In the previous post, I outlined how the minister would set total numbers of Commonwealth supported student places if the Universities Accord (Opening the Doors of Opportunity) Bill 2026 is passed. This post looks at how the Australian Tertiary Education Commission (ATEC) will allocate CSPs to public universities. ATEC will also allocate places to other higher education providers, discussed in a later post.

To recap on the previous post, ATEC will allocate places from a ‘total allocation pool’ (TAP) determined by the minister. ATEC will not allocate medical places, which the minister will do. ATEC will also not allocate demand driven places, currently Indigenous students in bachelor degrees or medicine.

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.

Feedback is welcome via the comments or direct communication. This is complex legislation and I may misunderstand things. Two revisions to my first post so far.

Total number of Commonwealth supported places per university

The total number of CSPs allocated to a university will be known as their ‘domestic student profile’: new section 30-15(2).

The domestic student profile will have up to two components, the ‘core student load’ and an ‘additional growth allocation’: new section 30-25.

Core student load

For 2027, the core student load for each university will be set by an ATEC determination: new section 30-25(1)(a) & (2).

The minister cannot give directions to ATEC in relation to a specific higher education provider, so this matter is solely ATEC’s responsibility: section 71(2)(c) ATEC Act 2026.

Core student load for 2027

The bill does not say how ATEC should make the 2027 determination. On my understanding it will be the lower of the university’s verified 2025 ‘higher education courses’ EFTSL or the notional 2026 allocation calculated using this formula: 2026 maximum basic grant amount/the average Commonwealth contribution for delivered 2025 higher education courses indexed (1.024).

If a university was under-enrolled in 2025 it will be re-set at this lower level for its first core student load. The government is trying to avoid CSPs locked away in universities that cannot use them. Some yet-to-enacted transition funding will be paid to significantly under-enrolled universities, discussed at the end of this post.

If a university was over-enrolled in 2025 its core student load will be set at the notional number of CSPs it would have had without over-enrolment. The government is not rewarding past over-enrolment, other than by boosting the 2026 maximum basic grant amounts of significantly over-enrolled universities by $50 million between them.

Core student load for 2028 or later

In future years – that is, for 2028 allocations onwards – for each university the core student load will be the lower of:

a) its previous year’s domestic student profile (i.e. previous to the year being allocated, 2027 DSP) or

b) the verified number of student places in the most recent year available (which for 2028 allocations will be 2026 data verified by mid-2027): new section 30-25(b).

(A footnote to the first post discusses legal issues about whether or not the numbers calculated for 30-25(b) represent a floor number of places).

For universities that are over-enrolled in 2026 – using the notional places calculation – this formula will ensure that they only get their 2027 domestic student profile as their core student load for 2028.

But the formula could cause medium-term problems for universities with a temporary under-enrolment problem.

Say a university under-enrolled in 2027, i.e. it delivered fewer CSPs than specified in its 2027 domestic student profile. While it won’t know exactly the scale of this until late in 2027, by its second semester census date it knows it can’t fully use its places profile. On the legal schedule in the bill this 2027 under-enrolment won’t be ‘verified’ until April or May 2028. The 2027 under-enrolment therefore has no impact on the university’s 2028 ATEC domestic student places profile, because ATEC is precluded by new section 30-25(b)(ii) from taking it into account (verified student data is defined for the first time in the bill: new section 33-31).

While ATEC might unofficially know about the under-enrolment for 2027, for the 2028 year it must allocate a core student load of the university’s 2027 domestic student profile. Unofficial knowledge of under-enrolment may, however, be a factor in additional growth allocations, discussed below.

In 2028 the university recovers from it 2027 under-enrolment problems and reaches its 2028 domestic student profile, a fact it will know to a high degree of accuracy by its last 2028 census date.* But this won’t be ‘verified’ under section 33-31 until April or May 2029.

When making 2029 core student load allocations, during the second half of 2028, ATEC will be statute-bound to reduce the university’s core student load for 2029 back to its 2027 actual level, as the lesser of its 2028 domestic profile allocation and its 2027 verified EFTSL.

This anomaly can be fixed with an ‘additional growth allocation’ (AGA), with ATEC using its unofficial knowledge of the university’s actual enrolment situation. But if the university receives no AGA it could be in a situation where, due to the additional student load flowing through to 2029 from meeting the domestic student profile target in 2028, it will have to cut 2029 commencing students to stay within its fully-funded allocation. Over-enrolment is one option to maintain opportunities, but that too is limited by this bill.

