Productivity Commission finds areas for improvement in higher ed policy


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Designing university entrance arrangements presents a “vexed policy problem”, according to a new report from the Productivity Commission.

The report looked at students who went to university as a result of the demand-driven system (DDS) — implemented between 2010 and 2017 to increase domestic student numbers and give under-represented groups more access to higher education.

The expansion in university places had advantages over previous policies that “severely rationed access”, the report said, but “results were mixed”.

Higher education was more accessible to some disadvantaged students, and more than 40% of additional students attracted through the DDS had graduated by the time they were 23, according to the study. These graduates eventually obtained managerial and professional roles at similar rates to other students.

While students from a low socioeconomic background and ‘first in family’ students were more likely to participate in higher education, participation ‘gaps’ remained – and may have widened – for Indigenous, regional or remote students.

Many of the additional students did not succeed academically, and identifying those most likely to benefit from university is difficult.

Productivity Commission Chair Michael Brennan said governments and universities must move towards a “mass participation model”.

“Our report doesn’t make specific policy recommendations, but it certainly points to areas where improvement is needed, regardless of whether or not funding is demand driven,” he said.

Policy challenges that have emerged from the DDS include:

  • How governments effectively tackle the growing number of students who perform poorly, so they can succeed at university and meet the growing skills demand in the economy.
  • The lack of incentives for universities to change, despite enrolment practices and student support helping student retention. Such incentives could reduce standards or discriminate against groups who are more likely to drop out, and rigid requirements for entry and support ignores the diversity of students and universities.
  • Improving access for remote or regional students has proven resistant to policy, despite them having the same academic ability to metropolitan students.
  • University is not for everyone, but flaws in the youth labour market and the vocational education and training system have made the alternative options less viable.

“The chance of a university education has been transformative for many, setting them on a path to better economic prospects. But it is also costly — to students as well as taxpayers,” Brennan said.

“The university sector needs to be motivated by informed choice much more than enrolling large numbers of students, bringing a stronger focus on student outcomes, quality teaching and support.”

The report suggested that in a continually expanding system, some of the lessons from eight years under the DDS may be of value to future policy design.

It also encourages policymakers to consider ways of improving the foundational skills of students, addressing access issues for regional or remote students, upping retention rates for additional students, and giving young people a range of options.

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