This post is the first in a series of explainers on how the new Commonwealth supported student funding system will operate if the Universities Accord (Opening the Doors of Opportunity) Bill 2026 is passed.

The series is primarily aimed at policy advisers and people working in university planning offices. I covered the most important issue for the general public and prospective university students in this Conversation article.

This post looks at how the total number of fully-funded Commonwealth supported places will be determined. A fully-funded place is one for which both a Commonwealth and a student contribution is paid. Student contribution only places will be discussed in a later post.

The current system

As a refresher, the current CSP allocation system has three components:

• Designated courses, where the minister allocates, via university funding agreements, specific number of CSPs. Currently only medicine for non-Indigenous students is designated. The funding formula is the Commonwealth contribution rate * the number of student places delivered or the allocated number of places, whichever is the lower.
• Demand driven courses, currently only Indigenous students in bachelor degrees or medical courses. The funding formula is the Commonwealth contribution rate * the number of student places delivered. Effectively, universities and students decide on the allocation.
• A ‘higher education courses’ grant in which each university gets a maximum basic grant amount (MBGA) to cover CSPs not in the previous two categories. The value of CSPs delivered in this category is calculated as the Commonwealth contribution rate * the number of student places delivered. If the value of these places exceeds the MBGA the university gets the MBGA. If the value is below the MBGA in theory the university receives that amount. In practice, in recent years, universities have received the full value of their MBGA via other programs despite not delivering CSPs of the required value.

The proposed reforms

All three of these components will change if the bill passes.

The overall higher education courses category will be allocated in CSPs instead of dollars, with no maximum basic grant amount. Total places will be determined by the minister, allocations to specific providers will be determined by ATEC.

Designated places will become a sub-category of higher education courses, used to allocate/restrict places in specific kinds of courses. While the minister decides which courses are designated, ATEC allocates designated places to providers.

Medicine will move into a new, separate category, still functionally equivalent to designation but allocated by the minister (as now) instead of ATEC.

The existing demand driven categories will be maintained and include a ministerial discretion to add new categories of courses. There will be a new mechanism to cap demand driven places if needed.

All legislative references in the following text are to the Higher Education Support Act 2003 unless otherwise specified, ‘current’ signalling the legislation now in force, ‘new’ signalling the amending bill.

The ‘total allocation pool’

The first step in the process of allocating places is for the minister to set a ‘total allocation pool’ (TAP): new section 30-5.

The TAP will have separate allocations for Table A providers (i.e. public universities) and other higher education providers: new section 30-5(1). I will discuss the other higher education providers in more detail in another post.

Presuming the legislation passes the 2027 TAP will be officially set sometime between the day it receives royal assent and the start of 2027. The pool will cover higher education courses, i.e. it includes designated places but not medical or demand driven places: section 30-10. A document distributed to universities in May 2026 estimates a 2027 TAP of 624,590 CSPs.

In future years, the minister must set the TAP ‘before 1 July’, creating a 30 June deadline: new section 30-5(2). This gives ATEC time to negotiate/allocate places to universities (discussed in the next post). But it also means that system size is set well before key demand indicators are known, such as applications for the following year. Proximity to the May Budget may be more important to the number set by the minister than proximity to demand information.

The minister’s decision on the TAP is a legislative instrument: new section 30-5(1). However it is not subject to disallowance by either house of parliament, as is usual for legislative instruments: new section 30-5(9). But legislative instruments are published on the legislation.gov.au site. This improves on current arrangements, under which total grants can only be worked out after specific allocations to universities have been made, with the relevant information usually published in late January.

New section 30-5 of HESA 2003 does not specifically require the minister to seek ATEC’s advice on the TAP. Under section 41 of the ATEC Act 2026, however, ATEC can advise the minister on student demand and the size of the higher education system. I expect that the minister will use that analysis as part of internal government Budget considerations.

Varying the total allocation pool

In the year of allocation the minister can subsequently vary the TAP up but not down: new section 30-5(5). This can be done on the minister’s own initiative or on request by ATEC, mentioned in this context: new section 30-5(6). The minister must consider ATEC’s advice (if given) and whether increasing the number of CSPs will promote the objects of HESA 2003: new section 30-5(7). The reference to HESA 2003‘s objects, while logical enough in an amendment to HESA 2003, is a little odd because the funding legislation pre-dates the current governing philosophy. HESA 2003‘s objects refer to passé goals such as the ‘development of cultural and intellectual life in Australia’ (current section 2-1) while omitting the VET and industry preoccupations of the ATEC Act 2006: section 3.

