More bad news for Australia’s private for-profit higher education sector

There’s more bad news for Australia’s private for-profit higher education sector.  CCA’s CEO, Dr Don Perlgut, reports below:


Earlier this month of January, the Australian Government Department of Education and Training released its report Completion Rates of Higher Education Students: Cohort Analysis, 2005-2014.

A great deal of attention has been paid to how some public universities are not performing as well as others, noting that one in three university students drop out (also see The Conversation and  Put simply, the higher prestige universities (Melbourne, Sydney, ANU) do a whole lot better than the lower prestige ones – New England, Southern Cross, Charles Sturt, Charles Darwin, Southern Queensland, Federation University (Ballarat).  In fact, of the nine worst-performing universities, only one (Murdoch) is located in a major capital city – and the reverse is true that only one of the ten top-performing public universities is located outside a major capital city (University of Wollongong).

In other words, regional universities continue to struggle to keep their students enrolled, and the metropolitan ones are leaping ahead.  Sound familiar?  This is consistent with how regional and rural Australians continue to lose out in higher and post-secondary education.

Ignored by the news reports are some very clear figures that differentiate student outcomes between the 38 Australian public universities (“Table A” in the report), and the 78 Non-University Higher Education Institutions (with the quaint acronym “NUHEI”).  These are mostly (although not entirely) private for-profit institutions: there are some religious institutions, a few public institutions like the National Institute of Dramatic Art (NIDA) and the Australian Film Television and Radio School (AFTRS), a scattering of TAFEs and a few commercial operations owned by public universities.

The biggest difference:  the student outcomes of public versus (mostly) private higher education providers are VERY different, with public institutions (despite the regional poor results) doubling the best results of the private institutions.

Specifically, for students who commenced study in 2007, while completion rates after three years were approximately the same (22/23%), the completion rates after eight years were dramatically different:  71.8% for the public universities and 47.1% for the non-university institutions (NUHEIs) - see Chart 1 below.

The comparison of students dropping out becomes apparent immediately for this cohort (2007 study commencements):  private institutions had almost double the first year drop-out rate – 27.7% compared to 14.7% for the public universities.  Within eight years (2014), the private institution drop-out rate rose to 47.2%, more than double the public universities at 22.6%.  (See Chart 2 below.)

Only one commentator has picked up on this:  the Australian Council for Private Education and Training (ACPET) CEO (Rod Camm), who writes that this data should create “a real push to lift the standards and reputation of private tertiary education.”

This bad news for the private for-profit sector arrives hot off the heels of the massive changes in loans for vocational education and training (VET) students: the demise of the much-abused (by private for-profit providers) of VET FEE-HELP and move to the new VET Student Loans program.  The new program – effective from 1 January 2017 – has much stricter requirements.

The relevance to community education?  A great deal.  Post-school education needs to be viewed as a continuum:  what happens in higher education affects VET and vice-versa.  Even though none of our providers deliver university qualifications, many of our providers have organised articulation agreements and other partnerships with individual universities.  We in community education need to monitor these higher education trends carefully, because they are the same players as in VET, and government policy in one sector influences the other.

Chart 1: Completion Rates of Public and Private Higher Education Providers, 2008-2014

Chart 2: Drop-Out Rates of Public and Private Higher Education Providers, 2008-2014

Source of the charts: Completion Rates of Higher Education Students: Cohort Analysis, 2005-2014, Australian Government Department of Education and Training, January 2017.

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