Master’s places rise, as universities adopt ‘social good’ mindset

Australian universities increased their postgraduate enrolments during the coronavirus pandemic, although it left them no better off and even hurt them financially. But the gesture has left them in a bind by entrenching expectations that they will provide subsidised master’s places, just as their capacity to do so declines.

A new study has found that university administrators are not necessarily guided by financial interest, even when it comes to postgraduate places – one of the few areas where they have the discretion to set fees.

The study, published by the University of Melbourne’s Centre for the Study of Higher Education, analysed how universities responded to a Covid-era relaxation of rules governing the use of teaching subsidies. The change, part of the 2021 Job-ready Graduates (JRG) reforms, allowed administrators to expend unused bachelor’s and sub-bachelor’s subsidies on taught master’s study, and vice versa.

It coincided with a funding guarantee introduced to help sustain universities’ financial health during the pandemic. The government committed to maintaining their teaching allocations at 2020 levels for four years, even if they failed to attract enough students to use the subsidies.

This meant universities obtained no financial gain by using funds that they would have received anyway to subsidise more postgraduate places. And they risked reducing their income by discouraging enrolments in more lucrative full-fee master’s places.

Despite this, master’s enrolments soared in 2021 and again in 2024, following a lull in demand for higher education during an upturn in the labour market in 2022 and 2023.

The study, by Monash University’s Andrew Norton and the University of Western Australia’s Ren-Hao Xu, found that some universities had enhanced their competitiveness by increasing postgraduate enrolments. For example, La Trobe University and Queensland University of Technology had boosted their share of master’s students in information technology – a field previously dominated by crosstown rivals – by offering subsidised places.

Graduate certificates introduced during the pandemic had also encouraged postgraduate study. But Norton, a professor of higher education policy, said these factors could not fully explain the spike in master’s numbers.

He said the JRG change had helped reverse a long-term decline in postgraduate study, as universities opened up subsidised places in “social good” fields like nursing, teaching and social work. “Offering affordable courses in nursing in particular – I think that made a difference,” he said.

“It meant that students who wouldn’t have done a full-fee course, because it was too expensive relative to their likely returns, did in fact enrol because it was more affordable.”

The study found that 29 of the 38 publicly funded universities had increased their postgraduate enrolments in fields outside medicine, which is governed by different rules, between 2019 and 2024. Thirty-one had increased their postgraduate numbers as a share of total enrolments.

Overall, the postgraduate share of subsidised university places had risen by over 40 per cent. Meanwhile, admissions into full-fee taught postgraduate courses declined by about 7,000 or 10 per cent, meaning that subsidised postgraduate places outnumbered the full-fee variety for the first time since the late 1990s.

But Norton said the availability of subsidised master’s places now appeared almost certain to contract, as a spike in school-leaver numbers forced universities to shift teaching grants back into undergraduate courses.

Their capacity to accommodate postgraduate demand may be further constrained if a bill to curtail the admission of unsubsidised students, known as “over-enrolments”, passes parliament.

Norton said the data suggested that “mission-based” considerations helped drive universities’ spending decisions, but not when the funding settings made it completely unaffordable. “There comes a point where it doesn’t make any sense,” he said.

He said that if universities were forced to reduce subsidies for master’s courses, they should do so in information technology rather than nursing or teaching. “But obviously that’s a judgement the institutions will have to make.”

john.ross@timeshighereducation.com