University Accord gets many things right, but will it be actioned?

The Universities Accord review says Australia needs to double the number of domestic university students to 1.8 million by 2050.

On Sunday, Education Minister Jason Clare handed down the final report of the Universities Accord. It includes 47 recommendations to improve and grow higher education in Australia, with a projected 1.8 million Commonwealth supported places by 2050.

Of the sweeping changes recommended, other standouts include increased access for students from disadvantaged backgrounds and calls to reform the HECS-HELP loan system.

The Accord report claims that 90 per cent of 25 to 34-year-olds will require a tertiary (vocational or university) education by 2050. Specifically for universities, the promised 1.8 million Commonwealth supported places will mean a minimum 55 per cent threshold for university attainment by 2050, up from 45 per cent today.

While this would certainly lead to a higher-skilled and more productive labour force, it should not be forgotten that this would require the majority of high school graduates to undertake an academic pathway, something that is not necessarily best-suited to all students. So, any policy movements need to dually ensure that high schools are setting up students for academic pathways, while ensuring that they are not pushed into university courses when vocational or other options might be better suited to them.

The report is clear that employers are going to demand more university graduates, however, it is unclear on whether students in aggregate are going to grow in their demand for university places. A key driver here is wages, and if the number of degrees increases, their relative value may decrease, reducing the salary a university graduate can attain. There is already a sentiment around vocational pathways (especially tradies and FIFO workers) being more lucrative than university pathways. So, in order to fill those 1.8 million university places, the government needs to consider how it will convince students to give up at least three years and tens-of-thousands in HELP debt to invest in their careers.

As someone who grew up in a community of low higher educational attainment, equity in access to university is deeply personal for Minister Clare. From the announcement of the Accord back in 2022, the minister noted that the Accord was about “supporting greater access and participation for students from under-represented backgrounds.”.

The Accord report highlights that low socio-economic, regionally-located, and Indigenous students are significantly under-represented in higher education settings, with Indigenous Australians also suffering from low levels of qualification attainment following enrolment.

To achieve enrolment parity for these students, the Accord report suggests outreach programs, fee-free preparatory programs, a needs-based funding model, and financial support for unpaid work placements. On the whole, these reforms are quite sensible. For example, the latter change will ensure that a nursing student who is unable to work part-time because they are on a full-time placement in a regional location will be able to get some financial support – an obvious issue with the system for quite some time now.

However, some will be quick to express that these measures do not go far enough. For example, the National Union of Students has been strongly campaigning to increase welfare rates for students to “match the cost of living”, and reduce the ‘age of independence’ from 22 to 18 years old – a quirk in the system that does not allow under-22s to access welfare unless their parents are under low income threshold, regardless of whether their parents actually support them.

The Universities Accord cannot be more clear: the Job Ready Graduates (JRG) package should be replaced. For those who don’t follow closely, JRG was the Morrison government reform that in 2021 increased humanities fees by 113 per cent (among many other fee changes) to try and direct students into courses it deemed “job ready”. My research shows that the policy did not work as intended.

Instead the Accord recommends a three-tier fee structure, where fees are linked to expected lifetime earnings – a similar structure to pre-Morrison changes. They also recommend tying HELP loan indexation to the lesser of the consumer price index and the wage price index, meaning we won’t again see the 7.1 per cent indexation due to a high inflationary environment.

There are a few other technical changes that will leave the HECS-HELP policy wonks (myself included) satisfied, but on the whole, the funding changes are quite reminiscent of the old system.

Beyond the proposed reforms mentioned above, there’s lots more in terms of research output, university leadership, new qualification types, and a future fund (although some universities are characterising this as a tax-in-disguise on rich universities). While they are certainly sensible on the whole, they will require significantly more budget support to enact in full. And given the Albanese Government’s current poll woes, we wait to see whether Minister Clare will be able to see through a passage of legislation to cement them all.

Maxwell Yong is an economist and researcher. His research showed that the Morrison government’s Job Ready Graduates policy did not have the intended effect of changing students’ degree choices.