Creating a better integrated education system – some notes on Rethinking Tertiary Education, a book building on the work of Peter Noonan

Peter Noonan was a rare person with expertise across vocational and higher education, and an even rarer person who made significant policy contributions to both. Sadly he passed away in 2022 at the age of 67.

Rethinking Tertiary Education, co-edited by Peter Dawkins, Megan Lilly and Robert Pascoe, with sixteen others as co-authors, is billed as ‘building on the work of Peter Noonan’, and does so by exploring ways of making the component parts of Australia’s formal education sector – especially higher education and vocational education, but also schools – work together more smoothly than now. Pascoe also contributes an interesting biographical chapter on Noonan.

For historical and political reasons the vocational and higher education systems in Australia have quite sharp dividing lines in the nature of the qualifications they deliver, how they are funded, how they are taught, and with some exceptions the occupations they support. The book also looks at school credentials, especially the idea that they don’t measure all they should.

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What’s going on with domestic undergraduate numbers? Part 1, Demographic differences

Higher education enrolment data for 2022 was released on Monday. Overall enrolments fell 3.2% in 2022 compared to 2021. A 1.9% increase in international student numbers partly offset a 5.1% decline in domestic numbers. In 2021 overall enrolments also fell, with the opposite dynamic – an increase in domestic students partly offset a decline in international student numbers. The 2021 and 2022 enrolment decreases were the first total enrolment reversals since the early 1950s.

Domestic undergraduates

This post focuses on domestic undergraduates, the subject of many media inquiries and much speculation. The chart below shows that enrolments started growing in the late 2000s, at a fast rate during the demand driven funding era, before entering a more subdued phase in the late 2010s and then the decline discussed in this post. Sub-bachelor courses are a larger share of the total more recently than in the 2000s.

Overall domestic bachelor enrolments decreased 4.9% in 2022 compared to 2021. Despite a 2 percentage point increase in attrition rates for commencing 2021 students into 2022, the continuing cohorts offset a larger fall in commencing bachelor-degree students of 8.6%. That’s more than double the previous largest commencing student decline this century, in 2003, when the then-minister cracked down on over-enrolments. Sub-bachelor numbers are down around 4% for both commencing and total.

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The complex rules around admitting, funding and supporting higher education students

[Update 18/12/2023: Some parts of this post have been revised as the enacted student support guidelines replaced the draft guidelines. The revisions are noted in the text.]

The support for students policy discussed in a previous post adds to an already complex system for admitting, funding and supporting higher education students. Universities have strongly argued against additional bureaucratic processes in areas covered by existing regulation. This is a positive sign – a much better strategy than taking under-funded nuclear submarine student places – and I hear that the final support for students guidelines will be at least somewhat better than the draft guidelines.

The content below is my attempt to understand how all the different rules in this space overlap, interact and potentially contradict each other. While the support for students parts may change soon (the legislation operates from 1 January 2024 [Update 18/12/2023: Now delayed until 1 April 2024]), some existing rules look redundant to me. A warning: this post contains mind-numbing details and distinctions.

Initial admission to a course

The most general rules apply on admission to a course, with TEQSA responsible for enforcement. These protect high-risk students and appear in the higher education threshold standards. They require that:

“Admissions policies, requirements and procedures are … designed to ensure that admitted students have the academic preparation and proficiency in English needed to participate in their intended study, and no known limitations that would be expected to impede their progression and completion”: Part A, section 1.1.

Order of funding priority

For Commonwealth supported students selection decisions must, in the “provider’s reasonable view” be made on “merit”: section 19-35(2) of the Higher Education Support Act 2003. The provider can, however, take into account “educational disadvantages that a particular student has experienced”: section 19-35(3).

As I noted last year, this requirement is in tension with university practices and government policies on admitting members of equity groups in preference to other applicants. The equity group categories are only proxies for educational disadvantage; membership does not say anything certain about a “particular student”.

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Mapping Australian higher education 2023 – official release

Mapping Australian higher education 2023 is now available from the ANU Centre for Social Research and Methods website.

Update 26/10/23: A reader has pointed out that list of FEE-HELP NUHEPs is incomplete. A column of names from the original Excel file was omitted during production. The full list is available here. This list also includes three non-FEE-HELP providers registered by TEQSA since the pdf version was finalised. A corrected version of Mapping with the full list of NUHEPs, as of mid-2023, is here.

If anyone has noticed other errors please let me know.

For universities the Accord interim report proposes a more extreme version of Job-Ready Graduates

The Australian Universities Accord interim report recommends overturning the most controversial Job-ready Graduates policy, using student contribution price signals to guide student course choices.

But overall the Accord interim report and Job-ready Graduates have strong parallels. They both take a utilitarian view of higher education, that its purpose is to provide benefits to others rather than being of any intrinsic value. Universities exist to meet skills needs, find practical uses for research, contribute to their local communities, and promote equity. The main difference is the interim report proposals are, with student contributions the main exception, more extreme and interventionist than Job-ready Graduates.

Substantially reduced university autonomy

Historically universities in Australia and other western countries have operated with a significant degree of autonomy from government. But despite using the word ‘autonomy’ a few times the Accord interim report shows little interest in this idea.