The power to vary the TAP can, according to the bill’s explanatory memorandum, ‘ensure that there are sufficient places in the system to support the participation of eligible students from equity backgrounds’ (p. 14). This is the policy remnant of ‘effectively demand driven funding’.

The minister will make decisions, for both the TAP and subsequent variations, within funding parameters approved through the Budget process. Will the potential need to vary the TAP mean some of the available funding is held back from the original TAP?

Can the minister reduce the TAP in a following year?

[Note: This section was substantially rewritten 1 July 2026.]

Section 30-5 does not directly require the minister to allocate any minimum number of places.

The policy intent seems to be that public universities receive year-on-year guarantees of minimum places in higher education courses (i.e. places not in medical or demand driven courses). This is stated in the explanatory memorandum at pages 13 and 18. It is not, however, clear that this intent is reflected in the bill’s text.

When ATEC allocates places to providers there will be two categories, ‘core student load’, which is a carry-over of places from previous years, and an ‘additional growth allocation’, which is new places.

From 2028, core student load is defined as the lower of a) the university’s previous year’s domestic student profile (i.e. 2027) or b) the verified number of student places in the most recent year available when ATEC first made an allocation for the reference year (which in practice will be 2026 data available in the second half of 2027 when core student load allocations are made for 2028): new section 30-25(1)(b).

Verified student data is not a new concept, it is the result of the final reconciliation of enrolments for funding purposes due in the April after the year of funding [Note: this date was initially reported as May]. But this is its first appearance in funding legislation: new section 33-31.

Due to verification delays, the core student load for a university could could be lower in 2028 than in 2027.

According to the explanatory memorandum, the core student load provision ensures that a university’s allocation will not go backwards (p. 18), at least on the lower of these two numbers. On another reading section 30-25(1) simply defines core student load. Section 30-20(2) says that a university’s ‘domestic student profile’ must not exceed the core student load plus additional growth places, if any (emphasis added). The expression ‘must not exceed’ implies that a lower number could be used. This does raise the issue of why the expression ‘must not exceed’ was used rather than just the university’s domestic student profile is its core student load + additional growth allocation, if any.

If the policy intent is that ATEC allocate at least the number of places for each university’s core student load there needs to be a parallel provision that the minister must allocate at least this number in the TAP. The explanatory memorandum agrees, saying that ‘new sub-section 30-5(4) ensures that the number of places that is available to be allocated is sufficient to cover the core student load for all Table A providers for the year’ (p. 13).

Section 30-5(4) in the bill says that, in its allocations from 2028, ATEC must not exceed the number of places that is the higher of a) the sum of Table A core student loads or b) the number of places specified in the most recent TAP. This seems to say that ATEC can over-ride the minister’s TAP if all Table A core student load numbers add up to more than the TAP, although it is not required to do so if section 30-20(2) is read as including discretion to set a lower number.

ATEC should not be put in a position where it must decide whether or not to defy the minister.

These provisions should be rewritten so that the words of the bill reflect the policy intent, as described in the explanatory memorandum.

The minister could reduce the places available for medical and demand driven courses, both discussed below.

The minister could also refuse to vary the number of places in the event of additional demand.

Allocation of medical places

The minister will allocate medical places outside the ATEC process: new section 30-65. This reflects the reality that the Department of Health has a major influence over medical CSPs.

The bill creates scope for allocating medical places to non-Table A providers: new sections 30-65(1)(b) & 33-6(5). Bond University is the only non-Table A provider currently offering medicine.

The minister can either set a precise whole number or a method for determining the number of medical places: new section 30-65(2). The method part is a reference to a bureaucratic mess the government created when it established an Indigenous demand driven program for medicine within an otherwise tightly controlled allocation.

The allocations of medical places must be published on the Department’s website: new section 30-75(b). This is an improvement, since the only way to get the allocations now is by transcribing them from university funding agreements. However there is no deadline given for when a decision about medical student places must be made.

