The Student Sensitivity to Funding Index

A subindex of the Student Sentiment Index (SSI)

The Student Sensitivity to Funding Index

A subindex of the Student Sentiment Index (SSI)

The Sensitivity to Funding Index measures how sensitive prospective students are to the funding landscape across Australia.

This Index is important in understanding how different funding arrangements across the country impact different segments of the prospective student population.

What is the Sensitivity to Funding Index?

The Sensitivity to Funding Index forms part of the overall Student Sentiment Index (SSI).

It is essentially a measure of how sensitive prospective students are to the funding landscape; gauging whether prospective students are concerned about accessibility to funding and their dependency on funding arrangements.

The Sensitivity to Funding Index contains over two years of data. Responses have been analysed to measure prospective students’ understanding and perceptions of the funding landscape. There are four individual indices that form a part of the overall SSI, and ‘Funding’ is just one of these.

Key Insights From the Sensitivity to Funding Index

When we delve deeper into the insights the Student Urgency Index provides, we can see that distinct demographic data plays an important role on someone’s desire to take up studying.

Some key takeaways:

  • Females are more sensitive to funding arrangements than their male counterparts
  • Location has a large impact on sensitivity to funding – this, in large, could be attributed to the different funding arrangements that are available across the country

When it comes to the Sensitivity to Funding Index, the higher the funding sensitivity, the greater the perceived dependence or reliance on funding arrangements and / or changes to funding arrangements.

Overall Insights

Key takeaways:

  • YoY growth in sensitivity to funding since data collection began
  • As student urgency to begin studying is increasing, there is a close alignment with the increased sensitivity to funding
SSI Sensitivity to Funding Index Aug19

We’ve recently witnessed the short-term effects on the sensitivity to funding index with the announcement of the FREE TAFE scheme in Victoria, where we saw a 10% drop in the underlying trend from Victoria, demonstrating how changes to the funding landscape can instantly influence the recognised reliance on financial assistance of prospective students.

We expect to continue to see the effects of policy announcements and changes to funding arrangements ongoing over the next few years.

The recent $525.3 million Skills Package, detailed by the new Australian government in the first half of 2019, has put a huge focus on raising the profile of VET in the country. However, there is still uncertainty around what this actually means in terms of long term funding arrangements for the VET sector. The funding freeze for universities in Australia is also set to continue, with no return to demand driven funding in sight.

These considerations will play a role in the attitudes of prospective students towards funding in the future.

Our Funding Index also shows that there are spikes in sensitivity to funding across census date each year. We are consistently seeing this correlation – a higher urgency to study coupled with an increased sensitivity towards the funding landscape. With a greater urge to study comes a more focused and greater urge to pursue, understand and access funding.

In both the short and long term, the Sensitivity to Funding Index can be used as an indication of the correlations between prospective student dependency on funding, overlaid with changes to funding across the sector.

Particularly how any change – big or small – to funding arrangements can potentially impact their decision to enrol.


Key takeaways:

  • Female sensitivity is consistently 5% or more higher compared to male sensitivity
  • With increasing urgency to begin study, there is a close alignment to increased sensitivity to funding across gender
SSI Sensitivity to Funding Index Gender Aug19

Females have consistently remained more sensitive to funding than their male counterparts. We can look at things like the National Skills Shortage List, which contains the Government’s High Priority occupations to understand the drivers behind this.

Skills Shortage occupations have a high skew of qualifications in male dominated industries, such as trade qualifications, engineering and technology.

Given that female representation is low in these fields, it could be said that females are more sensitive to funding as they perceive fields with low female representation as difficult to pursue, or perceive their access to funding options in these fields as much lower.

Given the difficulties around gender bias, the gender pay gap and female representation in the workforce throughout childbearing years, we quickly get an idea on why funding is a contentious issues for prospective female students.

While highly funded industries such as education, aged care and healthcare are traditionally female dominated, it is easy to understand why women are more concerned about funding arrangements and accessibility to funding, and are therefore more sensitive to funding, given the gender equality debate.

Female representation in higher education is at its highest levels, but that statistic in itself doesn’t tell the full story.

What Role Does Location Play On Funding Sensitivity?

Key takeaways:

  • NSW has seen the biggest increase in funding sensitivity over the past two years
  • Victoria and WA have consistently the lowest funding sensitivity across the country
SSI Sensitivity to Funding Index State Aug19

State based funding arrangements continue to be the driving influence around funding sensitivities across the country.

For example, the Government expenditure for education is the highest proportionally for Victoria and Western Australia, where there’s approximately $185 and $178 of funding available per person, respectively. When we compare this with respondent’s sensitivity to funding, we can see that these states also score the lowest, indicating that, the more accessible funding is to prospective students; the less impact funding has on their decision to pursue a course.

The rise in funding sensitivity in NSW draws parallels to the launch of new funding arrangements announced back in 2015, with their Smart and Skilled funding reforms in the vocational space. This rise in sensitivity could suggest that there is an increasing focus and reliance on funding with these relatively new reforms.

According to the director of the Mitchell Institute, Megan O’Connell, since the end of the VET FEE HELP scheme in the vocational education space, government course funding to the sector has actually “plummeted to its lowest point in 10 years.”

With declining funding across VET across the board, how will students perceive this?

How will initiatives such as FREE TAFE continue to be perceived?

Grattan Orange Report 2019

If we look at the winder Higher Education landscape, funding is a contentious and often discussed issue. In particular, the 2019 Grattan Orange Report recommends return to demand driven funding, encourages more students to turn to vocational education, and better funding arrangements for vocational education.

Overall, the funding landscape across the higher education and vocational education landscape has room for improvement, particularly if we are to continue answering Australia’s ongoing skill shortages.

The increasing sensitivity to funding could be fuelled by a strong enthusiasm to study by the need to upskill, and indicative of a stronger desire to study and therefore a higher reliance on funding arrangements.

We welcome any initiatives that address skill shortages in the long term, and funding arrangements to suit these initiatives.

In the Long Term

The Funding Sensitivity Index helps us understand the behaviours and attitudes of the prospective student population. As a real-time, leading indicator, we can hope to provide immediate insights into policy changes with the SSI, along with funding arrangements and the health of the Australian education sector.

The overall industry has returned to good health, but how will policy changes to funding across both the higher education space and vocational space be received?

Will we continue to see funding sensitivity rise over time?

As we have discussed before, perhaps the propensity to study will increase, as we witness slow wage growth in Australia. This could also be impacted by people’s tendencies to turn to education as a way to combat economic uncertainty.

With this uncertainty, it could be said that Australians are turning to further education, across the vocational and higher education sectors, to boost their chances of success in uncertain times.

For up to date insights and data on the Student Sentiment Index, get in touch.

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