Historic changes to higher education in Australia have passed through the Parliament, which will mean that by 2012 universities will be funded for every eligible student they teach, rather than through a system of rationed places.

The Deputy Prime Minister, Julia Gillard, today said the passage of the Higher Education Support Amendment (2009 Budget Measures) Bill paves the way for a fundamental shift in universities providing higher education moving to a student centred system of funding.

The Bill allows universities to decide how many places they will offer in approved courses, with the government funding all places offered to those students. From 2012 there will be no cap on the number of students universities will be able to offer to students.

Alongside the new student centred system, the changes also introduce measures to ensure quality, address Australia’s skills needs and the broader public interest, and support the Government’s goal of 40 per cent of all 25 to 34 years olds holding a qualification at bachelor level or above by 2025.

The Bill makes provision for an historic increase to the indexation of government university funding - ending more than a decade of real and brutalising cuts under the previous Government.

The Bill will work to improve access to higher education to lower socio economic status students. $108 million will be provided over four years for a new partnerships program to link universities with low SES schools and vocational education and training providers.

$325 million over four years will be provided to universities as a financial incentive to expand their enrolment of low SES students, and to fund the intensive support needed to improve their completion and retention rates.

The Bill will drive improvements in higher education quality through the establishment of the independent Tertiary Education Quality and Standards Agency. TEQSA’s work will be supported by tied performance funding. In 2011, universities that have agreed to quality targets will receive $90 million to help them achieve their targets. In 2012, up to $135 million will be distributed to the universities that have met these targets.