This post in an overview of rewards and penalties available to ATEC as it enforces mission based compact terms and student places allocations.
By the standards of recent higher education regulation the ATEC compliance regime seems relatively weak. This may reflect a trade-off between maximising administrative discretion and creating clear laws to which fines could be attached.
The only automatic penalty universities face under the new system is for enrolling more students than the bureaucrats think they should have.
Rewards – the strange absence of mission funding
Despite the word ‘mission’ in the compact title and reference to university missions in the ATEC Act 2026 nothing in the original ATEC legislation, or the Universities Accord (Opening the Doors of Opportunity) Bill 2026 introduced late last month, gives ATEC any power to support universities in achieving their mission other than by allocating additional Commonwealth supported places.
A mission fund could have provided a balance to homogenising compact targets. But no such fund is planned and no legal provision under which it could be paid is in the current or amending legislation. With no mission funding the compacts are just another compliance exercise.
The Centre for the Study of Higher Education at the University of Melbourne has today published The fall and rise of postgraduate Commonwealth supported places, which I co-authored with Ren-Hao Xu. It is part of our research project on university decision-making under Job-ready Graduates, with other papers here and here.
As the title suggests, the paper shows how domestic postgraduate coursework places became increasingly full-fee before a reversal, so that now, for the first time since the 1990s, most places in public universities are Commonwealth supported. Additional flexibility in the use of CSPs introduced by Job-ready Graduates facilitated this growth.
This change saved postgraduate students significant amounts of money, but the scale of CSP provision looks fragile. We argue that it was partly a byproduct of excess capacity created by weak undergraduate demand in the post-lockdown years. As that demand returns pressure to move CSPs back to undergraduate courses will grow, compounded by tighter controls on CSP numbers in the ATEC era.
Financing domestic postgraduate coursework
With a few niche exceptions, all public university domestic undergraduates are in Commonwealth supported places (CSPs). But domestic postgraduate coursework – graduate certificate through to masters by coursework – has long been a mixed economy, with both Commonwealth supported and full-fee places on offer, sometimes in the same course. Full-fee students can use FEE-HELP to finance their studies.
Until Job-ready Graduates took effect in 2021, postgraduate CSPs were a ‘designated’ category, along with sub-bachelor places. Postgraduate CSPs were allocated to universities by funding cluster (groups of disciplines with the same Commonwealth contribution) in university-government funding agreements.
The spread of designated CSPs across postgraduate courses reflected historical allocations and ad hoc decisions on new places. These ad hoc allocations were not principle free – recurrent justifications included providing places for postgraduate initial professional entry courses and addressing skills shortages – but the cumulative consequences were untidy. University allocations of postgraduate CSPs ranged from dozens to thousands. This created messy local markets. Universities struggled to fill full-fee places when their competitors had CSPs.
Job-ready Graduates abolished specific allocations of postgraduate places, except in medicine. It put postgraduate coursework into a single fund with sub-bachelor and bachelor degree places. The Commonwealth contribution funding each university could receive for these places is their ‘maximum basic grant amount’ (MBGA).
From 2021, universities decided whether to use their CSPs in postgraduate courses. These decisions were not straightforward. A fixed maximum basic grant amount created a potential trade-off with undergraduate places. A second trade-off existed with full-fee postgraduate places, which usually generate significantly more revenue per place than a CSP.
Trends in postgraduate full-fee and Commonwealth supported places
Across the entire sector, including private higher education providers, domestic full-fee postgraduate places are just a majority, at 50.2% of all places.
But looking at public universities only, CSPs became a similarly narrow majority in 2021, the first year of Job-ready Graduates. The CSP share stood at 58% in 2024. The relative shares are back to where they were in the late 1990s, but with CSPs trending up rather than down.
In his second reading speech for the Universities Accord (Opening the Doors of Opportunity) Bill 2026 education minister Jason Clare said that it will ‘help more people from poor families and the regions and the bush to get into university. In simple terms, if you get the marks, and you’ve got what it takes you will get a place.’ Later in the speech, he described the new policy as ‘effectively uncapping the system for these students’.
