries and mexico alongside wealthy scandinavian countries) and the cost of abolishing hecs-help is stated to be "immense" and similar to the gst but as far as i know the annual revenue from hecs repayments is less than 0.5% of total government revenue. There is minimal discussion of the effects of fees on participation rates for different groups and no discussion at all about the differences between tafe and university fees or the changes that have been made since it's introduction to greatly increase the rate of hecs-help leading to much higher levels of debt for students..

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    1. Tim Pitman
      Tim Pitman is a Friend of The Conversation.

      Senior Research Fellow, National Centre for Student Equity in Higher Education at Curtin University

      In reply to Nick Fisher

      Hi Nick

      A consequence of being limited to under 1000 words by the editor, I'm afraid.

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    2. Andrew Norton

      Program Director, Higher Education at Grattan Institute

      In reply to Nick Fisher

      The nominal cost of making existing Commonwealth-supported places for 2013-14 would be about $4.5 billion, actual cost around $3.5 billion (because about $1 billion in HELP lending is written down anyway due to doubtful debt). The cost would be more if students paying full fees were incorporated (as most postgraduates do, for example). However the actual cost is likely to be less, as the number of places would almost certainly be cut significantly.

      Consistent with the broad hypothesis of the article, the introduction of free education in Australia coincided with a flat period of growth in higher education attainment:

      http://andrewnorton.net.au/2014/03/01/did-free-university-education-increase-higher-education-attainment/

      The main reason was that growth in higher education places was only just keeping up with population growth.

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    3. Nick Fisher

      Programmer & Analyst, pt student

      In reply to Tim Pitman

      Fair enough Tim I appreciate that this topic deserves a bigger stage, I definitely agree with what you say about students paying less and governments more. While I would ultimately like to see a free system for TAFE and Uni I think pragmatically at the present time the tuition part of HECS could be reduced back to around the $2-3,000 level.

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    4. Nick Fisher

      Programmer & Analyst, pt student

      In reply to Andrew Norton

      Is the 4.5 billion the amount by which the total HECS-HELP debt grows (the size of the IOU from the students) ? as I understand it the actual amount repaid through the tax system is around 1.5 billion per year, so for the government to get rid of fees it would have to replace the revenue from non HECS-HELP post-graduate fees plus a varying proportion of the 1,5 billion depending on how the issue of the existing debt is handled, ie totally written off, left as is but no new debts levied, kept as a loan system for living expenses etc. (this is ignoring TAFE for the time being which is run by the state govts).

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    5. Andrew Norton

      Program Director, Higher Education at Grattan Institute

      In reply to Nick Fisher

      $4.5 billion is $3.9 billion in new HECS-HELP advances + $600 million in up-front payments of student contributions.

      I have not calculated postgraduate fee-paying costs but there will be around $1 billion in FEE-HELP lending for 2013-14, including to students in non-uni higher ed providers. However CSP per student funding is substantially below full-fee per student funding, so unis are likely to close many of their postgraduate courses or restrict them to international students.

      Repayments were $1.7 billion in 2010-11, the last year for which we have official numbers. We estimate $1.9 billion for 2013-14, although there is a history of volatility in these numbers that we don't fully understand.

      All this for information. But the key point, from the original article, is that while free education would enrich some students over time it will almost certainly reduce higher education participation and attainment relative to the counter-factual of the current system.

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    6. Tom Fisher

      Editor and Proofreader

      In reply to Andrew Norton

      Andrew, with respect, but you are not controlling for the wider social and cultural background in which higher education is simply not of central concern when it might be, and should be.

      What is needed in this country before anything is properly turned around, is a broad culture of scholarship and learning in which universities figure centrally, not peripherally as they yet are.

      ALL of our media, not just News Ltd, do seriously need to dispense finally with cheap journalism, presented by the…

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  3. Joy RIngrose

    Retired Maths/Science teacher

    There was not mention of the TAFE system in this article. It is an important adjunct to the university system. Universities have increased their student intake, but are all of the courses rigorous enough? We need to educate our brightest citizens in order to maximise our ability as a society to innovate and create.
    Many universities are offering courses that are really jobs training. Universities should be places of intellectual rigour. The advent of high fee-paying overseas students has seen the…

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    1. Tim Pitman
      Tim Pitman is a Friend of The Conversation.

      Senior Research Fellow, National Centre for Student Equity in Higher Education at Curtin University

      In reply to Joy RIngrose

      Hi Joy

      TAFE/VET is definitely important however word-limits and the need to compare like with like across systems is the reason for the focus on universities.

      I don't necessarily agree that free higher education is essential for our nation's future - but a fairer one is. Much, MUCH more needs to be done to reduce inequalities in the system.

