June 23 - 29, 2024: Issue 629

 

Next Steps In Delivering Universities Accord Reforms:  Two Consultation Papers Open For Feedback Until July 26

On Friday June 21 The Hon Jason Clare MP, Minister for Education, released two consultation papers on the implementation of significant structural reforms to the tertiary education sector. 


The federal government states the consultation papers will guide the implementation of the Australian Tertiary Education Commission (ATEC) and a new funding system for higher education. 

'Both reforms are recommendations from the Universities Accord and are central to setting the tertiary education sector up for the future. ' a release says

The ATEC will be responsible for tertiary education system stewardship and driving reform over the longer term. 

The ATEC is intended to be established in an interim capacity by 1 July 2025, and formally established from 1 January 2026, pending passage of legislation. 

The new Managed Growth Funding System will better meet student demand, maintain sustainable growth and increase opportunity for people from underrepresented backgrounds.

The new system will provide for long-term growth in funding arrangements for universities, allowing them to plan for the future, meet Australia’s skills needs, prioritise resources and provide a better educational experience for more students.

This reform is central to reaching the Government’s target of having 80 per cent of the workforce with a university degree or TAFE qualification by 2050. 

This new funding system is due to be in place by 2026. 

The consultation papers on the ATEC and the new Managed Growth Funding system are now live and can be found here.

Feedback can be submitted via email (AustralianUniversitiesAccord@education.gov.au), with the feedback requested by Friday, 26 July 2024. 

These initiatives form a key part of the Government’s first stage response to the Universities Accord.

Minister for Education Jason Clare stated:

“In the years ahead more jobs will require more skills. 

“The Universities Accord sets a target that by 2050, 80 per cent of workers will have a TAFE or university qualification. 

“To hit that target we have to break down that invisible barrier that stops a lot of people from disadvantaged backgrounds getting a crack at going to university. 

“Part of that is changing how we fund universities. 

“The Universities Accord is also bigger than one Budget and bigger than one term of Parliament. It’s a national project. 

“That’s why we are also establishing an Australian Tertiary Education Commission. To stay the course, to drive reform, to help us reach that nation-changing target – no matter who the Minister for Education is.

“Targeted consultation and feedback from stakeholders across the education landscape will ensure we get the detailed design of these vital reforms right.” 

A big change is coming for higher education funding. What would a ‘hard cap’ on domestic places mean for students and unis?

Andrew NortonAustralian National University

Back in February, the Universities Accord final report recommended major changes to university funding.

It proposed a new body, the Australian Tertiary Education Commission, to oversee funding and link it to national goals. These include more people from disadvantaged backgrounds going to university, more Australians getting a tertiary qualification, and better matching enrolments with skills needs.

After accepting these recommendations in the budget, on Friday Education Minister Jason Clare released two consultation papers on how to implement them. One is on the new commission and the other looks at how student places would be distributed across universities.

There are big changes on the table and they would put a limit on domestic student places. This would mean all student places, both international and local, would be capped in Australia.

What does this mean for universities and students?

What Happens Under The Current System?

Under the current funding system, universities have no fixed allocation of, or targets for, student places subsidised by the federal government. These are called “Commonwealth supported places” and sometimes called HECS places.

Except for medical courses and Indigenous students, funding is allocated in dollars rather than places. Each public university has a maximum public funding grant through an agreement with the federal government.

How many student places this grant supports depends on which courses students do. This is because the public subsidy per student (called a Commonwealth contribution), varies between courses. Universities choose how to allocate student places between disciplines, except in medicine.

For example, under the current contribution system, universities get a subsidy of only A$1,236 a year for each Commonwealth supported place in business, law and most arts disciplines. So, one million dollars from a university’s grant supports more than 800 student places in these disciplines. Most of the university’s funding comes from the student contribution, which is $16,323. By comparison, in engineering, the Commonwealth contribution is $18,292. One million dollars supports just 55 engineering places.

The current system creates tradeoffs. Moving student places to engineering to meet skills needs, while staying within the university’s maximum grant, could mean sacrificing hundreds of student places in business, law and arts.

What Is The New System?

The proposed new funding system would be based on numbers of student places, not fixed dollar amounts. The government would decide on the total number of student places across Australia. The Australian Tertiary Education Commission would then divide that total up between universities.

Funding based on student places rather than dollar amounts improves on the current system. It makes the number of students easier to predict.

The government can see more clearly whether the number of student places aligns with its targets to have more Australians complete a tertiary qualification. Also, universities would not need to reduce total enrolments to increase the number of student places in disciplines, like engineering, with high Commonwealth contributions.

The Change From A ‘Soft’ To A ‘Hard’ Cap

But the changes will also remove flexibility in another way.

The current funding system puts a “soft cap” on student places at each university. A university cannot be paid more Commonwealth contributions revenue than it has been officially allocated. But it can take extra enrolments based solely on a student contribution (also known as HECS-only basis), a practice known as “over-enrolment”.

This would end under the new model. Universities would be given something called a “managed growth target”. This is a hard cap. If a university’s enrolments exceeded their target it would receive no funding at all for the above-target students.

If over-enrolments occur, students would still be charged a student contribution. But the money would go the government rather than the university.

‘Managed Demand Driven Funding’ For Equity Students

The problems of these inflexible enrolment caps are highlighted by what the consultation paper confusingly calls “managed demand driven funding” for equity students.

For Indigenous bachelor degree students, genuine “demand driven funding” will continue. This means there will be no cap on their places and they will not count towards a university’s overall enrolment cap.

But other equity groups, which have not yet been specified (but presumably would be those from low socioeconomic backgrounds, regional areas and those with disability) will count towards each university’s cap.

As explained by the paper, two things will happen if an university applicant from one of these groups receives no offers.

First, the equity applicant will be offered a place in another university in their area, if that university has not already hit its enrolment cap.

If all local universities have hit their caps, a second process starts, of going back to the Australian Tertiary Education Commission for more places. This may or may not be successful.

This convoluted process could often be avoided if universities had the flexibility to take students above their cap on a student contribution basis only. The equity applicant could attend their preferred university, rather than one chosen for them, with no waiting for extra approval.

The process seems particularly inadequate when one of the government’s main policy aims with universities is to see more students from equity backgrounds go to university and get a degree.

What Should Happen Now

If the government funds enough student places to meet national demand, and the Australian Tertiary Education Commission allocates these places to fit with where students want to study, the mismatch between supply and demand could be minimised.

But the commission can never completely foresee the preferences of the hundreds of thousands of people who apply for university each year.

Every year some universities will get more applicants than anticipated and others fewer. Student contribution-only places are a flexible way of quickly adjusting supply to demand. They should remain a feature of Australia’s higher education funding system.

Comments on the two consultation papers are due by July 26.The Conversation

Andrew Norton, Professor in the Practice of Higher Education Policy, Australian National University

This article is republished from The Conversation under a Creative Commons license. Read the original article.