This is the latest iteration of a concept first announced as ‘effectively demand driven’ funding in the Accord final report and then described by the Department of Education as ‘managed demand driven funding’.
Whatever its name, how this policy would be implemented remained unclear. The policy implies eligibility criteria – ‘if you get the marks’ – that do not exist at the system level. It raised questions about the coherence of the government’s position. Does it make sense to impose tougher caps on enrolments generally while claiming to ‘effectively uncap’ a sub-section of students? Isn’t this just a part-solution to an avoidable problem caused by hard caps?
The silence of the bill
Anyone hoping that the funding bill would provide clarity will be disappointed. There is no uncapping of places for any category of student that isn’t already demand driven. But another feature of the system gives ATEC some flexibility to allocate additional places late in the enrolment period.
A recap on the new system
First a recap on how the new system will work. The first step is for the minister to set a total allocation pool of places, which will cover all coursework places other than medicine and the demand driven programs for Indigenous students.
The second step is for ATEC to allocate those places to universities. This will be a combination of ‘core student load’, a historical figure, and an ‘additional growth allocation’. Together these are the ‘domestic student profile’ of each university.
On top of the domestic student profile universities will have an over-enrolment buffer, of 750 places or 5% of the domestic student profile, whichever is lower. As part of transition measures some universities can have total places exceeding these levels but caps on commencing students.
The idea behind needs based funding is that universities should be paid according to student characteristics, not just the disciplines of the subjects students take. While agreeing with the broad concept behind needs based funding, I have criticised the government’s approach for its limited use of direct measures of need.
Needs based funding as implemented modifies existing programs rather than making a major conceptual change to the funding system. It converts equity group funding and a regional campus loading to a per student basis, rather than the previous formula-driven shares of a fixed maximum fund.
I won’t re-prosecute my criticisms of the government’s policies in detail here. My focus will be on the how these policies have been translated into legislation through the Universities Accord (Opening the Doors of Opportunity) Bill 2026, introduced into Parliament in late June.
I have two main concerns about the bill compared to expectations. Low SES status will be defined by the time of enrolment in a unit of study, rather than the first address on enrolment with the provider, and so numbers will be under-stated. Also the minister can easily vary down the loadings for various student characteristics and regional campus payments for continuing students.
As with my previous explainer posts on this bill, I am happy to receive feedback via comments or direct communication.
Interim needs based funding
Needs based funding exists this year under interim legal measures. This post describes 2026 funding rules for low SES and Indigenous students. This post explains 2026 funding rules for regional campus students.
In those posts I was critical of their poor-practice legal basis, which allowed the minister to pay needs-based funding grants (or not) entirely at his discretion, with the substantive rules for allocation in a Department of Education document with no legal standing.
The bill will give the needs based funding programs a much stronger legal basis while still leaving significant ministerial discretion.
All legislative references in the following text are to the Higher Education Support Act 2003 unless otherwise specified, ‘current’ signalling the legislation now in force, ‘new’ signalling the amending bill.
Which higher education providers are eligible?
A provider is eligible if it has been allocated Commonwealth supported places for the year: new section 39-10. This applies to both the equity and regional parts of needs-based funding.
In presentations earlier this year I told audiences that the government will try again to impose provider-level caps on international students. Its 2024 attempt failed due to a surprise Coalition-Green alliance in the Senate. The basis of my statement was ATEC ‘s legislation, which said that it would ‘allocate a maximum number of international student commencements to ESOS registered providers’ (emphasis added).
But for unexplained reasons the government is backing away from tough provider-level international student enrolment limits. The Universities Accord (Opening the Doors of Opportunity) Bill 2026 gives ATEC a role in allocating commencements to higher education providers, but it is something closer to current national planning level allocations for new overseas student commencement (NOSC) than a hard capped system.
The basic process will be that the minister sets a total allocation pool of international student commencements, and ATEC then decides on the distribution between universities and other higher education providers.
As described in detail below, this process has very high levels of ministerial and ATEC discretion, to the point of both being able to reduce allocations after the students have started their courses.
