tag:theconversation.com,2011:/global/topics/demand-driven-system-review-9911/articlesDemand Driven System Review – The Conversation2015-03-18T01:10:57Ztag:theconversation.com,2011:article/388952015-03-18T01:10:57Z2015-03-18T01:10:57ZDefeat of higher ed bill should ease budget pressures<p>In recent years higher education enrolments have surged. This is triggering many policy issues. It has contributed to government budget concerns. <a href="https://theconversation.com/labor-flags-higher-ed-plan-with-aim-to-reduce-attrition-38705">Labor</a> is worried about completion rates and skills mismatches. </p>
<p>The scale of growth in government-funded places can be seen in the chart below. After a boost to student numbers following the introduction of HECS in 1989, enrolments grew only gradually until rapid increases from 2008. The enrolment boom trigger was the removal, by Labor over 2010-2012, of previous controls on government-supported bachelor degree places in public universities. This is known as demand driven funding. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/75025/original/image-20150317-9214-1l0ef1t.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/75025/original/image-20150317-9214-1l0ef1t.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=413&fit=crop&dpr=1 600w, https://images.theconversation.com/files/75025/original/image-20150317-9214-1l0ef1t.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=413&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/75025/original/image-20150317-9214-1l0ef1t.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=413&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/75025/original/image-20150317-9214-1l0ef1t.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=519&fit=crop&dpr=1 754w, https://images.theconversation.com/files/75025/original/image-20150317-9214-1l0ef1t.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=519&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/75025/original/image-20150317-9214-1l0ef1t.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=519&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Commonwealth supported growth.</span>
<span class="attribution"><span class="source">Department of Education and Training</span></span>
</figcaption>
</figure>
<p>Unsurprisingly, government spending on tuition subsidies has increased significantly. They are up 40% in the five years to 2014. It was this growth that prompted the previous Labor government to announce an “efficiency dividend” cut to government spending. In <a href="http://andrewnorton.net.au/2014/09/24/julia-gillards-inside-story-on-the-demand-driven-system/">her autobiography</a>, Julia Gillard argued that this was preferable to putting back government controls on student numbers. </p>
<p>Following the recommendations of <a href="https://education.gov.au/report-review-demand-driven-funding-system">a report I wrote with David Kemp</a> on Labor’s demand driven funding system, the government decided to keep and extend it. From 2016, it proposed including students at TAFEs and private colleges in the demand driven system. This means that these students would no longer have to pay full fees.</p>
<p>Although this reform is desirable higher education policy, it is expensive in a time of tight public finances. The <a href="https://docs.education.gov.au/node/35761">2014-15 budget papers</a> predicted that full-time equivalent government-supported places would exceed 700,000 by 2017-18, up by more than 100,000 on 2013. </p>
<p>To finance this and make a contribution to overall deficit reduction, the government decided to cut average per student tuition subsidies by 20%. This proposal has now been <a href="http://www.theage.com.au/federal-politics/political-news/christopher-pyne-backs-down-on-research-funding-as-defeat-looms-for-university-deregulation-bill-20150316-1m035p.html">deferred to a later time</a>.</p>
<p><a href="http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22legislation%2Fbillhome%2Fr5396%22">With the defeat</a> of the remainder of Christopher Pyne’s higher education reform bill, the budget numbers will not look as bad. If the demand driven system is not extended, the growth in subsidised student numbers will be much lower than originally anticipated. </p>
<p>There will still be increases in public university enrolments, but these have slowed. Between 2013 and 2014, there was <a href="https://education.gov.au/undergraduate-applications-offers-and-acceptances-publications">a small decline in the number of university applicants</a>. In the <a href="https://docs.education.gov.au/node/36781">latest budget update</a>, presumably in response to new university enrolment estimates, the government revised down by about 4,000 its forecast for 2014-15 student places.</p>
<p>The defeat of fee deregulation will also reduce predicted government spending. Fee deregulation saves money when it replaces tuition subsidies, as it would have with the proposed 20% cut. But beyond that it is an expense. This is because HELP loans have interest subsidies and because the budget papers predict that 23% of the money lent will not be repaid. </p>
<p>So overall the collapse of the broader Pyne reform agenda has reduced the chance that Labor’s original demand driven model will be deemed financially unsustainable. However, without some reduction in per student subsidies, I am not sure it is entirely safe. As under Labor as revealed in Gillard’s autobiography, there will be internal government pressure to deliver financial savings. </p>
<p>My view is that some cuts to tuition subsidies are fair overall. Measures that restrict access to Commonwealth-supported student places put all the financial cost of curtailing government spending on a relatively small number of people. These are the prospective students who miss out entirely on higher education, or are forced into full-fee places in private colleges and universities. </p>
<p>But with the Senate likely to obstruct reductions in per student subsidies, the government’s budget options are limited. If they are determined to save money, they have to use methods that do not require parliamentary approval. </p>
<p>To slow spending on the demand driven system, the Coalition could use <a href="https://docs.education.gov.au/node/34675">university funding agreements</a>. These are agreements that every university has to sign with the government before getting student funding. While these agreements cannot be used to reduce spending, they can freeze it from 2017. <a href="https://docs.education.gov.au/node/35761">The budget papers</a> show this was the government’s financial goal all along - to keep tuition subsidy spending stable. </p>
<p>If announced soon, this is likely to have effects before 2017. Universities would reduce commencing student numbers to avoid having “unfunded” enrolments in 2017. This would be explained as a pause of demand driven funding, not a repeal.</p>
<p>From Labor with Senator Kim Carr as the shadow minister, the challenge to the demand driven system is as much ideological as financial. Although denying that they would re-impose caps on student numbers, Labor is moving away from this Gillard legacy. </p>
<p>In <a href="http://www.senatorkimcarr.com/labor_s_vision_for_a_fair_sustainable_university_system">a speech last week to the Universities Australia conference</a>, Senator Carr argued that low completion rates for some groups of students and imbalances between supply and demand for some graduates justified more government intervention. </p>
<p>The current legal framework for higher education isn’t well designed for the micro-management this approach implies. But if there is a change in government then new rules, like the cruder funding freeze currently possible, may be used to reduce spending without cutting per student funding rates. </p>