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    2. Frank Johansen

      Truck Driver

      In reply to Joy RIngrose

      I studied at the South Australian College of Advanced Education for a coupe of years in the mid eighties. One of my lecturers had a sign on his doors "If you think education is expensive, try ignorance" True then, true now.

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  4. Monika Merkes

    Honorary Associate, Australian Institute for Primary Care & Ageing at La Trobe University

    I studied in Germany during the 1970s. While university education was free, income support was not. We had to pay back the equivalent of Austudy (Bundesausbildungsförderungsgesetz, or BAföG). It doesn't make much difference to the individual whether the debt they have to pay back is called HECS or BAföG. BAföG has been in effect since 1971 http://www.das-neue-bafoeg.de/

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  5. Peter Farrell

    teaching-principal at at a small rural school

    My adult educational journey began with my local TAFE. A diploma gave me entry to university and the rest I managed myself. I rec'd a university stipend for my masters and did my doctorate part-time while working (it was HECS free). For the rest of the time I needed Austudy and augmented this by working part-time.

    I don't think having a HECS debt is a problem for the student (I've paid mine). It is something for the future.

    Having support to cover living expenses while studying is an issue…

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    1. Tim Pitman
      Tim Pitman is a Friend of The Conversation.

      Senior Research Fellow, National Centre for Student Equity in Higher Education at Curtin University

      In reply to Peter Farrell

      Hi Peter

      Living costs is certainly an issue and in its response to the demand driven funding system review, the National Centre for Student Equity in Higher Education has reaffirmed its support for HECS to be expanded to include a form of bursurary for living costs, which can then be paid back along with the course fees.

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  6. Gavin Moodie
    Gavin Moodie is a Friend of The Conversation.

    Adjunct professor at RMIT University

    Usher and colleagues (2005, 2010) had a pretty good go at comparing disadvantaged groups' access to higher education in selected OECD countries. Their broad conclusions are that low fees result in rationed access which is therefore restricted to higher scoring students, most of whom are from higher socio economic status backgrounds; while high fees-high financial aid in the form of loans and/or means tested grants result in higher access for students from lower socio economic status backgrounds.

    Usher, Alex and Cervenan, Amy (2005) Global higher education rankings 2005: affordability and accessibility in comparative perspective, Toronto, ON: Educational Policy Institute, http://www.educationalpolicy.org/pdf/Global2005.pdf (accessed 26 April 2008).

    Usher, Alex and Medow, Jon (2010) Global higher education rankings 2010: affordability and accessibility in comparative perspective, http://higheredstrategy.com/publications/GHER2010_FINAL.pdf (accessed 28 October 2010).

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  7. Tom Fisher

    Editor and Proofreader

    Big big issue I have with this piece lies in its idea that if government covers the costs of higher education, somehow that makes it free, presumably to students. But nothing can be further from the truth.

    As my old philosophy professor used to say to freshers during his orientation lecture every year, if you are only here for a degree, come up to my office after the lecture, give me $30,000 and I will give you your degree and wish you well in life. The rest of you are here to work.

    It makes…

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    1. Tim Pitman
      Tim Pitman is a Friend of The Conversation.

      Senior Research Fellow, National Centre for Student Equity in Higher Education at Curtin University

      In reply to Tom Fisher

      Hi Tom

      Indeed, who says language doesn't have power? 'Free' is a subjective concept and I acknowledge that higher education can never be truly free. And as you say, replacing 'cost' with 'investment' has a powerful effect. Or 'equity' with 'opportunity' for that matter.

      For me it's a choice between fighting for the utopian or dealing with the reality. In regards to the former I strongly believe in 'free' mass higher education without social restriction. In respect of the latter - and where I focus most of my effort - I opt for improving HECs and arguing for policies which require universities to make meaningful changes to their student selection and support processes to improve access for disadvantaged students.

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  8. Andy Cameron

    Care giver

    There is also the issue of quality. Despite its population and wealth, Australia's universities are much better than Germany's. And I don't know if the situation has changed, but at least ten years ago, the German undergraduate model was based almost solely on ginormous lectures, with most students having to sit outside the lecture theatre taking notes from outside speakers of the lecturer inside. Germany has nothing to teach us. Also, a large % (more than 50%?) Australia's university educated population was educated overseas. We have tended to import our university-educated workforce.

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    1. Monika Merkes

      Honorary Associate, Australian Institute for Primary Care & Ageing at La Trobe University

      In reply to Andy Cameron

      Andy, Germany has traditionally not had an undergraduate/graduate model. After 13 years of primary and high school education, a university degree involved at least 4 years (8 semesters) of study.

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