The Impact of FEE-HELP on Outward Student Mobility by homers


									  The Impact of FEE-HELP on Outward Student Mobility

      Christopher Ziguras, Senior Research Fellow, Globalism Institute, RMIT

Paper presented at the Australian International Education Conference 2006, Perth
                         Convention Centre, 12 October

One of the main reasons that so few Australian students study abroad is the difficulty in
financing fees for overseas programs. And while the Commonwealth offers generous
loans to Australian students enrolling in full fee programs here, these are not available to
Australian students who want to study at a foreign university. Extending FEE-HELP to
Australian students heading overseas will give students access to overseas study options
that are currently unaffordable, and will help to counter the view that Australia’s interest
in international education is purely financial. In any case we may have no choice in the
matter, since Australia has made a binding commitment through the World Trade
Organisation’s General Agreement on Trade in Services not to discriminate against
foreign higher education providers. As I will argue below, making FEE-HELP only
available for study at Australian universities is clearly discrimnatory and is most likely in
breach of Australia’s undertakings. No foreign government has yet publicly challenged
Australia’s failure to implement these undertakings, but as competition for students in the
region heats up, it is just a matter of time. For example, the Canadian embassy in
Canberra has been leading a group of foreign governments who are exploring ways to
increase Australian student mobility to their countries.

In Australia, we have a higher proportion of foreign students in our higher education
universities than any other country, and we are rightly proud of our success in attracting
students here. However, less than one per cent of Australian tertiary students study
oversees. While international students coming into Australia are exposing themselves to
new experiences which enhance their professional and cultural mobility, few local
students have similar international exposure through higher education. Reponses to this
imbalance have so far focused on semester-long study abroad experiences as part of a
local degree program. Various mobility programs funded by the Commonwealth and
universities assist students to spend a semester at an overseas university, usually to
undertake a structured program. In 2005 the Commonwealth introduced the Overseas
Study Higher Education Loan Program (OS HELP), providing full-time undergraduate
students in local institutions with loans to cover the cost of undertaking a part of their
degree overseas. Many universities invest heavily in fostering outgoing student exchange
programs by establishing exchange agreements with overseas universities and providing
funds, advice and training for their outgoing students. These are all excellent initiatives,
and they would be well complemented by measures that also assist Australian students to
undertake whole degrees abroad.
In the mid-1990s Australia was a leading player in efforts to establish the World Trade
Organisation, and was committed to establishing global rules on trade in services as well
as goods. Consequently, our undertakings within the General Agreement on Trade in
Services were comprehensive compared with many other countries. The agreement is
notoriously complicated, but in summary we committed to open our higher education
market to foreign providers, and to not discriminate against foreign providers of ‘private
higher education services’. The principle of non-discrimination is referred to as national
treatment, and it requires that the foreign provider is treated no less favourably than a
local provider. In technical terms, Australia committed to national treatment for private
higher education services delivered through cross-border supply (when an Australian
student enrols in a foreign program while in Australia such as an online program) and to
consumption abroad (when an Australian student goes abroad to study in a foreign
instiution). National treatment requires a government to ‘accord to services and service
suppliers of any other Member in respect of all measures affecting the supply of services,
treatment no less favourable than that it accords to its own like services and service

Australia’s GATS commitments apply only to ‘private higher education services’, but
there is currently no official definition of what constitutes a private higher education
service in Australia. For this limitation to be meaningful, the government would need to
be able to demonstrate that such a distinction exists in practice in Australia in order to
clarify the scope of its GATS undertakings if another country challenged our
discriminatory arrangements. In relation to secondary education, Australia’s GATS
commitments apply to private educational institutions rather than services, and such a
distinction is a little easier to work with. Clearly, certain tertiary institutions are
considered ‘public’ by governments in that they were established under Commonwealth,
State or Territory legislation and have been predominantly funded by the
Commonwealth, however no such clarity exists for ‘private higher education services’.

The most plausible approach would be to argue that public education is broadly
understood in the Australian higher education sector as those student places which are
allocated to institutions by, and (partly) funded by, government, ie. Commonwealth
Supported Places. One could conceivably argue that even though there is a significant
private contribution by students, such places constitute public rather than private
education services. It would be difficult to argue that ‘fee-paying’ places which are not
funded by government are not private higher education services (especially where these
places are provided by a private institution). So, in all matters concerning fee-paying
places the government is bound to treat foreign providers offering education to Australian
students no less favourably than it treats local providers.

Australia’s non-discrimination commitments did not apply to foreign campuses in
Australia, so the government is free to treat these campuses (such as Carnegie Mellon’s
in Adelaide) less favourably than comparable domestic institutions. Even so, Carnegie
Mellon was immediately given access to FEE-HELP through an ammendment to the
Higher Education Support Act late last year. Now, the Australian branches of overseas
higher education institutions are able to access FEE-HELP and OS-HELP if they meet a
number of conditions. This brings the higher education into line with most other sectors
of our economy, where we encourage foreign investment and do not discriminate
between private entities on the basis of nationality of their owners.

Only students studying at the Australian campuses of overseas institutions are able to
access this financial assistance, while Australian students enrolled with foreign
universities through distance education or overseas study are still denied access. To live
up to Australia’s commitments, a new category of providers (Table D) would need to be
established, along with setting out reasonable conditions to be met by foreign universities
in order for their students to be eligible for FEE-HELP loans.

If the Australian government is serious about supporting the international mobility of
Australian students and introducing more competition into the Australian higher
education system, here is the perfect opportunity.

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