Results of 2019 Audits: Universities

Tabled: 30 June 2020

Appendix E. Student enrolments and government funding

Student volumes

Student enrolments drive the sector's operational activity, including its two largest sources of income—student fees and Commonwealth student assistance grants. 

Figure E1 shows the total EFTSL has steadily increased over the last five years.

Figure E1 
University sector number and proportion of domestic and overseas EFTSL for the years ended 31 December 2015–19

Figure E1 University sector number and proportion of domestic and overseas EFTSL for the years ended 31 December 2015–19

Source: VAGO. 

Domestic EFTSL decreased in 2019 for the first time in five years, highlighting that the sector’s growth is driven by overseas students, who now make up 41 per cent of the sector’s higher education student load. Domestic enrolment numbers have also been impacted by the government funding cap which is discussed below.

Figure E2 shows the university sector revenue concentration for the year ended 31 December 2019. As seen in this figure, the second highest source of revenue for the university sector is from international student fees.

Figure E2
University sector revenue concentration for the year ended 31 December 2019

 

Figure E2 University sector revenue concentration for the year ended 31 December 2019

Source: VAGO. 

Figure E3 shows the proportion of revenue from domestic and international students for each university. Three universities have greater reliance on international students with a higher proportion of revenue from this source than from domestic students in 2019.

Figure E3
Revenue from domestic and international students for the year ended 31 December 2019

Figure E3 Revenue from domestic and international students for the year ended 31 December 2019

Source: VAGO. 

Commonwealth Grants Scheme funding

The sector receives its Commonwealth government student funding primarily through the Commonwealth Grants Scheme, which subsidises course fees for eligible students. An enrolment that is eligible for this subsidy is known as a Commonwealth supported place (CSP).

Designated courses

Designated courses are non-research postgraduate courses, medicine courses, enabling courses and courses of study leading to a diploma, advanced diploma or associate degree.

The Commonwealth Government designates courses which have their funding capped at an agreed number of enrolments in any given year. In December 2017, it announced a reduction in the number of CSPs it would fund because postgraduate courses were overall, historically under enrolled. The funding was reallocated to courses that are pathways to a bachelor degree. Designated courses make up 12 per cent of the sector's total CSP enrolments.

Figure E4 shows the number of enrolments allocated compared to the actual number of enrolments for the sector over the last four years. It also shows the dollar value of capped funding and the estimated amount of government grant if every enrolled CSP were funded.

Figure E4
University sector number of enrolments and funding for designated courses from 2016 to 2019

Figure E4 University sector number of enrolments and funding for designated courses from 2016 to 2019

Source: VAGO. 

The demand and actual number of places offered by the sector continues to increase. 

As shown in Figure E5 'Education' enrolments have the lowest number of unfunded places. Humanities has the lowest number of enrolments for the sector, but has the highest number of unfunded places.

Figure E5
University sector number of funded and unfunded enrolments in designated courses, by area of study for 2019

Figure E5 University sector number of funded and unfunded enrolments in designated courses, by area of study for 2019

Source: VAGO. 

The number of funded and unfunded places in designated courses for each university in 2019 is shown in Figure E6. 

Figure E6
Number of funded and unfunded places in designated courses in 2019

Figure E6 Number of funded and unfunded places in designated courses in 2019

Source: VAGO.

Non-designated courses

In contrast to designated courses, non-designated courses had their funding pooled and capped at the total level of funding received in 2017, leaving the universities discretion to determine the optimal mix of enrolments across these courses. Although the sector reached this cap during the year, universities continued enrolling students in these courses, charging them the subsidised fee while not receiving any Commonwealth contribution funding for these places.

Figure E7 shows the total CSP EFTSL enrolled in non-designated courses for the university sector from 2016 to 2019. The figure demonstrates little growth in the number of CSP enrolments taken by the sector in the first year of the funding cap. In the second year, the overall intake for non-designated places for the sector declined.

Figure E7
Total CSP EFTSL enrolled in non-designated courses for the university sector from 2016 to 2019

Figure E7 Total CSP EFTSL enrolled in non-designated courses for the university sector from 2016 to 2019

Source: VAGO. 

There is a demand for higher education and the sector has continued to enrol students above the capped levels. Figure E8 shows the capped funding provided to the university sector and estimated funding based on actual enrolments for non-designated courses for the years 2016–19. The figure illustrates that the estimated shortfall in funding for the sector’s non-designated courses was $14 million in 2018 and $47.5 million in 2019.

Figure E8
Capped funding provided to the university sector and estimated funding based on actual enrolments for non-designated courses for the years 2016–19

Figure-E8.PNG

Source: VAGO. 

The reduction in government funding has meant universities have had to find other ways to maintain and expand operations such as:

  • exploring alternative sources of income to make up the funding gap including increasing international offerings
  • reviewing programs delivered and offering new programs where shortages in the market exist
  • reviewing and changing the CSP placements strategy, focusing on finding ways to maximise enrolment numbers in each area of study to ensure the highest amount of government funding is received
  • focusing on increasing growth in courses that have more profitable margins
  • exploring strategies to reduce reliance on designated student loads as a pathway into non-designated courses
  • seeking opportunities to reduce the cost of delivery, while maintaining quality outcomes.

Universities continue to offer domestic places above the levels funded by government to meet the social and economic need for an educated and skilled population. As these additional places are not subsidised, the financial strain is borne directly by the sector, increasing its sustainability risk.

From 2020 onwards, universities will be able to grow their CGS funding for non designated courses above capped levels if performance criteria are met. Performance will be assessed across four measures – graduate employment outcomes, student success, student experience and participation of Aboriginal, low socio-economic status, and regional and remote students. This is to ensure that universities deliver quality teaching and produce skilled graduates for Victoria's workforce. 
 

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