<p>From <a href="https://education.gov.au/report-review-demand-driven-funding-system">my work on demand driven funding</a>, I think it is not perfect but the best system we are likely to get. With modest cuts to per student tuition subsidies, it should be sustainable for the foreseeable future.</p><img src="https://counter.theconversation.com/content/38895/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Norton was appointed by the Abbott government as a co-reviewer of the demand driven system. The report was published in April 2014.</span></em></p>In recent years higher education enrolments have surged. This is triggering many policy issues including ballooning student debt.Andrew Norton, Program Director, Higher Education , Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/364782015-01-20T19:25:06Z2015-01-20T19:25:06ZThe ATAR debate: students need to be able to finish uni, not just start it<figure><img src="https://images.theconversation.com/files/69486/original/image-20150120-24465-jz3g3s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Students with low ATARs are less likely to graduate from university, but very likely to leave with debt. So is it ethical to give places to all-comers?</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Controversies surrounding university courses with <a href="http://www.theaustralian.com.au/higher-education/universities-ramp-up-offers-to-lowest-tier/story-e6frgcjx-1227188986104">low ATAR admission requirements</a> have become a January ritual. Once universities make their offers to potential students, debates start over whether widening opportunities to attend university are a sign of declining standards in Australia’s higher education system.</p>
<p><a href="https://docs.education.gov.au/node/36743">Statistics released last week</a> show a steady increase in offers to lower-ATAR university applicants. In 2010, fewer than 2000 applicants with an ATAR below 50 received any university offer. By 2014, more than 7000 such applicants received an offer. If <a href="http://www.theage.com.au/victoria/firstround-vtac-offers-decline-as-more-students-apply-direct-to-uni-20150119-12tawz.html">early reports of the 2015 offer round</a> are a guide, that number will grow this year.</p>
<p>The policy trigger for the latest decline in ATARs was the full lifting in 2012 of previous caps on the number of undergraduate university places. While some universities set minimum ATARs based on academic requirements, most ATAR cut-offs reflect supply and demand. In this academic auction, the price of entry has dropped because universities offer more places.</p>
<p>Sometimes this trend is framed as evidence of falling standards. The <a href="https://www.ncsehe.edu.au/truth-about-atars/">main response to this</a> is that what matters is how well a student does at the end of their course, not the start. Minimum ATARs would deny opportunities to people who could successfully complete a course.</p>
<p>Last summer, I worked with David Kemp on a policy review of the <a href="http://education.gov.au/report-review-demand-driven-funding-system">demand driven funding system</a> that led to these decreasing ATARs. This was one of the most difficult issues in the review. While we rejected proposals for a minimum ATAR, we also found considerable evidence that there is a problem.</p>
<p>A study tracking students who started their courses in 2005 found that only a little more than half of students <a href="https://docs.education.gov.au/system/files/doc/other/completion_rates_of_domestic_bachelor_students_-_a_cohort_analysis_1.pdf">with ATARs of 59 or below</a> had completed a degree by the end of 2012. Some were still enrolled, but the vast majority of the rest had dropped out. By comparison, for students in the top ATAR ranges completion rates were 90% or more. There is a clear pattern in the data: the lower the ATAR, the lower the completion rate.</p>
<p><a href="https://docs.education.gov.au/system/files/doc/other/review_of_the_demand_driven_funding_system_report_for_the_website.pdf">Shorter-term attrition data</a> gives little reason to believe that things have improved for later low-ATAR students. Nearly a quarter of students with ATARs below 50 are not re-enrolling for their second year, although some will come back after time off. </p>
<p>The dilemma here is not so much opportunity versus excellence as opportunity versus likely outcomes. We do not want to deny people a potentially life-changing chance at a degree and more interesting work. The argument has an equity angle, as students from disadvantaged backgrounds are over-represented among lower-ATAR school leavers. But nor do we want to waste a student’s time on a course that has a high risk of not leading to a degree, but a near certainty of leaving them with student debt. </p>
<h2>So how do we fix it?</h2>
<p>The first step to improved completions is better decision-making by prospective students. It would be wrong to think that lower-ATAR applicants are naive about their prospects. More than half of the applicants with an ATAR of 50 or less who receive an offer <a href="https://docs.education.gov.au/node/36745">reject it</a>. </p>
<p>But with data on the high rate of non-completion hidden in obscure government reports, people who do accept their offer may not realise the risks they are taking. With better information, they may make different decisions.</p>
<p>The second step is making universities more accountable for their admission policies. In theory, <a href="http://www.comlaw.gov.au/Details/F2013C00169/Html/Text#_Toc330548949">regulation of admissions</a> has been tightened in recent years. Universities need to be able to prove that they: </p>
<blockquote>
<p>… ensure that students have adequate prior knowledge and skills to undertake the course of study successfully.</p>
</blockquote>
<p>They are also supposed to have measures in place to identify and assist students who are struggling academically. In practice, it is not clear how the <a href="http://www.teqsa.gov.au/">Tertiary Education Quality and Standards Agency</a> is enforcing these requirements. </p>
<p>Public reporting on attrition rates by basis of admission at each university, rather than just the <a href="https://docs.education.gov.au/node/35983">aggregate numbers that are published now</a>, would help. It would inform potential students, and if the rates are poor this could prompt regulatory action. Universities shown to have effective programs would get public credit for their success. </p>
<p>The third step is to think through our institutional provision of post-secondary education. One recommendation of the <a href="http://education.gov.au/report-review-demand-driven-funding-system">demand driven review final report</a> was to expand the use of pathway colleges. These colleges typically offer the academic equivalent of first-year university, but taught differently. They aim to build some of the study skills that led to lower ATARs, and without which students are likely to fail at university. </p>
<p>The government <a href="http://education.gov.au/other-higher-education-institutions">accepted this recommendation</a>, but the controversies surrounding <a href="https://theconversation.com/a-few-embrace-higher-ed-changes-but-many-more-have-reservations-29043">fees and funding cuts</a> look likely to sink the entire higher education reform package. </p>
<p>While institutional reform will probably have to wait for another time, improved information could be done fairly easily. It does not have to go to the Senate and would not cost very much money. It would save money if more lower-ATAR applicants decided not to accept their offers.</p>
