Opportunity looms for Australia’s independent sector

Soaring demand and a slightly more even playing field augur well for private and independent higher education providers

September 9, 2020
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Australia’s independent higher education sector appears set for a growth spurt, as universities struggle to accommodate student demand and government policies tip in private colleges’ favour.

Uptake of places grew more quickly at independent providers than public universities under Australia’s demand-driven system, even though universities attract teaching subsidies denied to most other colleges, and their students avoid the 25 per cent loan fee levied on private college enrolments.

The independent higher education sector attracted 47 per cent more new domestic students in 2017 than in 2011. Commencements at the 37 public universities grew by a relatively sedate 15 per cent.

Representative body Independent Higher Education Australia (IHEA) said that its members had been growing at twice the rate of the public sector before the Covid-19 outbreak. And while the pandemic had temporarily suppressed appetite for study, that was not expected to last.

“There is significant demand for tertiary education,” said chief executive Simon Finn. “I don’t think anybody knows the Covid scenario, but there are opportunities.”

The opportunities are reflected in course application figures across the country. By 1 September, the Universities Admissions Centre in Sydney had received 24 per cent more submissions for undergraduate study than at the same point in 2019, driven by a 27 per cent increase from high school students.

Applications from older people, primarily for courses starting in the second half of this year, were up by 18 per cent. Universities outside New South Wales have reported similar surges in demand.

While the government says that its Job-ready Graduates reform package will help satisfy this demand, analysts including Australian National University policy expert Andrew Norton and University of Melbourne research fellow Mark Warburton disagree – suggesting that more students may need to consider enrolling with non-university providers.

Recent rule changes have somewhat alleviated the independent sector’s competitive disadvantage, with students at four private universities no longer required to pay the loan fee. More significantly, perhaps, independent providers – unlike public universities – have attracted the JobKeeper emergency wage subsidy introduced during the pandemic. Mr Finn estimated that JobKeeper was supporting some 5,000 jobs among IHEA’s 70-plus members.

Independent colleges – unlike universities – were also given some extra funding to subsidise short online courses developed during the pandemic. They shared A$7 million (£3.8 million) to support 1,015 places, Mr Finn said, with applications for the places “oversubscribed”.

The Job-ready Graduates legislation has been referred for review by a Senate committee. If it passes parliament, demand on independent colleges could increase further – particularly in disciplines facing large fee hikes.

Units in law, economics, management and humanities areas will be almost unsubsidised, with students paying 93 per cent of their course costs, so the relative unattractiveness of privately delivered full-fee alternatives would decrease.

But other disciplines would be affected differently, Mr Finn noted. “[For] some, student contributions will be a lesser proportion. There are ups and downs in terms of the pricing movements,” he said.

The changes would also cut students off from government benefits if they failed too many subjects, saddling universities with punitive measures that independent colleges have borne since 2017. Mr Finn said that IHEA supported this change. “Academic progression requirements should apply universally across the sector,” he said.

But he said that the government should go further by completely abolishing the “loan tax” to remove financial barriers, encourage study and “create a level playing field for all providers”.


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