Disadvantaged students ‘worst hit’ by humanities fee hike

Disadvantaged Australians have deserted arts, business, commerce and law courses after a post-Covid inflationary spike intensified the sting of Job-ready Graduates (JRG) fee hikes, new analysis suggests.

Research by the Innovative Research Universities (IRU) has found that a longstanding decline in humanities and social science (HASS) enrolments has been most pronounced among students from low socio-economic status (SES) backgrounds, hitting elite fields like law as well as generalist arts degrees.

The IRU’s analysis of unpublished Education Department data suggests that the former government’s JRG reforms, designed to shepherd students away from HASS into disciplines with supposedly better employment prospects, are having a disproportionate impact on low-SES students.

This is undermining the current government’s policy agenda of shepherding more disadvantaged students into higher education.

The IRU found that between 2020 and 2024, take-up of bachelor’s degrees among low-SES Australians had slumped by 10 per cent, compared with a 2 per cent decline among students from wealthier backgrounds.

Low-SES commencements declined particularly sharply in the fields with the highest tuition fees, falling 18 per cent in law, business and commerce and 21 per cent in other HASS fields.

While all of these disciplines lie within the top tuition fee band – currently A$16,992 (£8,458) a year – society and culture courses were particularly affected by JRG because they had previously been in the lowest band.

The JRG reforms increased fees for society and culture disciplines by 113 per cent. Business, commerce and law degrees had already carried the most expensive fees, which JRG increased by a relatively modest 28 per cent.

The IRU found that society and culture disciplines accounted for 24 per cent of domestic commencements in bachelor’s degrees last year, down from 28 per cent in 2020.

Analyses in the years following JRG’s 2021 roll-out found that the fee hikes had made only a marginal difference to students’ discipline choices, suggesting that personal interest trumped cost considerations – particularly in places like Australia, where income-contingent loans cover upfront tuition costs and blunt the impact of fee increases.

IRU said this may no longer be the case after Australia’s cost-of-living crisis – highlighted by a spike in the student loan indexation rate, which hit a 33 year-high of 7.1 per cent in 2023 – raised consciousness about graduate debt.

IRU policy adviser Peter Bentley said Covid had also altered study choice by boosting interest in health and teaching. The pandemic had also depressed school completion rates in ways that may have disproportionately affected low-SES communities.

Bentley said it was difficult to disentangle the influences that had swayed demand for university courses, particularly among disadvantaged Australians. But it was likely that government messages about job-readiness had resonated more with low-SES Australians than their wealthier peers. “Talk about A$50,000 degrees cuts through way more for people who are scared about debt,” Bentley added.

Monash University policy expert Andrew Norton has found that a “structural decline” in the take-up of HASS courses accelerated after the JRG reforms, although the plunge was as pronounced in foreign languages – whose fees were lowered through JRG – as in the expensive humanities subjects. “It’s hard to say what is JRG and what is just a trend continuing,” Norton blogged.

The Australian Universities Accord recommended a staged “remediation” of JRG, starting with fee reductions in “significantly affected” humanities fields. The government says JRG has failed but has taken no steps to replace it.

Greens higher education spokeswoman Mehreen Faruqi has introduced a bill to reverse the JRG fee hikes in the most expensive disciplines. Independent MP Dai Le has also reintroduced a bill to transfer society and culture courses to the lowest fee band.  

IRU executive director Paul Harris agreed that the highest fees should be reduced, but warned that such moves could be counter-productive without offsetting increases to government subsidies. “Otherwise, universities will have less funding overall to teach these courses and will have to offer fewer places.”

IRU has modelled options for unravelling the JRG – by slashing humanities fees, trimming law and commerce fees and boosting teaching subsidies in HASS and STEM – with the additional expense to government ranging from A$324 million to A$1.77 billion a year.

Harris said the government could cover its costs by diverting education funding from elsewhere, notably private schools. “It’s a question of targeting public investment to where it’s going to have the most impact.”

Independent senator David Pocock said he was “alarmed” at the lack of progress in reforming JRG amid “mounting” student debt. He said JRG had now been operating for longer under Labor than under its Liberal-National party architects.