Additional funding for regional universities and students is needed to ensure they survive if course fees are deregulated, according to submissions to the Senate from higher education advocates.
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Fourty-four submissions have been made to The Senate Education and Employment Legislation Committee which is currently reviewing the Higher Education and Research Reform Amendment Bill 2014.
Among other things, the Bill would allow universities to set their own course costs.
In his submission, the chairman of the Regional Universities Network (RUN) Peter Lee said his organisation was proposing the federal government introduce a $100 million-a-year Competitive Regions Fund to ensure regional universities can remain competitive in the market.
"A Competitive Regions Fund would be specifically targeted to those providers whose total proportion of domestic undergraduate students from regional and remote areas is higher than the mean for all providers, to recognise those universities operating in thin markets."
RUN has calculated 51 per cent of CSU's 23,380 students in 2013 were from regional and remote areas and based on their thin market states CSU should receive 18 per cent of the funding.
CSU would be given the highest percentage of the Competitive Regions Fund, followed by the University of Southern Queensland at 12.4 per cent.
CEO of the Country Education Foundation (CEF) Sarah Taylor said her organisation would certainly support the Competitive Regions Fund.
She said an initiative such as the Competitive Regions Fund would "absolutely" have a positive impact on regional and rural universities.
"We're not supporting regional universities just to support regional universities... if they don't prosper neither do rural and regional areas," Ms Taylor said.
About 60 to 80 per cent of students who study at regional universities remain in regional Australia after they graduate, according to RUN, but less than 25 per cent of students who study in the city return to regional areas.
RUN are also calling for additional scholarships for regional students.
"We also propose funding regional scholarships in addition to the proposed Commonwealth Scholarships Scheme, or, if this doesn't eventuate, pooling some or all money from the proposed Commonwealth Scholarships Scheme to redistribute to universities with a high proportion of low SES students to allocate to disadvantaged students, or to give directly to students," Mr Lee said.
Under the Bill, universities with 500 or more students would be required to put $1 for every $5 of revenue towards scholarships, but RUN said the plan only benefits metropolitan universities which could charge higher fees compared to their regional counterparts and therefore had more funding available.
The Senate Education and Employment Legislation Committee is due to table its report on October 28.