Transformation in the private higher education sector

Claire Field

Presentation to Higher Education Reform Summit

Overview

History

Provider characteristics

Student characteristics

Changes within the sector

Higher education funding reforms

Quick History Recap

1987 – Dawkins’ Green Paper - 4 private providers:

3 non-government teachers’ colleges (Avondale, McAuley, Signadou)

Marcus Oldham Farm Management College

1987 – Bond University granted university status by Qld government

1994 – Navitas & ECU partnership for international students

Late 1990s/early 2000s – VET Training Packages (78 private providers in 1999)

2005 - FEE-HELP introduced for all full-fee paying higher education students

7 private universities (ACU, Bond, Notre Dame, MCD University of Divinity, Carnegie Mellon, UCL, Torrens)

120 non-university higher education providers (incl 11 TAFEs)

36 publicly owned universities, plus Batchelor Institute

Overseas universities not TEQSA registered (Boston, NYU)

Non-university HE educated 52,000 students in 2012

Higher education sector today

Source: TEQSA, 2014, Statistics Report on TEQSA Registered Higher Education Providers

Provider characteristics

4 different private Higher Ed provider types:1. Pathways programs

2. University equivalent offerings

3. Niche courses

4. Theological

Private Higher Ed grew 23% in the 4 years to end of 2012 despite uncapping of funding for university places (ACER, 2013)

Almost ½ of all students are international

Enrolments by field of study

Source: TEQSA, 2014, Statistics Report on TEQSA Registered Higher Education Providers

Higher education in private providers and TAFEs, 2012

Enrolments by AQF level

AQF level Unis % Non-unis % Non-unis as a %

of total

AQF 5 0.5% 22.0% 72.5%

AQF 6 1.0% 4.4% 21.8%

AQF 7 75.8% 49.2% 3.9%

AQF 8 5.2% 14.8% 15.3%

AQF 9 12.9% 8.0% 3.7%

AQF 10 4.6% 0.2% 0.3%

Other 2.3% 1.4% 3.5%

Total 100% 100% 5.9%

Source: TEQSA, 2014, Statistics Report on TEQSA Registered Higher Education Providers

Provider types

Students

17% of students studying at private providers from the lowest SES quartile, compared to 18% at university.

Private students more likely to:

be older than those studying at university,

gain entry on the basis of an alternate admission mechanism, outside the ATAR

Admissions processes that include face-to-face interviews, portfolios, and letters of recommendation.

Source: ACER, 2013, Higher Education enrolment growth, change and the role of Private HEPs

Basis of admissions

Source: ACER, 2013, Higher Education enrolment growth, change and the role of Private HEPs

Reasons to study privately

Students cite the following reasons they chose a private provider: leading industry practitioners vocational nature of courses/work experience small class sizes with an average of 20 students opportunity to interact with teachers on regular basis learning environments and teaching facilities second chance for many students stepping stone or pathway into university; personalised services flexibility of the courses

Source: Shah & Nair, 2011, Engaging with Quality: Quality Assurance and Capacity Building in Private Higher Education

Changes in the sector

Consolidation among local ASX listedproviders

2005 – Navitas (as IBT) first to list on ASX*

2010 – Academies Australasia purchases a private HE provider

2010 – RedHill launches (chaired by Bruce Baird AM)

2014 – Vocation purchases two private HE providers

Overseas providers buying a stake

Kaplan – first purchase in Australia in 2006

Laureate (Torrens Uni, Think Education, Blue Mountains International Hotel School)

Open Colleges (70% stake owned by Apollo Education Group – Phoenix Uni)

Changes in the sector cont’d

Overseas private equity ownership

Study Group

Growing number of VET providers with private equity backing

Growing no. of private VET providers applying for HE status

Increased number and variety of partnerships between universities and private providers

More consolidation in the sector irrespective of reform progress

Impact if reforms are passed

Strong growth in private HE enrolments

New enrolments coming from

new students entering HE, and

non-elite unis losing some market share to privates

Some unis likely to expand diploma enrolments (impact on TAFEs & some private VET providers)

Growth in both ‘uni-comparable’ and 'niche' courses in private HE & increased course differentiation in unis

Significant M&A activity in private sector in first 2 years

Impact if reforms are delayed

Slower rate of growth in private HE enrolments

Continuing strength in numbers in:

Pathways courses (depending on funding arrangements)

Niche courses

Theology courses

‘University-comparable’ courses in private HE will need to continue to offer distinct differences

Higher reliance on international student growth

Lower rate of M&A activity

How to respond?

Do not dismiss large private providers & expect more of them to appear

Think about why students choose private providers and where you need to make changes to stop the drift. They offer

leading industry practitioners;

work experience embedded into the curriculum;

small class sizes & opportunity to interact with teachers;

specialist learning environments and teaching facilities;

personalised services

the flexibility to undertake the courses in different ways