Category: Legal matters

The first COVID-19 support package for higher education

Andrew Norton2 Comments

Update 15/4/20: This post contains material that has been revised and republished to take into account later information.

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The government now has a support plan for higher education. The key elements are letting universities keep student-related grants and loans in 2020 even if they enrol too few students, funding short courses, and regulatory fee relief.

In this era of government by tweet, media report, media release and media conference the details of how this might work are lacking as of today. I will revise this post as more detail comes to hand. For now, I will focus on the broad outline and pursue my pedantic interest in the legal basis of government policy.

Commonwealth Grant Scheme

The government’s biggest higher education funding program is the Commonwealth Grant Scheme, which pays tuition subsidies of over $7 billion a year. Under the Higher Education Support Act 2003 total payments for the year cannot exceed equivalent full-time student numbers multiplied by the relevant Commonwealth contribution.

Universities are paid fortnightly based on estimates of their CGS entitlement for the year. A few days ago the University of Sydney announced that it was down 5 per cent on its domestic student target (which could include full-fee students, which I will come to below). Whether this is due to COVID-19 or because it was just losing out in a tough NSW market is not clear. A number of other universities were struggling before COVID-19 due to demographic factors.

Whatever the reason, the minister now says that universities will be paid their original estimated funding rather than their legal entitlement. This also suspends the need to meet performance funding criteria, which is sensible. Read More »

What could the government do to stabilise university finances?

Andrew Norton1 Comment

There are some pretty high figures circulating about possible university losses due to COVID-19. I have seen no supporting evidence to justify the estimates, and the top-of-the-range numbers are implausible. Nevertheless, 2018 financial data shows many institutions with thin operating margins. We have grounds for concern about how they would manage a major hit to their finances.

On the revenue side, we have actual or potential losses from international students who never arrived, international students who may have gone home, domestic students withdrawing prior to the census date, and domestic students claiming student contribution refunds and HELP remissions because their course delivery methods changed.

On the cost side, universities have had to finance quick transitions to online education for students and working at home for staff, as well as some universities offering students financial support.

This post summarises things that the government can do within existing or announced legislation to stabilise university finances. I have blogged about some of them before and will note them concisely here. Of course, other policies supported by new legislation are also possible. Read More »

HELP remissions and COVID-19 university course changes

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Last week I published a blog post on the financial dangers posed by the COVID-19 crisis starting prior to the census date for each subject. It is a critical date for universities. They get no Commonwealth or student contributions for subjects dropped prior to the census date.

As Stephen Matchett reported in Campus Morning Mail yesterday, social media talk about dropping subjects is still at high levels. One of the reasons, that unemployment income support benefits would be more generous than student benefits, seems to have been fixed in Parliament yesterday. Although I think students are better off finishing their course on schedule if they can, we should expect higher drop-outs than usual prior to the census date.

I am also hearing reports of international students heading home before the census date because of family pressure. They might also leave because they can no longer support themselves due to the collapse of the student labour market. Due to an extraordinary new power to widen social security eligibility some international students might temporarily receive benefits, but I think entitlements are too unclear to change short-term behaviour.

If these drop-outs are happening at any scale then, except for the universities on trimesters that are already past their first census date, then serious higher education financial problems are very close, as universities will have to scale back their expected Commonwealth-supported student revenue and international student fee income for the year.Read More »

What happens if a university needs bailing out?

Andrew Norton3 Comments

University finances have been in the news this year. As the travel ban on Chinese students was announced some very big financial costs were estimated – since moderated due to the third-country quarantine exception, but still estimated to be well over $1 billion, at least in temporary cash flow issues.

In worst-case COVID-19 scenarios there would be travel bans from many international student source countries, along with campus closures that could require refunds or compensating classes for affected domestic and international students.

While I doubt the worst-case scenario will become reality, the ‘rivers of gold’ era (as Simon Birmingham once described it) for university revenue is over.

Even before COVID-19 international student demand seemed to be softening, while remaining high by historical standards.

