PRIVATISATION FOR profit and privilege-that's the Liberal strategy for higher education revealed in Peter Costello's budget. It comes on the back of two decades of a neo-liberal rampage against our universities. Australia has gone from a free education system to the most expensive in the industrialised world.A recent 25 per cent HECS hike means Australian students already pay more than even their US counterparts.

Despite media hype, the budget is worse news for students.

The budget removes the 35 per cent cap on full fee paying places. Now vice-chancellors, hungry for profits, can charge what they like for a degree.

After a brief wobble, Kevin Rudd kept Labor's committment to abolishing up-front fees for domestic students.

But the ALP agreed with the Budget's Higher Education Endowment Fund.

The government argues the $5 billion fund is about an "investment in the future" of education and spending on "capital works" for universities.

If this was true, why set up a virtual trust fund to do the job? Why not just spend the money now to fix the problems of over-crowding, lack of facilities and access to funds?

But only interest from the fund, approximately $300 million per year, is available, subject to the discretion of the Education Minister advised by a handpicked panel.

The Fund has nothing to do with fixing actual problems.

According to Labor Senator Kim Carr, this won't even pay the outstanding maintenance bill, which was $1.2 billion in 2005.

The $5 billion is "seed" funding to attract private investment. Only the richest unis will benefit because the minister will grant funds that are matched by a similar amount from the university.

The Endowment Fund is about furthering the privatisation of higher education. Ultimately the Liberals want universities to become places of privilege that provide for a rich elite, a la Harvard-style in the US.

By Judy McVey and Graham Hastings