Our ‘over-enrolled’ universities

Some Vice-Chancellors will be relieved that tertiary education minister has issued a media release talking up the promised demand-driven funding system. It is an obvious savings measure for a cash-strapped government, with no parliamentary approval required for delay and few punters having any idea what it is.

Data released by Evans’ office (though not in the link above) can be compared to funding agreement data to see university ‘over-enrolment’ levels. Under a phase-in to the demand-driven system, universities can receive government tuition funding up to 10% more than their agreed amount for 2010 and 2011 (up from 5% under the previous government). For students enrolled above that, they get the student contribution amount but not any direct Commonwealth tuition subsidy.

Though we can’t directly extrapolate from student numbers to $ amounts, 23 universities have hit 10% undergraduate over-enrolment, and 7 have hit 20% undergraduate over-enrolment. Australian Catholic University is a staggering 41% over-enrolled. Across the whole system, over-enrolment is at 13%.*

While ACU is the most over-enrolled in percentage terms, Western Sydney is the most over-enrolled in EFTSL terms, with more than 4,000 more students than it originally agreed to take for 2011. Not surprisingly perhaps, they have been advertising heavily for more staff.

This pattern of over-enrolment makes it hard to predict what will happen in a demand-driven system. We might have expected Group of Eight universities to hold back student numbers to maximise prestige, but collectively they are only slightly less over-enrolled (11%) than the system average. UNSW is the second most over-enrolled in absolute terms.

And we might have thought that the former College of Advanced Education universities, which still have the weakest brands, were vulnerable to poaching from the tiers above, such as former tech colleges and universities from the 1960s and 1970s. But half the top ten over-enrollers in percentage terms are from this group.

These numbers also have implications for the funding review. While of course all universities are calling for more money, it requires complex arguments about average compared to marginal cost to explain away these figures. Otherwise it appears that universities are falling over themselves to enrol additional students at funding rates they claim are too low. If I was sitting in the minister’s office, I would call their bluff and give them nothing more than what they get already.

* I have had to use 2010 target enrolment figures for 3 universities, but this is unlikely to have a major effect.

9 Responses to “Our ‘over-enrolled’ universities

  • 1
    conrad
    April 24th, 2011 16:03

    “Otherwise it appears that universities are falling over themselves to enrol additional students at funding rates they claim are too low.”
    .
    I think it’s more complicated than that — my bet is that what you’ll find is that most of the additional enrollments are in areas that are cheap to teach because it’s easy to get staff and because there are lots of postgraduates happy to teach (e.g., Arts).

  • 2
    Andrew Norton
    April 25th, 2011 06:34

    Conrad – At the margins, I think this applies to most disciplines with lectures and tutorials as the main basis of teaching. However, from the acceptances data for 2010 when over-enrolment started surging it is not driven by courses that are primarily student funded. The two fields where the Commonwealth subsidy is hardly worth worrying about – law and business – actually had *declines* in acceptances between 2009 and 2010. And the field where the Commonwealth subsidy has the highest impact – science – had the biggest *increase* in acceptances.

    I’ve said before that I think some of this behaviour is reckless, and I am yet to see evidence that would cause me to withdraw that judgment.

  • 3
    conrad
    April 25th, 2011 17:41

    “I’ve said before that I think some of this behaviour is reckless”
    .
    I agree, although I think that most VCs don’t think about what actually happens in classes, only that they can be taught (i.e., they don’t care about corners getting cut or how standards are affected — indeed, I doubt they have any real idea about standards at all as most of this is done at the departmental and individual course level. cf. student satisfaction surveys) — Why teach chemistry with reagents when you can just use computer simulations? or why disect animals in biology when you can just watch a video? or why have 14 week semesters when you can have 12 or 10? All that happens at most places is that everyone gets a target number for enrollments and some sort of incentives to get there.
    .
    Speaking of consequences of this sort of stuff, I’ve learnt via gossip that there’s an interesting case at Deakin going on where they have over-enrolled in a clinical course which they doubled overnight, and now they can’t get enough clinical placements for some of their students (these are exceptionally hard and expensive to get and organize, so it is no surprise to anyone presumably except for the people that screwed up). I’m not sure what will happen as yet, but it will be interesting to see if they get legal processings against them because of this.

  • 4
    Andrew Norton
    April 26th, 2011 08:22

    One interesting question is how much VCs actually drive these decisions, and how much is coming up from the faculties or other parts of the unis (for one thing, VCs are typically on holiday when the offers go out).

    On clinical places, as you know these have been a chronic problem across all unis for years, and are worst for international students. Certainly serious ethical questions could be raised about uni enrolment practices, and I suspect there are also breach of contract cases that could be brought.

