Author: Andrew Norton

The proposed new funding system, part 2: ATEC allocations of Commonwealth supported places to public universities

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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. Three 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.

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The proposed new funding system, part 1: Setting the number of fully-funded Commonwealth supported places

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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.

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Trends in domestic postgraduate coursework education

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I have a paper coming out soon, co-authored with Ren-Hao Xu, on the rise of Commonwealth supported places in postgraduate coursework degrees. It is another in our series on university decision-making under Job-ready Graduates. This post provides more general background on domestic postgraduate coursework trends.

Key points:

  • Despite a return to headcount growth following a mid-to-late 2010s stall, domestic PG coursework enrolments are declining as a % of the main potential market, the bachelor-degree holding population.
  • On a full-time equivalent student basis the largest domestic PG coursework enrolments by field are in education, business and health. Growth over the last decade is concentrated in health, social work and IT.
  • PG coursework had a 63.6% female enrolment share in 2024. The large health and education fields are highly feminised. The female enrolment share is increasing in most other broad fields of education.
  • Two-step bachelor/masters entry to professional occupations is making the PG coursework population younger.
  • More PG coursework is being delivered online, a likely cause of increased rates of part-time study.
  • In line with 2020s enrolment trends, course completions are increasing. Many migrants also have postgraduate qualifications. As a result the postgraduate share of the workforce is increasing.

Why do students enrol in postgraduate coursework degrees?

In the ABS work-related training survey students mainly give job-related reasons for taking a postgraduate coursework degree. Since 2017 more students take degrees for reasons relating to their current job, compared to seeking a career change or a better job.

Trends in overall domestic postgraduate enrolments

In the mid-to-late 2010s we saw a multi-year plateau in postgraduate coursework enrolments, at around 200,000. Then, in a likely example of higher education’s counter-cyclical relationship with the labour market, enrolments increased significantly in 2020 and 2021. As jobs returned enrolments eased off, but remained above 2019 levels.

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Job-ready Graduates – its effects on university Commonwealth supported places decisions

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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).

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Self-reported status by educational attainment, an update

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It’s common to hear concern about the ‘status’ of vocational education. An article yesterday in The Conversation reported a ‘stigma’ associated with school leavers choosing vocational education. ATEC’s recent discussion paper on a more joined-up tertiary system noted ‘a lack of parity of esteem’ between vocational and higher education. There was a parliamentary inquiry on status of vocational education a few years ago.

For the university-educated academics and bureaucrats who devise measures of status, such as the index of education and occupation used to determine higher education low SES, it seems self-evident that higher education ‘ranks’ above vocational education. In higher education policy the problem is not that educational hierarchy exists, but that access to its upper echelons correlates with family background.

But in a late 2010s blog post I argued that, outside this top-of-the-AQF bubble, educational status is present but seems less significant. The post reported on young people rating the ‘prestige’ of different qualifications and general social survey results of self-reported status by educational level. Although status-focused individuals seek the top educational brands, this does not fully transfer through to general status.

Self-reported status by education

The self-reported status measure asks survey respondents to rate themselves on a 1 (labelled ‘bottom’) to 10 (labelled ‘top’) scale. The chart below reports average results, comparing 2015 from the original post to the 2023 Australian Survey of Social Attitudes.

While survey sample problems may affect the results – with 1010 responses to this question in 2015 and 883 in 2023 – self-reported status declined across all broad qualification groups. Perhaps falling living standards are perceived as a loss of status.

Self-reported status fell by the most for people with a bachelor degree or above. A consequence of this is that the average degree holder status was in 2023 only 0.4 points higher than the average upper vocational qualification holder, down from 0.7 in 2015.

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Rule by email in higher education policy – over-enrolment and governance

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This post is about unlegislated higher education policies. The story starts last year with reports that the government was imposing caps on commencing Commonwealth supported places, which reached the media in November 2025. This sparked my interest, as the current funding legislation does not specifically authorise it.

By the end of the Universities Australia conference in February 2026 I was also hearing that governance conditions were being imposed on universities getting additional funds to reduce over-enrolment (taking students on the student contribution only). The policies were implemented via emails to vice-chancellors.

I decided to file a Freedom of Information request on the emails. I paid a $150 processing charge. This week the request was granted.

The minister’s letter

The FoI release shows that this process started with a letter from Jason Clare to the ‘interim ATEC’ dated 28 August 2025.

The letter reiterates the minister’s views on the impact of over-enrolments for the universities left with too few students. Its solution is to get over-enrolled universities to do three things:

  • ‘Agree’ to a plan to reduce or not further grow commencing Commonwealth supported students
  • Report on plans to support staff and students during this transition period (an implicit acknowledgement that fewer CSPs = fewer staff)
  • Early adoption of agreed actions from the Education Ministers’ consideration of recommendations from the Expert Council on University Governance

To do these things, universities were to be given two incentives and one threat.

  • A share of a $50 million over-enrolment fund for 2026, which would convert some over-enrolled places to fully-funded places (i.e. Commonwealth + student contribution)
  • A more attractive transition phase to a capped system, under which they could keep student contributions for over-enrolments while trending down to the caps (the ‘glidepath’)
  • And the threat that ‘actions they take now will be considered by ATEC when allocating growth places through mission based compacts for 2027’.