<p>Reform needs to be geared towards not just increasing enrolments, but to what is in the best interests of students and prospective students. We want to give them a chance to complete a degree, not just to start one.</p><img src="https://counter.theconversation.com/content/36478/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Norton was a government-appointed co-reviewer of the demand driven system. </span></em></p>Controversies surrounding university courses with low ATAR admission requirements have become a January ritual. Once universities make their offers to potential students, debates start over whether widening…Andrew Norton, Program Director, Higher Education , Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/261582014-05-01T02:38:16Z2014-05-01T02:38:16ZThe university funding challenge: competition vs the public good<figure><img src="https://images.theconversation.com/files/47496/original/pmmsh57b-1398908955.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Vice-Chancellor of Southern Cross University Peter Lee says universities have to consider their social obligations when looking to raise student fees.</span> <span class="attribution"><span class="source">Supplied</span></span></figcaption></figure><p>In tackling the challenge of funding universities, we constantly confront a particular conundrum. Universities are hybrid organisations, straddling the public and private spheres. We are creatures of (mainly) state legislation, substantially (but not wholly) supported by Commonwealth funding, often engaging in competitive behaviour. </p>
<p>We compete with one another (and globally) for the best students, for excellence in research, for the most qualified staff and, ultimately, for status. Nevertheless, when eyeing off one another’s TV adverts, or pondering a fresh branding exercise, we mustn’t undervalue our more traditional “public good” role.</p>
<p>Southern Cross University, for example, is legislatively required to provide “facilities for education and research of university standard, having particular regard to the needs of the north coast” (of NSW). This is more than a mere legalism - we take these teaching and research obligations seriously. Moreover, serving smaller, regional campuses is neither cheap nor easy. </p>
<p>In turn, there has been public investment in SCU’s activities; we’ve had two decades of this support, other universities many more. The point remains: when debating funding options for universities, this contribution by Australians – in recognition of universities as a “public good” - should not be ignored.</p>
<h2>Who should pay, and how much?</h2>
<p>Of course, students (or their families) contribute substantially to their degrees. Bachelor students pay between $6000 and $10,000 a year for their government-supported place. Depending on the degree, universities get around a third to just over three-quarters of their funding for each place from the student themselves.</p>
<p>Those pointing to the United States as an exemplar in flexible funding and diversity do not mention that Australia is ranked just behind the US in terms of the share of private expenditure on tertiary institutions. According to <a href="http://www.oecd.org/australia/educationataglance2013-countrynotesandkeyfacttables.htm">2013 OECD figures</a>, the US was ranked fifth and Australia sixth (out of 30).</p>
<p>Students clearly get a private benefit from their degrees so it remains appropriate that they make a personal contribution. And there is a case for looking at the mix of funding for particular disciplines. Maybe Australian students can even pay “more” for their studies across the board. But how much “more” is contentious.</p>
<p>Students’ pockets aren’t limitless and modern economies such as Australia’s need well-qualified graduates, with bachelor and increasingly, post-graduate qualifications, not burdened with debt. We don’t want to live in a society where individuals dismiss their personal capacity to do a university degree because of cost or background - because they are Indigenous, mature-aged, or from a small rural town, or because no-one in their family has ever gone to university before. University is not for everyone: but an individual’s background and their capacity to pay should never be a reason why not.</p>
<p>So, if government wants to go down the path to “deregulate” (read “increase”) student fees, we must be cognisant of the impact on those who are more price-sensitive. A glib reliance on “scholarships” does not really suffice: how many? To whom? How much?</p>
<h2>Student loans still need to be repaid</h2>
<p>It is noticeable that since the release of <a href="http://www.education.gov.au/report-review-demand-driven-funding-system">the Kemp-Norton review</a>, much of the commentary about fee deregulation is being debated almost as a given: as government can’t (won’t) provide, we have to turn to students themselves. And as they can rely on the HELP loan scheme, then, somehow, it’s not a “real” impost. But this is illusionary.</p>
<p>Indeed, it might be arguable that if a university wants to charge whatever fee it chooses for a sub- and bachelor degree, it should be able to do so. (Although it remains to be seen whether this just means that fewer students then opt for fee-paying post-graduate level studies, to avoid adding to their university debt). My issue is the presumption that there can also be a continued call on public funds to subsidise this fee, either through the receipt of the Commonwealth contribution or even via a HELP loan.</p>
<p>If you want to drive diversity through competition on fees, fine, but let’s make sure we’re not just creating a greater burden for taxpayers through excessive growth of HELP debt. Putting an annual or total cap on loans is one option, as is giving universities the capacity to charge above the loan cap. Getting these policy levers right, so that they act to both drive diversity and give universities a more sustainable funding footing, is no easy task.</p>
<p>A loan cap set too high will see the HELP debt balloon out. Too low, and universities will continue to be financially strangled, bunkering down just to survive. This does not help diversity, nor does it augur well for any ambitions to improve Australia’s international rankings.</p>
<p>A loan cap that is “mid-way” may work – but who could say what this mid-way mark might be? Experience shows that most (all?) universities will raise their fee to the maximum amount as soon as they can.</p>
<p>We shouldn’t assume the HELP loan scheme is set in stone. Fifteen years ago, former minister Kemp wanted to replace the then-HECS scheme with a universal loan scheme, coupled with a real rate of interest. Assurances about maintaining the HELP scheme might alleviate some of the disquiet about deregulating the fees themselves.</p>
<p>Another option is to consider a completely different tack. For most universities, the focus on student fees is largely driven by inadequate research funding: neither the research component of the Commonwealth-supported teaching place nor the amount funded via a successful competitive research grant fully funds the actual research activity. One possibility is to think about fully funding research, so that the more predatory behaviour for student enrolments is minimised.</p>
<h2>Frame policy for Australian conditions</h2>
<p>A lot more policy work needs to happen before these decisions can be made.</p>
<p>In so doing, rather than fixate on the purported advantages of the US or the UK, we should be mindful of the resilience of the Australian system. We have a system of universities servicing national and local interests across a relatively small and dispersed population and, in different ways, successfully reaching out globally. Importantly, our system brings a real research presence to many communities beyond capital cities. We must protect this legacy.</p>
