Category: Higher education

Job-ready Graduates price effects?: An update with 2022 enrolment data

Andrew Norton2 Comments

The official release yesterday of the CPI-indexed Job-ready Graduates student contributions for 2025 has prompted questions about what impact the JRG price increases have had on enrolments.

With arts, business and law student contributions to hit nearly $17,000 a year in 2025 – with our bout of inflation having increased them from $14,500 in 2021 – students would be wise to think about whether this is a sensible investment. That’s $50,000 for a basic 3 year degree or $85,000 for common combinations like arts/law or business/law.

On the other hand, as I have argued, students follow their interests while keeping an eye on which courses within their cluster of interests would have the best employment and salary outcomes.

The most sophisticated work to date, using NSW data to 2021, found small effects in the expected directions.

Using simple trends in subjects taken, this post will look at domestic commencing EFTSL by discipline in the 2010-2022 period, drawing on the annual commencing load spreadsheet produced by the Department of Education. This does not distinguish between CSP and domestic full-fee students, but it is the best I can do with publicly available data.

Because I am comparing fields with very different absolute enrolments, I have converted them to an index, with 2010=1. So an index of 1.1 in a subsequent year would mean 10% more EFTSL, and an index of .9 would mean 10% fewer EFTSL.

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Accord implementation proposals, part #5: Needs-based funding that is not aimed directly at needs

Andrew Norton1 Comment

The Accord implementation consultation paper on need-based funding for equity group members was released late last week, although students with disability will be discussed in a later consultation document. That leaves low SES, Indigenous and students at regional campuses for this paper.

When the Accord interim report came out I rated the principle of needs-based funding as one of its better ideas. But turning it into policy faces significant conceptual, practical and ethical issues. The consultation paper does not resolve these issues.

Funding based on needs versus equity group membership

The basic conceptual problem, in the Accord reports and this consultation paper, is that it remains unclear why needs-based funding should apply only for students designated as equity group members. With the exception of people with disabilities that require adjustments for them to participate in higher education, none of the equity group categories identify personal disadvantage. As the Accord report itself notes, groups other than the equity four are ‘under-represented’ in higher education.

The higher education system should help all its students achieve success, not just those that for historical reasons are included in the equity group list.

Many of the outcome differences we observe are the by-product of mass higher education, which brings a wide range of people into the system. There are more people who were not especially ‘academic’ at school, more people who have trouble financing their education, more people who have major responsibilities other than their studies. In a mass higher education system these students are core business.

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Accord implementation proposals, part #4: Managed demand driven funding for equity students

Andrew Norton3 Comments

When the Accord final report was published one recommendation that confused me was a policy to increase equity student enrolments that was “effectively ‘demand driven for equity’ but with planned allocation of places to universities”.

A demand driven system, under which universities can enrol unlimited numbers of students meeting set criteria, can sit alongside a system of allocated student places or funding. Current Indigenous bachelor degree demand driven funding, which would be retained in the Accord model, sits alongside a soft capped block grant for most other students. But for the same courses, or student categories, demand driven and allocated student place systems are mutually exclusive.

Any hope of clarity has been dashed by the Accord implementation paper on managed growth. It proposes “managed demand driven funding for equity students”.

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Accord implementation proposals, part #3: Distributing student places between qualifications & disciplines & the funding floor

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Part 1 of this series on the government’s Accord implementation plans looked at the proposed Australian Tertiary Education Commission. Part 2 examined how student places would be allocated between universities. This post considers Accord implementation plans for distributing students places within universities between qualification levels and disciplines. In this post, at least, I find that some of the government’s proposals have merit.

Some background: The government has often allocated higher education resources differently depending on qualification level, course, field of education and sometimes students. This practice can target and/or limit spending on a policy goal. The trade-off is less flexibility in moving resources where they are needed. As a result, prospective students miss out or pay much more than the student contribution rate in the full-fee market.

In the 2010s sub-bachelor, bachelor and postgraduate CSPs were funded separately. Since 2021 they have been funded together, with exceptions for Indigenous bachelor degree students and medical courses.

The distribution of student places between qualification levels – postgraduate

While the Accord final report supported more Commonwealth supported places at the postgraduate level, it wanted to focus them on areas of “national priorities and skills needs”.

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Accord implementation proposals, part #2: The distribution of student places to universities and the folly of hard caps

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An earlier post looked at the government’s plans for the Australian Tertiary Education Commission. This post examines the government’s proposals for setting the number of student places and distributing them between universities. This includes a hard institution-level cap on student places, so that universities would get zero funding for enrolments above their allocated level. This post explains why a hard cap is unnecessary and counter-productive.

