As of this morning eight universities are offering 43 ‘undergraduate certificates’ in the government’s university short courses program. Last week I outlined the then multiple legal and funding difficulties of ‘undergraduate certificates’.
But as I was writing that blog post a band aid legal fix was being applied. Undergraduate certificates have been temporarily added to the Australian Qualifications Framework. They can be awarded between this month and December 2021. This gets universities, and the Department, which otherwise lacked legal authority to pay Commonwealth Grant Scheme or HELP money to universities, off the legal hook.
Apart from highlighting AQF governance weaknesses? – it is just an agreement between education ministers – this leaves the question of what happens to undergraduate certificates after December 2021.
The links between short courses and qualifications
In answering this question we are not starting with a blank sheet of paper. The AQF recently had a major review, which reported in October last year. The review was sympathetic, as I am in general, to helping students build towards a credential. Students don’t necessarily want or need a formal qualification, but where they do we should, where we can do so efficiently with low integrity risks, help them achieve their goal incrementally and cost effectively.Read More »
A week ago, when I last reported on the saga that is university eligibility for JobKeeper, the government had just announced that its grants would be counted in university revenue, making it harder for universities to get the required 30 or 50 per cent (depending on their size) drop in their income.
Despite this, I thought that some universities might still be eligible. The University of Sydney believed that it was. This was because while no university is likely to be down 30 or 50 per cent on its annual revenue, the timing of when international students pay their fees could mean that, in certain months, the cash flow reductions were that large.
The amended JobKeeper rules dash that hope. While other organisations can calculate their revenue losses over a monthly or quarterly period, for universities the relevant period will be the six months starting 1 January 2020. Over a six-month time period, the fortnightly payments of Commonwealth grants are likely to push university revenue losses back below 30 or 50 per cent. Read More »
Update 4/5/20: It seems that State education ministers have agreed to temporarily putting ‘undergraduate certificates’ on the AQF.
Update 5/5/20: My take on whether ‘undergraduate certificates’ should stay on the AQF.
The COVID-19 higher education ‘short courses’ – four subjects at discount student contributions – are now appearing on CourseSeeker. As of this morning, there are 64 courses from eleven universities.
Most of them are graduate certificate courses. While letting the minister announce lower student contributions sets a bad precedent, these courses are not otherwise problematic. A graduate certificate is a credential listed in both the funding legislation and the Australian Qualifications Framework.? The university can legally receive Commonwealth Grant Scheme payments and the student is eligible for HECS-HELP.
The same cannot confidently be said for the other short courses. Although the minister’s early terminology of a ‘diploma certificate’ is not used, as of this morning there are 17 ‘undergraduate certificates’ (such as an Undergraduate Certificate in Information and Communication Technology) from three universities and a Professional Certificate in Aged Care from a fourth institution. Read More »
Update 2/5/20: The government has further changed the rules so that university income must be assessed over the six months from 1 January 2020.
When I first wrote about universities and JobKeeper, at the end of March, I concluded that although they were included they were unlikely to meet the required revenue falls. Especially for the universities with $1 billion plus annual revenue, the required 50 per cent fall in revenue seemed like a financial disaster beyond what COVID-19 issues could trigger.
Since then, the universities and JobKeeper story has had many twists and turns. In early April, universities briefly hoped that they would only have to meet the 15 per cent decline in revenue required of charities (they are educational charities). But the JobKeeper legislative instrument specifically excludes institutions listed in Tables A and B of the Higher Education Support Act 2003, which cover all public and private universities.
This flips the normal funding biases of higher education. Generally, educational organisations that were publicly-funded before 1989 have privileged access to government subsidies. Now, for a brief time, the educational charities that are not in the pre-1989 group have easier access to public funding. They only have to show a 15 per cent decline in revenue, instead of 30 or 50 per cent for Table A and B institutions, depending on their revenue. In 2018, 41 non-university higher education providers were registered educational charities.*Read More »
At least temporarily, some domestic students are financially better off due to the government’s COVID-19 measures. This is due to increased income support payments and JobKeeper exceeding their likely pay if they had been working.
Eligibility for JobKeeper is a two-stage process. First the employer has to be eligible, with a 30 per cent reduction in revenue for businesses with revenues below $1 billion, and a 50 per cent reduction for business with revenue above $50 billion. Most charities have a lower threshold of a 15 per cent reduction in revenue.
I have no direct data on how many students are employed in eligible firms, but student employment is concentrated in industries that we know have been hit hard by COVID-19 shutdowns.
Second, the student has to be an eligible employee. In the ABS Characteristics of Employment Survey for August 2019, about two-thirds of employed students aged 17-30 years who are studying full-time meet the criteria. They have either on-going employment (using the entitlement to paid sick leave proxy) or are casuals who have been with their current employer for 12 months or more. This analysis includes all students, not just higher education students.
[Update 25/4/20: The Treasurer has announced that full-time students aged 16 and 17 years will not be eligible for JobKeeper, adding an age condition that slightly affects my analysis.]
If these tests are satisfied, there is a flat payment from the government, but paid by their employer, of $1,500 a fortnight. This is likely to be much more than full-time students usually earn. According to the Characteristics of Employment Survey, their median earnings are $320 a week, or $640 a fortnight. JobKeeper is likely to more than double earnings for eligible students until it expires on 27 September 2020. Read More »
Update 28/04/20: It now seems likely that there won’t be additional higher education places beyond 1000 places for non-university higher education providers. This would revise down the potential value of the package by about $100 million, to around $500 million – but noting the substantial uncertainty in the original post.
In today’s media, there are some very large estimates of likely international student fee losses. The federal government is not compensating universities directly for falling international student revenues, but as outlined in my blog post on Wednesday they have announced measures focused on domestic students.
Calculating the financial impact of these measures is not easy. We don’t know what impact COVID-19 has had on domestic student numbers, although some universities had soft demand before COVID-19 disrupted on-campus classes. The University of Sydney has reported that its domestic numbers are down nearly 5 per cent on expectations, but that could be due to a tough NSW market.
Many universities have delayed the census date at which Commonwealth and student contributions are triggered, and so they won’t know for sure what their first semester situation is until that day has been reached. Nor do we know what will happen in later semesters. It may depend on whether campuses can re-open. Read More »
The government now has a first support plan for higher education. Its key elements are letting universities keep student-related grants and loans for 2020 even if they enrol too few students, funding short courses, and regulatory fee relief.
An earlier post was my inference and guesswork from fragmentary Easter Sunday announcements. This post uses material from FAQs issued by the Department of Education on Tuesday.? For readers who do not need to be across the technical detail of higher education funding I recommend my article for The Conversation rather than this post.
Commonwealth Grant Scheme
The government’s biggest higher education funding program is the Commonwealth Grant Scheme, which pays tuition subsidies of over $7 billion a year.?Under the?Higher Education Support Act 2003 total payments for the year cannot exceed equivalent full-time student numbers multiplied by the relevant Commonwealth contribution.
Universities are paid fortnightly based on estimates of their CGS entitlement for the year. A few days ago the University of Sydney announced that it was down 5 per cent on its domestic student target. Whether this is due to COVID-19 or tough NSW market conditions?is not clear. A number of other universities were struggling before COVID-19 due to demographic factors.
Whatever the reason, universities will now be paid their original estimated funding rather than their legal entitlement. This also suspends the need to meet performance funding criteria, which is sensible. Read More »