On top of this, all public universities are dealing with a decline in the real value of their bachelor-degree student funding, and some are struggling to maintain domestic student numbers due to soft demand.

Cutbacks have been reported at many universities including Wollongong, La Trobe, Sydney, Macquarie, Monash, and in the last day the University of Tasmania.

Fortunately, the universities that are most exposed to the China market are relatively wealthy. They should be able to deal with short-term liquidity issues from a mix of reduced and delayed spending, drawing on reserves and perhaps bank borrowing. But what if a university faces more serious difficulties?Read More »

Universities with good performance may still miss out on performance funding

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Last week the government released more detail about how its university performance funding scheme is to work (in the same week that the re-badged Department of Education, Skills and Employment’s administrative arrangements, showing some very dry bureaucratic humour, listed as one its responsibilities ‘reducing the burden of government regulation’).

Last week’s document confirms that the legal basis of performance funding will change from 2021. As I pointed out last year, at the moment there is performance funding but no performance fund. For 2020, all the government offers is to pay universities a bit more of their demand driven funding entitlements.

If a university’s demand driven entitlements (bachelor-degree EFTSL * the relevant funding cluster rates) don’t reach the performance funding maximum grant (2017 demand driven funding + special deals done since + population-growth based performance-contingent increment) it will not get the performance funding, or will get only part of it. Read More »

Should higher education providers have double academic freedom regulation?

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Last week the government released a new legal definition of academic freedom and freedom of speech on campus for consultation,  following a recommendation made by the French review of free speech in Australian higher education. The new legal definitions align with a model university-level policy that French supported and the education minister, Dan Tehan, has been encouraging universities to adopt. I have reservations about the wording that I have explained in another blog post. This post is a more technical one about the definition’s role in the higher education regulatory structure.

The new academic freedom definition would apply to the Higher Education Support Act 2003  (HESA) which is the funding legislation, and the Tertiary Education Quality and Standards Act 2011, which is the main academic legislation. Amendment of the TEQSA legislation, and the consequent changes to the Higher Education Threshold Standards, are the more significant.

To be registered at all by TEQSA, a higher education provider would need to have a clearly articulated higher education purpose that includes a commitment to and support for freedom of speech and academic freedom (currently ‘free intellectual inquiry’). A subsequent section places responsibility on the provider’s governing body to ‘develop and maintain an institutional environment in which freedom of speech and academic freedom is upheld and protected’ (currently ‘freedom of intellectual inquiry’).Read More »

Do students have academic freedom? (And other issues with the proposed legal definition of ‘academic freedom’)

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The Government is planning to amend the Higher Education Support Act and the Tertiary Education Quality and Standards Agency Act to strengthen campus protections of academic freedom and freedom of speech. Last week it released for consultation a new legal definition of academic freedom.

While I strongly support freedom of speech and academic freedom (and have a newly-acquired personal vested interest in academic freedom), I have reservations about the proposed definition.

The French review of freedom of speech in Australian higher education, which is the basis of the proposed amendments, recognised that freedom of speech and academic freedom are related but distinct concepts. But the proposed legal definition blurs them.Read More »

The legal basis of performance funding

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In December 2017, the Commonwealth froze maximum Commonwealth Grant scheme funding for bachelor-degree places for the next two years. In subsequent years, the maximum payment will increase in line with growth in the 18-64 year old population, conditional on universities meeting performance indicators.

Just before the 2017 announcement, I outlined its legal basis. It used university funding agreements to set the maximum amount, with the method chosen because it did not need parliamentary approval.

At least initially, performance funding will be administered via the funding agreements, which include a standard statement that should the university meet its performance targets it will be advised of a new maximum funding amount.

A drawback of this method of allocating performance funding is that there is no performance fund. The underlying demand driven funding system is still operating, and under section 33-5(5) of the Higher Education Support Act 2003 universities receive the lesser of their demand driven funding amount (bachelor-degree full-time equivalent student places times the relevant Commonwealth contribution) and their maximum funding amount.

All the Commonwealth is doing is promising universities it will pay a little more of what they would have been entitled to anyway under demand driven funding. Read More »

How could Labor make unis increase admission requirements for teaching courses?

