Category: Higher education

The 2026 funding agreements, Part 3: New rules on closing courses

Andrew Norton1 Comment

In the 2026 university funding agreements the rules on closing courses have changed and now require universities to follow additional processes. These changes are presumably a response to course and subject closures at UTS, at Macquarie, the ANU, the University of Canberra, and other institutions.

Confusingly, however, the agreements differ between universities on the timelines to follow.

Which courses are covered?

The basic threshold for a course being covered by the closure rules is that it must be an undergraduate or postgraduate course in which Commonwealth supported places have been used for at least two years. This includes a major within a course.

A course is not considered closed if it is immediately replaced by another course that leads to the same occupation or provides a similar specialised skill.

A course is considered closed, however, if it suspends intake of students for more than one consecutive academic year.

These criteria are unchanged from last year.

Timing of notification

In 2025 universities had to notify the Commonwealth of potential course closures by 31 July and before information on the closure is made public.

In 2026 the 31 July deadline is gone. Presumably it was unrealistic about university decision making timelines.

In what I will call funding agreement variation A, for 2026 notification of actual or potential course closures should occur at the earlier of (i) as soon as reasonably possible before final decisions to close courses are made or (ii) before any information on the potential course closure is made public.

In what I will call funding agreement variation B, for 2026 notification of potential course closures should occur by the earlier of (i) the finalisation of the provider’s Mission Based Compact for the following year (or where a new Mission Based Compact is not being negotiated, the finalisation of annual allocation of domestic student places for the following year), or (ii) one calendar month before any information on the potential course closure is made public.

Variation B is a bold inclusion, as the ‘annual allocation of domestic student places’ refers to a new funding system that requires legislation. As of early February 2026 it had not been introduced into Parliament, much less passed.

For variation B universities, then, the effective current rule is to notify the Commonwealth at least one month prior to making a course closure public. Variation A universities can wait until closer to the date of public disclosure before telling the government, unless they have made a final decision, as they need to inform the government as soon as possible before that decision.

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The 2026 funding agreements, Part 2: Sorting out the medical student policy mess

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Last year the Parliament passed legislation making Commonwealth supported places demand driven for Indigenous students enrolled in medical courses. It sounded good, we need more Indigenous doctors. But as I pointed out, the policy as legislated risked reducing non-Indigenous medical student enrolments without increasing Indigenous medical students enrolments.

The 2026 funding agreements reveal that the Department of Education has been quite inventive in finding a workaround to prevent this perverse outcome. The price, however, is yet more complexity in higher education policy.

The problem

A demand driven funding policy for Indigenous medical students assumes that fixed total funding holds Indigenous enrolments down. Student places are indeed unusually restricted in medicine. Medicine is the only ‘designated’ course, meaning that the government sets a specific number of student places. While designation does not prohibit over-enrolments (i.e. student contribution only places), medicine also has a completions cap. A standard funding agreement clause specifies that a university must not change its medical enrolments in ways that will change annual completions from the capped level.

While medical student numbers are restricted it is not clear that this prevents increased Indigenous enrolments. As I argued in my original post, universities already try hard to recruit Indigenous medical students, with special entry schemes and quotas in some cases. On the available data (below) these schemes are delivering Indigenous enrolments, a source of pride for the medical deans association. 3% of domestic medical students are Indigenous, compared to 2.3% of the overall domestic student population.

The main obstacle to further enrolment increases is unlikely to be funding. It is finding potential students who are not being set up to fail.

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The 2026 funding agreements, Part 1: Public university block grants

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The 2026 higher education funding agreements, the legal basis of Commonwealth Grant Scheme funding, were published recently. This post examines public university funding for ‘higher education courses’.

‘Higher education courses’ has a specific legal meaning. It includes FEE-FREE Uni Ready (enabling) courses and coursework programs other than medicine, except for Indigenous students in bachelor degree courses, who are funded separately. Each public university receives a maximum basic grant amount (MBGA) for higher education courses. This funding is intended to be a flexible block grant. Universities can move money between qualification levels and disciplines, except for medicine.

Policy change

For 2026 the government has changed its policy on setting university MBGAs, as part of a transition to a new funding system under the proposed Australian Tertiary Education Commission. For 2023-2025 Labor retained the Coalition policy of indexing MBGAs to inflation and adding regional-campus-biased increments for population change. This policy led to many universities not using all their MBGA, known as ‘under-enrolment’. Coalition policies to compensate higher education providers for under-enrolment cost taxpayers $844 million between 2020 and 2023.

