Australia should consider creating a discount for university courses delivered wholly online, according to an expert who says that Canberra should also revisit its insistence that changes to undergraduate course funding ¨C designed to meet a looming spike in demand ¨C must not entail increased government spending.

Policy specialist Geoff Sharrock has floated an ¡°alternative model¡± to education minister Dan Tehan¡¯s?Job-ready Graduates package, an overhaul of course subsidies and fees which would tip the average balance of costs more towards students.

Under Dr Sharrock¡¯s recipe, planned subsidy cuts and fee increases would be pared back. This would moderate the overall funding decreases for courses in which the government wants to see more enrolments, particularly in science and engineering disciplines.

Universities would also be able to offer a A$2,000 (?1,100) ¡°cloud campus discount¡±. Dr Sharrock said such a mechanism would enable universities to differentiate their offerings while meeting the government¡¯s desire to boost uptake in priority fields by cutting costs for students.

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He said the approach would require universities to apply what they had learnt about digital delivery by transferring all their offerings online earlier this year, and by developing scores of?discounted online certificate courses.

Dr Sharrock described the idea,??in his blog ¡°Big little thought crimes¡±, as a ¡°sketch¡± that will need careful modelling. He said the discount would function as an ¡°experiment¡± to help judge whether fee reductions influenced students¡¯ choices of course and study mode. ?

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While most experts say fee changes?make little difference?to course selection due to Australia¡¯s deferred loan scheme, the government has cited the rapid uptake of the certificate courses as evidence to the contrary. Dr Sharrock said a cloud discount experiment would help test both views.

He said he expected possible opposition to his proposal, with universities protesting that well-crafted online courses cost more than their face-to-face equivalents while the government has rejected any increase in grant spending.

But he said now was the time to start debating alternatives to the Tehan package, ahead of the inevitable ¡°horse trading¡± as the government negotiated its plan with the Senate. When that occurred, any compromise measures ¨C and their unintended consequences ¨C would themselves need further modelling.

He said the government should consider measures that were not ¡°cost neutral¡± if they supported other aspects of its reform agenda. ¡°The government is spending billions of dollars in other sectors to get the nation through this crisis,¡± said Dr Sharrock, an honorary senior fellow at the University of Melbourne¡¯s Centre for Vocational and Educational Policy.

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¡°Universities are in trouble financially. They¡¯re adapting course delivery and they need to be well set up to meet future growth.¡±

He said a cloud discount on fees could eventually be extended to teaching grants, ultimately saving the government money as universities refined their online programmes. ¡°By 2030, much higher domestic student volumes could be met, at progressively lower funding costs and student fees per course place.¡±

Online delivery could yield big savings in ¡°high volume¡± courses, he said. ¡°There are establishment costs but once you¡¯re set up online, you have a much wider addressable market.

¡°Your extra costs might be a sessional academic doing the same class twice instead of once a day, plus assessments. In subjects where classes don¡¯t involve labs or field work, that kind of cost for extra groups is marginal if the average student is bringing you A$13,000 to A$15,000 a year in revenue.¡±

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john.ross@timeshighereducation.com