Protection for universities that don’t under-enrol

While the new system does not reward over-enrolled universities, and creates risks for under-enrolled universities, universities that consistently reach their target number of CSPs cannot be cut below their previous domestic student profile: new section 30-25(1)(b)(i). This is the places equivalent of the existing funding floor: current section 30-27(3). (Noting again the legal discussion at the end of the previous post about whether section 30-25 achieves its aims.)

Additional growth allocations (AGA)

The minister envisages additional places in the system, which will be included in the total allocation pool, although nothing in the bill requires growth in places. These additional places will be allocated by ATEC: new section 30-25(3)&(4).

The ATEC AGA model is very different from how additional places have been allocated over the last 20 years. I would put these in two broad categories:

• Formula-driven growth, such as the incremental % growth based on campus location under Job-ready Graduates
• Quasi-tender allocations, where the government announces that it want to allocate X number of places for purposes A, B & C and universities put in bids to receive those places

Under the ATEC AGA model new places will be decided through one-on-one negotiations with universities.

ATEC will give broad signals through its statements of strategic priorities about what kinds of new places requests might receive support. ATEC’s priorities will be influenced by the minister’s priorities: new section 30-45(1)(a).

ATEC’s interim statement of strategic priorities give us potential AGA places for skills needs, rewards for universities improving VET pathways, and equity students.

In compact documents issued for 2027 compact negotiations, over-enrolled universities can apply to convert student contribution only places to fully-funded places.

In further documents distributed to universities as part of 2027 compacts negotiations I noted the following additional considerations: student demand, market dynamics between institutions (suppressing or following these left unclear), sector sustainability (i.e. protecting less popular universities), performance on equity (i.e. more places to universities lifting equity enrolments), performance against compact terms, performance against the university’s own mission, increasing the number of FEE-FREE Uni Ready places, and institutional capacity to deliver quality provision on the scale

With so many possible criteria for allocating places, twelve to date, universities cannot easily predict how many places they might get. The decisions could seem arbitrary at the university level, even if ATEC sees some coherence at the regional or national level.

But ATEC itself is likely to struggle to reconcile some competing functions for the AGA pool. If no AGA is the penalty for not meeting the terms of a compact, it means that some equity and skills-need focused students who might have enrolled at that university can no longer do so. Why should they pay the price for a university they are yet to attend not meeting compact terms? Does ATEC want to undermine the achievement of regional or national goals to inflict an institution-level penalty?

Pipeline

One criticism I had of previous allocations of new student places was the pipeline policy. This assumed year-on-year reductions of 25% of the original commencing student load, even when successful retention practices were a criteria for the allocation of student places.

This cannot directly apply to the AGA, which is incorporated into the university’s domestic student profile that is protected by new section 30-25(1)(b)(i), as mentioned above.

But AGA allocated on a year-by-year basis does create issues ensuring that the university will have sufficient places to see commencing students through to completion.

The bill recognises the problem. ATEC must consider whether its allocation of places will affect the university’s ability to comply with current section 36-25, which requires that a student enrolled in a CSP is entitled to a CSP for the rest of that course: new section 30-45(b).

But combined with the strict controls on over-enrolment, to be discussed in the next post, universities have only one option if continuing student load is too high relative to the overall cap: cut commencing students.

AGA and allocations by course or field

The most surprising provision in the bill is new section 30-20(3) – that the domestic student profile, which includes both the core student load and the AGA, ‘must not specify that a number of Commonwealth supported places…are for a particular higher education course or kind of higher education course, unless the course is a designated higher education course’ (emphasis added).

I have complained for years about extra-legal allocations of places to specific courses. I fully expected them to be explicitly authorised by the ATEC funding legislation, to bring the law in line with practice. Specific allocations flow logically from the explicit focus on targeting skills and workforce demand mandated by the ATEC’s legislation: section 3(c) of that Act. But this bill does the opposite of what I expected, and specifically prohibits such allocations, unless the course is designated.

Section 30-20(3) also seems inconsistent with ATEC’s interim statement of priorities, which says that ‘where applicable, providers should consider national skills and workforce priorities as part of their mission based compacts and requests for additional growth in 2027’ (p. 4). In the 2027 compact templates distributed to universities there is a ‘performance domain’ on these priorities. In the ‘measures’ section for this domain universities must nominate at least one ‘priority’ field of education, state their baseline 2025 enrolments in this field and nominate a 2027 milestone and a longer term expected outcome and timeframe.