The government has, sensibly enough, decided not to keep increasing MBGAs for universities that cannot utilise the funds. The new policy, as summarised in the funding agreements, is:

  • For universities that significantly under-enrolled in 2024, the last year with ‘verified’ data, the provider will receive no increase in higher education courses MBGA between 2025 and 2026. Section 30-27(3) of the Higher Education Support Act 2003 prevents the government from lowering a MBGA between years.
  • Universities with enrolments valued at or near their MBGA will receive inflation indexation.
  • Universities with significant over-enrolment ‘may’ also receive a share of an over-enrolment fund.

In a document distributed to universities in 2025, significant over-enrolment was defined as delivering places valued at 5% or more above their MBGA.

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Mapping Australian higher education – December 2025 data update

Andrew Norton3 Comments

To prolong the life of Mapping Australian higher education 2023 I have been updating a spreadsheet which contains the data behind the charts and tables.

The December 2025 Mapping data update is here, revised 2/1/2026 due to an error with FEE-FREE Uni Ready funding in the 16/12/2025 release, is here.

Since the last update in March 2025 the changes include the 2024 enrolment data, the 2024 university financial information, and graduate employment outcomes.

Research income has been the most recent significant data release, including research block grant funding for 2026 and the HERDC data used to calculate it, which goes up to 2024. The chart below shows the research-specific income sources 2017-2024.

I will next update the spreadsheet when we have projected 2026 spending on Commonwealth supported places in the first quarter of 2026. I hope by then the 2025 staff data will also be available.

The Australian Tertiary Education Commission legislation – Part 3, Per student funding and student contributions

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Since it came to office, Labor has deferred dealing with Job-ready Graduates student contributions. First it added student contributions to the Universities Accord list of issues. In February 2024 the Accord Final Report suggested basing student contributions on lifetime earnings. Subsequently the minister said the new Australian Tertiary Education Commission would provide advice. Now we have ATEC’s legislation, but how student contributions will be handled is less clear than I expected.

All legislative references, unless otherwise specified, are to the Universities Accord (Australian Tertiary Education Commission) Bill 2025.

The ATEC bill and per student funding

The ATEC bill does not mention student contributions at all. One of ATEC’s functions, however, will be to advise the minister on:

“The efficient cost of higher education across disciplines and student cohorts and in relation to the Commonwealth contribution amounts for places in funding clusters.”: section 11(d)(ii), section labelled “Functions of the ATEC”.

In different words, in a later section on “Advice and recommendations”, a topic of advice is:

“The costs of teaching and learning in higher education and overall higher education funding amounts, including on a per student basis.”: section 41(1)(b).

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Senate inquiry submission on mass cancelling courses for international students, banning new higher education providers, and Indigenous demand driven funding for medical courses

Andrew Norton2 Comments

Update 28/11/2025: The Senate passed some amendments to this bill. These are noted in the original posts.

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Senate inquiry submissions are due on Friday for the Education Legislation Amendment (Integrity and Other Measures) Bill 2025.

I am releasing my late draft submission in case it helps people finalising their own submissions and to identify any errors or omissions on my part.

Update 17/11/25: Final submission on the Senate committee website.

It builds on my three prior blog posts on the subject – on mass cancelling courses for international students, on a de facto ban on new higher education providers, and on extending Indigenous demand driven funding to medical courses.

Mass cancelling CRICOS course registrations

The main new content in the submission is description of existing legislative powers that can achieve the same claimed policy goals as the course cancellation proposal.

The practical effect of the bill, if it passes, would be to enable the suspension of the rule of law. It would allow the minister to make decisions according to vague criteria, without consulting anyone or considering other relevant laws. Due process would be abolished; providers could be penalised with course cancellation even if they have followed the law and acted ethically at all times.

It shocks me that this Trump-style bid to rule by executive order has even been introduced into Parliament. It’s staggering that, given nearly a year to think again since its original defeat last year, the government has brought back a bill that is, in some places, even more defective than their first attempt. I am referring here to removing the requirement to consult TEQSA or ASQA before cancelling a course on ‘standard of delivery’ grounds.

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Is the government introducing a de facto ban on new higher education providers?

