Universities are publishing student work themselves
Despite universities taking a stance against students publishing past work, lecturers and tutors often do just that by providing exemplars of past student work to their classes and encouraging only top doctorate students to publish research papers and theses in journals. Academics often provide past student work to their classes so that current students get a better understanding of how a response should be structured or so that ideas and concepts can be used as research. The fact that this is done by universities themselves reflects the honest and fair nature of publishing.
Examples of assignment libraries published by universities include: ‘Higher Education Language and Presentation Support’ at UTS, ‘Knowledge making’ at UQ, ‘Assignment structures and samples’ at Monash and ‘Assignment-writing guides and samples at Swinburne’. Each of these university libraries contain past student work and publishing this is in contradiction to the university stance that student publishing enables contract cheating.
University policy explicitly gives them the right to publish student work
Deakin University Intellectual Property Policy
A Student who owns Intellectual Property pursuant to section 5 grants to the University a world-wide, non-exclusive, irrevocable royalty-free licence to use, reproduce, modify and exploit the Work referred to in section 5 (and sub-license other people to do those things) for the business or internal requirements of the University. The licence granted to the University pursuant to this section 5 includes the right to:
make the Student’s Work available to the public (in hardcopy, electronic or any other format) in accordance with relevant University policies and procedures; and
reproduce and retain the Student’s Work for the purpose of assessment of the Work by the University and for the purpose of ensuring that the Work complies with University policies and procedures (including checking for plagiarism and collusion, through electronic or any other means determined by the University).
Under normal circumstances, when you create a piece of work you subsequently control the rights to its publication and distribution. This mechanism is what allows individuals to control how artistic and literary works are performed and monetised in public. Producing a piece of work whilst attending a university is not such a straightforward affair. Whilst universities unconditionally state that students own the work they create (and the rights that go with that ownership), they then go on to give themselves a licence to the work for their own purposes. This seems reasonable, when the purpose is to ensure the university can check and assess the work, including providing this work internally to third party contractors such as Turnitin for plagiarism checking.
Where this becomes entirely unreasonable, is when the university grants themselves the right to make this work avaliable to the public for their own benefit, but then in turn penalises students for performing the same action.