Perhaps section 30-20(3) needs reading narrowly – no allocations to courses but allocations to fields of education are ok. That reflects the architecture of the funding system, which generally funds by the discipline of the subject rather than by course. But fields of education are a clumsier way of achieving occupation-related skills goals than specifying courses. The same field of education can contribute to many different courses; maths and biological sciences are common examples. And some courses focused on specific occupations draw on multiple fields of education; social work was an example that caused problems during the introduction of Job-ready Graduates.

Designation by the minister

Perhaps designation will be used more frequently than in recent years. Since 2021 the only designated course has been medicine. As noted in the previous post, this bill moves medicine to a separate category of its own that is functionally equivalent to designation – i.e. it is capped – but no longer uses the language of designation.

Under this bill, the minister can, by legislative instrument, designate ‘a kind of higher education course’: new section 30-30(2). This is equivalent to the current section 30-12(2). The phrase ‘kind of higher education course’ could refer to a qualification level. Prior to Job-ready Graduates sub-bachelor and postgraduate coursework CSPs were designated. Or it could refer to a kind of course occupational outcome (such as medicine now) or field of education (no examples to date).

The designation legislative instrument is disallowable, i.e. a vote of the House of Representatives or the Senate could knock it out.

ATEC allocation of designated places

If a designation is in place, ATEC gives the university an allocation of places for each designated category, which can be zero: new section 30-20(4)(a).

Designation could be used to reserve places for a particular favoured course. But as it functions as a cap rather than a floor it is best used when the government wants to keep student numbers down, as it does in medicine.

Once a university reaches its designated number of places in each designation category it receives no further Commonwealth contributions: new section 33-5(5).

In cases where different Commonwealth contributions apply within the designated category – for example if postgraduate courses were designated – the bill provides that an average funding cluster rate be paid: new section 33-5(7).

For example, say the university was allocated 100 designated postgraduate CSPs.

If it delivered exactly 100 postgraduate CSPs it would receive the relevant discipline Commonwealth contribution rate for each.

If it delivered 120 postgraduate CSPs an average would first be calculated. Using 2026 Commonwealth contributions:

40*nursing Commonwealth contribution $19,497 = $779,880 + 40*education Commonwealth contribution $15,898 = $635,920 + 40*humanities Commonwealth contribution $1,316 =$ 52,640. Total Commonwealth contribution value = $1,468,440.

Divide that by 120 for the average Commonwealth contribution = $12,237. Multiply $12,237 by the original 100 = funding of $1,223,700.

If multiple course types are designated this system will be less favourable to universities than the pre-JRG system. In practice these were aggregated in ways that could even out under- and over-enrolment. For example, say a university was allocated 50 sub-bachelor places and 50 postgraduate places. In practice it delivered 60 sub-bachelor and 40 postgraduate places. Despite missing the sub-targets it would be paid for all 100.

Under the new system it would be paid for 50 sub-bachelor places, calculated by averaging the Commonwealth contributions of the 60 and then multiplying by 50. For the postgraduate places it be paid 40 * the relevant Commonwealth contribution, losing 10 places to under-enrolment.

Designation transition

Newly designated courses are likely to have existing students.

Can ATEC give existing but newly designated courses zero places, as it is apparently authorised to do under new section 30-20(4)(a)(ii)?

I think this will be another use for new section 30-45(1)(b), which requires ATEC to take into account the provider’s capacity to comply with current section 36-25, i.e. that current CSP students can continue with a CSP in their current course.

Undesignation

Unusually, the bill provides for designation to be lifted during a year. A course is designated only if it is in force at the end of the year: new section 30-30(1).

If a determination ceases to be in force the university is taken to never have had a designated courses profile for the year: new section 30-20(5).

As designated places are a sub-section of core student load undesignation could be helpful. Going back to the sub-bachelor example above, undesignation would mean that the additional 10 places are potentially fundable within the original non-designated student load.

I don’t know if this is what is intended or whether the government has some other scenario in mind. A law that lets the same student place be in two different funding categories in the same year is confusing.

Publication

Domestic student profiles must be published on ATEC’s website: new section 30-50(1)(a).

The total higher education courses places for each university clearly must be published. There does not, however, seem any requirement to publish the details of the allocation – core student load and growth places, designated places, and allocations by field of education, if this is indeed allowed.

Delegation

ATEC can delegate its powers under HESA 2003 to an ATEC commissioner or an SES employee assigned to ATEC (this is the third ‘SES’ in higher education policy, in this case the APS senior executive service): new section 238-5A(1).

In exercising these powers the delegate must comply with any directions from ATEC: new section 238-5A(2).

The next post

The next post will deal with over-enrolments.

---

*There are provisions for enrolments to be cancelled after the census date, which creates scope for small variations in the totals.