The COVID-19 pandemic had a devastating financial impact on Australia, characterised by mass job losses and heightened financial anxiety.

In 2020, our Student Sentiment Index revealed that prospective students displayed a higher sensitivity to funding arrangements, indicating they were less likely to pursue study without financial support.

This article will explore the Sensitivity to Funding Index in more depth. In particular, why some student segments were more reliant on funding arrangements than others.

Our Sensitivity to Funding Index measured the financial status of prospective students and how it influenced their decisions to study in 2020. It deep-dived into these students’ appetite for government-funded education programs and how it influenced enrolment behaviours. 

Our Index found that:

The Index revealed that the majority of Australia’s states (Victoria, New South Wales, Queensland, South Australia and Western Australia) displayed a similar response at the start of the pandemic, with individuals located in these states observing a higher sensitivity to funding in March 2020 (figure 1).

During this time, we saw nationwide lockdowns and mass job losses. 780,000 people lost their jobs in the week following the announcement of local and national restrictions. 

In this time of job insecurity and financial distress, Australians became more concerned about their finances. 30% of Australians felt financially stressed as a direct result of the pandemic and 48% expect the next few years to be financially difficult – these figures indicating the availability of funding was a priority for prospective students.

Another spike in sensitivity to funding was observed in June 2020 (figure 2). This can be attributed to the announcement of national funding initiatives, including:

Australians responded eagerly to these funding schemes, with Victorian Free TAFE alone being 83% higher in January 2021 than the same time last year.

Women were disproportionately affected by the COVID-19 pandemic, facing higher job losses and greater caring responsibilities at home. This pink recession left women financially worse off and more sensitive to the availability (or lack) of education funding. 

It’s reported that 55% of the 600,000 jobs lost in April of 2020 were held by women, with 8% of Australian women losing their jobs compared to just 4% of men. 80% of women also did more unpaid domestic work during the pandemic, compared to 39% of men. 

With this loss of income, women were less likely to pursue study unless they received financial support. We see this through the number of female enrolments in higher education – women accounting for 75% of the overall student decline. 

The Sensitivity to Funding Index (figure 3) also reveals that women were consistently 5% more sensitive than men to the availability of funding when considering educational opportunities. 

This problem is further compounded by the Government’s support of male-dominated fields.  The majority of ‘high priority’ occupations defined in the National Skills Shortage List are in the male-dominated industries of trades, technology and engineering.

Although all age groups experienced an increase in sensitivity to funding in 2020, this increase was not felt equally across all age groups.

Young people aged 18 to 24 displayed the highest spike in sensitivity, particularly at the outset of the pandemic in March 2020 (figure 4). This can be attributed to higher rates of unemployment, low wages and higher costs of living. 

Interestingly, 63% of young people reported high levels of financial stress. Nearly one in three workers aged between 18 and 24 lost their jobs between March and April of 2020. Additionally, many young people were unable to secure permanent work upon graduation, prompting them to consider further study only if it was available and affordable.  

On the other side of the age spectrum, individuals aged 45 and older expressed a similar trend to young people. They displayed an abnormally high sensitivity to funding in March 2020 as shown in figure 3. This can be attributed to older individuals holding better financial positions prior to COVID-19, suggesting they were able to undertake study without government assistance. However as the pandemic progressed, a greater proportion of 45 to 65 year olds reported feeling less financially comfortable. 

For those who lost their jobs due to the pandemic or felt their role was insecure, the availability of government funding became more important in helping them return to paid work. These insights reveal that Australians of all age groups are eager to obtain the skills necessary to secure work or pivot to emerging professions, with funding being key to this.

2020 was a turbulent year for Australians, with shifting attitudes to education and training as a result. The volatility of our labour market pushed a third of Australians to upskill or reskill to remain employed and competitive in the workforce. 

The pandemic triggered the first Australian recession in 30 years, skyrocketing unemployment rates to 6.9%. State and Federal Governments responded by bolstering support for education and training, announcing several funding initiatives such as JobTrainer, Boosting Apprenticeship Commencements and Free TAFE.

These initiatives increased access to training for thousands of workers displaced or impacted by the pandemic. Prospective students are now able to access free or low fee (concession) qualifications, relieving financial hardship for those looking to upskill or reskill.

Long-term, these schemes will:

Prospective students from all walks of life demonstrated greater dependency on government funding in 2020. Job insecurity and financial difficulties prompted many to pursue upskilling and reskilling in the most cost-effective way possible. Some discrepancies can be seen within the student population, with women and young people being more sensitive to the availability of funding schemes.

Ongoing government funding seems to be key to future-proofing Australia’s workforce and strengthening its economy.

This article is the latest addition to our 2020 Student Sentiment Index series. To keep up to date with the latest insights, subscribe to our newsletter.