  • 5
    conrad
    April 26th, 2011 10:44

    “and how much is coming up from the faculties or other parts of the unis”
    .
    My experience is that there’s usually quite a hierarchy, and the successful areas are usually comparatively successful due to people at the faculty level that want to make things happen — there are of course managers above that simply create mindless targets, but in general, since they don’t actually come up with ideas on how to get the new students, make changes etc. they’re essentially useless. You could probably employ a monkey to do this if you wanted. I think that level is certainly the most worthless (everywhere I’ve been) and seem good at created “make work” changes that waste many people’s time, but little else.
    .
    I also think that “big” changes are done sporadically by VCs and can be evaluated, although I’m not sure they’re nearly as successful as people at the lower levels that actually know what is going on. Where I work at present, the “big idea” from our VC (hopefully ANU will enjoy him more), was trying to go online, but that basically loses money, and is essentially a failure as far as I can tell (now a classic example of a sunk cost). Alternatively, the areas that did well compared to other universities with similar offerings are basically ones where a few key people were able to make good decisions about expansions (one might call that organic growth, which seems to be the most successful way of growing).
    .
    You could also look at who created or was the impetus behind some of the big failures (e.g., the various overseas campuses that failed or are now sunk costs, e.g., UNSW’s Singapore campus, Monash’s South African campus; the “big” collaborations, all of which just waste money, e.g., Universitas 21, the EU Consortitum (or whatever its name is) etc.; the private arms of various universities, e.g., Melbourne University Private). I think part of the problem is that VCs also experience “inputs as outputs” judgement so loved in the system here, and so they think of these big useless things and claim credit for spending money — or perhaps I’m wrong and they just tick the box, with the bad ideas coming from other parts of management.
    .
    As for success stories of VCs — it would be good to compare like-with-like departments across universities and see which ones have outperformed and why. Obviously VCs can stick resources in some places and not others, and presumably good judgement doing this can help people lower down the chain actually make changes for the better, thus the interactions between people are probably important. This might be an area where they do better that is less obvious than their failures. For example, if an area is successful, it is often used to subsidize other areas. This is very commonly done, but demotivates everyone in the successful area (why build something good when the benefits accrue to other people?). Presumably smart VCs can work out ways to stop this happening too much.

  • 6
    Andrew Norton
    April 26th, 2011 11:31

    I think the idea that there would be a massive shift from on-campus to online has proven to be incorrect to date, but mainly via Open Unis Australia online study is growing quickly. As I understand it, Swinburne’s deal for more online was with Seek, so trying to use the leverage of their internet reach. In a competitive market, this makes sense. The economics will depend of course on demand and pricing, but the capital costs of IT are lower than for on-campus education, Swinburne uses its IT capital year-round rather than 6 months a year, and at least for the units I did it is the same curriculum as for on-campus, saving on costs there.

    And while I do think there are issues with the quality of uni management, I think credit should be given where it is due: who would have thought 25 years ago that they could create a multi-billion dollar export industry?

  • 7
    conrad
    April 26th, 2011 14:10

    “but the capital costs of IT are lower than for on-campus education”
    .
    It’s not clear to me that is true because (a) to accredit many courses, you need an on-campus equivalent; and (b) it is actually more time-consuming to run many online courses than face-to-face ones, so you actually have bigger staff costs. Apart from that, the main problem with Swinburne’s model is that since OUA went to a for-profit model, they are offering too little per student to be economical in most courses (this is one of the reasons Monash left them and why Swinburne will too once the contracts are up). This means that other partners need to be used, which in Swinburne’s case is Seek, running under the title “Swinburne-Direct”. The problem here is that unless Seek manages to get as broad a coverage as OUA in terms of advertising (very unlikely), no-one will have have ever heard of it and so no numbers won’t be high enough to make courses profitable. Perhaps the new VC will take the losses and run. I think Deakin has a better model where they just market stuff through themselves, but that took them years of hard work to build-up, unlike all the universities that want to rely on partners to do this work in a hurry (that’s not to say you couldn’t use partners, but the margins are so thin that it seems rather difficult).
    .
    “I think credit should be given where it is due: who would have thought 25 years ago that they could create a multi-billion dollar export industry?”
    .
    I agree, and looking at the recent figures in OS student numbers, it appears to have mainly hit non-university courses.

  • 8
    Andrew Norton
    April 26th, 2011 14:27

    I was paying the student contribution amount for my units, but Swinburne was not getting any Commonwealth contribution. I could understand that it would be difficult to make money on that basis. I’m not sure of the labour differences between the courses – after the sunk cost of the course materials that I assume were the same for online and campus, assessment was the main staff cost. We had quite a lot for online; not sure if on-campus had less. In the first year subject I did a lot of this was purely online with computer marking and so most of the effort was in devising the materials, but in second and third year we had to submit work that was individually evaluated.

    I know the second year subject had 83 online students, which would have generated around $80,000 revenue – not sure what OUA’s cut is, but well over what Swinburne had to pay the senior lecturer for 3 months work.

    I presume with Swinburne Direct they will use Commonwealth-supported places from 2012, which will significantly increase revenue per student.

  • 9
    conrad
    April 26th, 2011 18:06

    “I’m not sure of the labour differences between the courses – after the sunk cost of the course materials that I assume were the same for online and campus”
    .
    Most people I know that do both online and on campus stuff think that online stuff actually takes more time, even once you have the materials developed. Alternatively, you can do a lot of it at home more easily, so night tutorials etc. are much more bearable. You also don’t have “collateral” time lost where you are writing references letters, providing job advice etc. for students that you see face to face for 3 years. Given this, I’m not sure what the real trade-off is.
    .
    “Assessment was the main staff cost. We had quite a lot for online; not sure if on-campus had less. ”
    .
    Swinburne does a lot of assessment all round (at least the faculty I’m in). I’m not sure why aside from history, although it’s good for many students (as a comparison, I know Sydney University has rules against the amount of assessment we use in some subjects).
    .
    “not sure what OUA’s cut is, but well over what Swinburne had to pay the senior lecturer for 3 months work.”
    .
    OUA keeps on reducing the cut, which is a big reason they are leaving (I believe). I think they wanted to give us around $300 per student last time if I remember correctly, so it’s less economical than you think. I think with Swinburne direct, both Seek & Swinburne put in half the money each (6 million total?) and then they split the profits (Seek does the advertising, Swinburne the teaching), which means it is far easier to do economically if you can get the same number of students, whether CSP or not, and you don’t end up with OUA forever trying to reduce the amount they give you. It’s also simple to transfer courses over. I imagine if this is successful (which I don’t think it will be), it will a big problem for OUA because it should be pretty simple for other universities to copy (it’s not like the technology is hard to set-up these days), and so OUA will have no-one to run their courses — and why go to OUA when you can an accredited degree from somewhere decent?