The cost of FEE-HELP

Providing me with my second page one dial-a-quote this week, the SMH this morning leads with a story titled ‘Student debts out of control’. Drawing on an article by Bruce Chapman in this week’s Campus Review, it says:

GRADUATES from private colleges and universities are costing taxpayers more than those from public universities, and new ministers of religion present one of the greatest burdens.

Though for reasons I will explain this is not correct, Chapman’s original article does make a valid point. This is that under the FEE-HELP loan scheme for full-fee students there are implicit subsidies because student debt is only indexed to inflation, meaning that the taxpayer bears most of the real cost of lending students money to pay their tuition fees. (Aspects of this issue were discussed on this blog last October.)

Undergraduate FEE-HELP students do pay some real rate of interest, because they have to pay a 20% surcharge on any amount they borrow (eg, if they borrow a tuition fee of $10,000, they will owe the government $12,000). If these students repay quickly, that could work out at quite a high real rate of interest. But if they borrow a large sum that takes many years to pay back then their real rate of interest will be low, and they will effectively receive a subsidy from taxpayers.

Chapman uses the example of what he calls a ‘private sector bachelor of law’ student with a debt of $92,000. As such a student can borrow a maximum of $81,600 this year, some of that must be the surcharge. He calculates an implicit subsidy of between 20% and 30% on average. No doubt using much less sophisticated statistical techniques, indeed the Excel equivalent of back-of-the-envelope, I tried to replicate this finding.

Assuming an original tuition fee of $80,000 (the original, now inflation adjusted, maximum) incurred over four years and using an income derived from a lawyer’s salary survey (assumption: a mid-range salary at a mid-tier firm) and a cost to taxpayers of 4% p.a. above inflation I arrived at a similar conclusion to Chapman, with an implicit subsidy of about 24% of the original cost, or about $19,000.

Because law is a low tuition subsidy course, a Commonwealth-supported place with price control would be a cheaper option for taxpayers. Including the tuition subsidy, for a graduate with the same job as in the above example, I estimate a cost to taxpayers of about $15,700. Though Chapman finds low implicit interest subsidies for Commonwealth-supported students, I find (in % terms) that they are about the same in this example, because these students do not contribute a surcharge (this is I think where I differ with Chapman – though HECS students who defer do pay a surcharge and from their perspective have a real rate of interest, the Commonwealth pays this money to the universities. Consequently, a HECS student is making no contribution to covering the cost of the implicit interest subsidy.)

These issues aside, it is a mistake to say that the costs of FEE-HELP are primarily incurred by private colleges and universities. Though the figures have to be pieced together from several sources, in 2006 full-fee students at public universities borrowed $309 million, and at private colleges and universities students borrowed $123 million. The average amounts borrowed per student were quite similar – $7949 at public universities, and $8633 at non-public colleges and universities (I have not extracted the TAFEs etc that effectively operate as private providers in the higher education sector).

And apart from Bond University, it is likely to be the public universities that are enrolling FEE-HELP students in the long-haul and expensive degrees that generate the high subsidies mentioned above. It is the Group of Eight universities who both dominate the full-fee undergraduate market and charge very high fees for their undergraduate courses. The non-profit private institutions tend to be quite cheap, and even the for-profits charge much less than the Group of Eight.

While I disagree with some of Chapman’s analysis, his basic point is a sound one: regardless of who triggers these subsidies they are high. We should look carefully at whether they are warranted, and if not how to reduce them. Chapman has favoured price control, though he does not mention it in this piece. I oppose price control, but there seems to be a prima facie case for increasing the debt surcharge.

50 thoughts on “The cost of FEE-HELP

  1. “I oppose price control, but there seems to be a prima facie case for increasing the debt surcharge.”

    I would have thought that it was a prima facie case for raising the interest rate on the income-contingent-loan. I don’t see why you can’t charge the market rate and have the loan income-contingent.

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  2. “I don’t see why you can’t charge the market rate and have the loan income-contingent.”

    The reason is easy to see, because politically, it isn’t very fun to see students going broke from their studies. I believe in fact this happens quite often in the US — although I’m also lead to believe the bankruptcy laws are quite different, which means it such a fuss to get rid of your debt this way.

    It would be worthwhile calculating how much money you would save incidentally from this. i.e., the amount gained in extra interest versus the amount lost to increased bankruptcies. Note that I believe that under the current system, you pay the money back no-matter what (if working in Aus) — even if you do go bankrupt, so there is something to be gained by having these odd schemes indexed to the CPI.