While there should be much better processes than those set in the bill, at least for non-public university providers it is not obviously significantly worse than what we have now.
As for domestic students in Commonwealth supported places, the minister for education will start by setting a total pool of ‘overseas students that may commence a course of education with ESOS registered higher education providers during a specified period’: new section 46B(1).
What does the minister take into account when setting the international student allocation pool?
Although the minister’s promotional material focuses on new Commonwealth supported places expected over coming years he could have funded those under the current system – albeit imprecisely, as the current system largely allocates in dollars rather than places. The most we can say in favour of the bill and new places is that it will be more obvious whether or not they have been funded.
Where the bill differs most from the current funding system is in reducing places at the university level. In the previous post I explained how a year of under-enrolment could result in a lower allocation of places two years later. In today’s post I describe proposed new restrictions on over-enrolments, students taken above the allocated level.
All legislative references in the following text are to the Higher Education Support Act 2003 unless otherwise specified, ‘current’ signalling the legislation now in force, ‘new’ signalling the amending bill.
As with the earlier posts, this is one is dealing with complex legislation so I am happy to receive feedback through comments or direct communication.
The current system
Under the current ‘higher education courses’ grant – all CSP categories other than medicine or Indigenous students in demand driven places – there is a maximum basic grant amount. The value of CSPs delivered in this category is calculated as the Commonwealth contribution rate * the number of student places delivered. If the value of these places exceeds the MBGA the university gets the MBGA but no more: current section 33-5(2). In 2024 nine universities delivered student places worth at least 5% more than their MBGA.
For student contributions, however, there is no cap. The provisions on upfront student contributions and HECS-HELP loans give the Commonwealth no power to intervene on these payments: current sections 93-15 and 96-1 respectively.
The proposed system – capped student contributions
There will be a transitional scheme for currently over-enrolled universities, which I cover below. First I will focus on the long-run system under which universities will get an over-enrolment buffer, for which student contributions are paid, but then be penalised student contribution revenue for places in excess of the buffer.
To recap on the previous post, ATEC will allocate places from a ‘total allocation pool’ (TAP) determined by the minister. ATEC will not allocate medical places, which the minister will do. ATEC will also not allocate demand driven places, currently Indigenous students in bachelor degrees or medicine.
All legislative references in the following text are to the Higher Education Support Act 2003 unless otherwise specified, ‘current’ signalling the legislation now in force, ‘new’ signalling the amending bill.
Feedback is welcome via the comments or direct communication. This is complex legislation and I may misunderstand things. Three revisions to my first post so far.
Total number of Commonwealth supported places per university
The total number of CSPs allocated to a university will be known as their ‘domestic student profile’: new section 30-15(2).
The domestic student profile will have up to two components, the ‘core student load’ and an ‘additional growth allocation’: new section 30-25.
The series is primarily aimed at policy advisers and people working in university planning offices. I covered the most important issue for the general public and prospective university students in this Conversation article.
This post looks at how the total number of fully-funded Commonwealth supported places will be determined. A fully-funded place is one for which both a Commonwealth and a student contribution is paid. Student contribution only places will be discussed in a later post.
The current system
As a refresher, the current CSP allocation system has three components:
Designated courses, where the minister allocates, via university funding agreements, specific number of CSPs. Currently only medicine for non-Indigenous students is designated. The funding formula is the Commonwealth contribution rate * the number of student places delivered or the allocated number of places, whichever is the lower.
Demand driven courses, currently only Indigenous students in bachelor degrees or medical courses. The funding formula is the Commonwealth contribution rate * the number of student places delivered. Effectively, universities and students decide on the allocation.
A ‘higher education courses’ grant in which each university gets a maximum basic grant amount (MBGA) to cover CSPs not in the previous two categories. The value of CSPs delivered in this category is calculated as the Commonwealth contribution rate * the number of student places delivered. If the value of these places exceeds the MBGA the university gets the MBGA. If the value is below the MBGA in theory the university receives that amount. In practice, in recent years, universities have received the full value of their MBGA via other programs despite not delivering CSPs of the required value.
