Mandler argues that in Britain a national higher education system emerged out of a ‘patchwork of institutions dating back to the middle ages’. Although local funding has been part of higher education finance in Britain, national funding was more significant early in the 20th century, and dominated the post-WW2 expansion of higher education. Universities were linked in a common funding system.
Free or consistently-priced undergraduate education across Australia since 1974, along with means-tested student income support, has not fundamentally changed the largely regional nature of Australian higher education. Most students attend universities in their state, and usually in their home city. Australia’s admission systems remain state-based.
The Australian university system in 2020 is in many ways very different from what it was in 1920. But despite the transformations some issues recur repeatedly over the decades, which I will discuss further in a later blog post. I will start with what has changed the most, prompted by the Croucher and Waghorne book, but adding other material and my own take on events.
As the policy name ‘Job-ready Graduates’ suggests, the main stated reason for changes to student contributions is to promote graduate employment outcomes. Or as the JRG discussion paper puts it ‘incentives in the current funding system could encourage sub-optimal choices for students and institutions, leading to poorer labour market outcomes and returns on investment in higher education.’ The assumption is that if arts becomes more expensive students will instead choose a course with lower student contributions and better employment prospects.
Employment outcomes can be measured in many ways, but every method shows that graduates in fields typically taught in Arts faculties are at an elevated risk of disappointing outcomes.
Whatever the reasons for 1970s educational trends, in the 1980s rates of school completion rapidly increased, as the chart below shows. According to Simon Marginson’s book Educating Australia, increasing the proportion of students completing Year 12 was a deliberate policy goal, supported by state governments and the Commonwealth.
With these older teenagers, in the 1980s compulsion was not a politically acceptable policy tool for increasing school retention. As recently as 2007 in Victoria and 2009 in NSW the school leaving age was still only fifteen. Incentives were needed. According to Marginson, the Commonwealth significantly extended income support for secondary school students, with recipient numbers increasing six-fold between 1982 and 1990.
Despite its title, Mandler’s book does not neatly belong to either educational merit genre; it neither bemoans the excessive influence of academic ability in allocating social and economic goods, nor laments the decline of academic standards in schools and universities. Instead, its core theme is how changing attitudes, aspirations and expectations drove up British educational participation and attainment after WW2. There are many interesting parallels with Australia.
How performance funding will work under Job-ready Graduates remains unclear, to me at least. Some recently published FAQs on Job-ready Graduates, which are a cut-and-paste from a previous statement, indicate that performance funding will continue:
From 2021, the PBF scheme will be adjusted to make approximately $80 million amount of growth funding per year contingent on performance requirements. Performance funding will grow each year to a total equivalent to 7.5 per cent of funding for domestic, non‑medical bachelor places to incentivise university performance. This measure is in line with the PBF model implemented in 2020. [emphasis added]
Is performance funding a condition of other announced CGS increases?
The difficulties of introducing new money into a transitioning system
Between them, the two new allocations total about $550 million over the next four years, with the short course money lasting for two years.
The question is how this relates to the Job-ready Graduates transition fund. This fund is designed to leave universities with the same Commonwealth student-related funding for the next three years as if JRG had never happened.
The draft Commonwealth Grant Scheme Guidelines released at the end of last month set out how the transition fund will work. The Guidelines have several unclear and seemingly contradictory elements, which I discuss in a footnote.* But this is the basic formula for transition funding:
I put in a submission to the legislation consultation, which recommended various amendments to the draft provisions, along with strengthening academic freedom to ensure that it was protected from government decisions.
This post is a slightly modified extract from the submission that explains the proposed amendments, with the aim of informing discussion if the Hanson amendment is introduced.
Update 30/9: The minister has announced $326 million over an unspecified period, but starting in 2021, for additional student places. This would have a a significant effect on the calculations below. I will update again when I have more detail.
Over the longer-run, there are multiple mechanisms in JRG that could require or encourage universities to deliver more student places than now. However, the Department does not explain how it arrived at most of its numbers. They do explain the assumptions behind their 2021 forecast. For the reasons given below, I doubt that these justify a claim of additional places compared to status quo policies remaining in place.
Of the 15,000 additional funded places, 7,000 are said to come from ‘increased flexibility for universities within the funding envelope’. This refers to ending three separate Commonwealth Grant Scheme grants for sub-bachelor, bachelor and postgraduate coursework places. Instead, universities would have a single ‘funding envelope’, within which they could freely move resources between qualification levels.