Uncapped student market to cost more than expected

12 July 2012

Canberra coffers hit by response to new 'demand-driven' enrolment policy. Susan Woodward reports

Enrolments in Australia's newly uncapped market for students are outstripping predictions and will force the federal government to fund tens of thousands more places than anticipated.
In January, Australia ushered in a "demand-driven" system, allowing its 37 publicly funded universities to accept as many undergraduates as they choose - or who choose them - while continuing to fund each place.

According to data recently released, the policy change has led to an average rise of 5.3 per cent on offers of undergraduate places compared with 2011. They have also increased 15.9 per cent since 2009, when the government announced plans for the policy and began to ease caps.
For students, the impact of the policy has meant an 87.2 per cent success rate in applications in 2012, compared with 83.7 per cent in 2009.

Daniel Edwards, who compiled the data as senior research fellow for the Australian Council for Educational Research, said growth of such magnitude had forced the government to adjust its forecast.

In 2009, federal budget estimates predicted that 458,000 government-supported places would need to be funded in 2012-13. By this May's budget, however, the figure had increased more than 50,000 places to 512,000.

A tertiary education department spokesman said the government had injected an additional A$759 million (£500 million) to meet the increased demand for 2012. It now estimates that supported places will top 560,000 by 2015, he added.

Dr Edwards said that he was in favour of the idea of a demand-driven system, but added that underestimating its impact had put the current Labor government, which is bent on cutting budget deficits, in a tight spot.

"When it grows this quickly and when it's a bit of an open cheque to the universities, it does have a bottom-line impact," he said. "There are political implications across the board when you've got something that's open and that universities are finding a market for."
The Australian Catholic University is one institution to have seized the chance to expand its offerings.

The university, which has had a 40 per cent spike in student numbers across its six campuses since 2009, now has 18,000 students. Deputy vice-chancellor Pauline Nugent said it aimed to have 25,000 students by 2017.

"ACU began a calculated growth plan several years ago in a bid to position itself for the introduction of the demand-driven system in 2012," Professor Nugent said.

Fears that the new system will mean Australia's regional universities losing students to metropolitan counterparts have not been supported by the data.

Caroline Perkins, the executive director of the Regional Universities Network, confirmed that early trends indicated that enrolments had risen by 10 per cent at some regional institutions.
"We're undergoing fairly healthy growth, but we know that it's early days...It will probably take a few years for the full impact to be felt, and we need to remain fairly vigilant about how we respond," Dr Perkins said.

"This is also a broader issue about the national need for regional universities and the training of professional people in the regions," she added.