Emails to vice-chancellors of over-enrolled universities, dated 11 December 2025, mentioned that they had already agreed to ‘pursue a more modest growth strategy in 2026’ and told them that they had until 14 January 2026 to confirm student and staff support plans and agreement to governance actions.

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TEQSA’s response to the Australian National University’s governance issues

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Julie Bishop quit as ANU Chancellor last Friday, but not without a parting shot:

“Following unprecedented and co-ordinated interference, the ANU Council is no longer able to discharge its legal and ethical obligations,” she said. “The higher education sector is at a crossroads of regulatory overreach in the governance of our institutions or autonomy and academic freedom.”

The ANU needs to move on from the last few years of drama and disruption. The departure of controversial figures, including Julie Bishop, will help with that process. But her parting shot made a valid point. A TEQSA decision that Bishop is alluding to, while at least in part a by-product of weaknesses in TEQSA’s enforcement mechanisms, was an odd one. It was at most a partial solution to the ANU governance problems identified by TEQSA. Compared to other options it raised more serious legal compliance issues for members of the ANU Council.

The voluntary undertaking

The most prominent “unprecedented interference” is a voluntary undertaking the ANU made to TEQSA about the appointment of a new Chancellor. This was to happen in the lead up to Bishop’s term expiring on 31 December 2026, but will now be brought forward.

What the voluntary undertaking does is set a process by which the Council will accept or reject a recommendation for the new Chancellor.

The recommendation will come from a panel of TEQSA-approved members. The panel will have an independent chair nominated by TEQSA (announced as Peter Coaldrake), two TEQSA-nominated people with experience and expertise in higher education and university governance, an Indigenous person if neither of the earlier two nominees are Indigenous (who appoints this person is not stated, by inference TEQSA) and two members nominated by ANU Council who are “accepted by TEQSA in writing.”

So TEQSA will either appoint or have veto power over all five or six members of the panel.

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ATEC’s interim statement of strategic priorities

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Yesterday the Australian Tertiary Education Commission issued an interim statement of strategic priorities. This statement will guide university mission based compacts for 2027. This post covers the legal status of the statement, its apparent approach to management of the sector via compacts, and what it proposes in the areas of skills, First Nations, equity, teaching quality, VET-higher education relations, and research.

Decision-making under the ATEC system

When fully operational the ATEC decision-making process will operate in the sequence shown in the chart below.

Despite the ATEC Act 2026 officially coming into force on 29 April 2026, ATEC’s interim statement seems to be operating in the legal limbo the organisation has been in since being established as the ‘interim ATEC’ in July 2025.

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Treasury’s take on student debt repayment times under Job-ready Graduates

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Thanks to a Guardian story based on a FoI request we now know that Treasury has modelled changes to HELP debt repayment times under Job-ready Graduates. They are six years too late to influence the original policy, but better that than never as JRG remains a live issue.

Treasury used much more sophisticated methods than my own recent analysis of arts graduate repayment prospects. However, Treasury does not use the new student debt repayment system introduced in 2025-26, and so under-estimates current repayment times. I will return to this, but Treasury has produced a helpful conceptual and empirical guide to what the Morrison government should have considered prior to Job-ready Graduates being proposed, and the Albanese government should think about when redesigning the system.

Debt and income data

Instead of just using debt levels based on three years of the relevant student contributions for each course, Treasury put into their model actual subjects taken, with data from the Department of Education included in PLIDA. So the model captures extra debts caused by double degrees, changing courses or failing and repeating subjects. It also captures lower debts of people who never complete a course.

My analysis used Australian citizen median income by single year of age, as recorded using ATO and DSS income linked to Census records. For years 1 to 10 after university Treasury used a model based on actual debtor income in PLIDA (which also has ATO and DSS data). These are critical years for repayment for most debtors, so this is important. Treasury’s model uses Census data to estimate repayments after 10 years.

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The $1 billion spent on undelivered student places

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Last year I wrote about payments to universities under the Higher Education Continuity Guarantee, a Morrison-era program to compensate universities for ‘under-enrolment’. I then had data up to 2022. This can now be updated to 2024. Total expenditure on the Guarantee and its 2020 predecessor, the Higher Education Relief Program, now exceeds $1 billion.

How the Higher Education Continuity Guarantee worked

In simplified terms, the Higher Education Continuity Guarantee offset reduced payments to universities from the Commonwealth Grant Scheme.

Under the funding legislation, universities are supposed to receive the lesser of 1) The value of Commonwealth supported places delivered, calculated on a full-time equivalent place multiplied by the relevant Commonwealth contribution amount, or 2) the maximum grant amount that universities were entitled to receive under their funding agreement (how this maximum was calculated varied in the life of the Guarantee).

For universities entitled to receive only the amount calculated in option (1), the Guarantee topped them up to the amount in (2).

This is called ‘under-enrolment’ because universities did not deliver sufficient Commonwealth supported places to receive their maximum grant amount.

The cost of the Higher Education Continuity Guarantee

Guarantee funding peaked in 2022, at $346 million, before dropping to $298 million in 2023 and $218 million in 2024. Total cost since 2020 is $1.056 billion.

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