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Split on extending CSPs to private providers – and fees

22 April 2014

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The Kemp-Norton review’s recommended extension of Commonwealth subsidies to students attending private for-profit higher education providers has split the public university sector. 

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Universities Australia (UA) says such an extension is a policy high wire act which, if not properly controlled, could endanger the hard won reputation of the Australian higher education sector and called for a cautious approach.

UA chief Belinda Robinson says universities are not opposed to even more competition but such a move would “represent a radical change to the ecology of Australian higher education and warrants further, deep and comprehensive analysis, including of any unintended or undesirable consequences”:

In considering this recommendation, serious analysis must be undertaken on the potential impact on educational quality, Australia’s international reputation, potential taxpayer dollar waste as a consequence of institutional failure, relative quality assurance safeguards (both internal and external) and the capacity for meeting future labour market needs.

Greg Craven, vice-chancellor of the Australian Catholic University, which has almost doubled its student enrolments from 14,000 to 24,000 since the introduction of the demand-driven system, said giving private providers access to government subsidies might prove to be problematic.

There is a basic psychological difference between a statutory body (university) ploughing money back into the enterprise and a private college whose modus operandi is to make a profit.  Right or wrong, there are simply a different set of economic assumptions and if you are going to extend public funding you have to think that through.

He notes “the hint” in the report seems to be that uni students might have to pay more out of their own pockets to bankroll the extension to commercial operations.

Of course, there always has been the argument that if a government were to allow universities to charge more by way of fees — arguably necessary at some future point to support national research excellence — private colleges would keep them honest by undercutting them.

But the truth is the privates would not be competing with the elite universities that might potentially charge a significant premium, but with the very mass-entry institutions that inevitably would have to keep their charges low.

Right on cue, in an article for the Times Higher Education supplement, Warren Bebbington, vice-chancellor of the University of Adelaide, a member of the Group of Eight leading universities, says that the review is an opportunity to transform Australian higher education into the most dynamic system in the world.

According to Bebbington, if the chance is taken, Australia could develop a system with as much variety of provision as the US, but “without the crippling debts that American students suffer”. But:

…the review’s recommendations have generated anguished outcry from our public universities. It seems for some vice-chancellors, ‘demand driven’ means only that government should demand everyone is driven into the present public universities. The sameness which bedevils Australian higher education, where we all try to be comprehensive research universities, would simply go on and on.

Meanwhile, the case in favour of fee increases has kicked off , with Ian Young, vice chancellor of ANU and chair of the Group of Eight, in a nuanced article with ANU chancellor Gareth Evans, argues:

It is time to change our one-size-fits-all funding system and let diversity develop. Changes to the system will be controversial, but real change is required if Australia is to offer its young people a real choice in education and produce graduates to match the best in the world.

Andrew Norton, co-author of the review responded that the peak body is out of line with many of its members and its concerns weren’t backed by solid evidence. He noted that many universities are already happy to take students prepared for university study by for-profit providers such as stock exchange listed Navitas Ltd.

He said extending public subsidies to non-university providers is a critical part of the review’s proposed changes, noting that such providers were more expert and successful than universities at delivering sub-bachelor programs such as diplomas. One of the recommendations of the review is that the government include higher education sub-bachelor programs, such as diplomas, in the demand driven system in which public universities are allowed to offer as many government subsidised bachelor degree places as they can fill.

The architect of the demand- driven system, Denise Bradley, has also given the thumbs up to the Norton-Kemp review while lashing out at commentators who have raised alarm at the recommendation to include private colleges and training organisations in the funding system. Bradley told The Australian that the Norton-Kemp review “moves the demand-driven system forward to where it needs to go”.

[The review of higher education] had always assumed that commonwealth supported places would spread further among non-university providers.  Some of the biggest owners of private providers are universities themselves and there is something extraordinary about the Universities Australia media release on the review. Every university either owns a registered training organisation or works in a formal relationship with one.

 

See
University funding: Student fees may rise as Government considers major shake-up (ABC AM)

 

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