The Abbott government is poised to unveil sweeping changes to higher education in today’s budget.

Education minister Christopher Pyne has been doing the rounds in recent weeks, reportedly preparing for the deregulation of university fees, the extension of government funding to private colleges and TAFEs, and increasing the interest on HECS-HELP debt. “We want to set up our universities so they can compete,” Mr Pyne has been telling anyone who will listen. “We want to unshackle them so they can fly.”

Education minister Christopher Pyne (Photo: Dept of Education)

Education minister Christopher Pyne (Photo: Dept of Education)

The extension of Commonwealth supported places to “teaching only” colleges and TAFEs aims to increase innovation and competition in the sector. Colleges have welcomed the idea and Mr Pyne has strongly indicated the government’s intention to implement it, despite the hesitance of some in the higher education sector.

Fee deregulation is arguably the most controversial of the potential measures. Critics argue that it will damage equity and access, with the size of the debt for expensive degrees putting off people from lower socioeconomic backgrounds. However, some analysis has suggested that – under the HECS-HELP system – higher fees don’t discourage poorer students from going to university.

Any changes in this area will come after strong voices outside the government have made their preferences clear. The Group of Eight, chaired by the ANU’s own Professor Ian Young, support deregulation as a way of increasing funding and quality. The government’s Commission of Audit recommended a 12-month investigation into deregulation options before implementing anything. The report also suggested that students pay a greater share of their fees (up from 41 to 55%, reducing the government’s contribution) and lowering the income threshold for HECS-HELP repayment from its current level of $51,000 to the minimum wage ($32,000).

In a recent opinion piece published in The Australian, Professor Young and Chancellor Gareth Evans said that if Australian universities want to compete internationally, they need a funding model that encourages diversity and not “perverse incentives”. Young, Evans and others advocating for deregulation have said that it is a recognition of a harsh economic reality: while governments should be increasing funding to the sector, this isn’t going to happen so the money has to come from somewhere. They also suggested equity scholarships would be an important part of protecting diversity.

Protesters interrupt Q&A - click for video.

Protesters interrupt Q&A – click for video

The issue has divided vice-chancellors across the country, however, with some favouring more cautious deregulation and others completely opposed. With the government’s fixation on reducing the budget deficit, proponents of fee deregulation have also stressed that it shouldn’t come at the expense of existing government funding.

Greens Senator Lee Rhiannon slammed deregulation as “code for jacking up fees at Australia’s highest ranked universities – and creating a more unequal, elitist education system.” The National Union of Students says that “students already graduate with almost a decade’s worth of debt to repay, and deregulating fees would only increase that debt burden.”

Commentators have offered that full deregulation of university fees is unlikely, as it would result in an explosion of HECS debt and bring us too close to the situation in the United States – where total student loan debt stands at $1 trillion . Professors Young and Evans proposed capping fees at the same level as international students’.

Whatever happens, university students should be paying close attention to the first budget of the Abbott Coalition government.

Woroni is inside the budget lock-up today – look out for our coverage of the government’s higher education measures.