Budget Changes a Triple Hit to Engineering Students

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Tuesday, June 17th, 2014
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Changes to university fees in Australia will cause a triple-whammy for engineering students at a time when the nation needs greater investment in skills to design and build vital infrastructure, the engineering sector’s leading professional association says.

In a statement released on Thursday, Engineers Australia said higher education changes outlined in the Federal Budget posed a ‘triple threat’ to students, involving savage cuts to government contributions toward courses, removal of the cap limiting the amounts universities are allowed to charge for their courses and higher real interest rate charges on HELP debt – which would also be subject to lower income thresholds before students have to commence repayments.

According to Engineers Australia, a 20 per cent cutback in government contributions to courses from 2016 would reduce the average annual government contribution for engineering courses from $17,104 to $12,045 – meaning overall student contributions toward a four year course (currently costing around $103,000) would increase from $34,584 to $54,820.

Furthermore, proposed changes to HELP debt arrangements would see graduates faced with the prospect of having to commence paying off loans according to a lower income threshold and would subject the loan to real interest rate charges, which will almost certainly result in higher debt levels and would increase the time taken to repay the debt in many cases.

Finally, the impact of deregulation of university fees and removal of the cap universities are able to charge for courses is unknown as few universities have been forthcoming about how they will respond, especially in the light of reduced public funding.

On May 31, for example, The Age reported a leaked staff email from Melbourne University Vice Chancellor Professor Glyn Davis in which he was quoted as saying that early analysis had shown fees for engineering courses could rise by as much as 61 per cent in order to cover government funding reductions.

Meanwhile, higher education policy and management academic Geoff Sharrock  foreshadowed overall increases of between $55,000 and $106,000 to student contributions over the life of engineering courses in an editorial in The Chronicle last month – the latter amount reflecting an assumption that universities increase their course fees by 50 per cent.

On June 4, Universities Australia estimated new engineering student contribution rates to range from $59,024 to $63,455 based on low, medium and high fee rise scenarios.

The  changes come amid broader concerns surrounding what some see as a shortage of skills in science, engineering, technology and mathematics (STEM) within the broader Australian labour force.

A report published last year by Australian Industry Group found that even though 41 per cent of businesses (out of 500 surveyed) across different sectors of the economy reported difficulty in recruiting technicians and trade workers.

It also found that 27 per cent and and 26 per cent had difficulty finding professionals and managers with suitable STEM skills respectively, and that the number of students studying advanced mathematics at secondary levels and maths related disciplines at tertiary levels was in long-term decline.

However universities choose to respond to the changes, Engineers Australia said the impact of the budget would hit students hard and make it more difficult for the nation to train sufficient quantities of skilled professionals to meet long term national requirements.

“Each year Australian universities see around 16,000 students enrolling in engineering degrees, yet only 9,500 graduates enter the engineering workforce” Engineers Australia said. “From our interactions with students we understand the volatile engineering workforce is a contributing factor to this shortfall, as are the difficulties in securing a job during low times.”

“These higher education reforms are adding another hurdle to Australia’s ability to supply enough engineers to deliver our infrastructure future.”

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