‘Mixed’ report card for Australia’s demand-driven system

“Weak” incentives for universities to provide remedial support for struggling students led to “mixed” results from Australia’s now abandoned demand-driven higher education system, a report has found.

The Productivity Commission says the removal of caps on undergraduate places ushered “additional students” into university between 2010 and 2017. But they proved 75 per cent more likely to drop out than traditional students.

And while the policy boosted access to higher education for some disadvantaged groups – namely, people from low socio-economic backgrounds and families with no history of university study – it did little to improve participation by indigenous or rural Australians.

Nevertheless, university participation rates among 18-22 year olds rose some 13 per cent, and boosted the prospects of many of the newcomers. Around half graduated by the age of 23, with half of those embarking on managerial or professional careers at similar rates to traditional graduates.

The study, based primarily on data from the Longitudinal Surveys of Australian Youth, concludes that the demand-driven system increased student numbers and achieved progress in making access more equitable. “However, many are entering university ill-prepared and struggling academically,” the report says.

“The growing risk of students dropping out of university requires attention. On average, the additional students need greater academic support to succeed. While universities had strong incentives to expand student numbers, the incentives for remedial support [were] weak.”

The report warns of unintended consequences from the government’s plan to use performance measures to allocate additional funding from next year. It says governments will need to address the generally declining levels of student proficiency, particularly among school leavers, but highlights the “difficult design issues” they face in devising policy measures likely to work.

“Prescriptive government requirements for entry and student support would discourage innovation and ignore the variations in the groups going to different universities,” the report says. “On the other hand, while rewards for universities to increase their retention rates overcome the problems of prescription, they may inadvertently lower standards or discriminate against groups with higher average likelihoods of dropping out.”

The report says a “workable” incentive regime will necessitate “better measures of outcomes for students beyond retention alone”. And improving university access among remote or regional students – a priority of education minister Dan Tehan – is likely to require “more innovative models”.

Representative group Universities Australia said the report had underestimated participation among disadvantaged groups by focusing only on students aged up to 22. “The numbers we have always used – and I’m sure these are correct – are that regional students have increased by 50 per cent in the last eight years or so,” chief executive Catriona Jackson told the ABC.

She said the number of indigenous students had doubled under the demand-driven system, but one-third of these people had been aged over 30.

The Productivity Commission stresses the report is not a “policy evaluation” of the demand-driven system. “It has made no attempt to weigh the benefits in terms of greater opportunity against the resource costs of expanding the system,” the report says.

“Nevertheless, this study seeks to make a contribution by identifying who the additional students were under the demand-driven system, without which it would be difficult (if not impossible) to make a rigorous assessment of the policy.”

john.ross@timeshighereducation.com