How will deregulating uni places affect regional unis?

In today’s Higher Education Supplement, University of New England VC Jim Barber becomes one of the first non-Group of Eight VCs to raise questions about what happens when the supply of university places is deregulated, while prices remain at flat regulated levels. He fears that regional universities like his own will lose out as metro universities expand.

I have no sympathy for the old higher education system, run in the interests of institutions rather than students. We should not narrow students’ options so they have to end up at a regional university, if they want a university education at all. But nor should we deprive universities like UNE of the tools of competition, particularly on price.

The figure below, from a University of Melbourne analysis of international student fees, shows that regional unis have charged low fees to give themselves market share. Indeed, on average several of them earn roughly the same amount for an international as a domestic student (the figure also gives quite a few clues as to how the money is spent).

Barber’s solution, it will surprise nobody who has observed regional higher education politics, is another government handout – a $4,000 student contribution discount. The hapless taxpayer is spending enough on higher education already, and regional unis have to learn to deliver an attractive service rather than rely on handouts. But I certainly share Barber’s concern that a voucher system without price competition will have some unintended consequences that are in nobody’s interests.

7 Responses to “How will deregulating uni places affect regional unis?

  • 1
    Jame Vicars
    August 4th, 2011 06:54

    ‘Regional unis have to learn to deliver an attractive service rather than rely on handouts.’? Eh? What with?
    Mr Norton, higher education funding has bled in recent years, not to mention the impact that Howard’s VSU had on student infrastructure. I am a student at UNE – which, as far as quality goes, tends be one of Australia’s best kept secrets, despite past Commonwealth decisions (such as the financially-disastrous Dawkins amalgamation and disamalgamation). Even so, it will be disadvantaged by the new system, which will seem to encourage vast mega metropolitan campuses built at huge expense while not only the space is here but the facilities and the staff. Price competition is a very blunt policy instrument, without the intelligence we should expect from policy-makers. Finally, in encouraging the big to get bigger this will once again privileging centralisation rather than the reverse and is very likely to be a further blow to regional Australia.

  • 2
    Andrew Norton
    August 4th, 2011 07:59

    Jame – Most of UNE’s students are external so the fact that it is physically in Armidale doesn’t matter much for them – it is overall value for money. Price is only one element of that, but an important element for institutions that do not have an easy sell in high prestige.

    My plan is to decisively break the dependence on Commonwealth-set subsidies and prices which has been problematic over the years. For some institutions these have been protections as well as shackles, UNE among them I suspect, though I have not closely examined their demand and local demographics.

  • 3
    August 9th, 2011 09:35

    Yes – and I would disagree with the assertion that deregulation would necessarily lead to vast mega-unis. Yes, there will be some consolidation as sub-standard unis close and some of the better unis will expand – a move that should be encouraged.
    That said, people want value for money. And there may not be value for money in mega-unis. So also expect some of the better unis to charge higher fees and maintain a limited intake.
    After all its quality not quantity.

  • 4
    August 9th, 2011 11:34

    The problem with all Australian unis is they’re too expensive, the only ones that are not are the regional ones. CSU, UNE, probably SCU

    So you end up slipping back into class divides.

    Only those all ready of considerable wealth or on a significant scholarship can afford to go to places like ANU or Melbourne

  • 5
    August 9th, 2011 14:20

    The regional universities might get the first year students but then have others cherry pick their best students in year two…

  • 6
    Russell S
    August 10th, 2011 11:27

    Senexx – Isn’t the issue that the lack of price deregulation (for undergraduates) means all institutions charge the same and students aren’t able to either make a choice based on price versus quality/prestige – or potentially get the benefit of lower costs for regional institutions? While you might argue that postgrad programs are expensive, the price differential between institutions is still not that great.

  • 7
    Enrolment share in deregulated higher ed markets | Andrew Norton
    September 8th, 2011 18:33

    […] places to be largely deregulated from next year for public universities, there is considerable anxiety at some institutions about how this will turn out. My theory is that a market without price signals will be bad for […]