Labor’s promise of a “universities accord” suggests a slow and careful approach to higher education policy. A new education minister without a strong background in the portfolio may also want time to get across the issues.
In general, taking this time to get policy right and build support for it is a good approach. But when current policy is causing problems and lacks significant support there is a case for acting more quickly. This is the situation with the previous government’s Job-ready Graduates student funding policy enacted in late 2020.
Job-ready Graduates imposes unfair HELP debts on some students, adds to the government’s costs of running the HELP loan scheme, and distorts university incentives in distributing student places between courses.
How are university courses funded?
A mix of contributions from the Commonwealth and students fund domestic undergraduates in public universities. Added together, these contributions are the overall funding rate per subject.
The government sets Commonwealth contributions, which vary by academic discipline. The government pays universities, according to their enrolments up to a capped total grant amount.
Universities set student contributions up to a legal maximum, which also varies by discipline. Universities are paid directly by students or through HECS-HELP loans. Total student contribution revenue is not capped.
Once universities reach their maximum Commonwealth contribution grant they can still increase enrolments, but on student contribution revenue only. These extra students are called “over-enrolments”. Historically, over-enrolments have been an important source of flexibility in meeting student demand.
In its basic architecture, Job-ready Graduates has similarities with previous funding policies, other than the demand-driven system, which uncapped both Commonwealth and student contributions.
Where Job-ready Graduates differs is in the setting of Commonwealth and student contributions.
Article source : The Conversations