Australians think students are being asked to pay far too much for their degrees. Just under half (47%) of Australians  surveyed by YouGov in June 2025 believe a worker on an average income should be able to pay off the debt for a standard three-year degree within five years. When it comes to the cost of a degree, 58% believe a student should pay $5000 or less per year – less than a third of what arts students now pay.

Just under one in five, or 18%, believe a standard degree should be free – as it was 50 years ago, when the Whitlam Labor Government introduced free university education in 1974. This ended in 1989 when, in a world first, the Hawke Labor Government introduced the income contingent Higher Education Contribution Scheme which is still with us today. It has continued to evolve, with costs to students rising with successive governments since.

Today, thanks to the  Job Ready Graduates scheme introduced by the Morrison Coalition Government in 2021, the cost of an arts degree has risen to over $50,000.

Unsurprisingly, the  Universities Admissions Centre found that concern over HECS debt influences the decision to attend university for 40% of Year 12 students.

How did we get here?

Free education

The evolution of Australian universities has passed through three distinct phases. These were first defined by Hannah Forsyth and paraphrased  by John Quiggin as: the sandstone era from 1850 to 1945 that saw each state establish its own university; the era of expansion from 1945 to the election of the Hawke Labor Government in 1983; and the era of transformation from the 1980s to today.

The post-World War II era of expansion saw the Commonwealth take over primary funding for universities, while leaving the states in charge of governance. This split responsibility continues to the present day as a source of regulatory incoherence.

In this era of sweeping social and economic change, ahead of the 1972 election in his “It’s Time” speech, Whitlam declared:

We will abolish fees at universities and colleges of advanced education. We believe that a student’s merit rather than a parent’s wealth should decide who should benefit from the community’s vast financial commitment to tertiary education. And more, it’s time to strike a blow for the ideal that education should be free.

For many, Whitlam’s 1974 reforms remain the high water mark. But while university education was free of charge, it was not freely available. Limited places meant problems of equity and access remained.

Profit in universities – from the 1980s

The Dawkins reforms in the 1980s, named for education minister John Dawkins in the Hawke Labor Government, remade Australia’s higher education sector. In many ways, the basic structure and market orientation that he put in place remain intact, including incentives for universities to compete internationally and operate like corporate entities.

Competition between universities and their embrace of a profit motive has suited successive governments. It has meant universities increasingly raise revenue from market-based sources, including student fees, rather than relying on the public purse. In 1995, the  federal government spent 0.9% of GDP on universities, with this dropping a third to 0.6% in 2021 (implying a $6.5 billion reduction).

To put it another way, in the 1980s the federal government contributed around 80% of the sector’s funding, 

© Pearls and Irritations