<p>I want all Australian students - and indeed, international students - to have a quality higher education experience, reflecting Australia’s world-class education system. A first-in-family student embarking on a nursing degree, intending to live and work in a country town after graduation, is as deserving of a quality learning experience as a highly gifted undergraduate student who intends to pursue a PhD and an international research career.</p>
<p>Australia needs to be smarter in the way we use our public resources and assets. But in being smarter, we also need to be mindful of the impact of policy decisions on individuals and the way they exercise choice in the opportunities they see before them. Most of all, we need to avoid subsidising elitism at the expense of a “fair go”.</p><img src="https://counter.theconversation.com/content/26158/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Lee does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>In tackling the challenge of funding universities, we constantly confront a particular conundrum. Universities are hybrid organisations, straddling the public and private spheres. We are creatures of (mainly…Peter Lee, Vice-Chancellor, Southern Cross UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/257522014-04-22T20:04:59Z2014-04-22T20:04:59ZShould universities fear non-university providers?<figure><img src="https://images.theconversation.com/files/46762/original/64sq7762-1398127029.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The distinction between public and private universities isn't always black and white; should the government just fund everyone? </span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/downloading_tips.mhtml?code=&id=133423097&size=medium&image_format=jpg&method=download&super_url=http%3A%2F%2Fdownload.shutterstock.com%2Fgatekeeper%2FW3siZSI6MTM5ODE1NTc2NywiYyI6Il9waG90b19zZXNzaW9uX2lkIiwiZGMiOiJpZGxfMTMzNDIzMDk3IiwicCI6InYxfDEwMTI3NTg4fDEzMzQyMzA5NyIsImsiOiJwaG90by8xMzM0MjMwOTcvbWVkaXVtLmpwZyIsIm0iOiIxIiwiZCI6InNodXR0ZXJzdG9jay1tZWRpYSJ9LCJCMi92OEkrZXFKTTg4Nk8wNkxJVzcwZmRncG8iXQ%2Fshutterstock_133423097.jpg&racksite_id=ny&chosen_subscription=redownload_standard&license=standard&src=X4ea08PWey75-Z1XQUN1Ag-1-8">Shutterstock</a></span></figcaption></figure><p>The release of the <a href="http://www.education.gov.au/report-review-demand-driven-funding-system">Review of the Demand Driven Funding System</a> by David Kemp and Andrew Norton has triggered significant interest in non-university higher education providers. </p>
<p>The review recommended that all higher education providers, including public universities and non-university higher education providers, be eligible for Commonwealth-supported places subject to approval by the Tertiary Education Quality and Standards Agency (TEQSA).</p>
<h2>Recommendations get mixed response</h2>
<p>La Trobe University’s <a href="https://submissions.deewr.gov.au/Forms/demand-driven-funding-system/pages/item?SubmissionID=DFS1400064">submission to the review</a> was one of the few university-based submissions to support the extension of Commonwealth support to non-university providers.</p>
<blockquote>
<p>La Trobe’s central proposition within this submission is that student entitlements to government support and subsidy should be made available to all elements of the higher education system, underpinned by appropriate levels of regulation and quality assurance, and in a fiscally sustainable manner.</p>
</blockquote>
<p>This position was adopted because we believed competition would drive quality, innovation and efficiency. It would enable the higher education sector to service a greater diversity of need, including the needs of Australian universities. </p>
<p>However, not all representatives of public universities have embraced the prospect of greater competition for funding and students.</p>
<p>Universities Australia <a href="https://www.universitiesaustralia.edu.au/news/media-releases/International-reputation-of-Australia-s-higher-education-system-must-be-maintained">issued a statement</a> calling for “a cautious approach to be exercised in considering its recommendation to extend public funding to for-profit non-university higher education providers”. Providing for-profit providers with access to public funding could create a “substantial risk to the reputation of the entire sector”, it argued.</p>
<p>The vice-chancellor of Australian Catholic University, Professor Greg Craven, <a href="http://www.abc.net.au/pm/content/2014/s3986201.htm">questioned among other things</a>:</p>
<blockquote>
<p>… why should you be funded as a university if you’re not a university?</p>
</blockquote>
<p>The University of Adelaide’s vice-chancellor, Professor Warren Bebbington, has written that <a href="http://www.timeshighereducation.co.uk/comment/opinion/australia-must-ignore-vested-interests-and-seize-chance-for-change/2012778.article">Australia must ignore vested interests and seize the chance for change</a>. He highlighted the positives for Australia if we were to emulate the diversity of the American system.</p>
<p>Universities Australia are right in recommending a cautious approach to government funding of non-university providers. Australia has little to fear from non-university providers, <em>if</em> we maintain clear standards and a focused regulator. There is more to fear from maintaining a path that does not cultivate institutional diversity.</p>
<h2>What exactly are non-university providers?</h2>
<p>One might assume from the way the debate is being framed that universities and non-university providers are clearly distinguished along public/private and for-profit/not-for-profit lines. As with many aspects of higher education, the reality is complex and riddled with anomalies.</p>
<p>The <a href="http://www.teqsa.gov.au/national-register/search/provider">TEQSA Provider Register</a> lists 173 higher education providers, of which 43 are universities. Everything else is a non-university higher-education provider. The enrolment share for non-university providers is very small, a little over 5%.</p>
<p>Some non-university providers aspire to be universities. They are committed to one day demonstrating teaching and research excellence that will meet the Higher Education Standards. </p>
<p>Some non-university providers are commercial entities of public universities, blurring the boundary between public and private. Many universities work in partnership with non-university providers as they deliver university programs through franchising arrangements. </p>
<p>Some non-university providers target specific occupational needs in areas such as health or business. Other non-university providers appeal to individual interests such as religion or jazz music. This type generally occupies niche areas where universities do not compete.</p>
<p>Analysing the performance of public universities is reasonably straightforward, with <a href="http://www.highereducationstatistics.deewr.gov.au/">uCube</a> enabling ready access to data. Analysis of non-university provider performance is more challenging. Higher education public data sets group “private providers” together, restricting data access where sample sizes are small, or ignoring this category altogether. </p>
<h2>Implications of keeping the non-university sector small</h2>
<p>Universities are left free to compete solely with each other in a system that <a href="https://submissions.deewr.gov.au/Forms/demand-driven-funding-system/pages/item?SubmissionID=DFS1400079">Kaplan Australia’s submission</a> characterised as “<em>public sector supply driven</em>”. </p>
