Demand-driven funding in Australia should be restored

Mass higher education systems now operate across much of 바카라사이트 world. A strikingly wide variety of university funding policies produce similarly high and usually increasing participation rates. Sooner or later, it seems, 바카라사이트 social and economic forces driving demand push policymakers into delivering more student places, whatever 바카라사이트 funding system.

Still, important differences between systems remain. These affect how quickly demand is met and how fine-tuned student places are to student preferences.

Government-set maximum spending levels lock total funding into 바카라사이트 short- to medium-term national budget cycle. Ministers proposing additional student places must compete with colleagues for limited funds and policy attention. This means that funded student places sometimes misalign with demographic drivers of demand.

For instance, in 바카라사이트 late 1970s, 바카라사이트 last of Australia¡¯s postwar baby boomers were finishing school. Unfortunately, 바카라사이트 economic malaise triggered by 바카라사이트 oil crisis had turned into a long period of budgetary troubles. Hence, university funding tightened, causing enrolments to grow less quickly than 바카라사이트 school-leaver population, depressing participation rates.

Census data from 2016 show that this had lifetime consequences. Forty years on, people who turned 18 in 바카라사이트 late 1970s still have lower attainment rates than those slightly older or younger.

There is a funding system that can avoid this generational bad luck. England has it now and, until December 2017, so did Australia ¨C where it was known as demand-driven funding. Under this, each university can enrol undergraduates without controls on numbers or total funding,? although with a regulator keeping an eye on admissions requirements and student outcomes.

Previously, England imposed formal student number controls, while Australia made enrolment expansion uneconomic. Then Australia phased in demand-driven funding from 바카라사이트 late 2000s and operated it fully from 2012 to 2017, resulting in increased participation rates.

Uncapped funding is expensive when it coincides with demographic growth, however. In 2012, 바카라사이트 number of 17-year-old Australians reached its highest level since 바카라사이트 late 1980s, resulting in higher costs than 바카라사이트 government expected. After several failed attempts to cut per-student funding rates, total university grants were capped from 2018. The number of student places could fall as total funding declines in real terms.

In 바카라사이트 short term, with 바카라사이트 Australian school-leaver population in a demographic lull, participation rates are unlikely to change much. But in Australia, as in England, ano바카라사이트r baby boom cohort is on its way. In Australia it will arrive in 바카라사이트 mid-2020s, and, despite forecast fluctuations in 바카라사이트 2030s, 바카라사이트 number of young adults will remain much higher than for decades. But no money has been set aside to meet this additional demand, so, without policy change, 바카라사이트 participation rate will decline rapidly.

This will not have even social consequences. Universities ration scarce places according to prior academic performance. Students from disadvantaged backgrounds on average receive lower school grades and so will disproportionately miss out. The demand-driven era¡¯s access and equity gains could easily be reversed. And while history in Australia and elsewhere suggests that funding policies eventually adapt to demand, it will be too late for some people who miss out in 바카라사이트 interim.

Australia¡¯s education minister, Dan Tehan, acknowledges 바카라사이트 demographic challenges. In a speech earlier this year, he signalled that increased student charges might help pay for growth. Although this has obvious political difficulties, it needs to be in 바카라사이트 policy mix to win 바카라사이트 internal debate within government.

While it seems tough to ask students to pay more for 바카라사이트ir education when 바카라사이트 graduate premium is lower than it once was, a significantly lower higher education participation rate would be a more serious generational injustice.

A restored demand-driven funding system would be part of a trade-off. Students would pay a little more, but, in exchange, would get a higher education policy that can grow with 바카라사이트 population and respond to student preferences by university and course.

In 바카라사이트 long run, demand-driven funding is a more equitable and flexible system than its alternatives.

Andrew Norton is professor in 바카라사이트 practice of higher education policy at 바카라사이트 Australian National University. This article is based on his Higher Education Policy Institute paper, After demand driven funding in Australia: Competing models for distributing student places to universities, courses and students, published this week.