What proportion of their education costs do uni students pay?

In a speech she gave yesterday, Education Minister Julie Bishop says:

Today for every $1 a student contributes to their education, the Australian Government contributes $3. Students pay 25% of the cost of their fees, the taxpayer picks up 75%.

Her predecessor was fond of that argument too, but repetition does not make it right. Insofar as a defence can be made of it, in 2004 for every $1 HECS charged to Commonwealth-subsidised students about $3 was spent by the Commonwealth, but on all university activities, including research. Money spent on researchers who never step foot inside a classroom is not a contribution to a students’ education, which the Minister’s statement specifies: ‘their education’, ‘their fees’. A government that insists on unbundling university finances when it comes to student unions cannot rebundle to suit a different argument. Moreoever, student contributions were increased in 2005, which will alter the relativities.

Since the Commonwealth now specifies its exact contribution per student and the exact maximum fee payable it is possible to work out the student contribution as a percentage of the total. The lowest percentage – 27.8% for nursing – is higher than the typical percentage claimed by the Minister, and the highest – law at 83.85% – is more than three times as high.

Using data I collated from the funding ‘agreements’ signed between the universities and the Commonwealth, I have calculated the likely weighted average student contribution for 2005 and after enrolments, ie taking into account that some courses are taken by more students than others. This figure is 44%. (‘Likely’, in that I am assuming that the courses taken by 2005 and after students, who mostly pay a 25% premium, closely resemble those taken by pre-2005 students).

However, the government argues that there is doubtful debt associated with HECS lending. Once we adjust for that, the average student contribution comes down to about 38%.

So the government is still picking up most of the cost, but not as large a share as it claims.

8 thoughts on “What proportion of their education costs do uni students pay?

  1. Sinclair – They do tell such a story, but it’s hard to believe in many cases, especially given the number of staff classified as ‘research only’, and the fact that many courses are pretty standard and based on scholarship rather than original research.

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  2. On that basis, you’d support the notion of teaching-only universities? I understand we have such things in practice, but in principle?

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  3. Yes, I would. While there are some advantages in combining the two functions, there are also significant disadvantages in increased costs through paying staff more than is required for the teaching function, teaching getting too little attention, and only teaching for half the year.

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  4. I think you are wrong about the contribution of “research only” staff. In some disciplines, these guys are essential in keeping modern labs running (No doubt there are some superfulous ones). The other thing which research staff do is get universities into the rankings list game, which must be an extremely good correlate of their ability to attract OS students. Even if their research is otherwise worthless, the difference between, say, being in the top 500 universities and not must be quite reasonable in terms of income.

    It would be nice to see some data based on what percentage of which courses you think could be run without research. Even broad figures like “percentage in Engineering” would be nice.

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  5. Conrad – I am not sure about a strong correlate on numbers. For example here is the list of Victorian universities in order of size of o/s enrolment numbers, largest to smallest, with the Melbourne Institute international ranking in brackets (most don’t get to the global top 500, so I can’t use that):

    Monash (2), RMIT (5), Melbourne (1), Deakin (4), Victoria (7), La Trobe (3), Ballarat (8), Swinburne (6).

    The relationship with levels of OS fees for business or commerce courses is better, but not perfect:

    Melbourne (1), Monash (2), RMIT (5), Swinburne (6), Deakin (4), Victoria (7), La Trobe (3), Ballarat (8).

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  6. Thats interesting, although one thing that you might like to weight for also now I think about it is the amount that the universities can charge. Last time I looked Melbourne had the highest fees (I guess you must know whether is true), thus their margin (and overall) profit might make up for some of the difference, particularily given how cheap Australian courses already are (and hence I presume profit margins).

    The reason I brought it up is that some universities are desperate to get into this 500. Kerry Pratt from Swinburne, for instance, has been thoughtful enough to put a link to the index in Swinburne’s research plan. If it doesn’t make much difference, then this is evidentally a rather poorly thought out objective. http://www.swin.edu.au/research/plans/

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  7. Swinburne is not likely to get into this 500, because it does not have a medical school, and medicine is where the big research dollars are.

    I’m not quite sure what you mean by the amount universities can charge. You mean the amount they can get away with in the market? There is a floor price in this market, but apart from that no legal limits.

    I presume Melbourne makes a healthy profit, but there is no good information available on university cost structures. But the dynamic of the wretched Jiao Tong list is that universities will enter into bidding wars for the top academics, inflating their cost structures, and flowing through to student fees. All the more reason to have universities that refuse to play this game.

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