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14 April 2014

University places: report says scrap enrolment targets for poorer students

The education minister, Christopher Pyne.

Review of Labor's policies recommends abolishing cap on fees and introducing a pay-as-you-go system

The government should remove enrolment targets for university students from low socioeconomic backgrounds and remove the cap on student fees, a report says.
The post-election review of Labor's policy, which allowed universities to set places based on demand, was carried out by former Howard education minister and Grattan Institute board member David Kemp and his former advisor, Andrew Norton, who is now higher education program director at the Grattan Institute.
Kemp and Norton were asked to review changes made by Labor in 2012 that raised limits on the funding of bachelor degree students at public universities. The subsequent demand-driven system allowed universities to respond to demand, with a view to allowing more students to benefit from higher education, address skills' shortages and remove barriers for students from poorer families.

The number of university places had risen markedly under the new system, increasing enrolments by poorer students and those from regional and remote areas, the review notes.

Universities have responded to increases in aggregate demand with more places, the review says. In most fields of education, applicants are more likely to receive an offer. However, there has been only a small increase in the proportion of applicants receiving an offer for their first-preference course.
The review finds that for commencing bachelor-degree students with an Australian Tertiary Admission Rank (Atar) below 50, attrition rates are high and have not been improving, although these students comprise less than 0.5% of all university students.
It finds that a higher proportion of students from low socioeconomic backgrounds are less likely to finish school and less likely to achieve a higher Atar than those who are better off.
It recommends that the government should discard its 20% enrolment target for low socioeconomic status students, because it could skew university policy to meet the target and permit the recruitment of students who would have a higher attrition rate.

It would be a poor outcome if students were recruited because a university wanted to meet its low SES [socioeconomic status] target, rather than because admission served the long-term interests of the applicant, the review says.

Kemp and Norton recommend extending the demand-driven system to sub-bachelor-level courses as a pathway to progress to bachelor-level courses.
Due to their overrepresentation in low-Atar school-leavers, low-SES students would particularly benefit from more readily available sub-bachelor qualification programs, the report finds.
On the subject of university fees, the review finds that the financial sustainability of a demand-driven university sector requires greater funding flexibility.
In principle, the review panel supports a less-regulated system for setting student charges, the report says.
The current system of fixed commonwealth contributions and capped student contributions was not designed for the current regulatory or market circumstances.
The recommendations we make around student contributions are aimed more narrowly at ensuring the survival of the demand-driven system through fiscal sustainability, and improving its operation through some additional structural changes.

The education minister, Christopher Pyne, has yet to respond to the review.

A senior research fellow in higher education policy at Curtin University in Western Australia, Tim Pitman, said dropping targets for equity students would allow universities to opt out of their social responsibilities. Pyne had made it clear before the review that he did not believe in targets for targets' sake, he said.
If you drop the targets, what you will see is the elite group of universities maintaining the rhetoric of being accessible while pursuing the elite end of the market, Pitman said.
He said that while the review stops short of recommending higher fees, it lays out the architecture for increased contributions by students. Pitman said it was much more equitable to means-test students and let those who had the capacity pay fees as they attend university. At present, all students can defer paying university fees until they reach a certain income.

That is, not an increase in fees but simply a pay-as-you-go system, Pitman said. Inevitably there is some loss of fees for people who never earn, or never earn enough to repay, but the majority of students could potentially afford to pay as they go.
Pitman said Australia was almost unique in the world to have a majority government-funded system that did not restrict places, and therefore it had a right to set targets to ensure a social benefit of maximising education.

On the positive side, there has been overall unanimous support for a demand-driven system, with the recommendation of its expansion to sub-bachelor courses, which will provide more opportunities for low socioeconomic students.

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