The student contribution increases of Job-ready Graduates get regular media coverage, focusing on the plight of debt-laden arts graduates. Far less attention is given to how JRG affected university decision-making.

For universities JRG had multiple elements. Total overall Commonwealth supported student funding rates by discipline were changed, some increasing but most decreasing. The changes to student contributions altered incentives for over-enrolments. Previous separate allocations of sub-bachelor and postgraduate Commonwealth supported places (CSPs)were ended, merged into a single fund with bachelor degrees.

To explore these effects, Ren-Hao Xu from UWA and I interviewed 15 leaders and officials from five universities in 2024 and 2025. We chose universities with various sizes, locations, missions and rankings to find out how they interpreted the JRG incentives and how these affected decision making. An academic article reporting our methodology and findings was recently published in the Australian Educational Researcher journal.

Over-enrolment

One thing I was especially curious about was to what extent over-enrolment – taking students on the student contribution only – was deliberate and to what extent accidental, reflecting the inherent difficulties in hitting precise full-time equivalent enrolment targets.

For the over-enrolled universities in our study the answer was mostly deliberate.

Two universities in our study had mission-related reasons for over-enrolling. The vice-chancellor of an equity-focused university told us that ‘we’ve also felt that we should over-enrol based on demand due to the university’s mission to serve students from disadvantaged backgrounds.’ The vice-chancellor of a regional university was willing to over-enrol as there was no other local university students could attend.

Other universities took a more strategic approach. One noted the likely Accord system re-set, knowing that during past policy shifts enrolments as of a recent year were used at the basis of the new funding system. This was a chance to lock in a larger base funding amount (an approach that has so far only partly worked, with just $50 million allocated to convert over-enrolments to fully-funded places).

The impact of student contributions on over-enrolment

In several fields – business, law, most of arts – the JRG student contribution is more than 90% of the total funding rate. This seems to create an incentive to over-enrol in those fields above others.

Several interviewees acknowledged the financial attractiveness of these rates. But overall this was a less significant factor on over-enrolments than I expected.

Demand for these courses in the JRG years was not strong. Before a small recovery in 2024 arts and business commencing bachelor-degree numbers fell, while law had a smaller decline before fully recovering in 2024. Universities can’t over-enrol if the demand is not there.

Internal funding models did not necessarily support strategic over-enrolling in specific fields. They lacked detailed micro-targets by course or funding cluster that would enable clear identification of an ‘over-enrolment’. Two universities reported policies to smooth the income from over-enrolment across faculties.

The universities interviewed were generally demand responsive, taking additional students where there was capacity to do so and entry requirements were met, without focusing on student contribution levels.

The maximum grant interpreted as a minimum

Another factor affecting enrolment strategies was how universities saw the ‘maximum basic grant amount’ (MBGA) for ‘higher education courses’. This is the JRG merged Commonwealth Grant Scheme fund for sub-bachelor, bachelor and postgraduate coursework places.

The MBGA was seen as a minimum to be achieved, despite the temporary Higher Education Continuity Guarantee compensating for lost Commonwealth contribution revenue (student contribution revenue from under-enrolment was lost). To deliver less was seen as under-performing by the government and other universities.

To minimise under-enrolment universities moved CSPs to the postgraduate level, an option they mostly lacked prior to JRG (there was an interim sub-bachelor-postgraduate coursework swap option in 2020). We explore this aspect in detail in a forthcoming paper.

When the MBGA is interpreted as a minimum the rational strategy is to aim for at least a small over-enrolment, to create a buffer in the event of unexpectedly high offer reject rates, part-time study rates, or attrition rates.

In the new ‘managed growth’ system the government wants hard caps – an allocated number of CSP EFTSL, with a small over-enrolment buffer designed to manage the inherent difficulties of hitting precise EFTSL targets, but not to allow any strategic or mission-based over-enrolments.

While universities were less concerned with specific student contribution levels than I expected, student contribution revenue was important to them. Zero-funded student places will be a deterrent to over-enrolment.

The political meaning of over-enrolment will also change under the new system. The previous government was happy to get additional student places without paying Commonwealth contributions, the current minister is not. He is a protectionist, directing his ATEC enforcer to put system stability above student demand.

Under the new system, the optimal strategy is to aim for a slight undershoot of the buffer maximum, in case of unexpectedly low offer reject rates, part-time study rates or attrition rates put EFTSL above the cap.

This is one mechanism by which the new system is likely to enrol fewer students than it could in theory support.

Overall funding rates

As with student contributions, total funding rates – the Commonwealth + student contribution – did not have all the effects that might have been expected.

Engineering and science were the two worst-affected disciplines affected by reductions in total funding rates, slashed by nearly 20%.

Two interviewees complained about this cut but increased their engineering places anyway, one describing it as in the long-term interests of the university. The national statistics show that, after a small dip in commencing bachelor EFTSL in 2022, engineering grew strongly. Science did not do so well, but that was due to declining student demand despite a reduced student contribution.

In two cases – veterinary science and performing arts – interviewees reported negative effects of the total funding rates on enrolment decisions. Both fields had overall funding increases under JRG, but clearly not enough for these universities.

In ways we did not fully explore in interviews, I think another way JRG affected decisions was on low-enrolment subjects and courses. The JRG rates were based on average teaching and scholarship costs, results I believe were significantly influenced by large university economies of scale. Cuts to some disciplines removed surpluses that supported a swings and roundabouts model previously implicit in a block grant system – that profits in some areas would support loss-making fields that the university deemed important. A recent NSW Audit Office report on NSW universities showed a decline in courses and subjects on offer.

Clinical placements and teaching rounds

At least one interviewee from all five universities mentioned mandatory placements, such as clinical placements and teaching rounds, as a constraint on enrolment decisions. If universities cannot secure sufficient numbers of placements they cannot take additional students.

These will continue to be limits in the new system, irrespective of student demand or ATEC commands.

Conclusion

In my view – combining interview results and empirical observation – the single most significant explanatory variable explaining enrolment decisions is student demand.

Mission-based considerations were also important, in over-enrolments and in moving some CSPs to postgraduate courses (which I will explore in another post), but these only came into play when demand was there.

JRG did not distort university behaviour as much as I feared when it was being legislated. Its most consequential effects may be in reducing capacity to maintain low-enrolment courses and subjects.