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The Commoditization of Higher Education in Australia

Co-Written with Jan Thomas | Vice Chancellor and President, University of Southern Queensland

The Commoditization of Higher Education in Australia
There are many similarities between higher education in the United States and Australia, but the government support of tuition levels mean Australian higher education institutions must compete on factors other than price.

In the following interview, Ken Udas, deputy vice chancellor and chief information officer of the University of Southern Queensland, and Jan Thomas, vice chancellor of the University of Southern Queensland, discuss the impact commoditization and competition in higher education have had on the Australian higher education system. They discuss the factors by which Australian universities differentiate themselves and explain the ways online learning and MOOCs (Massive Open Online Courses) have altered how these institutions approach the higher education marketplace.

1. How do institutions differentiate themselves in the Australian higher education marketplace?

It is important to recognize that the Australian university sector is different in a number of ways from that of the United States. I want to point this out because many readers may have experience exclusive to the U.S. context. To start, 37 of Australia’s 39 registered universities are publicly funded, with only 2 private universities registered and recognized by Universities Australia. For all Australian students in publicly-funded universities, the government will pay a significant proportion of their fees, the remainder to be deferred to an income-contingent loans scheme provided by the government. Universities Australia serves as the peak body representing the university sector and is a wonderful source of information about the Australian university sector.

Generally speaking, the higher education sector in Australia is more heavily regulated than that of the United States. While Australian universities are set up under state legislation, it is the federal government that exercises relatively close management through funding regulation. Until recently, for example, enrollments in each program were allocated by the federal government to each university (the so-called “capped system”) as were the maximum tuition levels able to be charged. Since 2012, Australian universities have been able to enroll as many students in the programs they wish (with the exception of a few professional degrees) as part of government policy to expand attainment levels nationally. Universities have responded to this with rapid growth, which has consequently generated pressure on federal funding streams and a concomitant debate on admissions standards. With pending changes in government and shifting economic conditions in Australia, it is anticipated the sector may change again — and soon. This may take the form of replaced caps, and/or a shift towards greater personal contribution to the cost of a university degree. Under the circumstances, among the vast majority of institutions, there is little opportunity for price-based differentiation, which leaves characteristics such as convenience, location, delivery methods, student services, specific program offerings and perceptions of prestige and quality as decision-making criteria.

In Australia there is a cadre of universities referred to as the Group of Eight (Go8), which are the oldest institutions, the most prestigious, generally speaking, most selective universities in Australia and, some might argue, the most traditionally oriented. This is, of course, a pattern that exists elsewhere. As you can imagine, when you greatly reduce the impact of price as a differentiator, there is significant admissions pressure.

2. What are the majority of students in Australia looking for when they enroll in higher education? Have these preferences changed in the past 10 years?

Just as in the United States and most other well-developed economies, it is very difficult to generalize what students are looking for. As in most countries, higher education is seen as a way to prepare knowledge and professional workers to contribute to sustained economic growth and civic capacity. It is seen as a shared public and private good but, I think, like in many countries, there is an increasing perception amongst policy makers that a university education is principally a private good. As costs for education increase in tighter fiscal circumstances, this serves to add pressure to the cost burden on students.

At universities such as the University of Southern Queensland, where a significant majority of our students are non-residential adults studying part-time, there is a strong occupational and professional focus. Although I have only served here in Australia for a few months, I do get the impression there has been a growing emphasis on professional and occupational studies and a reduced emphasis on general or liberal education in Australia since Education Minister John Dawkins published his Green Paper on higher education in 1988, which, of course, is not so different than the trend in the United States started during the Reagan administration and the United Kingdom under the leadership of Margaret Thatcher. The exception is a trend in the Go8 universities to move to a U.S. model of three-year general degrees, which lead to professional master’s-level programs. This has added to the options for liberal arts in these three-year degrees, but is successful only because of the high demand for the professional degrees at these Go8 universities.

3. How significant do the quality of education and student experience differ between high-priced and low-priced institutions?

As price is not a differentiator among most Australian universities, we might want to reframe the question in terms of prestige or selectivity. Given the relatively equal pricing across universities for domestic students, there is admission pressure into the more selective universities that results in a higher concentration of the most academically-qualified students in a small number of institutions. This perhaps speaks to questions about quality, at least based on traditional measures, as it frames quality as self-defining.

That said, for many learners whose needs challenge the capacity of traditional universities, the experience of studying at a university that has invested in meeting the needs of adult and part-time learners, learners from disadvantaged backgrounds and learners from historically underrepresented groups will likely be of higher quality than they would be at another type of university with a different student body.

This question posed here does point at two related issues. First, education is an inherently value-laden and personal experience. Different types of universities are needed to provide different experiences to different learners in pluralistic societies that value social mobility and have interest in democracy and meritocracy. Second, some universities tend to be instruments of social reproduction. Frequently, highly-qualified learners from advantaged families disproportionally attend elite universities, which typically produce learners who earn more and hold positions of enhanced influence relative to those graduating from non-elite or non-selective universities. This being the case, we may want to concentrate our attention on the nature of a learner’s educational experience separate from the notion of objective measures of quality.

4. How are local institutions changing the way they approach the higher education marketplace as MOOCs branded by elite institutions and online programs become more prevalent?

As in most places, there is a sense that the higher education sector is changing. Most institutions do not know what to do about it, but there is a sense of urgency that something — anything — needs to be done. In Australia, there have been the expected responses within the sector with universities joining some of the big, well-funded and high-profile U.S. consortia such as Coursera and edX. In addition, in a more or less expected development, Open Universities Australia, a for-profit consortium of universities, recently launched Open2Study, a platform to support MOOCs running a handful of high production value, Khan Academy-styled courses.

Perhaps embracing the spirit of disruption more closely, the University of New England (UNE) has launched uneOpen, which is intended to provide a flexible and learner-directed experience, taking advantage of UNE resources, some formative learning assessment at no fee and optional assessment at a fee for credit certification. Although we have seen this type of model in a number of settings, including the recently announced University of Wisconsin Flexible Learning option, it does further the effort to reduce access barriers and contributes to the trend of disaggregating the traditional university bundle of services.

In a fit of foresight several years ago, an international consortium of universities (with the University of Southern Queensland taking a leadership role) partnered with the OER Foundation to found the OER University (OERu). Recently, the notion of Micro Open Online Courses (mOOCs) has evolved from participation in the OERu, which brings together a strong commitment to open educational practices, micro-credentialing and opening the opportunity for scalability through networks rather than large-scale (massive) course delivery. Like most environments, different institutions will address change differently. It appears as if the Go8 institutions are more likely to join consortia with their international peers, in many ways protecting or enhancing their reputations while embracing little risk, while universities whose cultural values are closely tied to open access will pursue combinations of approaches that challenge flexibility, access and capacity constraints that sit closer to their course business.

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