As Rafe and others have pointed out, the US financial meltdown is giving market critics a long-awaited opportunity. Indeed, over the last few years things had grown so desperate for them that they had given up arguing that capitalism didn’t work, and instead resorted Clive Hamilton-style to claiming that it worked too well, causing unhappiness and trashing the planet.
But now the argument is swinging back to markets don’t work. The National Tertiary Education Union is jumping on this bandwagon as the Bradley committee considers the future of Australian higher education, with several submissions (including of course mine) calling for relaxing quantity and price controls.
In this week’s Higher Education Supplement of The Australian, NTEU Policy and Research coordinator Paul Kneist says:
Opening up the higher education sector to competition to give potential students greater choice no doubt echoes the calls for financial deregulation in the ’80s.
Specialised private providers with lower costs will enter the market. Student choice will increase and the cost of a higher education qualification may fall. Universities will be forced to respond if they are to remain competitive.
However, will increased competition and lower prices result in lower entry standards and a lowering of the quality of education being delivered? Will there be a proliferation of sub-prime qualifications?
Nobody is calling for lower accreditation standards; indeed this is the one area where I think the current system is under-regulated, with self-accreditation creating clear conflicts of interest. This doesn’t mean that the government needs to do the accrediting, just that independent organisations should assure students and employers of academic standards. Student outcomes across all institutions could also do with more scrutiny.
My prediction is that average quality would almost certainly rise after deregulation. This is for the following reasons:
1) Price control has kept average expenditure per student lower than it would have been in a market; more fee income will let universities provide better facilities, reduce class sizes, and be more competitive in the market for staff.
2) More competition will create a greater consumer focus; in my submission I argue that this is already evident thanks to the international student market. I hope that better information about courses and facilities will increase this effect over time.
3) We are likely to see more growth in the teaching-only private sector; this lacks the conflicts caused by staff who are rewarded for research rather than teaching, and is as I understand it largely free of NTEU influence. The NTEU, like education unions generally, works to prevent staff being dismissed, when sackings are a vital part of quality control.
The most interesting issue here is ‘sub-prime’ students. It seems that when public universities recruit students with weak academic potential it is ‘access and equity’, but when private institutions do it entry standards are being compromised.
At the current time, there is no formal regulation of entry standards. In practice, quotas on student numbers – set for budgetary rather than academic reasons – combined with rank order of academic merit selection have largely excluded very weak applicants from receiving places.
With full deregulation, these quotas would disappear. While in some versions of voucher schemes minimum entry standards would be created, I have argued in the past that these are inevitably arbitrary, given the modest correlations between prior and future academic results.
What we need is not to pick an entry standard, but to provide much better information about academic and employment prospects for people at varying levels of initital academic performance. It will be then up to the student to decide whether he or she wants to risk the time and money involved in study. The protection to the community from incompetent ‘graduates’ is testing of what the student has achieved, not excluding people who might turn out ok from ever getting an opportunity.