Yesterday the Department of Education released the 2005 financial reports (pdf) for publicly-funded universities. According to Catherine Armitage’s report in this morning’s Higher Education Supplement:
THE so-called Nelson reforms appear to have undershot their potential to fill university coffers, with local undergraduate fee-paying places earning universities just $103.7 million, or 0.7 per cent of revenue, in 2005, the first year in which looser regulation of local fee places took effect.
I’m not so sure that this is the right take on 2005’s finances. On my calculations, up-front revenue from Australian full-fee undergraduates is up a healthy 9.8%, but this is not counting the people who deferred their payments through the FEE-HELP loans scheme, which was the most important element of the Nelson reforms. This is where it gets hard to work out what is going on, because FEE-HELP covers both undergraduate and postgraduate fee-payers.
However, we can take an educated guess. FEE-HELP’s predecessor, PELS, was available only to postgraduates. FEE-HELP lending in 2005 was 21.7% higher than PELS lending in 2004. We already know from aggregate enrolment data (pdf) that postgraduate enrolments overall were stable. This suggests that most of that lending growth was in the undergraduate market. It’s possible that undergraduate full-fee revenue is in fact up by 40% or more.
Another aspect of the financial data pointing to growth in the undergraduate full-fee market is the surprisingly low growth in revenue from Commonwealth-supported students. On my calculations, it is only 3.1%. Given that this was the first year of the 25% increase in student contributions that many universities imposed (though only to commencing students), and that there was normal indexation (about 2%) on students from previous years, it should have been more.
The only ways I can think of to explain this are that the total number of Commonwealth-supported students was down and/or there was some shift in the discipline mix toward lower-revenue places. I think the former explanation is likely to be the main one as we know that total undergraduate enrolments increased by just .9%.
My interpretation: Commonwealth-supported undergraduate enrolments actually went down for the third year in a row, and all the growth was generated in the full-fee market. As has been the case for a number of years, the private education market is propping up the dysfunctional public higher education system. Little wonder the government seems to be endlessly stalling releasing the full student enrolment data that would tell us what is really going on.
Andrew Norton 
Your conclusion that the private higher education system is propping up the public one might be correct, but it is a certainty that we wouldn’t have a private, fee paying system if the universities weren’t so good in the first place. Given that context, who exactly is propping up who? The system built by governments to allow the affordable education of it’s citizens, or the system built to leach off that achievement so that dullard rich kids can play too?
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David – The private higher education *system* isn’t propping anything up, it is privately-funded students within the public system.
And please spare us the stuff about ‘dullard rich kids’, since at places like Melbourne (the largest enroller of such students) many of them come in on ENTERs of 95+, and the dumbest of them could walk into almost any course at most other Australian universities.
Such prejudice!
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Beautiful response Andrew. Treated with the respect it deserved.
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I quote from the Age (23 February 2005)
“Students can obtain a full-fee place with marks below the entry score for a Commonwealth or HECS place. The entry score for a HECS law place at Melbourne was 99.4, while the fee-paying score was 96.
“Opposition education spokeswoman Jenny Macklin said the student figures made a mockery of the Government’s claims that no more than 35 per cent of students would pay full fees.
“People who can pay $96,000 to study law at Melbourne University, now have more than twice the chance of getting in as those who don’t have the money to pay full fees,” she said.
http://www.theage.com.au/news/National/Dramatic-lift-in-fullfee-uni-students/2005/02/23/1109046987717.html
Why exactly should your parents money be the deciding factor in whether you get a place in a highly sought after vocational degree like dentistry?
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David – They can take out government loans, though they won’t cover the full cost of dentistry. But even without the loans, I can’t see why parents should not decide to pay. Since when is producing more dentists a social bad?
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Andrew,
More dentists are great, no question. Any policy that can produce more qualified dentists and doctors should be supported.
Further, somebody willing to pay money to get into dentistry will have more motivation to finish presumably.
What I object to is the inherent bias of shifting the entry standard downwards for cash (it’s still a bell curve isn’t it?). If you want more dentists, I don’t see a problem with either shifting the standards (we have evidence that the 99.4 standard is apparently excessive for dentistry, since $60,000 will buy you 3.4 points).
The government is rolling in cash it refuses to spend on important areas like this. Instead, we get an old-australia policy of biasing the intake to those with wealth or access to it (note: I don’t think that is the intention of the policy, just the outcome). Funding medical/dentistry places is surely small change compared to a strange middle class welfare which gives with one hand and demands payment with the other.
The alternative (borrowing the money through the government FEE-HELP scheme) sounds OK unless you feel that graduating with more than $60,000 worth of debt is good social policy. Most of these people are young and that is an awful lot of money.
I can’t prove it’s discriminatory, personal experience suggests it probably is. I’d be interested to know what the correlation is between entry scores and regional students who might be more willing to work where there is a scarcity of doctors. If you want to bias the intake, how about attempting to influence both the scarcity and distribution at the same time?
I will say that not all federal government decisions in these areas have been misguided (new medical school up here at Armidale is excellent policy, even if the majority of the graduates still end up back in Sydney), it’s a start at addressing the problems in a rational way.
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