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  3. The historical argument for surchages and against real interest rates is that the latter disadvantage women, who often take time out of the workforce or work part-time.

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  4. Sorry Brendan, I misunderstood your comment — I assumed that you were talking about real loans, versus HECS that increases at a commercial rate vs. the CPI. The problem with the first of these is that if you don’t happen to pay the loan off early enough, I imagine it would be rather easy to get to insurmountable levels. Aside from the obvious (who would bother to make extra payments to something they can never pay off), I imagine there are big political problems against this, including the one Andrew mentions above.

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  5. Brendan, a side argument of this was also touched on earlier. Do we really want people’s career choices forced by interest rates from their education? Also (maybe I’m misunderstanding the concept here) can you please explain how real interest rates and income-contingent repayments can sit along side by side? I would have thought that levying an extra few thousand dollars each year in interest would defeat the purpose of allowing low-income earners a reprieve with income-contingent loans.

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  6. iamspam – This is an interesting point. If income-contingent loans are simply to smooth cash flow, then there is is no inconsistency between real interest rates and the loan system. You just repay over a larger number of years.

    However, I don’t think the loans were just about cash flow, they were about redistributing risk. Chapman’s point, if I understand it correctly, is that it was assumed that under the HECS system a cheap, standardised education was to be offered, which limited how much expense any student could incur. That approach is still reflected in the loan caps for FEE-HELP, but as the above example shows these are still capable of generating larger subsidies than the equivalent HECS course.

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  7. If the case for limiting subsidies is the opportunity cost of public funds (rather than equity, which is the rationale for the income-contingent aspect of the scheme design), a real rate of interest would seem to be a better solution than a higher surcharge. True that it would hurt women in particular. More generally, it would quickly reveal that people who intend to be out of full-time work for a long period – such as women having one more for the country – probably shouldn’t bother going to uni, at least from a private financial and public interest perspective. Very problematic.

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  8. “You just repay over a larger number of years.”
    – And under a system of real interest would therefore pay more, yes? That seems to be a perverse inequity where high-income earners who repaid their HECS quickly would pay far less than low-income earners who paid their debt over many years, and accumulated large sums of interest. Which seems to go against one major rationale of charging for higher education – that students should pay for private benefits they gain out of their degree – if those who benefit most pay the least, and vice-versa.
    .
    (I realise that I’m not particularly addressing the arguments relating to the economics of interest and risk, definitely not my area of expertise!)

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  9. Let’s just look at FEE-HELP for the moment: If the point of FEE-HELP and other income-contingent loans is to correct a market imperfection in the human capital market ( i.e. students can’t use their future earnings as collateral when taking loans) then I can’t see why there ought to be 0 real interest rate coupled with a loan fee rather than a 0 loan fee coupled with the market interest rate.

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  10. Iamspam – Or you could argue that students ought to pay the costs of their education, with income-contingent loans protecting against default in the event of low income but not providing a subsidy in the long term. As I said, that’s not the original idea, but not a crazy one if like Brendan we assume that FEE-HELP simply target certain problems in the human capital market.

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  11. I was interested in the mention of ministers of religion as primary culprits. I assume that this is because many of these will never earn enough to have to pay back any of their FEE-HELP loan.

    Is this another instance of the churches being quick off the mark to cash in on government subsidies that were not there previously?

    Similarly, I presume that anyone can avoid having to repay their debt by ensuring that they never work enough hours to take their income above the magic income threshold for repayment (currently around $38,000). Not a bad lifestyle really, as long as you don’t want a real career.

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  12. Nina seemed to be the spam equivalent of the pub bore – offering her opinion to anyone, regardless of whether they have shown any interest. I have deleted her.

    But the spammers are getting cleverer, writing messages that superficially seem to be on topic.

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  13. bg – On my calculations, in 2006 the theological colleges had 3,030 students who had taken out a FEE-HELP loan, out of the 68,600 persons who did so. Also, 425,874 persons took out a HECS-HELP debt.

    One of the issues is that Ministers of religion are often paid in-kind, such as free accommodation, and therefore their loan repayments do not reflect their true income.

    It’s not even clear to me that they understand the subsidy implications – economics not being a strength of clergy, to say the least. But they have clearly seen the advantages of being able to spend more on their education while improving their cash flow.