<p>There is <a href="http://www.lhmartininstitute.edu.au/research-and-projects/projects/35-australian-institution-profiles">great diversity</a> across our public universities. However, for almost all universities, the explicit strategy is to teach more students and undertake more research. Teaching income is often used to cross-subsidise research or other strategic priorities. </p>
<p>Australia undoubtedly needs more graduates, more research and more innovation. The review prompts some consideration of whether keeping the non-university provider sector small is an efficient and effective way to meet Australia’s teaching and research needs. </p>
<h2>What next for higher education providers?</h2>
<p>If review recommendations are accepted, we might see a sector where a greater proportion of students choose non-university providers focused explicitly on high quality or more efficient teaching. </p>
<p>Changes in higher education funding policy may also allow institutions to pursue a research focus, without having to accommodate ever-increasing numbers of students. Some universities would continue on their current growth trajectory, but this could be by choice rather than necessity.</p>
<p>At the very least, the review has put a spotlight on an important aspect of Australian higher education. It provides impetus for more regulatory oversight by TEQSA of providers and their courses. </p>
<p>Critical policy issues in extending public subsidies to non-university providers relate to funding, the refinement of Higher Education Standards and the role of TEQSA.</p><img src="https://counter.theconversation.com/content/25752/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Matt Brett does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The release of the Review of the Demand Driven Funding System by David Kemp and Andrew Norton has triggered significant interest in non-university higher education providers. The review recommended that…Matt Brett, Manager Higher Education Policy, La Trobe UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/230722014-04-14T04:35:51Z2014-04-14T04:35:51ZReview backs demand-driven model, but how will we pay for it?<p>The government has released its review on the success of the demand-driven system of higher education funding, implemented by the former Labor government. The demand-driven system uncapped Commonwealth supported university places, and instead implemented a supply-and-demand model of higher education funding. Gwilym Croucher has provided a most useful <a href="https://theconversation.com/demand-driven-university-funding-system-should-stay-25574">summary</a> of the main proposals of the <a href="https://education.gov.au/news/review-demand-driven-funding-system-released">final report of the review of the demand-driven funding system</a> by former education minister David Kemp and his former adviser and active <a href="https://theconversation.com/profiles/andrew-norton-3049/articles">Conversation</a> contributor Andrew Norton. </p>
<p>One issue he didn’t discuss in the limited space available was how the reviewers responded to the term of reference asking them to “recommend possible areas for improvement to ensure that the system … is fiscally sustainable”. This has been a concern of people who might otherwise support the demand-driven system.</p>
<p>Some object that the demand-driven system is maintained at the expense of cuts in other higher education spending. Both Labor and the Coalition have proposed this while in government (but each has opposed while in opposition!). Others believe that spending on increasing student access should be a lower priority than increasing spending on research.</p>
<p>The demand-driven system increases two lines of government spending, and Kemp and Norton propose two corresponding revenue measures. The biggest increase in government spending resulting from removing caps on bachelor places at public universities has been in the government subsidy for each bachelor place. The review found this increased from $4.1 billion in 2009 (before enrolment caps were relaxed) to $6.1 billion in 2013 and estimates it will climb to $7.2 billion by 2016-17.</p>
<p>The reviewers found that the fiscal sustainability of the demand-driven system and university revenues can be most equitably secured by cutting government subsidies and increasing student tuition fees by a corresponding amount, although they don’t express it so directly. Norton presents his full argument for changing the balance in course financing from government subsidies to student fees in his report <a href="http://grattan.edu.au/publications/reports/post/graduate-winners-assessing-the-public-and-private-benefits-of-higher-education/">Graduate Winners</a> for the Grattan Institute. He also discussed this in <a href="https://theconversation.com/university-subsidies-do-graduate-winners-need-another-prize-8678">The Conversation.</a></p>
<p>The other major increased cost of the demand-driven system has been in HELP loans that students take out to pay their tuition fees. The main costs are in the subsidised interest rate the government charges on loans and debts not expected to be repaid. The budget papers estimate these costs will be $1.5 billion in 2014-15 increasing to $1.75 billion in 2016-17, although not all this increase will be due to the demand-driven system.</p>
<p>Kemp and Norton find that a loan fee could help ensure the fiscal sustainability of the demand-driven system. The government charges a loan fee of 25% for all students enrolled in an undergraduate place not subsidised by the government. For historical reasons it does not charge a loan fee for postgraduate places not subsidised by the government nor for undergraduate places subsidised by the government.</p>
<p>Kemp and Norton argue that all student borrowers should be charged the same loan fee, but don’t say what it should be. However, their example is of the student contribution for a year of engineering, which is $8,613. A loan fee would be added to the loan being taken out. If the loan fee were 10%, the resulting debt would be $9,474.</p>
<p>The report notes that a major review of student loans would consider a wide range of issues. Many of these were considered by Norton in his report for the Grattan Institute on <a href="http://grattan.edu.au/publications/reports/post/doubtful-debt-the-rising-cost-of-student-loans/">Doubtful Debt</a>, which he also discussed in <a href="https://theconversation.com/student-debt-costs-are-an-obstacle-to-new-student-loans-25254">The Conversation.</a></p>
<p>Norton’s main proposal in that report is to remove the anomaly whereby HELP debts, unlike all other government and private debts, are not recovered from deceased estates. Norton proposes asset-contingent HELP repayment for estates over $100,000.</p>
<p>Norton also considers debts of former students who work overseas. This is a very small problem for Australia since most of the modest number of former students who go overseas return after a few years, merely deferring their loan repayments for that time. However, for some reason this annoys some analysts. Norton proposes that former students be required to make a minimum annual payment of $2,100 while overseas.</p>
<p>A more elegant proposal has been made by Peter Bentley, a research fellow at the LH Martin Institute, in one of his several astute comments on The Conversation. Bentley proposes that <a href="https://theconversation.com/chasing-unpaid-student-loans-could-save-government-800m-25321#comment_353344">the interest subsidy on debt be removed during years where debtors are not residents in Australia</a>. The Australian Tax Office could just add interest to the debts of all former students each year for which they do not file a tax return in Australia.</p>