Andrew Norton1 Comment

Update 28/11/2025: Last night the Senate accepted Coalition amendments that exempt higher education providers and TAFEs from the requirement to offer courses to domestic students for two years before being eligible to offer courses to international students. So effectively the provision discussed in this post applies only to non-TAFE registered training organisations. As I noted in the original post, offering courses to domestic students for two years is much easier for RTOs than higher education providers. Large numbers of RTOs have already met the requirement and could move into international education.

While this is good news, enrolment caps the government will try again to legislate next year could prove another insurmountable obstacle to education providers of any kind entering the international market.

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Last week Claire Field published an interesting overview of 15 new higher education providers since January 2024. But growth of this kind would become very difficult if the government’s ESOS amendment bill passes unamended. It would limit registration of new providers offering courses to international students. This post examines whether the proposed restriction would, in practice, be a de facto ban on new higher education providers.

Under the ESOS amendment bill providers could not offer courses to international students without first delivering courses to domestic students, but providers are generally not competitive in the domestic market without offering FEE-HELP loans. But to get access to FEE-HELP, providers must demonstrate experience in delivering higher education – in practice usually by teaching the international students the ESOS bill would stop them recruiting.

Legislative references are to ESOS Act 2000 section numbers, as they are or would be if the amendment bill passes unchanged.

The proposed changes

The ESOS amendment bill would give the minister the power to suspend, for up to 12 months, applications and processing of applications for course and provider registration: sections 14C to 14F.

To be registered on CRICOS to offer courses to international students the provider must have delivered courses for consecutive study periods over at least two years to domestic students in Australia: section 11(2).

This post focuses on the section 11(2) change by looking at how providers have entered the international and domestic markets in recent years.

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Demand driven funding for Indigenous medical students – is it a good idea?

Andrew Norton3 Comments

In line with a 2025-26 Budget commitment, the government has introduced legislation for demand driven funding of Indigenous medical students from 2026.

While well-intentioned, this policy is unlikely to make any significant difference to Indigenous medical student numbers and could accidentally reduce the number of non-Indigenous medical students.

Is there a problem that demand driven funding can solve?

In his second reading speech, the minister noted the current low number of Indigenous doctors and the benefits for Indigenous patients of Indigenous health care workers.

As with the earlier demand driven system for Indigenous bachelor degree students, however, it’s not clear that a shortfall in Indigenous doctor numbers is a problem that demand driven funding will solve.

Universities already try hard to recruit Indigenous medical students, with special entry schemes and quotas in some cases. On the available data (below) they are having some success, a source of pride for the medical deans association. 3% of domestic medical students are Indigenous, compared to 2.3% of the overall domestic student population.

The main obstacle to further enrolment increases is unlikely to be funding rather than the difficulties in finding potential students who meet the entry requirements and are not being set up to fail.

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The last university over-enrolment crackdown – some possible lessons

Andrew Norton1 Comment

As announced last year, the government plans to crack down on so-called ‘over-enrolments’ – enrolling additional students on a student-contribution only basis once all a university’s Commonwealth Grant Scheme allocation has been used.

When a proposed new funding system is in place, from 2027, student contribution-only places will only be possible in a buffer zone above a university’s Australian Tertiary Education Commission allocation. 2% and 5% buffers have both been suggested. Currently over-enrolled universities will receive some additional funding to bring over-enrolments within their official allocation of places. However, this will not in all cases reduce over-enrolments to the permitted range. Significantly over-enrolled universities need to moderate student intakes in 2026 to bring their medium-term enrolments down.

Not many current Department of Education staff were there the last time a minister thought reducing over-enrolments might be a good idea. The story is worth telling.

Brendan Nelson and over-enrolment

From November 2001 to January 2006 the education minister was Brendan Nelson, a Liberal. Nelson was worried about the quality implications of significant over-enrolments. The first reference I can find to Nelson’s concern is in a media release from December 2001, a month into his term.

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The future of voluntary HELP repayments

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In recent years voluntary HELP repayments increased significantly, peaking at $2.9 billion in 2022-23, before dropping back to $992 million in 2024-25 (according to data released last week). This post looks at why voluntary repayments spiked and what we can expect for future years.

The spike in repayments – indexation

The 2022-23 and 2023-24 big repayment spikes in the chart above are primarily due to people repaying early to avoid high CPI indexation.

With CPI now back to normal levels this should be much less of a factor in the foreseeable future. That said, to reduce indexation costs HELP debtors considering a voluntary repayment should still make it prior to the 1 June indexation date.

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