The federal budget is expected to lift uni fees amid cuts to tertiary education

The University of Sydney. Photo: University of Sydney/ Facebook.

Next Tuesday’s federal budget is expected to cut funding to the university sector, while pushing up student fees and making graduates pay back their HECS bills sooner.

Fairfax Media reports that universities will be asked to make a 2-3% “efficiency dividend” over several years as part of the education sector’s contribution to reducing the budget deficit, citing a government-commissioned report by Deloitte Access Economics that claims revenue growth is currently outpacing costs.

Course fees are expected to rise and the repayment threshold for HECS is expected to fall below the existing level of just under $55,000.

Education minister Simon Birmingham is expected to outline the government’s plans during an address to the sector tonight, as well as releasing a higher education reform plan this week.

Fairfax says the Deloitte report found that some courses, such as engineering and clinical psychology, receive more funding than it costs to deliver the courses.

The Deloitte report, which looked at 17 universities concluded that over 5 years between 2010 and 2015, costs grew by 9.5% while revenue jumped 15%. The report conceded that universities use the funds to cross-subsidise operations such as research.

The average profit margin for a university was 5.3% in 2015.

Senator Birmingham told Fairfax the analysis “speaks for itself”.

“Funding for our universities is at record levels, but it has grown above and beyond the costs of their operations,” he said.

A cut in funding of 3% could contribute more than $200 million in savings a year, but the sector argues in its own report that it has already contributed $4 billion towards deficit reduction since 2011.

Read more from Fairfax here.