The Australian government has dropped plans to let universities set their own fees, but has floated alternative plans to deregulate charges on ¡°flagship courses¡±.

The moves were outlined in a , to go out to consultation and published alongside Tuesday¡¯s budget, which also outlines options to increase student loan repayment rates, including by reclaiming debts from the estates of the dead.

The ¡°flagship courses¡± plan, aimed at allowing universities to set their own fees for ¡°high quality, innovative courses¡±, may be seen as likely to most benefit prestigious institutions in the Group of Eight.

A plan to cut university funding by 20 per cent remains on the table and is also part of the consultation.

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Under previous prime minister Tony Abbott, the Liberal-led coalition outlined plans to deregulate fees to accompany public funding cuts. But after the Labor opposition said that the move would lead to ¡°$100,000 degrees¡±, those plans were first shelved by new prime minister Malcolm Turnbull¡¯s government and now definitively dropped.

A Department of Education and Training statement said that the government will ¡°not be pursuing full fee deregulation¡±, but ¡°will consider future arrangements, including options for some form of fee flexibility, as part of its consultation on the future of higher education¡±.

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The idea of flagship courses was first raised in a 2011 government review.

¡°Giving universities flexibility to attract additional revenue in courses where they have developed particular expertise would enable them to innovate and differentiate themselves and pursue their individual vision for higher education excellence,¡± says the government¡¯s discussion paper. ¡°This would support their efforts to distinguish themselves internationally, and ensure that more of our universities are ranked among the top 50 universities in the world.¡±

It adds that institutions ¡°could be given the freedom to set fees for a small cohort of their students enrolled in identified high quality, innovative courses¡±.

On student loans, the discussion paper says that Australia¡¯s HELP loan programme is ¡°one of the most generous income-contingent student loan schemes in the world. The minimum repayment threshold in Australia is the highest among Organisation for Economic Cooperation and Development countries¡±.

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It says that 19 per cent of loan debt will never be repaid to the government on current estimates. Options to lower this rate outlined include ¡°changes to repayment thresholds and rates, for example by commencing repayment of HELP debts at a lower threshold income than the current minimum ($54,126) [?27,879], and/or introducing an additional higher contribution rate for high income earners (the maximum rate is currently 8 per cent for $100,520 and above)¡±.

Another option outlined is ¡°recovery of debts from deceased estates¡±.

john.morgan@tesglobal.com