Representing quality private education
providers in Australia

Be careful what you wish for

Monday, May 8 2017

A big piece of the federal government’s tertiary education policy and funding agenda was revealed last Monday with Minister Simon Birmingham releasing the Higher Education Reform Package. The Minister is to be congratulated for bringing forward reforms that provide some certainty and direction for the sector. 

This reform package has been a while coming with the Government’s previous 2014 proposals thwarted by the ‘$100,000 degree’ scare campaign.  That was a real shame as it contained measures that would have provided more choice and fairer access to higher education for all students regardless of their choice of provider.

Under existing funding arrangements bachelor degree students at private colleges get no funding support through the Commonwealth Supported Places (CSPs) program, as public university students do. Private college students can access FEE-HELP to pay for their (unsubsidised) tuition fees but also incur a 25% administration fee for the privilege, that is not paid by their university counterparts.

It’s not hard to spot the inequity and why ACPET has been so vocal on the need for reform.     

The policy rationale for this approach is difficult to understand. It’s not as if private colleges or their students are not up to the mark. As I’ve highlighted recently, the Government’s own national surveys of higher education students show overall levels of satisfaction are the same for private colleges and universities. The companion survey of graduate employers shows similarly high levels of satisfaction with the graduates of universities and private colleges.

Indeed, the very best student overall satisfaction results were dominated by private colleges.

So, we have the situation where students who want to attend the very best higher education institutions are punished financially for doing so. This hardly seems a good outcome for students, industry or the Government.

While ACPET argued strongly for these inequities to be addressed clearly the concern to contain government expenditure ‘won the day’ with the headline initiatives being the modest increase in university student fees and modest efficiency dividends for universities.

I must say that this does not mean that the need to address this inequity is completely lost. Certainly, there does seem to be plenty of support, it is just that the ‘fiscal realities’ took precedence. We are committed to working with the Government in finding a solution. I am pleased that both COPHE and TDA share our position. ACPET and COPHE released a joint statement last week on this important matter.

There is also, however, a proposed extension of CSP funding to sub-bachelor degrees delivered by universities that will further add to the challenges of both private higher education and VET providers and their students. The change will accentuate the inequity faced by students who choose a private college and will also see a shift towards university delivery of qualifications where quality VET providers are highly responsive to industry needs - a stated priority for this reform.

So, we will have, if the measures are passed by the Parliament, the recently overhauled VET Student Loans (VSL) program funding sub-degree programs through the VET sector and universities funded to deliver sub-degree programs through CSP and students loans.  Once again, I’m not quite sure the policy rationale for this is clear. What must students and industry make of all this?     

One scheme is overwhelmed by bureaucracy, caps and overwhelming rules, the other is about students’ driving choice and quality. A perverse incentive to choose higher education over technical skills development.

While ACPET supported the need to ensure the sustainability of the HELP student loan arrangements, the reduction in the HELP repayment income threshold from $55,874 (in 2017-18) to $42,000 from 1 July 2018, while maintaining the 25% loan administration fee, is a ‘double whammy’ for private college students.   

ACPET is committed to developing a higher education sector that best meets the needs of students, industry and taxpayers.  Addressing some of the inequities faced by students choosing a private college must surely be a priority.   

Of course, one can’t consider these changes in isolation.  These proposed reforms come on the back of the significant recent measures in the VET sector with the introduction of the VSL program causing considerable disruption and distress for many students and their providers. While ACPET called for the overhaul of the flawed VET FEE-HELP program some of the (VSL) funding decisions will penalise many students and quality providers.

Our sector really has taken a battering over the couple of years.

You then throw in the ‘collateral damage’ to international education from the changes to 457 visas, and the potential loss of $1.7B from the VET sector if the National Partnership agreement funding is lost, you can get a feel for just how hard it is.

We can only hope that the federal Government recognises the need to ensure a VET sector that is able to respond to the needs of students, industry and the economy and commits to a new National Partnership Agreement on Skills Reform to replace the agreement that expires next month. We will all watch the Budget closely.

ACPET appreciates that the current agreement had some fairly soft performance measures and Minister Birmingham is right in expecting any federal funding being contingent on the states and territories maintaining their funding efforts. Given the reduction in government funded training over the last few years a future agreement must simply be about putting more students into quality training and demanding student outcomes result.

Let’s see what Tuesday night’s Budget brings.

Rod Camm


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