They say that university education encourages ‘critical thinking’, but so rarely is that skill applied to university policy itself. At the weekend, Kevin Rudd returned to his anecdotes about higher education:
“We’ve got to look long and hard at how we make higher education affordable for kids from working families right across this country. I’m concerned we’re heading backwards on this, and it’s not good in terms of equity.
“We have young people and their families coming in to our electorate offices saying they don’t know if they can afford to have their kids go to university any more. This is a crying shame. The rest of the world’s investing more in education, skills and training, but public investment by the Howard Government is going backwards.”
Though demand for university places declined over the 2003-2006 period, at current prices it still exceeded aggregate supply (though some universities could not fill places, this was because the quota system of allocating places to universities does not take demand into account).
For 2007, preliminary applications centre data indicates that demand from school leavers is up by 3.8%. What is the point in trying to generate extra demand if there are too few places already? Especially if there are unlikely to be sufficient high-quality jobs at the other end.
In any case, there is no evidence – despite what people coming into Rudd’s electorate office might say – that low SES people are ‘under-represented’ at university once their ENTER scores are taken into account. The Cardak and Ryan research released this year showed that at the Year 12 to university transition point there is no evidence that anything other than ENTER score makes a difference. The problem is that low SES students get relatively weak ENTER scores.
Cardak and Ryan’s research was conducted before the 2005 student contribution amount increases, so it is theoretically possible that this was a tipping point that brought in differential price effects between SES groups. But using ENTER as a proxy for SES, it is very hard to see this in the school leaver applications and acceptances data.
For example, of school leavers applying for the 2004 academic year (before the price increases) 60.5% of them with ENTER scores in the 50-60 range applied for university, and 12.3% eventually accepted a place. For the 2006 academic year, 61.4% applied and 22.3% accepted. In the next highest group, 60.05 to 70, in 2004 76.8% applied and 33.8% accepted. In 2006 applications were slightly down, to 75%, but acceptances were up, to 48%.
Intriguingly, declining applications and acceptances were concentrated in the 80+ group, those most likely to come from higher SES backgrounds, and most likely to benefit from higher education. This, however, is consistent with the trend I have noted over a number of years, of the university starting age edging upwards. My guess is that among affluent Australian families, ‘gap’ years are becoming more popular, though most will eventually go to university if they have academic potential in the upper range. But over the shorter term, this trend could be creating places for lower SES students, if higher acceptance rates for students with low ENTERs is a good proxy.
But say price was (counter-intuitively) having a greater impact in high SES groups. Using lower prices to attract them back in to a system with finite places would squeeze out the low SES kids Rudd is trying to help, but who lose out in an ENTER-dominated admissions system. It would be a perverse result – but what you risk getting if you base policy on anecdote rather than analysis.
Andrew Norton 
I also blogged on Rudd’s ideas. A bad notion which suggets he or his advisors are not greatly informed about the SE status of people who attend university and its connection to price. See http://tinyurl.com/yafle7
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Some forms of mythology and political rhetoric are very hard to kill by anything as feeble as evidence and good arguments.
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Call me old fashioned, but I would still like to see a theory articulated (from Rudd) as to why deferred income contingent charges would deter anyone from going to uni that had a positive NPV from doing so. Is the idea that more of the fees cannot be deferred these days? Or is to do with tougher eligibility for Austudy, which has nothing to do with fees as such?
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Andrew, I’d like to put forward a thought that many friends have suggested to me about (and I’m not suggesting that I agree with this idea) – it’s something I’ve mentioned before.
The idea is this: it might be the case that the “loan” aspect of HECS deters people from studying as they think they will end up with a “debt” – and this could put debt-averse people off from studying. Now, I know that it’s not actually a debt and it’s only repayable once you start earning a reasonable income – and when I say this to my friends, they talk about how there’s an ingrained attitude particularly in many working-class families and that even the impression of owing the govt a lot of money at the end is enough to put people off studying.
Now I have no data about this at all – but I thought I’d throw it in the mix.
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Sacha – Lack of data never stopped anyone in this debate:) Any sensible person is ‘debt averse’, in that they don’t borrow money they won’t be able to repay. The question is whether there is a significant number of people who are irrationally debt averse to HECS debt? There is no evidence that this is the case for working class people as compared to affluent people; the data shows that their uni attendance rates are the same once you control for ENTER. So we’d have to be looking for a more general debt aversion syndrome not linked to class. The spread of consumer debt makes this seem unlikely; if anything there should be *more* rather than less debt aversion.
Among the people who are credible candidates for university, you would think (hope!) that irrational debt aversions are even less prevalent than for the general population, since they ought to be better at calculating the financial consequences of their decisions.
There more be some irrational individuals who are overly debt averse, but I can’t see that policy should be changed to indulge their irrationality.
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Yet I suspect many of the people with large credit card debts relative to income are ‘working class’.
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I’d also hope that someone considering going to uni would carefully look at whether the outcome justifies the “debt” incurred. My partner brought this situation to my attention when he said that many aboriginal people thinking about becoming cadet rangers for the NSW national parks were put off by the “debt” incurred by going to a uni course, and that they were considerably more inclined to become cadet rangers once they learned the National Parks govt dept was going to pay the HECS.
Maybe what this is about is that the impacts of people’s irrationality could be considered in developing policy (eg on HECS), in that consideration could be made as to whether it would put off people inclined to be put off by such irrational considerations – ie, does such a person’s irrationality mean their opportunities are restricted without sufficient reason? I don’t know.
I’m into people maximising their opportunities – and it’s a shame if irrational considerations cut off significant opportunities.
Just airing some thoughts.
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Sacha – It sounds like the main problem in that story is that park rangers need university degrees – see earlier posts on overeducation.
But if they do, then clearly the solution is – as it was in this case – for NSW Parks to pay what amounts to a slightly higher salary for a small group of people, and not for the federal government to spend hundreds of millions to little effect.
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My understanding is that NSW National Park Rangers needed a uni degree – I don’t know if they still do.
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I’m all into critical thinking in developing public policy. I’d like to contribute in that vein in the future.
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Sorry for doing 3 comments in a row! Rudd’s comments sound to me just like electioneering not hard policy – he’s trying to tag onto some people’s feelings.
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Park rangers have needed a degree for decades – usually in botany, zoology, ecology or forestry. Such knowledge may not be essential for the job , but it is undeniably useful.
It’s a bad choice of example, though, because it is considered an extremely desirable job by many people, with huge numbers of applications. Successful applicants are likely to be very well qualified, with a range of merely useful but not strictly necessary skills.
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“It
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