    But the biggest hole in the scheme is the capacity of people, mostly married women, to live in high-income households but to personally have annual incomes that either avoid repayment or repay very slowly.

    It will be brave pollie who closes that loophole…

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  14. “But the biggest hole in the scheme is the capacity of people, mostly married women, to live in high-income households but to personally have annual incomes that either avoid repayment or repay very slowly.”
    I suspect this would not have been an issue in the past given the relatively small size of HECS debts and the relatively advanced average age of professional women at the birth of their first child. For example, at an average wage of $60K over 10 working years (age 22-31), a graduate would pay off about $35K in nominal terms. However, it may be more of an issue when HECS debts are $50+K instead of $10-20K.

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  15. “The president of the National Union of Students, Angus McFarland, said universities were exploiting vulnerable 18-year-olds by allowing them to take out loans of up to $100,000 that would take many years to repay.”
    – SMH

    Maybe the NUS aren’t traveling towards coherence after all. First of all, the university isn’t offering the loan, it is the Commonwealth Government. Secondly, no one is forcing students to use FEE-HELP loans, if they want to pay upfront they are free to do so. Thirdly, the NUS speak of their fellow students with condescension as if students are too stupid to make decisions for themselves – consistent i suppose with their historic position on VSU.

    Finally, you could flip it around and also say that the with personal income taxes, the government is in fact exploiting young people by forcibly confiscating the fruits of their labour perpetually without end unlike loans.

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  16. Brendan – I think your third point is the key one. All along, the case against fees has assumed that would-be students are either too stupid to compare fee costs with long-term benefits, or too afflicted with irrational debt aversion to take out loans to secure those benefits. Neither assumption is genereally sound, and those people who are stupid or irrational are likely to be poor educational prospects anyway.

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  17. “Neither assumption is generally sound, and those people who are stupid or irrational are likely to be poor educational prospects anyway”

    I’d be interested to see the real figures for that. My guess is that a lot of high school leavers don’t think very much about the costs at all — so a lot of them are really doing the opposite of what you are saying — they are too irrational to calculate the benefits of when not to go. I imagine that is one of the reasons that price doesn’t affect attendance much — rather it appears to me that many students just take the easiest option which satisfies their current situation. In high employment markets, that might be getting a job, but if they can’t get that, they just default to university.

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  18. The contrasting assumptions in this debate are interesting. NUS et al assume that even low prices relatively to likely benefits deter. The FEE-HELP price control argument assumes that people will pay inflated prices because they don’t have to repay for a long time.

    The basis for observing some level of rationality is that application and enrolment rates decline steadily with academic results (data here). Though skill and uni marks correlate only imperfectly, that is a generally sound judgment about how likely they are to succeed at university, and therefore whether it is likely to be worthwhile from a financial perspective.

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  19. I don’t find that data very convincing — all it shows you is that people are rational about what courses they are likely to get into vs. the financial outcomes of their degree. I think this is a glass-full or glass-empty type phenomena, no doubt there is some level of _financial_ rationality, but it doesn’t explain the huge power of marketing (calling identical courses different names often massively changes the cut-offs, for example), nor why so many students that have extremley high marks do courses like law where the median outcomes are so poor (i.e., you won’t be working as a lawyer).

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  20. “all it shows you is that people are rational about what courses they are likely to get into vs. the financial outcomes of their degree.”

    Er, exactly. Mostly they are making sensible decisions given the likely costs, benefits and risks.

    The median outcomes for law don’t seem to be poor; at least to the 2001 census the rate of return was still high. They may not all be lawyers but they are getting other good jobs. And I would be interested to see examples of *just* a name change massively affecting cut-offs.

    I have concerns about what happens to the weak school leavers, most of whom don’t apply or get accepted if they do, but some of whom do get in. But most students are making what look to me to be fairly good decisions, when compared to the costs, benefits and risks of their realistic alternatives.

    The key issue is not whether everyone makes perfectly rational decisions, it is whether on average they make better decisions than politicians and bureaucrats acting on their behalf. In my view, they do and will.

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  21. “It’s not even clear to me that they understand the subsidy implications – economics not being a strength of clergy, to say the least.”

    Andrew, on your figures, clearly the emerging ministers of religion couldn’t be considered the greatest burden numerically, so presumably it is because they are unlikely to repay at all.