The proposed reforms
All three of these components will change if the bill passes.
The overall higher education courses category will be allocated in CSPs instead of dollars, with no maximum basic grant amount. Total places will be determined by the minister, allocations to specific providers will be determined by ATEC.
Designated places will become a sub-category of higher education courses, used to allocate/restrict places in specific kinds of courses. While the minister decides which courses are designated, ATEC allocates designated places to providers.
Medicine will move into a new, separate category, still functionally equivalent to designation but allocated by the minister (as now) instead of ATEC.
The existing demand driven categories will be maintained and include a ministerial discretion to add new categories of courses. There will be a new mechanism to cap demand driven places if needed.
I have a paper coming out soon, co-authored with Ren-Hao Xu, on the rise of Commonwealth supported places in postgraduate coursework degrees. It is another in our series on university decision-making under Job-ready Graduates. This post provides more general background on domestic postgraduate coursework trends.
Key points:
Despite a return to headcount growth following a mid-to-late 2010s stall, domestic PG coursework enrolments are declining as a % of the main potential market, the bachelor-degree holding population.
On a full-time equivalent student basis the largest domestic PG coursework enrolments by field are in education, business and health. Growth over the last decade is concentrated in health, social work and IT.
PG coursework had a 63.6% female enrolment share in 2024. The large health and education fields are highly feminised. The female enrolment share is increasing in most other broad fields of education.
Two-step bachelor/masters entry to professional occupations is making the PG coursework population younger.
More PG coursework is being delivered online, a likely cause of increased rates of part-time study.
In line with 2020s enrolment trends, course completions are increasing. Many migrants also have postgraduate qualifications. As a result the postgraduate share of the workforce is increasing.
Why do students enrol in postgraduate coursework degrees?
In the ABS work-related training survey students mainly give job-related reasons for taking a postgraduate coursework degree. Since 2017 more students take degrees for reasons relating to their current job, compared to seeking a career change or a better job.
Trends in overall domestic postgraduate enrolments
In the mid-to-late 2010s we saw a multi-year plateau in postgraduate coursework enrolments, at around 200,000. Then, in a likely example of higher education’s counter-cyclical relationship with the labour market, enrolments increased significantly in 2020 and 2021. As jobs returned enrolments eased off, but remained above 2019 levels.
The student contribution increases of Job-ready Graduates get regular media coverage, focusing on the plight of debt-laden arts graduates. Far less attention is given to how JRG affected university decision-making.
For universities JRG had multiple elements. Total overall Commonwealth supported student funding rates by discipline were changed, some increasing but most decreasing. The changes to student contributions altered incentives for over-enrolments. Previous separate allocations of sub-bachelor and postgraduate Commonwealth supported places (CSPs)were ended, merged into a single fund with bachelor degrees.
To explore these effects, Ren-Hao Xu from UWA and I interviewed 15 leaders and officials from five universities in 2024 and 2025. We chose universities with various sizes, locations, missions and rankings to find out how they interpreted the JRG incentives and how these affected decision making. An academic article reporting our methodology and findings was recently published in the Australian Educational Researcher journal.
Over-enrolment
One thing I was especially curious about was to what extent over-enrolment – taking students on the student contribution only – was deliberate and to what extent accidental, reflecting the inherent difficulties in hitting precise full-time equivalent enrolment targets.
For the over-enrolled universities in our study the answer was mostly deliberate.
Two universities in our study had mission-related reasons for over-enrolling. The vice-chancellor of an equity-focused university told us that ‘we’ve also felt that we should over-enrol based on demand due to the university’s mission to serve students from disadvantaged backgrounds.’ The vice-chancellor of a regional university was willing to over-enrol as there was no other local university students could attend.
Other universities took a more strategic approach. One noted the likely Accord system re-set, knowing that during past policy shifts enrolments as of a recent year were used at the basis of the new funding system. This was a chance to lock in a larger base funding amount (an approach that has so far only partly worked, with just $50 million allocated to convert over-enrolments to fully-funded places).
Andrew Norton 