Cash for graduates

Nieuws | de redactie
8 november 2011 | The Australian government faces a tightening higher education budget as university participation rates explode. Higher education minister Chris Evans already considers funding universities for every graduate they produce, instead of for every student they enroll.

A shift is taking place in Australian university funding. In therecent past, universities were called upon by the government tomassively increase university participation to develop thecountry’s skill base. Universities have followed this callresulting in a massive influx of freshman. Cost forecasts areballooning accordingly by an extra AUD1,6 billion (€1,6 billion)until 2013.

Now, the government is reconsidering its policy of awardinguniversities funds for every student they enroll. Instead, thefocus shifts to study success by awarding subsidies for everystudent that graduates. “We are not interested in a system thatproduces lots of commencements and churn. It is about […] providinggreater incentives for completions,” commented Tertiary EducationMinister Chris Evans.

Wrong incentives

This approach, however, has a downside as well. Main fear isthat universities get the incentive to let students graduate easierto receive more money while the overall quality of graduatesdeteriorates. That is why for now the Australian government wouldstick with the old system while even removing caps on the totalnumber of state funded student places.

“We aren’t deviating from our core policy objectives [expandinguniversity participation] and the uncapping of places is very mucha part of that. The major challenge for Australia is to grow ourproductivity and address skills shortages that are emerging, andthese skills shortages are going to be at the graduate level,” saidEvans.

Dutch debate on indicator performance

The Netherlands are currently involved in a similar debate overhigher education financing. For now, Dutch universities arefinanced through government endowments depending on how manygraduates they produce.

Junior minister for education, Halbe Zijlstra, however isplanning to implement a more detailed system where universitiesreceive funds depending on their performance on key indicators.These would entail study success and failing rates, educationallevel of teachers (Master, PhD), and overhead costs as a fractionof teaching costs.

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