Big universities face huge hit from fee shake-up

A number of Australia’s biggest universities will lose tens of millions of dollars in revenue under Dan Tehan’s student fee reforms.

A number of Australia’s biggest universities will lose tens of millions of dollars in revenue each if Education Minister Dan Tehan’s student fee reforms pass parliament, according to the most comprehensive study of the winners and losers from the policy yet.

Several of Australia’s biggest universities will lose tens of millions of dollars in revenue if Education Minister Dan Tehan’s student fee reforms pass parliament, according to the most comprehensive study of the winners and losers from the policy.

Centre for Higher Education senior fellow Mark Warburton has found Monash University will lose more than $17m by 2024 as a result of the changes to funding for domestic students, the University of Queensland will lose $14m, and the University of Sydney will lose $10.64m from the reforms alone.

All universities will see their funding increase up to 2023, and some are set to reap benefits from a change to student fees and commonwealth funding beyond the transition period.

They include a range of ­regional universities being boosted under the Job-Ready Graduate Package and the University of Western Australia which is set to see revenue go up $10.27m.

Mr Warburton — who implemented Julia Gillard’s university reforms when he was a high-level commonwealth bureaucrat — told The Australian on Wednesday that losses incurred as a result of the Morrison government’s reforms would lead to hundreds more job losses in the university sector, which is already shedding positions as a result of the COVID-19 recession.

“These reforms have some quite severe reductions in average funding levels,” he said.

“Universities can’t go to the wall as they’re public entities, but the losses are so substantial that university boards will need to consider measures to recoup those losses and the government will expect them to do that. That will include job losses.

“The government could have run with a much simpler package which would have achieved some of its objectives … I don’t think the government understands what it’s doing with this policy.”

Mr Tehan has promised a transition fund to get universities through the major funding shake-up that will see student fees slashed in post-pandemic job creator courses like science and maths, and the cost of units in subjects like law and humanities increase by as much as 113 per cent.

 

The Australian revealed in June that the reforms to student fees and shifts in commonwealth funding would see overall funding for some courses like science and maths ultimately fall, despite the government’s move to push students into those areas of study.

When that transition funding ends in 2024, Dr Warburton’s study has found some universities will lose significantly. Top of the list is the University of the Sunshine Coast, which is due to lose as much as $34m according to these projections by 2024, despite being one of the regional universities the reforms are designed to support.

Sydney, Monash, and the University of Queensland follow as the worst-hit universities under Mr Warburton’s 2024 projections.

Some universities are projected to grow revenue if the funding model comes into force. Macquarie University, which is reported to be considering cutting courses, is projected to grow its revenue by $24m in 2024 under the Job-Ready Graduates package, the Queensland University of Technology is expected to add $17m and Griffith University is poised to add $15m to its coffers.

Mr Warburton said the revenue benefits of the Job Ready Graduates package for some universities would depend on whether they could fill additional places for prospective students.

“They essentially have to earn that money by providing extra student places at a cheaper cost than before,” he said. “That will incur its own expenses for those universities. They have still lost money from foreign students and need to pay staff, pay for practical lessons. They could be hit.”

A Department of Education spokesman said the department did not agree with Mr Warburton‘s analysis and that universities would be able to prepare for the changes.

“To receive this additional revenue, universities will need to enrol students. This can only be expected – if universities wish to receive more money, they will have to teach more students,” he said.

“Claims about particular university funding outcomes in 2024 based on analysis undertaken now can also assume that there has been no change in the university’s enrolment patterns or practices. The Transition Fund explicitly gives universities a chance to adjust to the new arrangements under the JRG package and to respond to emerging demand.”

A separate analysis from ANU higher education expert Andrew Norton on Tuesday said the reforms could see funding for 10,000 student places dry up.

Professor Norton said contributions for continuing students and a backflip on hiking fees for psychology and social work students would squeeze the money available to fund students.

Mr Tehan’s education reforms are expected to pass the parliament in coming months but key crossbenchers are still in negotiations. One Nation senator Pauline Hanson on Tuesday said she had won a legislated definition to academic freedom in her negoti­ations, along with a plan to allow students a 10 per cent discount if they paid HECS debts upfront.