Performance-based funding for universities is poor policy

A media report that the federal government’s proposals about performance-based funding for universities might include criteria related to student loan repayments is one of the more bizarre suggestions around university funding, the National Tertiary Education Union (NTEU) said today.

“How can universities possibly be held accountable for whether or not their graduates get jobs that enable them to repay their HELP debts?” NTEU National President Dr Alison Barnes said.

“If enacted this would disproportionally impact on women, people from low SES, non-English speaking backgrounds and Indigenous graduates – and may perversely result in universities avoiding offers to ‘high risk’ students in the first place, with concerns not on their capacity to undertake and complete studies, but if they will in the future earn enough to pay back their HECS and associated debts,” Dr Barnes said.

“It would lead to institutions reviewing their course offerings and perhaps abandoning areas where graduates are unlikely to be ‘high earners’ – creative arts, social work, philosophy and the liberal arts, for instance. It would further undermine the original purpose of HECS as a universal income contingent scheme that allowed for access to education based on merit.”

Dr Barnes said that in any case, research has shown that performance-based funding policies are not associated with higher levels of student performance but may in fact contribute to lower performance over a longer period of time.

“There is also substantial research that shows that educational institutions in some cases respond to narrowly based student outcomes performance-based funding by either restricting student entry or even easing academic standards to improve pass rates. Reducing academic standards will undermine the reputation and standing of our universities.”

“Our submission on performance-based funding clearly argued against the introduction of funding measures as proposed by the Government, and instead called for policies that ensure genuine public accountability by universities.”

“One recommendation is that institutions expand their current individual agreements with government to also specify certain goals/objectives in relation to teaching/learning, research/research training and community service obligations.”

“These transparent public accountability agreements would be structured so that each institution is held accountable to its students, staff and community and government.”

The NTEU submission on performance-based funding can be viewed here.

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