Over-enrolment fines will backfire, Canberra warned

Proposed fines for “over-enrolment” risk further handicapping the universities most disadvantaged in the “Hunger Games” system the Australian government wants to replace, experts have warned.

Submissions to a Senate committee say automatic penalties for exceeding student quotas will inflict most harm not on the large city universities, where the government wants to restrict growth, but on struggling institutions where demand is more volatile.

The National Tertiary Education Union (NTEU) said universities could exceed their quotas “without a single additional admission” if current students decided to take on more subjects when local job opportunities dried up. “Study-intensity decisions respond to labour market conditions and are outside a provider’s control,” the union stressed, in a submission to the Senate’s Education and Employment Committee.

The NTEU said it supported a crackdown on over-enrolments because they had fuelled an expansion of class sizes and casualisation of the teaching workforce. But penalties should be discretionary and applied only after “mandatory consideration of matters outside the provider’s control”, it insisted.

The committee is inquiring into the “Open the Doors of Opportunity” bill, which legislates a system of “managed growth” supervised by the Australian Tertiary Education Commission. It limits admissions in excess of universities’ domestic quotas to a 5 per cent “buffer”, up to an overall cap of 750.

Universities will receive tuition fees, but not teaching subsidies, for over-enrolled students. However, institutions that exceed their buffers will be fined the average of their tuition fees for every unauthorised admission.

These calculations will be based on universities’ equivalent full-time student numbers, rather than student headcounts – a factor that “introduces further complexity”, according to a submission from the University of Sydney.

“Students regularly alter their study loads, defer enrolment, transfer between courses or change disciplines,” Sydney’s submission says. “[This] can affect how commencing load is calculated.

“Student load planning occurs well in advance of each academic year, requiring universities to make enrolment decisions based on imperfect information about domestic demand, acceptance rates and student behaviour. Even small forecasting differences can have significant financial consequences under a system of tightly managed caps.”

Mark Warburton, honorary senior fellow at the University of Melbourne’s Centre for the Study of Higher Education, said student load could spike by up to 10 per cent “simply due to student decisions about how much to study”.

This was most probable in the financially struggling institutions of regional Australia and the suburban fringe, Warburton warned. “In economic downturns, students increase the amount of study they are doing,” his submission says. “This occurs more at outer metropolitan, regional and rural universities than at inner metropolitan universities, which have more students straight out of school…with relatively affluent parents.”

Warburton said the proposal for over-enrolment penalties was “very poor policy” and should be removed from the bill. “It is not necessary and potentially harmful to some [of] our more vulnerable universities.”

Monash University policy expert Andrew Norton said the proposed fines penalised students, even though the bill characterised them as reductions in university funding. “Money students are paying, that should have supported their education, is instead being confiscated,” says the submission by Norton, who believes the over-enrolment limits should be scrapped.

Norton said the fines had been structured to protect universities that had significantly over-rolled in 2025, while accumulating against universities that were struggling to get more recent over-enrolments under control.

john.ross@timeshighereducation.com