Australia’s representative body for universities has become the latest group to call for some undergraduate places to be made free, as the tide changes on the longstanding assumption that deferred loan repayments make such moves pointless.

In a , Universities Australia (UA) has urged the federal government to match the A$493 million (£256 million) it spent on free vocational education places with a parallel investment in higher education.

The money would support fee-free university places for disadvantaged students in “areas of critical skills need” while combating a decline in domestic enrolments.

“[It] could help attract more people to university who otherwise wouldn’t pursue a degree,” said UA’s acting chief executive, Renee Hindmarsh. “This is what the nation needs.”

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The argument contradicts a widespread conviction that “price signals” are blunted by the income-contingent loan system pioneered in Australia, and embraced by other countries including England and New Zealand.

The contention is that students repay their loans so far in the future that they take little notice of increases or decreases to fees – a point borne out when hikes and reductions in Australia between 2005 and 2013, England’s near-tripling of fees in 2012 and New Zealand’s 2018 elimination of first-year fees produced no enduring effects on enrolment patterns.

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UA itself has used this argument to lobby against the former Australian government’s Job-ready Graduates (JRG) fee changes, which were designed to steer students into disciplines favoured by the government.

“Student contributions do not deter students from undertaking higher education, nor influence student choice,” UA noted in a  arguing that JRG should be replaced.

But the federal government apparently thinks otherwise. In 2022, it launched a programme that cuts the outstanding student debts of  who work in the bush. The following year, it pledged to wipe up to A$35,000 of the student debts of  who serve at least four years in remote areas.

“Our suggestion of fee-free university places…isn’t without precedent,” Ms Hindmarsh told 51�Թ�. “There’s clearly a belief in government that it works, so why not try it on a broader scale?”

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State governments have also introduced fee rebates in a drive to boost health workforce numbers. In 2022, Victoria promised up to A$16,500 to cover the course costs of  who work in the state’s public health system for two years.

Western Australia pledged to pay up to A$12,000 of the student debts of newly qualified  working in regional areas of the state, while New South Wales introduced a “study subsidy” of up to A$12,000 for  who commit to at least five years in state roles.

Meanwhile, the Australian Veterinary Association has demanded that the federal government wipe the student debts of . Veterinary business Apiam Animal Health has taken matters into its own hands with a A$68,800  for vets in its rural clinics.

The Australian Greens, National Tertiary Education Union and University of Melbourne vice-chancellor Duncan Maskell are among others who want tuition fees completely eliminated.

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The federal government’s free vocational education scheme proven extremely popular, with the initial target of 180,000 places in public colleges oversubscribed by almost 120,000. Canberra has since promised a further A$414 million to bankroll .

However, most college students – unlike their university counterparts – do not qualify for loans to cover their upfront course costs.

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john.ross@timeshighereducation.com