University graduates could pay $80,000 more for a degree and take twice as long to pay off their debts under a deregulated fee system, according to one of the country's leading economic modelling agencies.
Modelling by the National Centre for Social and Economic Modelling (NATSEM) finds female graduates will be hardest hit by fee deregulation and that science graduates face some of the biggest fee increases.
The Abbott government wants to allow universities to set their own fees and to peg the interest rate on student debts to the 10-year Treasury bond rate rather than inflation.
NATSEM, commissioned by The Conversation website, modelled fee increases based on several scenarios including what graduates would pay if universities attempt to recover their costs after government cutbacks and what students would pay if universities also increased fees by 20 per cent.
Under the second scenario, a female science graduate would be expected to take 16.4 years to pay off her HECS debt, up from 8.4 years currently. Total repayments would almost triple from $44,228 currently to $122,954 – a $78,726 increase.
A male science graduate would face total repayments of $111,146, up from $43,297 currently – a $67,849 increase.
Female teaching graduates would pay an extra $31,555, nursing graduates $22,961 extra and business graduates an extra $22,877 in repayments.
Female graduates are expected to face bigger hikes because of lower salaries and time spent off work to have children.
Fee deregulation is expected to have uneven effects, and elite universities would be expected to increase fees by more than 20 per cent for popular courses.
NATSEM finds that 50 per cent fee increases would see female science graduates pay $126,635 more and male graduates $105,355 more over a lifetime. Female teaching graduates would pay $56,163 more and male teachers $49,116 more.
If universities simply recouped their costs following cuts in government funding, repayments for female science graduates would rise by $51,492 and $45,081 for men. Nursing graduates would pay about $13,000 more, teaching graduates $17,000 more and business graduates $10,000 more.
The modelling assumes a government bond rate of 5 per cent and 3.5 per cent annual pay increases.
A spokesman for Education Minister Christopher Pyne said the NATSEM modelling was flawed.
“In a deregulated market, some fees will go up and some will go down, universities will compete and those who price themselves out of the market will find themselves with empty lecture theatres,’’ the spokesman said.
‘‘They will need to carefully consider the price point for their courses and what they offer, because students will have more power than ever to pick and choose the course that is right for them.
“Graduates will still benefit by, on average, earning 75 per cent more, or $1 million over their lifetime, than people who don’t go to university.’’
The story Modelling shows uni debts could take twice as long to pay off first appeared on The Sydney Morning Herald.