<p>Unfortunately it is still necessary to reinforce that Australia’s higher education finance challenge is not due to high government spending. The OECD reports in <a href="http://www.oecd.org/edu/eag.htm">Education at a Glance</a> that Australian public expenditure on tertiary education is only 0.8% of gross domestic product, far below the OECD average of 1.1%.</p>
<p>Contrary to the overwhelmingly dominant discourse in Australia, the core issue in Australian public finance is not spending but revenue: tax is only 26.5% of GDP in Australia, the fifth lowest in the OECD, and <a href="http://www.oecd-ilibrary.org/taxation/total-tax-revenue20758510-table2">way below the OECD average of 34.1%</a>.</p><img src="https://counter.theconversation.com/content/23072/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gavin Moodie is an adjunct professor and former principal policy adviser at RMIT, which would benefit from a continuation of the demand driven system.</span></em></p>The government has released its review on the success of the demand-driven system of higher education funding, implemented by the former Labor government. The demand-driven system uncapped Commonwealth…Gavin Moodie, Adjunct professor, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/230232014-04-14T02:28:00Z2014-04-14T02:28:00ZDemand-driven system review: experts respond<figure><img src="https://images.theconversation.com/files/46277/original/48q2wxn8-1397430360.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The government should keep the demand-driven system of university funding, the review found, but what do the experts say?</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/downloading_tips.mhtml?code=&id=115290760&size=medium&image_format=jpg&method=download&super_url=http%3A%2F%2Fdownload.shutterstock.com%2Fgatekeeper%2FW3siZSI6MTM5NzQ1OTEzMiwiYyI6Il9waG90b19zZXNzaW9uX2lkIiwiZGMiOiJpZGxfMTE1MjkwNzYwIiwicCI6InYxfDEwMTI3NTg4fDExNTI5MDc2MCIsImsiOiJwaG90by8xMTUyOTA3NjAvbWVkaXVtLmpwZyIsIm0iOiIxIiwiZCI6InNodXR0ZXJzdG9jay1tZWRpYSJ9LCJwVWZ2Sk02L1dEOXhxQlhPTmJKUk05SWQrSE0iXQ%2Fshutterstock_115290760.jpg&racksite_id=ny&chosen_subscription=1&license=standard&src=E2A7EXW5psbXNhKcTlpiSw-1-18">Shutterstock</a></span></figcaption></figure><p>The Federal Government has released a <a href="http://www.education.gov.au/report-review-demand-driven-funding-system">review</a> into the demand-driven system of higher education funding implemented by the Labor government. The review, undertaken by David Kemp and Andrew Norton, largely supports the system, which removed caps from the number of Commonwealth supported university places offered. Education Minister Christopher Pyne will now prepare a response to the 17 recommendations, but first, here’s what the experts say about the review’s findings and recommendations.</p>
<hr>
<p><strong>Hamish Coates, Centre for the Study of Higher Education</strong></p>
<p>Rubber band stretched white, then released, or stretched again? Can Australian higher education improve by jointly improving size and quality, or are shifts in price and productivity required? These basic principles, among others, were tackled in a review just released of the ‘national demand-driven funding system’ introduced by the Gillard Government in 2012, though with policy tentacles dating back to 2009.</p>
<p>Australia needs to grow its higher education system to compete academically and financially, but quality is important. What is really needed is growth in the productivity of learning, teaching and institutional management. The shift to a ‘demand-driven system’ was perhaps the major policy reform in the last decade to expand and diversify higher education. Did it work?</p>
<p>The review concludes, broadly, that it did. In summary, the review concludes the “there is no persuasive case for returning to the ‘capped’ system, and that the demand driven system should be retained, expanded and improved”. This is a major finding from two eminent reviewers. Of course, however, funding education is a matter which touches lots, and is never straightforward.</p>
<p>For instance, many of Australia’s university applicants still hail from schools and apply based on a single achievement rank. Admitting more students, therefore, means taking lower-ranked students. The report concludes rightly (drawing on prior research) that students with a lower rank on entry can still perform well, but the risks of dropout and poor performance are magnified, as is the need for professional individual support. While informed, the analysis of student outcomes is necessarily constrained, mainly due to data limitations. In any case, to help students not fail and ensure quality education outcomes there remains a need for ongoing improvement. Importantly, the review concludes that the demand-driven system spurred many education innovations, often involving technology. Over time, it will be important to see if these go merely to efficiency, or to productivity.</p>
<p>The review suggests that idiosyncrasies of the baseline policy (plus revisions) be addressed, by extending the funding model to Australia’s 130 or so non-university providers of higher education, and by extending the model in prudent ways to the qualifications below and above the bachelor degree. From certain angles this all makes conceptual sense, though perplexing contexts many impede implementation. The extension of public funds to private providers is controversial, for instance, as it further dilutes funds available to universities and at the cost of increasing per student funding. Crucially, the review sidesteps around any recommendation of price deregulation. In a politically expected move, the review recommends the removal of the Gillard Government’s population and disadvantaged group attainment targets—unlikely after five years to shape institutional or individual behaviour, and symbolic of a new perspective on excellent and equity.</p>
<p>Reviews such as this are an important means of guiding the evaluation and formation of public policy. Of course, it remains unclear if the Abbott Government will accept any of the findings or recommendations, and what if any policy will be initiated in response. Minister Pyne has yet to release a response. The mid-May Federal Budget will shed short-term light on this matter.</p>
<hr>
<p><strong>Tim Pitman, National Centre for Student Equity in Higher Education</strong></p>
<p>The most significant aspect of the report is that it not only supports maintaining the demand-driven system, but extending it to sub-bachelor places, private providers and the vocational sector. It also recommends removing caps on postgraduate courses that offer community benefit, for example health degrees. Overall, this will help provide access and opportunity for a wide range of students. The review has confirmed that for some students, pathway programs provide the best preparation for university study and extending access to these places will help increase their chances of success, rather than enrolling directly into a bachelor degree. </p>
<p>The reviewers also confirm that quality has been maintained within the system despite its significant expansion. Overall, attrition rates are going down, which is a sign that the system is improving. However, the report recommends dropping enrolment share targets for low socio-economic status students, which is concerning. The most likely outcome of this will be that even if overall access for disadvantaged students does increase, it will do so even more unevenly across the sector than it currently is. Put simply, many disadvantaged students will find that access to higher education will remain limited to certain courses at certain universities. For example, the Group of Eight has been vocal about wanting the right to opt-out of Commonwealth supported places and charge full fees for some of their courses. This would make their universities less, not more accessible. </p>