    You may be right that clergy themselves don’t pay too much attention to the economics (since their minds are supposedly on higher things), but I’m fairly sure that the people who run the church financial departments do. Presumably the latter are responsible for setting fees for theological colleges, etc. as well as setting most ministers’ remuneration low enough that they and their families can top up with the maximum amount of income support.

    And it is all helped along by the fact that the churches went to the High Court to get a ruling that all of the in-kind entitlements that clergy get can’t be considered employment ‘fringe benefits’, on the basis that their employment contract is with God or something. It’s enough to make anyone cynical about (organised) religion, really.

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  22. As far as the (married) women argument goes, I am instinctively a bit wary of using that argument to justify one policy over another. First, because I don’t think it helps women in the end for policy-makers to assume that they are somehow victims of their biology and programmed to forgo significant amounts of employment and income just because they have had a child or two. So I don’t have an in-principle objection to charging them a real rate of interest – they should be just as capable as men at factoring that into their decision-making.

    On the other hand, making husbands repay their wives’ debts (and vice versa) – that idea does make me a little uncomfortable. It smacks of family unit taxation which, in general, I’m not in favour of.

    But generally I agree that the weakness of income-contingent loans is that some of the people who take them out are unlikely ever to repay them, and some within that group will take them out knowing that to be the case. This was especially a problem with the defunct Student Financial Supplement Scheme (which I understand that the new government intends to reinstate) – I suspect that many if not most of the students who were willing to give up some or all of their income support for twice the amount of loan were quite unlikely to ever pay the money back.

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  23. bg – All the private theological courses on which I have data so far charge their students less in total than a public university would get for a Commonwealth-supported place. The most expensive private is still about $1600 p.a. cheaper than a CSP.

    There hasn’t been any deviousness on their part, clergymen have always been ‘paid’ this way.

    On your second comment, I am not calling for family taxation. However, my longstanding proposal to recover HECS debts from deceased estates would access some of the family wealth, given that wives usually outlast husbands.

    The up-front discount, from the government’s perspective, probably has an adverse selection effect. The people who pay up-front were probably always those likely to repay relatively quickly.

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  24. “I would be interested to see examples of *just* a name change massively affecting cut-offs”

    That’s easy. Two places I have worked changed the name of the course from BSci. to BSci with Honours (and BArts also), where you get to do an honors year automatically if your grades average over 75 (honours is well loved in my area). The two of course are of course completely identical — since you would get into honours with that mark anyway. However the TER was 15 points different if I remember correctly (I was that 12?), which is huge. This strategy seems to be catching on all over the place these days, where courses are advertised as “with honors” based on preconditions, which are of course identical to the normal degree (including your university).
    There are other examples of course names being rebadged that I am not sure about, but most things initially called “chemisty” and the like, for example, now have much more appealing names. Since thats not my area, you’ll have to ask someone else if it actually means anything different to the courses.

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  25. “My guess is that a lot of high school leavers don’t think very much about the costs at all — so a lot of them are really doing the opposite of what you are saying — they are too irrational to calculate the benefits of when not to go.”

    I’d guess that people in the workforce who are supporting themselves would probably be able to consider the benefits vs costs of study moreso than kids straight out of school.

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  26. Conrad – But is that really affecting the overall ENTER for Science or Arts, or simply reflecting the fact that courses have in them students with a wide range of marks, and that you can just rebrand the upper end of the distribution ‘B Sci (Hons)’. Perhaps that is actually useful information, as the published ENTERs, which are the score of the last person to be admitted, can give a misleading indication of the typical quality of student in the course.

    What I would like to see is an essentially meaningless name change that was followed by a signficant increase in demand from year to year.

    Sacha – Alas, that change alone would not save very much in the short to medium term as on average HECS debtors are still quite young.

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  27. I don’t really know, Andrew, but I suspect that before FEE-HELP seminaries didn’t charge their students anything. I guess we should just be grateful that they aren’t charging people $50,000 for a degree that will then attract a salary at about the minimum wage – I guess the optics of that wouldn’t look too good.

    All I’m saying is that, while I have no doubt that many of the churches do good things in the community, I think that some at least have quite a deliberate strategy of providing their clergy with an adequate income by way of the taxpayer. For example, either the pastor themselves or their partner can usually receive full income support and they would also generally get maximum FTB for any kids.

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  28. Come to think of it – isn’t a church charging its clergy-in-training for their degrees much the same as tradesmen charging their apprentices for their training?

