‘Financial viability’ concerns stalk Australian higher education

Australia’s higher education regulator has grilled private colleges about their “financial viability”, as government policy changes goad them to reconsider their operations.

The Tertiary Education Quality and Standards Agency (Teqsa) is seeking information from the institutions it regulates after “seeing changes in the data” it monitors. “This is not a ‘gotcha’ approach,” chief executive Mary Russell assured delegates at the Teqsa Conference in Melbourne.

“We want to see…that you’re dealing with a real and compelling risk in your business. What are the business planning actions that you’re putting into place? What are the risk mitigation actions? How are you handling the challenges, some of which are known and some of which you really won’t know [before] legislation is passed?”

Dr Russell said the bill to cap international enrolments, which has been listed for Senate debate in late November, had prompted private colleges to rethink their activities. Some were “looking at transitioning out of particular courses or…considering at a fundamental level whether [to] continue to operate.

“We expect you to have real regard for…the impacts on students,” she stressed. “What are your teach-out arrangements? Do they need to be refreshed or updated? What information are you sharing with students so that they can make well-informed decisions and plans?

“We’ll expect you to be anticipating possible impacts and making realistic and considered plans. But we do understand that it’s a really difficult and challenging time. We’ll do this in a way that is as effective as possible, without posing any unreasonable burdens on you.”

Dr Russell said Teqsa wanted to ensure that students’ consumer rights were safeguarded. Consultant and former regulator Claire Field recently warned that the Tuition Protection Service (TPS), which arranges alternative placements or refunds for students of institutions that close their doors, may not have sufficient funds to cover its workload.

Asked about this possibility at the recent Australian International Education Conference, Canberra bureaucrats said they were keeping watch. “We…work closely with the TPS,” said Laura Angus, first assistant secretary of the Department of Employment and Workplace Relations.

“They are aware…that there is going to be some structural adjustment going through the sector, and that is likely to have perhaps more impact than what we might have seen in other years. They are working towards managing that, so I would be optimistic.”

Karen Sandercock, first assistant secretary of the Department of Education, said civil servants were not privy to “all of a provider’s operations. We very much want to get a sense of where there are going to be impacts.”

The TPS Advisory Board has recommended increases to the levy that funds the service. “The financial pressures on private providers will only increase,” Ms Field warned.

The Teqsa conference heard that colleges were “pivoting to transnational education” in response to the proposed enrolment caps. Dr Russell said transnational education would be a “focus area” in 2025, as Teqsa strived to meet “the reasonable expectations of quality from students and our international partners”.

Universities Australia chief executive Luke Sheehy said the proposed Australian Tertiary Education Commission needed to “look at the financial viability of the entire tertiary education sector”.

“Without…the additional funds that we can have flowing from international education, we may be in more trouble than we thought we were 12 months ago,” Mr Sheehy told the conference.

john.ross@timeshighereducation.com