Australian higher education is facing the biggest shakeup in 15 years – and with that change comes opportunities

With a suite of reforms underway, many arising from the Universities Accord Final Report, Australia’s higher education sector is undergoing its biggest shake-up in 15 years. These changes will have tremendous consequences for providers, students and the nation.

Much of the sector’s focus has been on the risks of moving to a managed market (and there are some) but little attention has been given to the potential upsides of what is envisaged, particularly the knock-on effects. In this article we shine a spotlight on the opportunities arising from the reforms.

Australia’s tertiary education system has performed well for decades, improving quality and efficiency, building a global reputation and becoming a sought-after destination for students. Despite the ‘massification’ of higher education, however, many people still miss out. And some who do go to university might be better suited to vocational education and training (VET). The impending reforms seek to make progress on these issues.

Meanwhile, employers’ needs are changing rapidly, and our tertiary education system must anticipate and respond – not just in delivering a more skilled workforce, but also in generating knowledge and research to support innovation.

Again, there is scope in the reforms to do an even better job on these fronts. In so doing, the sector can continue to contribute to national priorities including building sovereign capabilities and maintaining a healthy level of education exports.

With this in mind, we have identified three significant opportunities for education providers from the reforms: broadening pathways from school; fostering more collaboration between higher education and VET; and modernising business models and teaching delivery.

The Accord Report’s call to move from 60 per cent to 80 per cent attainment of a tertiary qualification presents a huge growth opportunity for the sector.

In higher education, meeting the target relies on expanding university places to domestic students with more diverse backgrounds. The government says it expects people from regional communities, lower socioeconomic households, First Nations backgrounds and people with disabilities to make up a larger proportion of the student cohort.

Universities do not always rely on the ATAR to determine student acceptance, but there remains a perception that school success equates to a high ATAR. This drives specific behaviours, including an inclination to see higher education as superior to VET. It also is reductionist, presenting students as the sum of their academic performance rather than as people with skills, experiences and knowledge that might be of value to future employers.

Imagine if, rather than being judged purely on how well a student did in maths and English, their school certificate and learning records showed that they participated for years in caring for Country, were the primary carer for their grandmother, and spoke a language other than English at home? What if those documents recorded their problem-solving abilities, collaborative instincts and communication skills?

Innovations involving assessing students on what they know and can do are already happening at the school, organisational and system level. For example, Tertiary Admission Centres are starting to look at different forms of learning recognition, and there are experiments underway trialling new metrics and new senior secondary reports. The push to enrol a more diverse cohort at university will fuel these changes.

The benefit for students is they can make more informed decisions about post-school pathways. For universities, they have a better view of who might succeed and what supports might be needed.

A new Australian Tertiary Education Commission (ATEC) will be established to drive and oversee the Accord-related reforms. Importantly, it is being designed as a genuine ‘tertiary’ institution rather than one focused exclusively on higher education, so it promises to provide a framework for closer alignment and reduced friction in moving from one to the other.

Through the shared oversight of VET and higher education provided by the ATEC, there is an opportunity for progress on Australian Qualification Framework reforms and improved regulation of both sectors. The ATEC will also connect with Jobs and Skills Australia, the preeminent source of advice on skills needs in the economy, making it easier to pursue joint strategies across the sector.

The unified view from the top will ideally translate to provider-level collaboration between universities, TAFEs, other providers and employers. This already happens to a considerable extent, but the proposed reforms should push this further.

These changes mean we might finally get beyond a two-tier system where university education is seen as intrinsically preferable and better than VET. Instead, both types of education would be valued equally.

The new managed system will have major implications for provider revenues, with upside and downside risks. Needs-based funding arrangements should help providers to better support a broader range of students, but some providers (not all) may face a reduced number of international students they can recruit.

These changes will mean a shift away from providers competing with each other in ways they have in the past, towards optimisation based on a distinctive value proposition. Student experience, retention and career preparation will necessarily come into sharp focus, and each institution will need to think carefully about how it can improve its attractiveness to students, communities and industries.

This is a good thing. In combining this with a more diverse cohort and closer links to VET providers and employers, there is an opportunity to improve teaching quality and thereby student outcomes.

Optimising resources will be important. Within a managed market, providers will have less discretion and flexibility – meaning less control over revenue generation. This suggests a need to be even more careful to contain costs and maintain efficient operations.

The upside is the stimulus this provides to explore different delivery models, including those that better use technology, workforce and physical assets. This might include expanded use and quality of asynchronous delivery and AI-supported learning approaches, greater recognition of outstanding teaching as a career path, and better utilising campuses for in-person learning at times that best suit students.

Universities of the future must be positioned to enable impactful student engagement with academics, industry experts and peers. They must enable curriculum to be more responsive to emerging skills needs and lifelong learning, and provide supports to students that reflect a nuanced understanding of barriers to participation and success.

To do this at scale, in ways that are personalised and financially sustainable, will not be easy. But by keeping alert to the opportunities as well as the risks – embracing change, diversity and innovation – higher education can continue to serve as a catalyst for growth, advancement and progress.

It is an exciting new era, with considerable uncertainty. The sector has shown its strength and resilience, including through COVID and other major shocks. The desire to be adaptive, forward-thinking and bold is aligned to the mission of every higher education institution.

Providers know that the alternative is stagnation and irrelevance. This augers well for continued growth and broadening the benefits that flow from a thriving tertiary education sector.

Get in touch to discuss how we can help your institution take up the opportunities flowing from reform.

Connect with Peter Wiseman and Tanya Smith on LinkedIn.

Prepared with input from Zac Ashkanasy, Hamish Ride and Paul Taylor.