A new course funding model

Education Minister Dan Tehan will reveal a new undergraduate funding system at the National Press Club today

It’s in-line with his long-expressed emphasis on HE education as a job-generating engine of economic growth.

“Universities must teach Australians the skills needed to succeed in the jobs of the future,” Mr Tehan is expected to say.

The Commonwealth will reduce student contributions for degrees in areas of “expected employment growth” while increasing what undergrads pay for qualifications that are not in national priority areas.

What’s in it for universities: “We will reform the system so that the student contribution and the Commonwealth contribution actually equals the cost of teaching that degree,” is Mr Tehan’s commitment. He will also announce “an additional 39 000 university places” by 2023 and 100 000 more by 2030.

What’s in it for (some) students: “We will also incentivise students to make more job-relevant choices, that lead to more job-ready graduates, by reducing the student contribution in areas of expected employment growth and demand.” The expectation is that 60 per cent of students starting next year will pay fees the same, or lower than apply now. Existing students are grandfathered.

What Canberra will contribute: Funding for Commonwealth supported places is allocated in four clusters, replacing the existing eight.

* Cluster one includes, law, business, arts and social sciences. The Commonwealth will pay $1100 per annum per student place, down from $2000 for law and biz ed this year, and $6000 for humanities

* Cluster two includes teaching, IT, architecture maths and allied health. The government contribution will be $13 500, up from $6000-$11 000

* Cluster three: includes nursing, engineering, science and languages. Canberra will provide $16 500, compared to a $14 000 –  $18 000 range now

* Cluster four:  is the expensive-to-teach professions, medicine, dentistry, agriculture and vet science. The state’s share will be $27 000 a place, up from $24 000 now.

Students will pay:

Contributions are allocated to four bands, which do not coincide to the teaching cost allocations. Existing students are grandfathered.

* Band one: including teaching, maths, nursing and agriculture is $3 700, compared to $6000 to $ 11 000 this year

* Band two: including, health, architecture, IT, creative arts and science is $7 700 under the new model – $9000 now

* Band three: medical, dental, vet science is unchanged at $11 000

* Band four: law, bized, humanities and related increase from a range of $6000 to $11 000 to $14 000.

Into the weeds: There is room for universities to manage their student income in the model, with costs allocated at unit not degree level. Thus, a student rich enough to major in literature could reduce their study debt by also taking teaching. Universities claiming units belong in high government support, low student fee categories will take up officials’ time in years to come.

The pitch: Mr Tehan is expected to present this as a positive for universities. “A return to indexing of all the Commonwealth Grant Scheme funding by CPI, maintaining the real value of CGS funding for domestic students.

And he will continue to make his case to school leavers, and particularly their parents.  “We are facing the biggest employment challenge since the Great Depression. And the biggest impact will be felt by young Australians. They are relying on us to give them the opportunity to succeed in the jobs of the future.  A cheaper degree in an area where there’s a job is a win-win for students (and) when graduates succeed our country succeeds.”

Plus, coalition backbenchers who doubt the value of the humanities will like it a lot.