<p>The report also finds that an increase in maximum student contributions is one way in which the cost to the government could be reduced. It is important to note that the report did not go so far as to make this a recommendation. A fairer way might be to introduce means-testing and require pay-as-you-go for those students most able to do so. This could significantly reduce future bad debt, without any additional cost to students. Overall, the report’s recommendations rightfully have been well received by the sector - but which of the recommendations will the Government adopt?</p>
<hr>
<p><strong>Geoff Sharrock, The University of Melbourne</strong></p>
<p>The Kemp-Norton report is very informative, incisive and lucidly explained. It provides a good basis for evidence-based policy. It’s the kind of report we’ve come to expect from Andrew Norton, who, if he had a pop band would probably call it Fundamental As Anything.</p>
<p>The report gives the uncapped, demand driven system a very positive report card on key questions of widening access, lifting course quality and encouraging innovation. It recommends against reimposing enrolment caps on Commonwealth supported undergraduate bachelor-level degree places (CSPs), a view that the sector will welcome. It proposes to extend the demand driven system of publicly subsidised places to a wider range of higher education providers, to put them on a more level playing field with public universities. It also proposes to extend the demand driven approach to sub-bachelor qualifications, which are growing and important for student access and attainment at the bachelor level.</p>
<p>In the postgraduate space it recommends removing current caps on CSPs for fields such as nursing, where there is a combination of community benefit, skills shortage and modest earnings; but not for fields where full-fee demand is strong and there is no labour market shortage, such as law. Several of the recommendations are designed to remove anomalies, such as which institutions are eligible for public subsidy for their domestic students, and when domestic students pay different fees in the same courses.</p>
<p>I don’t find too many things to disagree with in this report, but others will. The more controversial suggestions, which don’t appear as firm recommendations, go to how the government might finance the higher cost of extending the demand driven system. Along with the proposals in Andrew Norton’s recent <a href="http://grattan.edu.au/static/files/assets/dc751829/809-doubtful-debt.pdf">Doubtful Debt report</a>, which included recovering HELP debts from deceased estates and overseas residents, this review suggests a loan fee for HELP loans (of say 10 per cent), to be added to the HELP debt, which students would repay at the same rate, but for longer. This would help offset the government’s carrying cost of HELP loans, which are already $30 billion and rising, and currently attract zero real interest.</p>
<p>Another suggestion in the report is to reduce the direct public subsidy rates for CSPs (which the report notes will cost the government over $6 billion this year) and raise the student contribution rates by the same amount, to maintain stable total funding rates for courses and institutions. <a href="http://www.lhmartininstitute.edu.au/insights-blog/2014/04/176-demand-driven-funding-review-debate-a-users-guide">The report offers plenty of food for thought</a> on the longer term design and sustainability of the system.</p>
<hr>
<p><strong>Conor King, La Trobe University</strong></p>
<p>University funding transcends the standard political divide to create a different split: between those who support consumer choice and the use of market mechanisms to achieve wide ranging access, whether to drive productivity and encouraged individual achievement or reduce social inequities; and those who prefer universities to be highly selective for the brightest and those with the right backgrounds.</p>
<p>The introduction of the demand driven funding system in 2009 highlighted this difference. It supports student choice, creates more of a market, and acts against discrimination on the grounds of superior prior academic performance.</p>
<p>The Kemp Norton review of its achievement confirms that the system is working well to give all Australians capable and interested in university education that opportunity. Recent data indicates 48% of students are the first generation of their family to access university, with a startling difference between the older universities with far fewer such students and those established since the mid 1960s.</p>
<p>The report addresses important long-term questions and more immediate needs for change.</p>
<p>Of the latter it rightly recommends including pre-bachelor qualifications within the demand driven system. This will give universities and students the flexibility to choose between initial foundation qualifications and immediate entry to bachelor study.</p>
<p>The approach to the postgraduate places is less convincing. More work is required to address the problem of the current badly structured mix of funded and fee based places for postgraduate qualifications. The Report’s recommendation to restrict funded places to a small set of course areas plus an arbitrary set of ‘legacy’ courses is not a viable solution. The problem of The University of Melbourne’s graduate degrees is considerable. No-one wants Melbourne to unpick its model but the funding that goes with it should not be a special favour but part of a coherent arrangement.</p>
<p>The big long-term change is the logical extension of funding to all higher education providers that wish to be subject to the full Commonwealth regulatory system. Already the system happily includes the non-public Australian Catholic University. The issue is whether the other providers can be trusted to use it well. The report rightly insists that any extension must be on the same terms as apply to universities where all undergraduate places are funded and regulated. Additional providers will not undermine universities but provide additional flexibility to meet short term needs.</p>
<p>Finally the underlying funding questions remain critical. As the report says “we do not recommend measures leading to a reduction in total university income per student” but it does set the grounds for a change in the relative balance of government and student contribution. That will be the focus for debate for some time yet.</p><img src="https://counter.theconversation.com/content/23023/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Conor King is Executive Director for the Innovative Research Universities</span></em></p><p class="fine-print"><em><span>Geoff Sharrock is a Program Director at the L H Martin Institute, at the University of Melbourne. These bodies rely on public funding, so the author may be perceived as having a potential conflict of interest in debates on public funding for universities.</span></em></p><p class="fine-print"><em><span>Hamish Coates works for The University of Melbourne.</span></em></p><p class="fine-print"><em><span>Tim Pitman does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Federal Government has released a review into the demand-driven system of higher education funding implemented by the Labor government. The review, undertaken by David Kemp and Andrew Norton, largely…Tim Pitman, Senior Research Fellow, National Centre for Student Equity in Higher Education, Curtin UniversityConor King, Executive Director, IRU, La Trobe UniversityGeoff Sharrock, Program Director, LH Martin Institute, The University of MelbourneHamish Coates, Chair of Higher Education at the Centre for the Study of Higher Education, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/255742014-04-13T09:01:26Z2014-04-13T09:01:26ZDemand driven university funding system should stay<figure><img src="https://images.theconversation.com/files/46261/original/vvbdyx27-1397374293.