Uni competition will hold down fees: Pyne

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Federal Education Minister Christopher Pyne insisted yesterday the "magic" of competition among higher education providers would curb big price rises after the Government allowed universities to set fees for degrees.

The Government is battling a backlash over its sweeping proposals to uncap fees, cut funding for courses and charge graduates a higher interest rate on student loans from 2016, with warnings they will saddle young people with even bigger debts that will take longer to repay.

The University of Melbourne has become the first institution to estimate the impact of fee rises, finding its engineering degree could soar as much as 61 per cent to almost $39,000.

The cost of some arts degrees at Sydney University could double, according to another analysis.

University of WA chancellor Michael Chaney has also indicated fee rises are likely.

But Mr Pyne seized on announcements by seven universities - including Murdoch and Edith Cowan - that they would freeze fees at pre-Budget levels for students enrolling this year as the free market at work.

"If universities think they can get away with charging exorbitant fees, you will find they will face intense competition," he told the ABC.

"Universities that price themselves out of the market will have empty lecture theatres and tutorials.

"The winners are going to be students, and the parents of students, and society as a whole as competition weaves its magic at university."

Labor accused Mr Pyne of contradicting his own policy after he said students enrolled at universities before the Budget would have their HECS arrangements grandfathered until 2020, with the interest rate remaining linked to inflation.

But shadow higher education minister Kim Carr said the Education Department's website made clear the new arrangement of indexing loans by the higher 10-year bond rate would apply to all debts incurred by former, current and new students.

What is actually being grandfathered until 2020 is the existing course fee arrangements for students enrolled before the Budget.

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