Protecting the high front gate

It’s a bit of a no-brainer that maintaining a high barrier to entry is the key to quality in a regulated higher education (HE) market, protecting not only students but the public purse.

Australia had to learn this the hard way when it’s vocational education and training student loans scheme (VET FEE-HELP) went rogue between 2014 and 2016, with around $2.2bn (£1.2bn) rorted from taxpayers while the VET regulator Australian Skills Quality Authority (ASQA) and the Department of Education were asleep at the wheel. It wasn’t until the Australian Competition and Consumer Commission (ACCC) started taking a handful of the worst fraudsters to court that a response was triggered.

Joining the club

Of course, different rules apply to different regulators and Australia’s HE regulator TEQSA (Tertiary Education Quality and Standards Agency) has assiduously kept its nose clean since its inception in 2013. Its CEO Anthony McClaran was previously chief executive at the UK’s Quality Assurance Agency for Higher Education (QAA) and Universities and Colleges Admissions Service (UCAS).

TEQSA has now published a report analysing its decisions around new applications for registration and re-registration as a HE provider. The conclusion: it ain’t easy. The agency has a track record of approving between five and seven new providers each year, despite a surge in the number of applications. Indeed, it was flooded in 2016/17 – if 29 applications amount to a deluge – as an imminent change in provider standards saw a rush of last-minute applications ahead of the new rules. Only five of those were approved for registration.

Some of the report’s key findings are:

• For-profits were the most likely to be subject to an adverse decision, followed by technical and further education (TAFE) institutions and faith-based not-for-profits (NFPs).
• Poor academic and governance structures were the leading reason for knockbacks, followed by weaknesses in financial modelling, such as unrealistic student projections and overly optimistic expectations about the ease and timeliness of getting on the government-backed gravy train.
• There was evidence of plagiarism in course outlines and sometimes “little evidence of capability in risk management, strategic planning, scholarship and scholarly activities in an HE context”, as well as lack of academic leadership and teaching staff with no HE experience.

Careful gatekeeping

Compared to the UK and US, there is very little penetration of for-profits in the Australian HE sector (although it’s a different story for VET). And maybe with good reason: in 2017, 54% of for-profits were classified as high risk, while only 13% of for-profits were deemed a low risk. In contrast, 11% of NFPs were high risk, while 40% were low.

None of the 29 universities which were assessed for re-registration had an adverse finding, although TEQSA does euphemistically note there was “variation in the group”.

Understandably, the riskier a provider, the longer the decision about its registration took. For registration decisions, it took an average of 417 days to be told a provider wasn’t successful and a year if it was successful but with conditions. It took a relatively short 217 day average for those that were approved outright. Course approvals were only slightly shorter (one year to be knocked back, 274 days to be approved with conditions, and 210 days to be approved).

Setting a “high front gate”, as McClaran noted in his press release, might be time-consuming but, given the rarity of market failure in the Australian HE sector (compared to VET), then TEQSA should get the thumbs up. It will be interesting to see – once it gets going properly – what the Office for Students (OfS) in England and TEQSA can learn from each other.