A minor point, but the reference to a ‘whole number’ of places here and elsewhere in the amending bill is new. Formula-driven allocations have led to CSPs specified down to multiple decimal places. Where decimal places appear for medical CSPs the number will be rounded up: new section 30-65(3).

Under the current funding agreements, which will be abolished under the proposed new system, allocations of medical places are subject to additional conditions. These include restrictions on the number of domestic completions and the location of delivery. Under the bill, current section 36-65, which requires that providers comply with their funding agreement, is repealed. This is replaced with a new section 36-65 allowing the minister to determine conditions that a specified higher education provider must comply with for the purposes of division 36, which covers conditions on receiving a grant.

I mention section 36-65 here as relevant to how medical student places are allocated under the proposed system, but it is a broad general power.

Demand driven places

The existing demand driven programs for Indigenous students in bachelor degrees or medical courses in public universities are preserved: new section 36-60(1)(a)&(b).

There is a new power for the minster, by legislative instrument, to create additional categories of demand driven funding. This can be a course of study or a kind of course of study: new section 30-60(1)(c) & (3). Nursing and teaching are given as possible examples in the bill’s explanatory memorandum (p. 24).

However the bill also creates the contradictory concept of an ‘allocation of places for demand driven higher education courses’: new section 30-55(1). This is a cap on demand driven places, to be known as a ‘demand driven courses profile’. The minster can set a profile with a legislative instrument, not disallowable. This cap is the equivalent of the current power to set a maximum basic grant amount for demand driven courses: current section 30-27(1)(b)(ii).

The former-demand driven places allocation cap must be published on the Department’s website: new section 30-75(a).

If no cap on demand driven places has been set previously, the allocation cannot be less than the places delivered in the most recent year for which there is verified student data: new section 30-55(3)(a). Note from the earlier discussion of verified places that this could be fewer places than delivered in the year of capping. This is a floor not a ceiling, so the minister could set a number matching current enrolments despite these not being formally verified.

If a cap has been set previously the minimum allocation is the previous cap: new section 30-55(3)(b).

If a demand driven cap is in force, a university must make decisions between demand driven categories. This is a weakness in ad hoc systems of demand driven funding. It limits which trade-offs can be made. The choice is made within the demand driven categories. For example, say nursing is made demand driven and then a cap is imposed on total demand driven places. Enrolment decisions are then between Indigenous students and nursing students. But if nursing is not demand driven, its trade-offs are with all other courses and all non-Indigenous students. In this much wider pool a university could potentially find a painless solution to high demand from both Indigenous and nursing students, such as a course where demand has dropped, freeing places for other uses.

Transition to demand driven funding

Transition to a new demand driven funding category would also cause problems. In the past, the government has deducted the historical value of the new demand driven category from previous grants or allocations. This means the government only pays for any additional enrolments due to demand driven funding.

The intention is that public universities will have a guaranteed minimum core student load, although as noted above it is not clear that the bill successfully implements this policy goal: new section 30-25(1)(b). If there is a guaranteed minimum load it blocks using already existing places as the basis of a new demand driven category. The nursing and teaching examples given for potential demand driven funding are both high-enrolment fields. To suddenly make them demand driven would leave some universities with much of their core student load missing, with far more places in their ‘higher education courses’ category than they could ever use.

Maybe I am misunderstanding something, but I don’t think the provisions to create new demand driven courses have been sufficiently thought through.

Delegation of ministerial power

The minister can delegate these funding powers, as these provisions are not excluded from the broad power of delegation in HESA 2003: current section 238-5.

The new bill, however, makes a change to the delegations. Currently HESA 2003 includes a power to delegate to an ‘ATEC Commissioner’. That is to be changed to ‘the ATEC’: new section 238-5(1)(ab). This prevents a single commissioner, in practice likely to be the Chief Commissioner, having too much power – a fault of the original ATEC bill that was fixed in the Senate.

In practice, the minister will keep control over total CSP numbers. But within previously agreed limits the minister may delegate the power to vary the TAP when it is likely to be needed, during the summer round of university offers.

In the next post

The next post looks at how ATEC will allocate CSPs to public universities.

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