Can universities just close loss-making courses?

As international student fee revenues fall universities are closing loss-making subjects and courses. Musicology at Monash. Maths and gender studies at Macquarie. Arts and social science subjects at Sydney. Neuropsychology at La Trobe.

Generally, universities have significant autonomy over what they teach. Changes in courses and subjects occur every year, in good as well as bad economic times.

But the funding agreements universities sign with the government impose some controls over course closures.

For courses leading to occupations deemed to be experiencing a skills shortage, and subjects teaching ‘nationally strategic’ languages, universities have to get government approval prior to closure.

The skills shortage rule is potentially quite restrictive. It refers to occupations on the Department of Employment State, Territory and National skills shortage lists and the Department of Home Affairs Medium and Long-term Strategic Skills List.

The skills shortage lists currently restricts closure of surveying, specialist engineering, veterinary science, dentistry, midwifery and a range of allied health courses.  The strategic skills list is more extensive, restricting a range of accounting, engineering, medical specialities, architecture, teaching, IT, psychology and social work courses not on the skills shortage lists.

The current nationally strategic languages are Arabic, Indonesian, Mandarin, Japanese and Korean.

The funding agreements require the government to take the university’s financial position into account when deciding whether to approve a course closure.

If Job-ready Graduates passes, universities will face funding cuts in some of these closure-regulated disciplines. A decline in international student profits means less money to support university activities that are not self-financing. The financial viability argument for closing courses will be strong. But for some courses there are bureaucratic processes to be followed before a closure is announced.

One thought on “Can universities just close loss-making courses?

  1. Now this is something that is near and dear to us. The issue is whether an institution can actually identify loss making courses, that is knowing exactly how much it costs to deliver that subject and the resultant revenue generated. If this is not know then the go-to analysis is looking at low enrolment courses, but they might not necessarily be making a loss or they might generate just enough to cover their fixed costs. This article goes into a bit more detail on the financial issues to consider when looking to Consolidate, Conserve or Cut courses


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