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  29. “is that really affecting the overall ENTER for Science or Arts”
    Its hard to say because demand fluctuates from year to year. I’d certainly bet yes — as the “with honours” course at least at the first place where I saw it done was exceptionally high, and the trend is catching on (I see more and more places doing it). It would also be pointless to do it if it simply streamed people (since everything else is identical), which of course is not say that it wouldn’t be done.
    Incindentally — the ENTER score is completely diddled at many universities (especially those scraping the bottom of the barrel). There can be huge differences between who is let in and what is reported, especially in courses where large proportions of the students are getting in via “non-traditional” methods.

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  30. Here’s a link for you Andrew that I found at MQ. CHeck out Bachelor of Psychology vs. Bachelor of Psychology (Honours). The second of these has a huge and atypical score to get in (93) at MQ, whereas the first is typical for MQ (84). Bachelor of Social Science, which might well be identical to Bachelor of Psychology (since you can probably do the same subjects, like psychology), has the lowest score (80.0). That pattern is replicated everywhere — students don’t like to do “social science” labelled degrees, even if the content is potentially identitical to other courses.

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  31. bg – My data is on Bachelor of Theology degrees, and all the institutions I have looked at charged fees prior to FEE-HELP. As I understand it, there is a further step to go before they become Ministers of religion. I am not sure how that is financed.

    Conrad – I can’t see a Bachelor of Psychology without honours, though there are other degrees with (Psychology) after them. But there is a fundamental difference between those and Bachelor of Psychology Honours, which is the four year course requirement as a preliminary to professional admission as a psychologist. Maybe (Honours) is a silly title, but it looks to me as if the market is (rationally) valuing more highly a degree that gives access to a profession which attracts many people.

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  32. Thats not how it works Andrews — its purely marketing. You can do the 4 year degree as long as you have high enough marks after 3rd year in the 3 year degree. Alternatively, if you don’t have the marks in the 4 year degree, they won’t let you into the honors year — you need to read the fine print of the requirements. Hence the criterion for getting into the 4th year is in fact identical for the 3 year and the 4 year degree (incidentally — if it wasn’t like that, it would essentially devalue the 3 year degree, as you could score higher than someone else and not get into 4th year). This type of marketing is now common, and at least at present, works wonders.

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  33. Here’s one from your university. Note read the fine print near the start — the first year is a like a degree. The second year is like a Grad Dip (4th year). Now, if you don’t get high enough in the first year, they don’t let you into the second year. Thats the same as getting a degree and then going into 4th year. They won’t let you in if you don’t score high enough (and for a full-fee grad dip, I doubt the entry scores are different). Hence whats being advertized is really a program you could do, not one they will neccesarily allow you to do. This is now common.
    It would be essentially the same as “PhD degree” [fine print: only if you are one of the top two people in honors], its just people wouldn’t believe that.

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  34. Conrad – OK, I agree that the two Macquarie courses are essentially the same, though I don’t think it is clearly established that this is ‘pure marketing’. Signalling that there are brighter students in the cohort is relevant information. And for full-fee students, the prices are the same.

    I don’t get the Melbourne example though.
    ‘Hence whats being advertized is really a program you could do, not one they will neccesarily allow you to do.’

    Isn’t that true of virtually all courses?

    I’m getting confused here. The M. Psych Studies will get you the equivalent of the 4 year undergraduate degree, but in half the time and more than double the cost, and with completely different entry and progression requirements.

    How is that a pure marketing kind of difference?

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  35. The Melbourne example is not as clear cut as the Maquarie one (where the courses and conditions are identical). In the Melbourne version, the first year is basically years 1-3 of a major. The fourth year must be identical to the fourth year for honours or the post-grad dip (which are identical in themselves excluding funding at most universities — perhaps Melbourne is different). However, because that year is competitive and there are never enough places (with post-grad dips also being fee paying, vs honours which go through HECS), the criterion for the 2nd year of the Master’s course becomes basically identical to the post-grad dip (credit average in your major). Thus what they are really selling is a major packaged into one year (fine by me), which _potentially_ allows you to get into 4th year, in exactly the same way as all the 3 year students get into the 4th year — but the 3 year students are not yet advertized to like that.
    This is not true of most courses. Most courses were once advertized on what what you could achieve even if you just passed all you subjects (e.g., a degree in engineering vs. a degree in engineering with honors [for some]) — i.e., what everyone could achieve excluding those that drop out. However, now they are advertising things that you potentially _might_ achieve if you got high enough marks (basically, post-graduate studies, or in my silly example, a PhD). We don’t know the percentage of students this applies too, but in the MQ marketing, its clearly out of mind (at least Melbourne is nice enough to make that distinction “large” print). As Jeremy points out, that’s just a stock standard framing effect, and I think it works wonders for MQ.
    As an aside, I might note that this is another example of degree name inflation. Melbourne is now calling a “Masters” what everyone else calls an honours year/post-grad diploma (since the content is identical).

