Government reforms of Australian universities

The Australian government recently announced some major reforms of the funding of universities. Students will have to pay more themselves and universities will be allowed to set tuition at the level they want. As before, tuition is paid for by a loan scheme (HECS) that students only pay back in taxation after they start earning above a threshold amount. Interest on the loans will higher than before.

Here are a couple of responses from Australian academics.

Nobel laureate Brian Schmidt has an article in today's Australian

Students should not shoulder the burden
He highlights one of the "dirty secrets" of the Australian system.

Student fees are a one-size-fits-all system, where every university gets the same amount of income, This system, after the uncapping of the number of student places allocated to each university in 2012, has led to the perverse incentive that rewards the teaching of large numbers of students at the lowest possible cost. Revenue raised from fees then can be used to cross-subsidise research. This is important for a university because its esteem is almost entirely set by international measures of its research quality. 

This funding model is so irrational that the status quo is unacceptable. Students suffer poor teaching outcomes, universities’ ability to undertake research is moderated by the number of undergraduates they attract rather than the quality of research, and we end up with sub-optimal teaching and research outcomes.

UQ economist Paul Fritjers has a cutting post on the Core Economics blog
What are the likely consequences of HECS fee liberalisation?
Here is an extract:

In terms of the impact of these reforms on ‘academia’, ie on ‘communities of scholars dedicated to truth finding’, I am less pessimistic than most of my colleagues. Whilst academic values will be entirely unwelcome and ousted from undergraduate degrees, simply because independent academics are seen as a potential threat to students, the even greater importance of research excellence will mean that academics will retain and expand their own little playgrounds in the graduate education and research realms: academia will simply become even more divorced from undergraduate education, which will become more and more like an extension of secondary school.

Update (August 15). I recently came across Joseph Stiglitz's warnings about Australia mimicking the USA.