Month: January 2024

What’s new in university and NUHEP funding agreements, part 2: Inappropriate use of the agreements to create a new equity program

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In a previous post on the new funding agreements, I looked at the 2024 Commonwealth Grant Scheme funding for higher education courses and designated courses, along with the amended rules for course closures. In this post I look at a novel funding agreement section, which creates a new equity program financed by under-spends on the Commonwealth Grant Scheme. This program has legal and policy flaws. I also examine some paperwork problems with the agreements for non-university higher education providers and private universities.

What usually happens if universities under-enrol?

Due to weak student demand some, quite possibly many, higher education institutions will under-enrol in 2024 – that is, take Commonwealth-supported students valued at less than the maximum funding they can receive for higher education courses according to the funding agreements – this year a $7.24 billion pot of money.

By law, under-enrolment results in CGS grants being reduced – higher education providers are paid the lesser of the value of student places (on an EFTSL * relevant Commonwealth contribution formula) or their higher education courses maximum basic grant amount: section 33-5(2) of the Higher Education Support Act 2003 for Table A institutions and section 33-5(7), using the terminology of ‘total basic grant amount’ for other higher education providers receiving CGS funding.

Under section 164-10(1A) of HESA 2003 any overpayment is recovered by reducing grants paid to the under-enrolled provider or as a debt to the Commonwealth. Clause 4 of the funding agreements reiterates this requirement.

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What’s new in university funding agreements, part 1: Commonwealth Grant Scheme funding and course closure rules

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The 2024 university and NUHEP funding agreements were released earlier this month. These documents are the legal basis of most funding from the Commonwealth Grant Scheme, the main tuition support program. I have created a spreadsheet with institution-level funding, available here.

Overall funding levels

Any total CGS comparison with 2023 is approximate at this point, as we don’t yet have estimated payments for demand driven funding – 2024 is the first year that metropolitan as well as regional Indigenous bachelor-degree students are financed on this basis. This creates disruptions to the time series for two of the three main CGS pots of money – demand driven and ‘higher education courses’, which covers all Commonwealth supported students except Indigenous bachelor-degree students and medical students.

Higher education courses are by far the largest CGS category. In 2024 maximum higher education courses funding will be $7.24 billion, $452.2 million or 6.7% more than in 2023.

Table A providers (i.e. each government-created university plus ACU and Notre Dame) get 99.5% of this money, while nine other providers get the remaining $34.3 million.

For designated courses, currently medicine only, the 2024 total is $413.97 million up 8.1% on 2023.

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The 2003 Cabinet papers and Brendan Nelson’s higher education reforms

Andrew Norton3 Comments

In the history of Australian higher education policy Brendan Nelson, the Liberal minister for education from 2001 to 2006, is perhaps under-rated. Several student funding structural changes he legislated 20 years ago are still in place. These include:

  • Student contributions set by universities up to a legislated maximum and going to universities (previously HECS was a fixed government charge);
  • A per full-time equivalent student Commonwealth contribution based on subject field of education (previously universities received an overall operating grant, which although informed by an early 1990s costing exercise did not directly tie money paid to discipline-level enrolments);
  • Commonwealth-university funding agreements as a method of allocating student funding to institutions, which made funding arrangements more transparent (but also turned into a backdoor instrument of policy and regulation that bypasses Parliament);
  • Through FEE-HELP, extension of student loans to full-fee undergraduates and students in private higher education institutions (the more limited Postgraduate Education Loan Scheme, PELS, was already supporting university full-fee postgraduates).

The 2003 Cabinet papers

The annual National Archives release of 20-year-old Cabinet papers, with the 2003 papers released earlier this week, gives us a look behind the scenes as Nelson’s reform package was developed and debated. Three digitised Cabinet documents record proposals and decisions, but not the Cabinet discussion. Sometimes, however, Cabinet thinking can be inferred from requests for further work and contextual material in the submissions.

This post focuses on changes to income contingent student loans.

The loan scheme that did not make it through Cabinet

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