Shared responsibility in our higher education system

Creating a sustainable, world-class higher education system

This Budget will deliver higher education reforms that ensure the long-term sustainability of the higher education system.

In recent years, university revenues have increased faster than costs. Between 2010 and 2015, the average costs per equivalent full time student increased by 9.5 per cent, while funding to universities has increased by around 15 per cent.

Although the Government will no longer proceed with the 20 per cent reduction in Commonwealth Grants Scheme funding, universities will play their part in building a more sustainable system alongside students and taxpayers. Universities will be subject to an efficiency dividend of 2.5 per cent in 2018 and 2019, a dividend that will be absorbed by universities and not be passed on to students.

The Government is also more fairly balancing the cost of higher education. From 2018, students will contribute an additional 7.5 per cent, to be phased in over four years, which can still be met through the Higher Education Loan Program (HELP) scheme so no student will face upfront fees. The Government will remain the majority funder of higher education. This increased student contribution better reflects the lifetime benefits reaped by higher education graduates and recognises the significant taxpayer contribution that subsidises more than half their costs.

A new set of HELP repayment thresholds will be introduced from 1 July 2018 and will be indexed by the Consumer Price Index. This will improve the prospects for repayment of student loans.

The Government is creating six new community-owned regional study hubs, and expanding support for work experience units. These measures will help remove barriers to university for regional students, and ensure that students are better supported to develop real work skills and gain access to industry-relevant experience.

The Government is committed to ensuring students from disadvantaged backgrounds have the opportunity to participate in university. The Higher Education Participation and Partnerships Program will be reformed to deliver two components — a National Priorities Pool and an Access and Participation Fund which rewards universities that deliver the best outcomes for Indigenous students and those from low-socioeconomic backgrounds.

These reforms will deliver a higher education system that will be more responsive to the aspirations of students and the needs of the future workforce.