Higher Education Policy Reforms

As you may well have read or heard in the media, the Federal Government has released its long-awaited proposed higher education policy. While we are still analysing the package to determine what it means for CSU, I wanted to share some initial thoughts with you.

As Minister Birmingham indicated, this package has been designed to “spread the pain,” with students set to pay more, universities to receive less funding and the Government achieving smaller savings than it originally intended.  I think it has been quite cleverly constructed to do this, to address some long-standing issues as well as provide some sweeteners to go with the cuts.

One significant part of the package is the impact on students and graduates.  The ratio of student to Commonwealth payments for degrees will shift, with students to pay on average 46% (up from 42%) of the cost of their degree. This is probably not as bad as we had feared.  In addition, HECS-HELP repayment will now begin at $42,000 at 1% repayments which on the other hand is lower than we had expected.  Acknowledging these, I believe investment in higher education represents good value, particularly for a university like CSU which has very strong graduate employment outcomes.

Another significant part is the imposition of two 2.5% efficiency dividends on Commonwealth Supported Place (CSP) funding to the sector in 2018 and 2019 which the Department of Education estimates will overall have a 2.8% impact on CSU teaching and learning funding.

On the Minister’s figures, combining both measures, the Federal Government will achieve a cumulative saving of approximately 10% in expenditure which is less than their original intention of saving 20% of Commonwealth expenditure.

You will see the Government justifying these cuts by stating that universities have more money than they need to deliver teaching and learning.  This is based on a report commissioned from Deloitte which shows that Universities only spend about 85% of their funding on teaching and learning.  Previously, there has been an acceptance that teaching money supports somewhere between 15-30% research and community engagement.  If we accept this metric, universities are at best close to breakeven or actually underfunded by about 15% which is consistent with previous studies.

The Government also claims that the Deloitte study shows that university funding has risen faster than costs based when compared to previous findings of the Lomax-Smith Review (2011).  In my view, these two studies can’t be directly compared.  They were conducted using different samples and methodology so you can’t draw clear conclusions by comparing the two.

Overall, while the package is less severe than we feared, I of course do not welcome yet another round of cuts to university funding.  I am very concerned that these cuts will again challenge our mission of extending a university education to Australians who have previously been excluded from higher education.

Over recent years, we rightly sought to improve our efficiency, and best use the public money provided to us.  University staff have worked hard for this and should be proud of their achievements.

We will therefore be strongly communicating that further squeezing budgets can only have a negative impact on our ability to serve our regions.  As we all acknowledge, universities are a critical part of driving innovation and we need to help rural and regional Australia expand and grow our economy.

A portion of our funding, 7.5%, will now be contingent on reaching performance measures. In 2018 these relate to providing teaching and research data, as well as compliance with the new admissions transparency requirements. In 2019 however, we understand these measures may reference retention and employment outcomes amongst others. This will require extensive discussion with the Government to ensure it really does support universities to do better work.  I also note that one of the cuts that has already been applied to the sector is the removal of additional performance funding.

In positive news for the University, the Higher Education Participation and Partnerships Program (HEPPP) will now be moved into the Higher Education Support Act (HESA) legislation, guaranteeing the fund moving forward. As we all know, HEPPP has played an important role assisting us to extend a university education across our communities, and I am pleased this wonderful work by many dedicated CSU staff may continue and have certainty.

Sub-bachelor degrees will now be part of the demand-driven system, as long as they meet industry needs, which is a great outcome. Likewise, the current clinical loading for medicine will be extended to dentistry and veterinary science programs. This will provide an additional $1394 per student. CSU has advocated strongly for this outcome, and we are pleased to see it included in the policy package.

Finally, we are still working to understand how a number of other measures will impact universities and CSU in particular. Postgraduate Commonwealth Supported Places will initially be cut and then be moved to be student-centred on merit, with the scholarship tied to the individual student and applicable at any institution. We will need to understand how ‘merit’ is defined to appreciate what this will mean for students – for example teachers in regional NSW studying Masters degrees.

The Federal Government is also to provide seed funding for eight new regional study hubs, based on the Geraldton and Cooma models where they support many students.  We have had experience with both of these so look forward to getting more details on this.

Lastly, a new Work Integrated Learning program is to be developed, with work experience able to be counted towards degree programs and with better support from Commonwealth funds.  CSU has a strong track record in work integrated learning, and if this helps to better support students on placement that would be a really good thing.

Obviously this is a significant package of policy measures and changes. We are committed to considering each fully, and advocating strongly to ensure the best results for our institution, staff and students.

You can see our initial media release and response here:

20170502 Higher Education Policy Media Release

As always, if you have any thoughts I am happy to hear from you.  I look forward to providing more detail and analysis as it becomes available.