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  36. Conrad – The Australian Qualifications Framework sets out what the various degree titles are supposed to mean, but it does not have any legal force. It’s still pretty clear what bachelor and PhD mean, but the coursework postgraduate qualifications are highly variable. They almost always require prior completion of an undergraduate degree, but the work is not necessarily more demanding than in undergraduate courses, and could even be less demanding, especially when compared to Honours.

    I’m not sure, however, that there is a problem with branding courses in terms of what students could achieve – many courses have always had the name of a profession in the title, but entry to that profession has always been conditional on academic grades and often a next step, though usually one provided by a non-university organisation.

    There is no inherent reason why 50% should be seen as a pass grade; if someone is offering professional services they should get a lot more than 50%, and universities (which probably should be more concerned about the quality of their graduates than they are) could reasonably be reluctant to credential someone for professional practice with scores of only 50%.

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  37. I’m not against branding courses in terms of what students could achieve (although I’m sure we’ll law suits in the future over how much “could” you are allowed to use — presumably there must be some limit). However, back to the original point, I think that these sorts of framing effects do affect student choices (with the MQ data being the cleanest example), even though, based on perfect knowledge and perfectly rational behavior, we shouldn’t see any difference (since in the MQ case, what is written on your degree will be identical no matter which course name choose, as will your course). This shows lack of rationality of the students.

    Sorry to keep on and on about this, but if you go and talk to students about what they want out of their degree, you’ll find lots of examples of students being either excessively optimistic, uninformed, or just plain irrational. For example, where I work we have 20 places per year in our Masters course (which gets you qualified to practice). If you asked our first year students how many want to do that course, I imagine 200 would say yes. Thus, on average, only 10% can ever hope to get qualified (and we’re postgraduate heavy). Similarly, I’m told that there are as many law students in Australia as there are practising lawyers (that may be BS for all I know). However, if a law course takes 3 years, and the average working life-span of a lawyer is 30 years, then that means only 10% of people (3/30) who do law courses will actually become lawyers. I bet if you asked first year law students how many want to become lawyers, far more than 10% would say yes (most I imagine). Thus this must also represent the irrational beliefs of many students.

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  38. I’ve been analysing some census data on major field of study and occupation; more than half of people with law as their major field of study are working in law or probably related professions (eg tertiary education teacher). The percentage will be higher after I remove those not working from the sample. This seems to be more than for other courses that I have looked at so far, though I have some work to do in deciding what are related professions (eg quite a few engineers work as managers of various kinds, which I would class as related if associated with an engineering activity).

    I’ll examine young law graduates as well, but the reality is that despite the difficulties some people have getting articles there are lawyer shortages. This is partly because law is a fairly adaptable qualification, and people choose to enter a range of other occupations (as I have).

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  39. I’m currently, doing a law/commerce double degree, and i will admit that i do not have any intention of entering the legal profession. i won’t rule it out completely, but at this point it is not likely.

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  40. In terms of people’s ability to rationally plan their future, I don’t think you should include related professions since people don’t generally plan for those (hence it isn’t rational planning). What you are talking about then is degrees that help you get a job vs. what people plan for. If I asked a first year law or psychology graduate what they want to do when they finish, I doubt too many would give associated profession as an answer (obviously, combined law degrees like Brendan is doing are a different story). I also doubt the answer “A degree that makes me smart and employable” would be common — only universities say these sorts of things. In addition, the things that actually make the psych graduates employable vs. other graduates (i.e., quantitative skills) are the things that garner the most complaints (and hence are disappearing from the courses). If students planned rationally, then this is in conflict — since it is clearly irrational in terms of future prospects.
    I wouldn’t use shortages as a marker either — I’m not sure of the truth of it, but the accounting industry complains of shortages, but that’s not because there are not enough graduates. I imagine the same is true of law — either people don’t want the average graduates or its simply hard to get trained in specifics (i.e., universities don’t do it).

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