On my count at least 25 interim report proposals would reduce the scope of university-level decision making or are new reporting requirements that set universities up for future regulation. In my list these cover general mission direction, student admissions, the mix of disciplines and courses, curriculum and teaching, use of funds, and accountability.

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University offers under Job-ready Graduates

In an earlier post I looked at how university applicants responded to COVID-19 and the new Job-ready Graduates student contributions. In this post I look at how universities responded, based on the offers statistics released yesterday. All the numbers are for domestic undergraduate applicants only.

The incentives faced by universities

In the lead up to 2021 university offers university leaders made various statements about trying to meet expected extra domestic demand, as COVID cut job and travel alternatives to study. But universities also faced, and face, a difficult finanacial situation. They are simultaneously being hit by the Job-ready Graduates policy, which reduces their per student funding in many fields, and by the loss of international student revenue, with the borders now closed to new international students since March 2020. These events compromise university capacity to fund domestic undergraduate student places that do not cover their own costs

Capacity aside, Job-ready Graduates creates complex incentives. By funding at average teaching costs it creates an economies of scale model. That’s one reason why we see the closure of low enrolment subjects and courses. If there is no longer any profit on some courses that may also disincline universities from expanding. On the other hand, if universities want to maintain a course then driving up enrolments may the key to it, by spreading fixed or semi-fixed costs over larger numbers of students. And in the $14,500 student contribution fields – arts (with a few exceptions), business and law – there may be a de facto demand driven system.

Universities also need to consider a complex short-to-medium term negative effect caused by JRG only partially grandfathering pre-2021 students. The link has explanatory detail, but the practical consequence is that more of a university’s total Commonwealth teaching grant has to be spent on continuing students, leaving less money for new students.

Yet another complexity for universities is that COVID-19 made estimating student numbers more difficult. For admissions, the key risk was that offer acceptance rates would be higher than usual, and the university would end up with loss making ‘over-enrolments’ (enrolments that earn a student but not a Commonwealth contribution). This created an incentive to be cautious about offer levels.

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Recurrent critiques, concerns and crises in Australian higher education

In a previous post on Gwil Croucher and James Waghorne’s Australian Universities: A History of Common Cause, I noted a range of significant changes in Australian higher education over the last century. This post looks at recurrent themes.

Debate about the purpose(s) of the university

From the start Australia’s universities served multiple purposes, with on-going tensions between knowledge for its own sake, typically most strongly supported by academics, and meeting practical needs, typically most strongly supported by governments.

At the 1920 meeting that Croucher and Waghorne mark as the start of a national organisation of universities, University of Sydney Chancellor Sir William Cullen warned against ‘adopting too enthusiastically the current preoccupation with ideas of “national efficiency”‘.

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Should students lose Commonwealth support for failing to complete subjects?

Post updated 1/01/22: Clarifying that the rules apply to non-completion of subjects as well as academic fails, updating to take account of amendments, and removing now irrelevant 2020 content.

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On 1 January 2022 a further element of the Job-ready Graduates package commenced, which restricts Commonwealth support for students who fail to complete at least half the subjects they have taken.

General rule – failing to successfully complete more than half of subjects leads to loss of funding entitlements for that course

The general rule is that students who fail to successfully complete more than half their subjects in a course will lose their entitlement to Commonwealth support: section 36-13 of the Higher Education Support Act 2003 (HESA 2003) for Commonwealth supported students, for FEE-HELP students section 104-1A . At public universities, FEE-HELP borrowers are mainly postgraduates, as they cannot offer undergraduate full-fee places except in narrow circumstances.

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Checking that students are on track to pass – the government’s proposal

My previous post argued that some university students needlessly incur HELP debts and fails on their academic record. This post looks in more detail at several measures proposed in new legislation to alleviate this problem.

Although these measures arrived without warning they have a history. With some amendment and addition, they extend to public universities rules applying to non-university higher education institutions since the 2017 provider integrity legislation. In turn the 2017 non-university provider legislation imported vocational sector rules intended to avoid a repeat of the VET-FEE HELP debacle.

Provider marketing and student motivations

The issues in VET FEE-HELP and higher education are, however, quite different. The offering of inducements, misleading statements about HELP, and cold calling that would be restricted or banned for public universities by the new legislation never or rarely happen in higher education.*

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Disengaged and failing students are an issue worth policy attention

The draft legislation for the Tehan higher education package, released on Tuesday, includes several previously unannounced measures. These include new – or least new for public universities – rules for managing under-performing students.

Among the measures are greater monitoring of student progress, restrictions on study load, and as the media has been reporting today students losing Commonwealth funding if they fail more than half the subjects they have taken. The minister’s media release is here.

I will get to the sometimes arcane detail in a subsequent post (or posts, there is a lot). I am not convinced that the government is going about this in the best way. But I don’t want complaints about the details to obscure the point that this is an area worth policy attention.

In the Grattan Institute Dropping Out report we argued that disengaged students are needlessly incurring HELP debt and blemished academic records. With demand likely to exceed supply for higher education next year, disengaged students are also using Commonwealth supported places that would benefit other people more.

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