Australia’s number caps ‘could be scrapped’ amid virus crisis

Spike in student demand driven by economic woes could force government to bring back demand-driven system

March 24, 2020
Source: Getty

The coronavirus pandemic could succeed where years of lobbying have failed, by convincing Australia’s government to restore the demand-driven university funding system, according to policy experts.

Commentators say hunger for upskilling and retraining, as coronavirus lockdowns displace thousands from the workforce, could force the government to remove the caps it imposed on university places at the end of 2017.

The government’s need to trim the cost of Australia’s social security net, which has ballooned as newly unemployed people apply for benefits that have temporarily been doubled, could make extra higher education funding a relatively attractive trade-off for reduced welfare spending.

Andrew Norton, professor in the practice of higher education policy at Australian National University, said a university funding hike would add to the government’s overall costs, even if it decreased the welfare bill. But he said the coronavirus would magnify demand for university places well before an anticipated spike in school-leaver numbers hits admissions offices in about 2023.

Professor Norton said universities could now expect increased demand next year because of multiple factors. He predicted an increase in deferrals this year as students postponed their courses until 2021, deterred by the prospect of studying online.

By contrast, he expected fewer than usual students to defer their courses next year. Job markets were likely to be depressed and travelling opportunities constrained, removing the obvious alternatives to study.

And while attrition was likely to spike this year – as students studying remotely struggled to pass their courses – the reverse could be expected next year. “Attrition normally goes down during recessions,” Professor Norton said. “There will be more people continuing with their studies than might be the case otherwise, [simply because] there’s nothing better to do.

“All these factors together suggest that even if applications don’t change very much, the actual realised demand next year could be significantly higher than this year.”

Education minister Dan Tehan has introduced performance-based funding as a means of bankrolling extra university places. He has also indicated that universities will be given more flexibility to exhaust their current funding, for example by harnessing unused postgraduate teaching grants to subsidise more bachelor’s students, and that increased tuition fees are under consideration.

But sceptics doubt that these measures will free up enough money to satisfy rising demand, particularly given the pandemic’s impact on student success and graduate employment rates – key measures in the performance-based funding system.

Professor Norton said universities had been “utterly swamped by a major historic event” and their performance on such measures would deteriorate significantly. The A$80 million (£40 million) available under the new scheme was “so trivial” that it would not underwrite many more enrolments in any case, he added.

A university policy analyst, who asked not to be named, said the coronavirus would leave “an awful lot of people with time on their hands”.

They added: “It’s not a matter of hiding the unemployment numbers by putting them into education. It’s what’s the most constructive thing we can do with this free capacity?”

Innovative Research Universities executive director Conor King said that as the coronavirus depleted universities’ reserves, they would behave like households and businesses by cutting avoidable spending. “All the scenarios they’re looking at give them a deficit of some sort,” he said. “It’s a question of how big.”

Mr King said the government wanted universities to be “major economic activity points” in their immediate regions as well as broader economic drivers through skills development and innovation. “I can’t see there’s any outcome other than universities will need some kind of serious prop up from this year, if [the government] wants them to be effective next year.”  

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