Submissions to the Bradley review of higher education policy are now appearing on the DEEWR website. As a veteran of such reviews – this is the third comprehensive review I have been involved with in just over a decade – my expectations of its outcomes are modest. I have two failures behind me.

But in The Weekend Australian yesterday there was some sign that the government is thinking seriously about the structural issues that keep the education system so far below its potential. In a page one story, they report a proposal to use federal incentive payments to get funding for vocational education to be based on student demand (aka vouchers) rather than institutional grants.

If vocational education, why not higher education? There are no states to deal with, just a Senate in which Labor would get an overwhelming majority if a party that has no ideological grounds for opposing student choice voted with it (despite its failure to implement it while in office).

I’ve yet to read more than a handful of submissions to the review, but both the University of Melbourne submission (pdf) and my own submission (pdf) explain how the current system of centralised allocation is highly dysfunctional.
Continue reading “Could we have a real ‘education revolution’?” →

…we can be pretty confident that the significant increase in the number of places in the last few years will continue to increase low SES shares of commencing students. There is a leading indicator of this in the statistics on accepted offers by Year 12 score, with the below-70 group continuing to increase its share of the total.

– my prediction of 17 July.

Fortunately, not one for the ‘corrections and clarifications’ category. As predicted, the 2007 ‘equity’ enrolment data released today (in the ‘appendices’) shows that low SES commencing students are indeed up between 2006 and 2007. Overall, the increase is about 5%.

Unfortunately more detailed comparisons between 2006 and 2007 are complicated, because the definition of low SES – a postcode in the bottom 25% – changes with each census. The total numbers for earlier years have been recalculated with 2006 census data, but not the institutional numbers.

Changes in the private provider category have also complicated things – not only are more institutions listed as they acquired access to FEE-HELP, but these providers are now reporting all students, not just those getting FEE-HELP. If I revise upwards their 2006 low SES numbers by the overall upward revision (just under 1%), the absolute number of low SES commencing students recorded at private providers is up by about 380, but the percentage of all their commencing enrolments who are low SES has declined by 1.1% to 11.8%.
Continue reading “HECS deters theory fails to predict, again” →

Never choose a simple scheme when there is a complex alternative: that, unfortunately, seems to a maxim of higher education policymaking. It was on display again yesterday morning at a Group of Eight forum on higher education and social inclusion.

In her presentation (ppt), Sydney University Deputy Vice-Chancellor Ann Brewer suggested an ‘equity trading scheme’ to encourage universities to enrol more students from low SES backgrounds. I must admit she lost me on the detail of how it would work, but presumably it would mean that those universities (like, I suspect, her own) that failed to meet their equity targets would have to buy credits from those that had more credits than they needed.

There is a much simpler way of dealing with this problem, which is to fix the market design of the whole Commonwealth funding scheme. At the moment, the total number of Commonwealth-supported places is largely fixed overall and for particular institutions. This means that all the specific proposals for recruiting low SES students she and other presenters offered would operate in a zero-sum game. The only way to increase low SES numbers is by decreasing numbers from other SES groups.

Universities have weak incentives to spend large sums coaxing under-prepared low SES students into university when they can take bright, well-educated upper-middle class kids who apply without needing encouragement. Brewer is right that the incentive structure would need to change before this would happen. But there is a simpler option than an equity trading scheme: just deregulate the market.
Continue reading “A simpler way to increase low SES uni enrolments” →

The SMH report of the higher education review discussion paper picks out one of its very few quotable quotes, describing the funding system as:

at best complex and at worst anomalous, inconsistent and irrational.

This will come as no surprise to readers of this blog.

There are a few instances of this kind of frank analysis. The discussion paper summarises the research on what effects increases in student charges have had on low SES groups or particular disciplines (ie, none), so we now have a government document that effectively admits that the hundreds of millions of dollars the government is spending reducing charges for maths and science students is money wasted.

The government’s rhetoric about cuts to per student expenditure is also put into context. Labor has preferred out-of-date OECD data which ends in 2004, conveniently missing the surge in spending per student since then. Here is the key sentence (p.15):

From 2005, income per place has increased and in 2006 was $15,090, or 7.2% above the 1989 level (in real terms).

Continue reading “Our ‘anomalous, inconsistent and irrational’ higher education system” →

I fear I may be, unintentionally, partly responsible for a minor piece of protectionism currently on its way through federal parliament.

The story started last year when I was researching for a paper on private providers of higher education (like many of my research projects, it has fallen victim to the daily bombardment of urgent tasks). These providers have been assisted by the extension of the FEE-HELP loans scheme, which lets their Australian students borrow money on similar terms to HECS students in Commonwealth-subsidised places at public universities.

However, the Higher Education Support Act 2003 requires that in order to be eligible these providers must (among other things) have their ‘central management and control in Australia’. This was always a strange provision, since there could be many benefits from having foreign higher education providers set up in Australia.

Indeed, not very long after the Act came into force the government itself came to the same conclusion, but instead of changing the law passed a special amendment permitting the students of the Adelaide campus of the Pittsburgh-based Carnegie Mellon University to get FEE-HELP. In the process, it added another strange ideological qualification, with the provision reading:

Carnegie Mellon University, a non-profit organisation established under Pennsylvania law. (emphasis added)

But I digress. In the course of researching the ownership of private providers, I came across two that had, since becoming eligible for FEE-HELP, been taken over by foreign companies. In the case of one of them, the government’s own higher education institution website is advertising this as a positive:
Continue reading “My (possible, unintentional) contribution to university protectionism” →

My quick analysis of the higher education aspects of the budget is online at The Australian. I had a 9pm deadline, so not much time to read the relevant parts of the budget papers and write the article (Wayne Swan’s voice droning in the background did not help either). Unlike last year, though, there wasn’t too much to absorb.

Labor’s estimated spending for 2008-09 is less than what the Coalition had in its forward estimates. There seems to be a small cut in the Institutional Grant Scheme, which is the block grant for research, but I think the main cause is that the first distribution from the investment fund that Costello set up last year has been postponed. It will be the leanest year for universities in a long time.