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May 6, 2013 | by  | in News |
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Payback Time?

It’s a case of less students, more problems at Victoria, as low enrolments mean the University may have to pay back millions of dollars in funding.

The University has not met enrolment targets for both domestic and full-fee (international) students. Domestic students are currently at
95.1 per cent of the 2013 target, while full-fee students are at 76.4 per cent.

These percentages mean the University may fail enrolment targets set by the Government. It is important for the University to meet targets for budgeting reasons, and to meet thresholds which, if not met, mean the University must repay previously allocated funding. University documents state that the financial impact of failing these targets has “[the] potential to be significant”.

As previously reported in Salient, this year the Government cut the enrolment-based funding threshold from three to one per cent. This means that universities have to meet 99 per cent of their enrolment targets to avoid paying back funding. Under the old system, education providers did not have to repay any funding if they enrolled 97 per cent of their target number of students.

While Minister for Tertiary Education Steven Joyce stated at the time of the policy change that the new margin of error is reasonable, University Council documents refer to this decrease as a “critical constraint”. Had the new threshold been applicable last year, Victoria would have had to repay $2.1 million to the Tertiary Education Commission.

Despite these numbers and potential financial risks, the University is not concerned that the current projections show student numbers to be lagging behind targets. Enrolments are still being taken for Trimesters Two and Three, however.

“The enrolment numbers presented at the University Council meeting were for February. More recent figures show that numbers are tracking as expected,” a spokesperson told Salient.

Roger Taylor, who tabled the report, allayed fears of financial vulnerability, assuring the Council that although things are tracking against the budget, it’s more to do with the timing of the report.

“[It’s] not a time to panic,” he said.

Regardless, the document recognises it will be a “tight year” allowing for changes that have occurred, and University management will have to keep their eye on the ball.

“Tight fiscal management and clear reporting is essential to ensure that the University manages and responds appropriately to these risks,” the report states.

While subject to the risks of low enrolments, the report showed the University had an operating surplus of $10.9 million for the period ending 28 February 2013. Despite Victoria’s external debt peaking at $45 million in January this year, total debt is forecast and budgeted at 6.8 per cent of the value of the University’s assets—well within the 20 per cent target.

Victoria’s total assets are listed at $801.1 million as of February 2013, or roughly $50,000 for each of Victoria’s 16,314 confirmed full-time students.

The data was released in a financial report covering the University’s financial position, detailing revenue, expenditure and debt for the period ending 28 February 2013. It was tabled at the second meeting of the University Council—Victoria’s governing body—held in the Council Chambers last Monday.

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