In The Australian this morning an article points out that publicly-funded language diplomas may be not be available to new students from next year. In my view, that is a correct implication of both general policy statements on funding diplomas and associate degrees made by the government, and the specific consultation paper on sub-bachelor courses.

Unfortunately, this is a case in which the government, in attempting to fix one problem, would create several new problems.

The original problem here is that diplomas and associate degrees were, at the last minute in 2011, excluded from the demand driven system. That means that the total number of government-funded sub-bachelor places remains set by the government, the allocation of places between universities reflects largely historical decisions, and new places (when available) are distributed according to regularly changing criteria. The distribution of places does not strongly align with the preferences of students, the strategies of universities, or the needs of employers. In the review of the demand driven system I did with David Kemp, we recommended putting sub-bachelor places into the demand driven system.

On the surface, the government’s proposal looks like it is responding positively to this recommendation. Constraints on the number of funded sub-bachelor places will be lifted in two ways. First, sub-bachelor courses approved by the minister will enter the demand driven system. Second, sub-bachelor courses not approved by the minister will be given an exception on the general ban on undergraduate full-fee places at public universities.

Language courses are in trouble because they typically fail to meet both the announced criteria for sub-bachelor demand driven funding – that they articulate into a related bachelor degree program, and that they have been developed with a focus on industry needs.

Allocated places for sub-bachelor language courses have increased substantially in recent years, coordinating with the previous government’s Asian Century initiatives and the current government’s New Colombo Plan, which encourages students to work in Asia. Typically, language diplomas are done concurrently with a bachelor degree rather than being taken sequentially (a diploma articulating into the bachelor degree is a sequential enrolment).

Concurrent enrolment reflects the purpose of these courses. The goal is not to prepare students for further study or to train them to be translators. It is to produce professionals and managers who can work in other countries, and converse with clients, customers, and citizens in other countries in their own language. The student’s primary bachelor-degree qualification is likely to be their main occupational course, not the language diploma.

Language diplomas could still be offered on a full-fee basis. But for universities just to stay on the existing overall funding rate they would need to increase charges by 200 per cent. And then there is the 25 per cent FEE-HELP loan fee for undergraduate courses. So courses that currently cost students about $6,400 a year would increase to nearly $24,000 for students who borrow.

At that price, demand is likely to fall. (This is different from the usual analysis of fee increases; not having a bachelor degree is likely to be very costly in career opportunities and income, and so school leavers don’t seem very price sensitive as a result. But not having a language diploma is only likely to be mildly negative for career opportunities, and there are other ways of learning languages, so I would expect much higher price sensitivity.) Another option is to enrol in a bachelor degree with a foreign language major, but that undermines one of the goals of consistent demand driven funding: to encourage students to take the qualifications that best suit their needs, rather than those with the most favourable funding arrangements.

The understandable focus on the specific problems of language courses has drawn attention from a broader problem – that the emphasis on industry needs is a radical transfer of ideas from vocational education into higher education. While previously there have been many specific allocations of new places to universities in response to actual or perceived skills shortages, there is no precedent for making entire higher education qualification levels only available on a publicly-funded basis if courses have links to industry.

In my view, it is important that this precedent not be set. Higher education has always been, and should always be, about knowledge and learning for its own sake as well as employment. It should not just be tied to current needs, as defined by employers or government. Self-accrediting universities can currently create courses with indirect or speculative links to work or business, as many seem to be doing in in the demand driven bachelor degree market, as they try to think through how work and careers might turn out for students with decades of working life in front of them. VET and VET-style industry links are ties to the status quo.

On my reading of the higher education bill before the Parliament, a cumbersome and uncertain approval process will obstruct universities beyond just the industry links. At the moment, sub-bachelor places are allocated administratively. This system lacks transparency and accountability, but it only operates for new places and can be flexible and quick when necessary.

Under the proposed system, the general criteria for allocation have to first be set out in the Commonwealth Grant Scheme Guidelines. The guidelines are subject to disallowance by either house of Parliament (essentially, Parliament cannot create or amend delegated legislation such as the guidelines, but it can reject it). Disallowance has only happened occasionally in higher education, but I’d rate it as a real possibility in this case if the overall HE reform bill passes. The Senate is unlikely to think that cutting language enrolments is a good idea. In any case, for this and all subsequent change of allocative criteria there would be a delay to give Parliament time to consider the matter.

Once the guidelines are approved, the Department would have to individually consider whether every course put up for consideration meets the criteria. This is a much more time-consuming process than just allocating new places to fields of education or courses. A list would be created that specifically names the courses that have been approved by the Department, which would then go to the minister (here is the VET equivalent, on which this seems to be based). If he or she approved the list, on my reading it is another disallowable instrument, and so another delay while Parliament considers it. Add to this the months lost through elections and new ministers getting their heads around the portfolio, and new courses could easily miss their first potential intake due to approval hold-ups.

This red tape is all a long, long way from what was envisaged for demand driven funding.

Yes, it would be good to get rid of arbitrary caps on student numbers in some sub-bachelor courses. But VETifying higher education, undermining language courses, and vastly increasing bureaucracy are much too high a price to pay for this benefit.