Overall number of CSPs

The government will determine the total number of CSPs. For ‘fully funded’ places – places for which universities are paid both a Commonwealth and student contribution – this is similar to the current system of the government deciding on total CGS funding, other than the small demand driven system for Indigenous bachelor-degree students (which will be retained). However,

  • because universities will have flexibility in moving EFTSL between disciplines (discussed in a later post) the maximum dollar amount the government pays will be less predictable than now.
  • because of the first point and hard caps on student places at each university (discussed below) the maximum number of CSPs the system provides will be more predictable than now.

It is not clear whether ATEC will advise the government on the number of CSPs, as opposed to contextual factors such as demographics, demand, and skills needs.

And if ATEC does provide advice on system-level numbers, it is not clear whether this will be published or not. The consultation paper mentions the state of the sector report recommended by the Universities Accord final report, but this is framed as a ‘report on higher education outcomes’, not future higher education needs.

Former higher education commissions provided detailed public advice on likely student demand and the sector’s capacity to meet it. For an education minister there is a trade-off. Public and quality advice gives leverage in Cabinet when arguing for money and a semi-independent justification for the government’s overall policy direction. But if the minister does not get the money the sector, and opposition MPs, will use ATEC reports against the government.

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What’s new in the funding agreements, part 4: revised equity plan rules

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As discussed in a blog post last week, the revised 2024-25 Commonwealth-university funding agreements add new restrictions on early offers. The revised agreements also rewrite the rules on a novel feature of the original December 2023 2024-25 funding agreements. These rules cover a new policy to spend unused Commonwealth Grant Scheme allocations on activities set out in equity plans.

The May funding agreements improve on their December 2023 versions by potentially making the equity plan requirement optional. However a change to how the equity plan amounts are calculated reduces how much money universities could receive.

The revised funding agreements also include some minor funding increases.

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What’s new in the university funding agreements, part 3: new rules on early offers

Andrew Norton1 Comment

Earlier this year I wrote a couple of blog posts on the 2024 university-Commonwealth funding agreements signed late last year. Revised agreements were signed in May 2024. These agreements include new rules on early offers. This post argues that early offers rules should be legislated separately and not included as a condition of Commonwealth Grant Scheme funding.

Restrictions on school leaver early offers

As foreshadowed by the minister in February, university funding agreements now restrict school leaver early offers. The basic rules are 1) No offers to Year 11 students; 2) No offers to Year 12 students prior to September; and 3) Offers must be conditional on successful completion of a senior secondary certificate of education.

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2024 funding by university for Commonwealth supported places

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The Universities Accord final report noted the problem of ‘no consolidated source of government expenditure by higher education provider and program (such as the Commonwealth Grant Scheme)’. It is one of the many reporting and data availability issues that make understanding Australia’s higher education system unnecessarily difficult.

CGS revenue by higher education provider

In January, after a laborious process of transcribing information from funding agreements, I published the ‘higher education courses’ and ‘designated courses’ funding allocations. To this I have now added funding determinations information on demand driven Indigenous funding, the medical student loading, estimated HECS-HELP lending as of May 2024 and estimated upfront student contributions, also of May 2024. You can download the spreadsheet here. [Update 17/06/24: with revised funding agreements, 15 universities have increased higher education courses funding. The updated spreadsheet can be downloaded here.]

The chart below aggregates the programs into their two main categories, the CGS and student contributions, and ranks them from the largest recipient of funds, Monash University at $722.4 million, to the smallest, Charles Darwin University at $157.8 million.

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Limits on international student numbers could reduce enrolments to well below the official cap

Andrew Norton3 Comments

I am not opposed to changing international student migration rules and education provider requirements to moderate problems long associated with international education, including “dodgy” colleges, inadequate student preparation, student poverty, student exploitation and “permanently temporary” migration.

Multiple steps towards minimising these problems have already been announced or taken, with increased financial requirements for a student visa added last week. Most changes announced before last Saturday are justifiable.

But capping international student numbers including down to a course level, as announced over the weekend, is a bad move.

The caps will face all the problems I have identified with bureaucratic allocation of domestic student funding. Because numbers will be allocated between universities and courses according to a politician or bureaucrat’s view of where students should enrol, rather than where students want to enrol, actual enrolments are likely to be well below the capped level.

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Bruce Chapman’s multi-rate marginal HELP repayment system – the PM’s ‘simpler’ option?

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Last week the prime minister was asked about changes to the HELP loan system.  In response he referred to Accord recommendations that ‘the system can be made simpler and be made fairer’ (emphasis added), and that ‘we’ll be making announcements pretty soon on that’.

‘Fairer’ probably means a lower-of HELP debt indexation formula, moving the indexation date so that more recent compulsory repayments can be taken into account, and a marginal rate repayment system to remove high effective marginal tax rates.

But what did the PM mean by ‘simpler’? I’m guessing that this refers to moving away from the current 18-threshold and rate repayment system to a system with fewer thresholds.

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