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Despite significant student loan debt, the government should continue the uncapped university funding system</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/downloading_tips.mhtml?code=&id=124981016&size=medium&image_format=jpg&method=download&super_url=http%3A%2F%2Fdownload.shutterstock.com%2Fgatekeeper%2FW3siZSI6MTM5NzQwMzA1MiwiYyI6Il9waG90b19zZXNzaW9uX2lkIiwiZGMiOiJpZGxfMTI0OTgxMDE2IiwicCI6InYxfDEwMTI3NTg4fDEyNDk4MTAxNiIsImsiOiJwaG90by8xMjQ5ODEwMTYvbWVkaXVtLmpwZyIsIm0iOiIxIiwiZCI6InNodXR0ZXJzdG9jay1tZWRpYSJ9LCI5ay8zWDdBWnNqT3R3UDZob3lUVjlMOVF4K3ciXQ%2Fshutterstock_124981016.jpg&racksite_id=ny&chosen_subscription=1&license=standard&src=E2A7EXW5psbXNhKcTlpiSw-1-2">Shutterstock</a></span></figcaption></figure><p>The <a href="http://www.education.gov.au/report-review-demand-driven-funding-system">government commissioned review</a> of the demand driven funding system of universities, undertaken by David Kemp and Andrew Norton has been released today. As many commentators speculated, it is broadly supportive of the current framework for funding undergraduate education, supporting the continuation of the system. It also advocates extending demand driven funding in important ways that could have a dramatic implication for Australian higher education.</p>
<h2>Extending the system</h2>
<p>The report supports extending the system to undergraduate sub bachelor places. Universities currently offer a variety of courses at the sub bachelor level, such as associate degrees and advanced diplomas, although the number of places was capped by the previous Commonwealth government. This was in part to address the fear that costs to the Commonwealth in a demand driven system could blow out if universities took students away from non university providers or largely state funded ones such as TAFEs. The report recommends the caps on the number of bachelor-level places not be re-imposed.</p>
<p>More significantly, it recommends a potentially wide-ranging change in how, and by which institutions, undergraduate education is offered in Australia by extending the system of public supported places to private and other non-university providers. The report suggests all higher education providers should be eligible for Commonwealth supported funding under certain conditions. It recommends they be allowed to offer these places on the same basis as Australian public universities, a policy that, if adopted, could dramatically expand the number of providers that have access to public funding, and hence the total public funding going into higher education.</p>
<p>In expanding the number of institutions able to access public funds, the report is firm that the Tertiary Education Quality and Standards Agency needs to approve the courses, holding these institutions to a consistent standard. It also recommends greater information for prospective students of non-university higher education providers, such as through extending the University Experience Survey to them.</p>
<h2>The challenge around post graduate places</h2>
<p>Where the report advocates further policy work is on the difficult issue of public subsidy for post graduate places. At present in Australia, universities can offer masters courses to domestic students on a full fee basis. However, the number of Commonwealth supported post graduate places they are granted is capped, with each university having a different allocation, based in part on history, and in the case of the University of Western Australia and the University of Melbourne, on their model of offering a number of professional degrees at post graduate level while restraining their undergraduate numbers.</p>
<p>To achieve better overall system coherence at all levels of higher education, there is an argument that Commonwealth support should be extended to all postgraduate courses. If we agree there is a case for <em>any</em> amount of public subsidy of higher education, it stands to reason this might be extended to higher level, post graduate courses. </p>
<p>This presents a serious public policy challenge. Doing so in a blanket manner could inflate the public funds needed for higher education, if demand driven CSP masters degrees prove widely attractive for students in addition to a three year bachelor degree. It also risks furthering ‘credential creep’ as a post graduate qualification becomes the minimum level expected and a bachelor degree is not seen to be enough (though there is an argument that this is already happening and Australia has little choice but to follow international trends).</p>
<p>The report acknowledges more thinking needs to be done on how to fund post graduate places but does advocate that the demand driven system be extended to post graduate courses where there is a combination of clear community benefit and modest financial rewards. However, it says that other postgraduate courses should be offered on an entirely full-fee basis. </p>
<p>The report is careful to acknowledge the complexity of current arrangements and how they might be extended in the future.</p>
<h2>Targets and transparency</h2>
<p>The review recommends that there should be no higher education attainment targets and that government should not set enrolment share targets for low socio-economic status students. This is in line with the government’s pronouncements, and the Minister declared last year that he is “<a href="http://www.smh.com.au/federal-politics/political-news/ditch-uni-quotas-for-poor-students-abbott-government-told-20140413-zqu6b.html?utm_source=rss&utm_medium=rss&utm_campaign=ditch-uni-quotas-government-told">not obsessed with percentage quotas</a>.” As universities are still working towards ensuring access and equity, and as far as has been announced government funds will still support these goals, dropping the targets per se may mean little for outcomes.</p>
<p>The report also makes a number of other recommendations to ensure continued transparency in the system. It says enrolment data systems should be updated so they provide detailed and timely information on enrolment trends, and that an annual report on higher education policies be requisite, with summary information on performance trends. It supports the intent behind the <a href="http://myuniversity.gov.au/">MyUniversity website</a> but says it should be replaced with an improved version with greater information on attrition and completion by university entry. Other recommendations include discontinuing the increasing funding for engineering and health disciplines in light of cost pressures, and removing the HECS-HELP benefit for graduates in designated occupations. </p>
<p>Overall, a report that will start some significant conversations about the future of Australian higher education, even if it was unable to fully address some important areas.</p><img src="https://counter.theconversation.com/content/25574/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gwilym Croucher is a higher education policy analyst in the office of the Vice-Chancellor at the University of Melbourne</span></em></p>The government commissioned review of the demand driven funding system of universities, undertaken by David Kemp and Andrew Norton has been released today. As many commentators speculated, it is broadly…Gwilym Croucher, Higher Education Policy Adviser, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.