Why are universities failing to fill all their places?

On Monday, Jenny Macklin explained the University of Ballarat’s failure to meet its enrolment quota this way:

Opposition education spokeswoman Jenny Macklin said it suggested HECS rates were turning potential students away from study in regional areas. Maximum annual HECS rates this year ranged from $3920 to $8170, depending on the course. “For students in country areas these fees are very high,” Ms Macklin said.

But today comes the news that both universities in affluent Canberra have also failed to meet their targets, the ANU by 175 and the University of Canberra by 300. The ANU is a particularly interesting case, because its experience contradicts most of the ad hoc explanations for what’s happening to university demand – that regional universities are disadvantaged, that there is rush to prestige brands (the ANU is part of the Group of Eight ‘sandstone’ universities, and the highest-ranked Australian university in the global research rankings), and that the 2005 increases in HECS have put students off. The ANU kept its HECS charges at pre-2005 rates.

ANU Vice-Chancellor Ian Chubb is putting it down to ” higher-than-usual deferral and graduation rates”. I can’t see that graduation rates have anything to do with it, since generally these increase student ‘load’ (as it is called) as students stick around to finish rather than dropping out. But deferrals or delayed applications could at least partly explain it. I have noted before that commencing students are getting older, and if the Department would release its 2005 statistics in a timely manner I’d be able to check whether indeed this trend is continuing. My hunch is that with a strong labour market more kids are taking time off after Year 12 to get a break from study, earn some money and create an ‘independent’ Youth Allowance entitlement for themselves, and perhaps do a little travelling. But without more data it is hard to be sure.

4 thoughts on “Why are universities failing to fill all their places?

  1. A potential second factor is that it is now becoming more acceptable for young adults to live with their parents longer again. Given that both the universities reporting shortfalls are in places that need to attract people from outside (especially Ballarat), any decrease in people’s willingness to move is going to hurt them.

    You could see whether this was true by examining the proportion of people going to these regional universities who also live in that region.


  2. Conrad – I suspect rent levels explain stay-at-home teens and 20-somethings more than changed social norms.

    But to the extent that regional universities recruit people who cannot get into their preferred big city university, more places in the cities will disadvantage regional institutions.


  3. I wouldn’t be surprised if the stinginess of ‘dependent’ Youth Allowance is a large factor in young people deferring. In all of the rush in recent years to throw extra money at families with dependent children under 16, those with dependent children aged 16 and over (ie those finishing Years 11 and 12 and going on to teritary study, as well as young unemployed people) have been completely left behind. None of the improvements in the income test for Family Tax Benefit have flown on to Youth Allowance, which still has parameters that are the same in real terms (ie only indexed for inflation) as they were when it was introduced in 1998.

    What this means is that most if not all low income families actually experience a reduction in the amount of assistance they receive for their children once they turn 16. Some will have the capacity to earn additional income to overcome this income shock (eg by mum going back to work or increasing from part-time to full-time), but many others will not. And where there is more than one child eligible for YA, the effective marginal tax rates are diabolical so even earning more money won’t necessarily work.

    So whether families understand all this or not, it seems highly likely to me that many are forced to conclude that they cannot afford to have their children go to university unless they are able to qualify as independent. This is particularly likely to be the case for country families, where young people will usually have to move away from home to study, with the extra costs that entails.


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