TAXPAYERS could save $3 billion in the next four years if the government spent less on subsidising university students, with new research showing fee help had little or no bearing on a student's decision to enter tertiary education or on their future earnings.
Existing fee subsidies are merely redistributing income to students and graduates who would have attended university anyway, according to the report, Graduate Winners, by the independent think tank the Grattan Institute. It suggests the $6 billion the government spends on fee support could be spent in ways that deliver greater public benefit.
The findings challenge the model where the federal government is investing heavily in boosting student participation, including encouraging more students from disadvantaged backgrounds. With the uncapping of student places this year, the bill for Commonwealth support places is expected to reach $7 billion to help domestic students .
Using data from the 2006 census and focusing on bachelor degrees, the report found the biggest driver of university participation was a high entry score based on year 12 results, regardless of social background.
It also found the fees paid by a student had little bearing on their future earnings, so a domestic student with a government loan had about the same "break-even point" as those paying full fees upfront, and international students paying higher fees.
The break-even point is when a person's earnings exceed the cost of their education and also exceed the earnings of a person of the same sex who finished in year 12.
Medicine, dentistry and law have the lowest point, with nursing, education, sciences, engineering and IT in the middle, while the performing arts have the highest.
Other Grattan findings include that tertiary education provides social and financial benefits for the individual and for the community through taxes, professional careers and greater civic engagement.
The federal government rejected the findings. The Tertiary Education Minister, Chris Evans, said raising fees would be a disincentive for those from disadvantaged backgrounds and would lead to decreased participation and higher debt for students.