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Equity in Subsidies Serves Students - Campus Review

Opinion: Equity in subsidies serves students - By Adrian McComb | Published in Campus Review, July 21, 2014.|

There is little justification for lower levels of Commonwealth support for private higher education providers. By Adrian McComb.

Some university vice-chancellors seem to want to determine what level of Commonwealth support students enrolling with their competitors should receive. This is akin to Qantas allocating landing rights to Virgin at Sydney airport.

The Council of Private Higher Education (COPHE) is strongly supportive of the reforms in the federal Budget. We are concerned, however, that the scare campaign, driven essentially by some public university and union self-interest, has generated fears that fees in an uncapped system would increase so dramatically as to make higher education unaffordable. Such irresponsible exaggerations that students will all be left with debts in the hundreds of thousands of dollars are damaging higher education in the public mind, and in the eyes of our future students, in a way that will take years to overcome.

Has there been any media comment anywhere recognising that support for humanities students would increase by $600 a year? Similarly, the original reason why, for example, dentistry and medicine or engineering courses are so heavily subsidised is obscure. The review will reduce student subsidies by $3200 a year in medicine and dentistry and $4700 in engineering but graduates in these professional fields can expect high incomes – they can afford the increased cost. Simply sticking with the current system will accelerate a slide into mediocrity, as many of the VCs recognise.

Reforms that extend Commonwealth support to all higher education students, beyond the 87 per cent now enrolled in public universities, will deliver equity for students who choose to study in other institutions. Current policy on student support is discriminatory and runs counter to competition policy. Taken together with the deregulation of university fees, the reforms will ensure our higher education sector can overcome current constraints in an increasingly global market.

Our Australian system for student support, underpinned by the income contingent loans system (HELP, but commonly referred to as HECS) leads the rest of the world. What is important is that students get good outcomes and value from their education. Competition enhances that. However, effective competition requires a level playing field.

Commonwealth Supported Place (CSP) funding is made under the Higher Education Support Act (HESA), which states in Part 30-1 (1), “A grant under this Part is payable, as a benefit to students, to a higher education provider.” That seems to make the intent of CSPs clear and they are paid at levels that vary in accordance with the particular course units students undertake. The act does not specify how the provider is to spend the money.

In the university sector, cross-subsidy often occurs when significant income – from, say, a large business faculty that conducts little research – is extracted to support research in totally unrelated disciplines. Such a practice is rarely transparent, delivers no perceptible value to the business student and seems difficult to defend. In such a case, the university needs to demonstrate that intensive research so benefits undergraduate students (who are the students for whom the CSP is provided) as to make it a good value proposition for them.

If a private provider wishes to put emphasis on quality teaching and learning, then it will prioritise spending appropriately, focusing on its value proposition. In other words, different providers apply funds in a variety of ways to support a mission that meets the needs of students. So whilst supporting an environment that reflects active scholarship, including research, what we would want to see is that achieving good outcomes for students is the first priority for all higher education institutions.

The origins of the idea that non-university providers should be paid less for CSP arose from responses to the Lomax–Smith Higher Education Base Funding Review in the context of some non-university providers having CSP for teaching and nursing. The review refused any data from non-university providers. The proposal for reducing funds paid to such entities came from the university sector, on the basis that only they are required to do research. This self-serving observation overlooks the fact that academics teaching in all institutions delivering master’s courses are required by TEQSA to demonstrate research activity for accreditation. The view that non-university institutions do not undertake research is simply wrong.

The Higher Education Standards Framework’s Threshold Standards require non-university providers to ensure that “the higher education provider’s academic staff are active in scholarship that informs their teaching, and are active in research when engaged in research student supervision”. 

Most non-university institutions accredited for bachelor’s degrees also offer master’s degrees. At least 10 COPHE member institutions also deliver research degrees, including PhDs, despite the lack of any funding support. Others amongst our member institutions are entirely post-graduate.

Research activity, in practice, often reflects the employment of scholarly academics who expect to maintain their publishing activity and continue to contribute to scholarship in their field. Institutions in the sector compete in the employment market for such people.

The key distinctive feature of higher education teaching, as described in the Higher Education Standards, is that it is informed by scholarship. Research, or discovery, is the important element of scholarship that is mandated by all our universities, something peculiar to Australia. However, the nation needs to embrace teaching-focused universities, too.

We were also reminded by the Go8’s Private Higher Education Providers in Australia backgrounder (released on July 15) that in Australia today the distinction between public and private institutions is not easy to define. The authors of the Bradley Report labeled the distinction obsolete way back in 2008. “In fact,” the Go8 document states, “by OECD definitions, Australian public universities could be considered private providers.” (

As we look to a more diverse range of higher education provider types that moves beyond the dominant research-intensive university model, it is appreciated that there are going to be challenging times for the existing institutions.

The reforms proposed in the Budget will enhance equity, expand choice for students and deliver more diversity in types of institutions. The student funding model adopted must ensure that institutions that are not public universities are able to compete and continue to support students effectively. The students will be the beneficiaries.

Adrian McComb is the CEO of the Council of Private Higher Education.

As published in Opinion: Equity in subsidies serves students - By Adrian McComb | Published in Campus Review, July 21, 2014.|



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