The communique from last Friday’s education ministers meeting stated, in part, that:
The Teacher Education Expert Panel … will focus on strengthening the link between performance and funding of ITE [Initial Teacher Education]. This will include but not be limited to advising on how Commonwealth supported places for teaching should be allocated based on quality and other relevant factors. [Emphasis added.]
This post examines how the government might go about doing this and the problems it would face.
Discipline-level funding under Job-ready Graduates
An initial problem is that the government does not allocate Commonwealth supported places to teaching.
Under section 30-10 of the Higher Education Support Act 2003 the government has no power to allocate student places except for ‘designated courses’, of which more below.
Education is not designated. It is funded under a block grant for ‘higher education courses’. Dollars rather than places are the unit of allocation and the entity that receives the allocation is a higher education institution, not a course or discipline. Recipient universities are free to distribute these dollars between courses according to their own priorities.
With its COVID-19 short courses the previous government bypassed the restriction on allocating student places by allocating dollars to specific courses instead. Using the funding agreements to quarantine dollars for education would, however, be a bad move. It is inconsistent with the apparent legislative intent, which is for university flexibility except in the case of designation. We need to restore full operation of the rule of law in higher education policy. Without amending HESA 2003 that means designation.
The ATO’s annual taxation statistics release shows that in 2019-20 the number of repaying HELP debtors continued its strong growth, up 23 per cent on 2018-19 and exceeding 1 million for the first time. However, compulsory repayments are not growing as strongly, up 8 per cent on 2018-19 to $3.6 billion.
This post offers a few explanations for overall growth and why repayers are increasing more rapidly than repayments.
The return of inflation has led to questions about what this means for students, graduates and higher education institutions. This post lists some of the implications.
Indexation of HELP debt
HELP debt is indexed each 1 June. It is based on a two year period of CPI data ending in the March quarter of 2022 (I am not sure why it is two years). Because inflation March 2020 to March 2021 was lower than inflation March 2021 to March 2022 indexation for 2022 was 3.9 per cent, rather than the 5.1 per cent it would have been on a one year CPI cycle. The downside of this reprieve is that after inflation comes down again indexation will still exceed the recent average.
I said at last week’s Universities Australia conference that increased indexation will affect the politics of HELP debt. The big increase in the number of HELP debtors and total HELP debt over the last 15 years occurred at a time of mostly low inflation. Annual indexation rarely attracted much comment. This year there was much more media and social media coverage.
CPI is well above bank interest rates, giving people who can afford to repay early an incentive to do so. Indeed, low bank interest rates may help explain why voluntary HELP repayments have grown in recent years.
A previous post on my new paper on tertiary student finances under COVID-19 showed that, despite two lockdown-caused crashes in employment, students generally did well out of the COVID-affected labour market. This post looks at the student income support system. It too did well in maintaining and increasing student living standards.
Bonus payments for student income support recipients
The base student income support payments are modest. When COVID arrived in Australia in early 2020 the fortnightly Youth Allowance rates were $304.60 a fortnight for 18 year olds living at home, and $462.50 if living away from home. But COVID-19 bonuses significantly increased the financial benefits of being on student income support.
Students receiving YA, Austudy or Abstudy on 12 March 2020 received a $750 economic stimulus payment. From 27 April to 24 September 2020 they received the $550 fortnightly Coronavirus Supplement. This supplement was then phased down, to $225 a fortnight from 25 September 2020 to 31 December 2020, and then $150 a fortnight from 1 January to 31 March 2021. A student continuously on student income support from March 2020 to March 2021 received more than $9,000 in COVID-related bonus payments.
From 1 April 2021 the base student income support rates were permanently increased by $50 a fortnight.
The number of students receiving income support increased
In the major 2020 and 2021 lockdowns tertiary student employment in the 24 years and under age group fell by over 100,000, or 20 per cent of the pre-lockdown total. Yet these losses proved to be temporary. As I discuss in a new paper, student employment rates and earnings recovered to record levels. While the strong Australian labour market is obviously a major factor, the sometimes significantly overlapping employment markets for students and temporary migrants made closed borders beneficial for students as workers.
Tertiary student employment rates
The strength of tertiary student employment is most obvious in employment rates, the percentage of the total student population with a job. Tertiary student employment levels and rates vary during the year, driven by movements in and out of both employment and enrolment. Comparisons of the same month in different years can help distinguish a trend from a normal seasonal change. December is not necessarily the peak month for total student employment, since course completions reduce student numbers. But student employment rates typically reach annual highs in December, as seasonal spikes in retail employment coincide with a summer holiday increase in student capacity to work.
As the chart below shows, employment rates fell sharply in April and May 2020 as lockdowns hit, but by August 2020 student employment rates were back at 2019 levels. In 2021 employment rates were consistently higher than in 2019, despite lockdowns in NSW, Victoria and the ACT causing a significant dip. In early 2022 student employment rates remain 10 percentage points or more above their 2019 levels.
