Friday, August 20, 2010

Higher Education in Australia: What we pay

Whilst working in NZ, I looked into how higher education and training is paid for there.

Now I'm back in Australia, I've encountered a reason to ask the same questions here. It turns out very few of my colleagues know how higher education is paid for exactly.

I've sent a couple of emails to people who probably do know, but while I wait for their advice I thought I'd do some digging of my own. Where do you look when you have no idea where to start? Wikipedia of course: Tertiary education fees in Australia. Reference note 12 there, points to a page credited to the Australian Department of Education, Employment and Workplace Relations called, What you pay.The actual DEEWR site is a total nightmare!

According to What you pay, Australian higher education and training is paid for publicly and privately. The public funding is called a Commonwealth Contribution and the private funding is called a Student Contribution. These two revenue streams are both derived through each student studying a full time load.

The Commonwealth Contribution

The amount of Commonwealth Contribution is determined by the study load a student has, and the subject of study. A student studying a full time load brings in 1 unit of Commonwealth Contribution. Several students studying part time, combine to make up the equivalent of 1 full time student. One full Commonwealth Contribution is called an EFTLS (Equivalent Full Time Study Load). This is what EFTSLs are worth at the moment:

So for each eligible student an institution has on its books studying a full time load in say - education, it receives $9020 of Commonwealth Contributions. 7 full time dental students bring that institution 7 x $19235. 50 full time visual art students bring 50 x $10662. I'm told that the number of EFTSL Commonwealth Contributions is ultimately capped, meaning an institution can only claim a limited number of Commonwealth Contributions each year, but finding out that cap is a little difficult so far.

The Student Contribution

The Commonwealth contributions are not the only revenue source that Institutions rely on to fund their educational services. There is also the Student Contribution. Each institution determines how much they will charge a student on top of the Commonwealth Contribution that student brings in. This amount is regulated to some degree, as follows:

So an institution offering education in law for example, can charge a full time student between $0 - $8859 per year, on top of the Commonwealth Contributions that their full time students bring in. Assuming they charge the full amount allowed for a Student Contribution, the revenue that one full time law student brings in per year is $10625 ($1765 Commonwealth Contribution, plus $8859 Student Contribution).

How much is that per unit?

A single unit of study is not a full time load, it is a percentage of a full time load. How might a student or a teacher of a unit calculate their expenditure and revenue? Assuming the institution is charging the maximum amount allowed in the Student Contribution, they would work out the percentage of the full time study load of the unit, and transfer that across to both the Commonwealth and Student contribution per EFTLS.

For example:

Leigh takes a unit in Illich studies within an education faculty. The unit is 3 credit points, or 150 hours - which is a quarter of a full time load in a semester, or an eighth of a full time load in a year. Therefore, to calculate the revenue and fee of this unit:

Commonwealth Contribution: $9020 x 0.125 = $1127.50
Student Contribution: $5310 x 0.125 = $663.75
Per student revenue for the unit in Illich studies = $1791.25


I'm not sure how much design or media students bring in, and I suppose a student that studies units across a spectrum of these subject categories, bring in a percentage of these amounts relative to study load in each of those units.

I'm also unsure of how the differences in funding and fees are determined. At first I thought it was based on the costs  of offering educational services in those areas, where I assumed dentistry and medicine were more expensive to run than law or accounting. But then, its likely I'd say, that the visual and performing arts are more expensive subjects to teach than engineering, science and surveying - especially considering other funding streams open to them. Then I thought it might be determined based on the expected income of a graduate, so the higher the salary that is expected for a graduate, the lower the Commonwealth Contribution. But then, a dentist stands to earn a lot more than an accountant. So the logic of the amounts in a Commonwealth Contribution seems consistent. This inconsistency, along with the footnotes in table 1, suggest the Commonwealth contributions go to political priorities term by term.

Finally, it is important to know what the cap is for Commonwealth Contributions to an institution. A rediculously low cap would completely change the implications of the numbers I have here so far.


brent said...

This just came thru one of my networks; Haven't looked at it myself but might be worth a look at in re: complexities of funding of universities.

training education said...

Interesting post. Sharing those figures means a lot. Thanks for the details.