The proposed move to a deregulated fee environment in Australian higher education has generated much discussion among commentators. Despite attracting pre-budget support amongst groups such as the Group of Eight (Go8), Innovative Research Universities (IRU) and Regional University Network (RUN), concern has also been growing at the prospect of escalating price structures leading to $100,000 to $200,000 degrees, driven partly by a dampening of price sensitivity caused by the income contingent HECS-HELP scheme. In other words, since students are shielded from the impact of upfront costs, will the usual mechanisms that drive price sensitivity in markets still operate in a deregulated higher education system?
Australia has already had a deregulated tuition fee system operating for some time, in the form of international and fee-paying domestic postgraduate coursework offerings. As with the proposed deregulated undergraduate system, domestic postgraduate students can defer the cost of their courses through an income contingent loan scheme. If deregulation is likely to lead to uniform fee inflation and sky-rocketing of student costs, this should be reflected in the current postgraduate domestic and international markets.
This paper uses an analysis of fees charged in this market to examine what might happen in a deregulated environment.