Labor went to the 2022 election with few specific policies on higher education, but with general plans for a different style of policymaking. The teal MPs have a few things to say about higher education. If Labor gets a clear House of Representatives majority, however, the opinions of the yet-to-be-determined Senate crossbench will be more important than those of lower-house teals in the passage of higher education legislation.
Additional student places
Labor’s main specific election promise was ‘up to’ 20,000 more student places. As I wrote when the policy was announced, the ‘up to’ is an important caveat, because under Job-ready Graduates the government allocates dollars rather than places. The same number of dollars can convert into lots of places in arts or business courses with low Commonwealth contributions, or relatively few places in courses with high Commonwealth contributions.
Despite a COVID-driven dip to 1.6 million, Australia remains a country with high numbers of long-term migrants without the rights that come with permanent residence or citizenship. In many areas of public policy we are struggling, often unsuccessfully in my opinion, to deal with the social and political implications of this population, of which international students are the second largest category after New Zealanders.
A recent article in The Conversation by election law expert Graeme Orr drew my attention to a further example of unjustifiable, and in his view potentially unconstitutional, treatment of temporary migrants. For some years now the government has been preoccupied with ‘foreign’ (ie Chinese) influence. One response has been stripping temporary migrants of political rights.
Three years ago I wrote a post criticising restrictions on temporary migrants being able to make political donations. Legislation passed this week takes these restrictions much further, covering other kinds of political expenditure and activity.
Although more recent current total international enrolment figures are available, a few things in the recently released 2020 enrolment data tell us more than is publicly available elsewhere.
International bachelor degree students have much lower attrition rates after first year than their domestic counterparts. Flying to a foreign country and paying sometimes exorbitant fees is a strong incentive to get the degree. But while attrition for 2019 commencers into 2020 declined for domestic students, the international rate increased nearly 3 percentage points to 12.73 per cent. The most likely reason is that some international students could not get back to Australia due to travel bans.
Increased attrition meant fewer continuing students than would have been the case without COVID-19. But the prior boom years for commencing students meant that continuing students still increased in 2020 on 2019 figures. This is one reason why the overall decline in international students was contained to 6.6 per cent, despite an 18.2 per cent decrease in commencing numbers.
Overall domestic student trends were positive for both undergraduates, up 2 per cent after a decline between 2018 and 2019, and postgraduate coursework, up 14 per cent after six years of stagnation or low growth. Postgraduate research was an exception, down by 577 enrolments or 1.3 per cent. Including enabling and non-award students total domestic enrolments were 1,133,519, 4.4 per cent up on 2019.*
Student ‘load’ – full-time equivalent enrolments – was up by less, 2.6 per cent. The headcount share of part-time students, defined as less than 75 per cent of a full-time equivalent study load, is only up by .7 of a percentage point, suggesting more part-time students with light study loads and/or more full-time students not at a 100 per cent study load.
Long overdue data on university staff in 2021 was released yesterday, giving us the most detailed information yet about job losses since COVID-19 hit the higher education sector.
The Department of Education’s staff statistics are mostly based on a 31 March census date. For staff with permanent or fixed term contracts I assume few job losses before 31 March 2020. The full travel ban on incoming international students was less than two weeks old, although some countries – including, importantly, China – had earlier travel restrictions. But retrenchments take time to process so I doubt the impact at 31 March exceeded some new hires abandoned at the last minute. These weren’t enough to prevent a 3.7 per cent headcount increase between 2019 and 2020.
In the next twelve months to 31 March 2021 total permanent or fixed term contract staff fell by 9,050, or 6.9 per cent of the 31 March 2020 total. This is only the third decline in staff numbers since 1989, and by far the largest. Difficult as 2020 was for everyone involved, total staff numbers at 31 March 2021 (121,364) were roughly what they had been on 31 March 2018 (121,718). The higher education sector is still a big employer by its own recent historical standards.
The full-time equivalent fall for permanent or fixed term contract staff was 7,985, or 6.8 per cent. This number, however, needs a caveat. For these staff the FTE is an extrapolation based on work arrangements as at 31 March. Normally this would understate actual FTE, as hours worked by additional staff hired after 31 March will not be counted until the following year. But in 2020 the 31 March estimate would have overstated FTE, by not taking into account net staff reductions during the rest of the year.
For casuals DESE reports actual FTE (ie not an extrapolation) with a lag, so that 2021 actuals will be reported in the next staff data release. Before then DESE publishes university estimates of casual FTEs. With no notice periods or retrenchment payouts required, universities could start reducing casual numbers before 31 March 2020. As the chart below shows, casual estimates were trending down at 31 March 2020 compared to 2019 – a contrast to the increase in permanent and fixed term staff.
The actuals show an even bigger decline, with losses of 4,258 FTE or 17.5 per cent in 2020 compared to 2019 .