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At the weekend, Labor announced that it would require universities to increase admission requirements for teaching students. Shadow education minister Tanya Plibersek says that:

“Labor wants the best and brightest Australians studying teaching. If universities don’t do the right thing and fix this themselves, a Labor government will make them.”

But how will a Labor government make them do it? There is no history of the Commonwealth government directly setting entry requirements for university courses. For that reason, there is no specific power in existing higher education legislation to set admission requirements.

This blog post looks at what existing powers could be used to achieve this goal.

Directly targeting lower-ATAR students

The minister can, by legislative instrument, determine that ‘a specified course of study is not one in respect of which students, or students of a specified kind, may be enrolled in units of study as Commonwealth supported students’: section 36-15 of the Higher Education Support Act 2003 (HESA 2003), emphasis added.

The legislative instrument could then specify that students with an ATAR below 80 (the figure nominated by Labor) could not be enrolled as Commonwealth supported students in teacher education. The university would then not get Commonwealth or student contributions for such students.

Such a determination would need to be made at least six months before the start of the course: section 36-15(4), HESA 2003.

In making the determination, the minister must have regard to its effect on students: section 36-15(3), HESA 2003.

A legislative instrument can be disallowed by either house of parliament, which is one potential obstacle to this method.

A determination under section 36-15 lifts the prohibition on full-fee undergraduate students: section 36-30 (1), HESA 2003. If the student is not Commonwealth supported they can only be charged a tuition fee: section 169-15, HESA 2003. This would be awkward for Labor, which came to office last time promising to abolish full-fee undergraduate places.

To ensure that the policy complied with other Labor policies and that universities did not use backdoor methods to by-pass the ban, the minister could also determine that undergraduate teaching courses are not eligible for FEE-HELP: section 104-10(2), HESA 2003. The minister must have regard to the effect on students of making such a determination. The determination can  be disallowed by either house of parliament.Read More »

When can domestic undergraduates be charged full fees?

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Revised 2/1/2024, principally to remove reference to repealed laws denying funding to students who had not successfully completed a sufficient share of subjects taken. Further updated 22/7/2025 to include reference to FEE-FREE Uni Ready places.

‘Full fees’ is a term used in Australia as an implied contrast with students who pay a student contribution, a price-capped student charge. A student contribution is usually combined with a tuition subsidy called a ‘Commonwealth contribution’. The two contributions together are the overall funding rate for a ‘Commonwealth supported student’.

‘Full fee’ means that there is no government subsidy and the student pays all the provider charges. These fees are not price capped, although there is a price floor for international students. 

A ‘full fee’ should be distinguished from an upfront fee or student contribution, which is paid directly to a higher education provider. All international and some domestic students are ineligible for a HELP student loan and therefore pay upfront.

About 6 per cent of subjects taken by domestic undergraduates are full-fee paying. The simple explanation for this is that domestic undergraduate students in public universities pay student contributions rather than full fees, while undergraduates in private universities and non-university higher education providers pay full fees. However, there are exceptions in both cases, sometimes at the unit of study (subject) level rather than the course.

In what follows, all statutory references are to the Higher Education Support Act 2003.

Entitlement to Commonwealth support at a public university

Universities have significant discretion in advising domestic students that they are Commonwealth supported: section 36-5. 

A domestic student is an Australian citizen, a New Zealand citizen, or a permanent visa holder: section 36-10(2).

Generally, domestic undergraduates enrolled in a Table A university (commonly known as public universities, although including the two Catholic universities, ACU and Notre Dame) must be enrolled as a Commonwealth supported student: section 36-30(1). Exceptions to this are discussed below. 

Once a student is a Commonwealth supported student, he or she can be charged a student contribution but cannot be charged another tuition fee: section 169-15(1).

If a student is not Commonwealth supported they must pay the tuition fee set by the provider: section 169-15(2). 

Becoming a Commonwealth supported student creates an on-going entitlement for that course, unless one of the exceptions below becomes relevant: section 36-25(1).

Read More »