The next issue of Policy is going to run a series of short articles by CIS researchers on social policy myths. I’m writing about the myth that university charges deter students from low-income backgrounds, one which our new leader believes. There is the associated belief that Whitlam’s free education opened the university system. In December 2006 I reported on our now PM and Deputy PM on this subject:

According to Rudd, he “was inspired to improve the quality of and access to education because he was the first member of his family to attend university, largely because of the Whitlam government’s free tertiary education policies.”

Julia Gillard was reported as saying, “…courtesy of the Whitlam government, I then went to university and obtained two degrees. I fear that it is harder today for a girl from a working class background to make that journey than when I was young.”

In a book chapter published last year, ACER researchers Gary Marks and Julie McMillan analysed data from a dozen social surveys conducted between 1984 and 2001 with questions about both the respondent’s education level and his or her parents’ occupational group. Consistent with previous research, they found that working class people in the ‘free education’ cohort born between 1960 and 1969 had much lower rates of university qualification than the HECS cohort born after 1970 (though the oldest in that group would have had at least some free university education).

Though that was unsurprising, something else did seem odd: the 1960-69 free education group had lower overall rates of degree achievement (9.1%) than people born between 1950 and 1959 (11.4%), even though only those born in 1957 or later could have enrolled as school leavers in the Whitlam free education period from 1974 onwards. Continue reading “Another ‘free education’ puzzle” →

Back in the 1980s, some on the left used to call for university admission to be conducted by lottery. Anyone who applied for a course would be selected at random. The left thought it would make it easier for working-class people, who do relatively poorly in admissions systems based on academic merit, to go to university.

At the time, I thought lottery selection of university students was a crazy idea. But now I am not so sure, and nor is the University of Sydney medical school, which is considering using a ballot to choose its students.

The University of Sydney’s problem is that the different admissions tests used for medical schools don’t seem better than each other in predicting future academic performance (here is one study, pdf). This is not an isolated issue. Other published studies, based on larger groups of students, have found correlations usually of around .3 or .4 between school and university academic results. That’s a lot more than 0, but also a lot less than 1. Several researchers have found that, for a given Year 12 score, students from standard government schools do better in their first year of university studies than students from private schools and selective government schools.

So if getting the best students is the goal, our admissions systems are only modestly good mechanisms for achieving it. Effectively, there are so many unobserved factors affecting results that, as a means of selecting the best students, our current methods already contain a random element.
Continue reading “Should university admission be by lottery?” →

In this week’s Higher Education Supplement in The Australian, higher education commentator Gavin Moodie offers the Liberal Opposition some policy advice. Some of it, such as introducing vouchers, unsurprisingly I think is sound. However there is also this:

There would have to be a cap on fees because the whole point of an income-contingent loan is to insulate students from the immediate cost of student fees, thus removing any price discipline on tuition fees as the US has found much to its cost.

This was an issue discussed at a workshop on the FEE-HELP loan scheme in Canberra this week. The idea behind a student loans scheme is, of course, to help students pay more than they would if tuition fees had to be paid upfront. To the extent that there is historic underinvestment in education, we would expect price increases when a loans scheme is introduced.

In the not-for-profit private non-university higher education sector this is what seems to have happened, with substantial fee increases observed in most of the institutions for which I have data in the year they received access to FEE-HELP, or the following year. But is this removing ‘any price discipline’? I doubt this. Their fees are still below what a public university would receive for a Commonwealth-supported place in the same discipline.
Continue reading “Does FEE-HELP inflate fees?” →

My criticisms of Labor’s policy of abolishing full-fee undergraduate places at public universities had a good run in The Australian‘s Higher Education Supplement this morning. Amazingly, even though Labor has being saying for 10 years that they will abolish these places, they cannot give basic details about how it will be done. A bit like the Americans invading Iraq, it seems like they have little idea about how they will run the country once they have won the war.

What we have so far is that these places will be phased out beginning in 2009, and that the universities will be compensated to the tune of $300 to $400 million. But as I pointed out to the HES, from a public policy perspective the most important issue is not the compensation (though more on that below), it is what happens to the student places created by the full-fee policy.

According to DEST, in 2006 there were 13,762 full-fee domestic undergraduate students at Australian public universities (the number of effective full-time places would be lower, but they have not published that number yet). That’s about 2.5% of all domestic undergraduate students. Are we supposed to remove 2.5% of the system’s undergraduate capacity? Shrinking the number of places in disciplines with graduate undersupply – there are many full-fee students in medicine, dentistry and veterinary science – doesn’t sound very sensible, and is hardly consistent with Labor’s rhetoric about skills shortages.
Continue reading “Labor’s full-fee phase-out policy shambles, and what to do about it” →

We are less than two weeks away from a Rudd government, but still the party promising an ‘education revolution’ has no higher education policy. The Opposition Leader’s campaign launch today did announce a few higher education related initiatives, but the silence continues on the key issues of how universities will be funded and how much they will get.

Two of the three initiatives announced today, while not high impact or on top priority matters, are likely to have some positive consequences for universities. The Future Fellowships program, which would give high salaries by university standards to mid-career researchers, could be a useful way of keeping academics with outside options in the higher education system. Doubling the number of research students receiving Australian Postgraduate Awards (effectively a scholarship that pays about $20K a year) could help more of them study full-time. In my own experience and that of many others, trying to write up a PhD while also working is very difficult.

I’m far less keen on Labor’s plan to double the number of Commonwealth Learning Scholarships, which provide about $2,000 a year to those who receive them, and expand the criteria away from just disadvantaged students to people enrolled in ‘national priority’ areas, and those moving interstate to study a specialist course not available near their home.
Continue reading “No higher ‘education revolution’” →

For all the fuss in the voluntary student unionism debate during 2005, there has been very little follow-up on its consequences. The first sector-wide study of VSU’s impact (which will be available from the Australian University Sport website on 7 November) is reported this morning.

It finds the amenities and service fee/membership fee income for sporting, recreational, social and culture activities dropped from $179 million before VSU to $12 million after VSU. From the perspective of the report’s funders that is clearly bad news, but from the government’s perspective it confirms that few students wanted these services badly enough to pay for them via membership fees. The summary findings do not say how much of that funding loss was made up for from increased direct charges.

My position (pdf) on this issue is unchanged. The separate and compulsory amenities fee is an anachronism; there is no point in itemising the cost of attending university if the student cannot opt-out of purchasing services he or she does not want. Universities ought to be free to sell whatever bundle of services they choose at whatever price they determine; if it is the wrong bundle or the wrong price they will pay a market penalty.
Continue reading “VSU impact” →

The Australian’s Higher Education Supplement asked me to write a short piece on the issue of university efficiency, which appears here.

People who read this blog will already know my views on trends in administration costs. But in the HES version I pick up on this report on ABC radio on Monday:

Ms Bishop says the university sector should be more deregulated, but first the universities must show that they are efficient and productive.

I presume that’s a reference to the Group of Eight’s plans to replace the current system of allocating student places from Canberra with a ‘portable scholarship’ (aka voucher) system. The context of the discussion was ‘the funding model the Group of Eight wants’.

The Minister is confusing means and ends. A more competitive system is not a reward for becoming more ‘efficient and productive’. It is a way of pressuring universities to become more ‘efficient and productive’.

While I don’t disagree that universities can be more efficient than they are, history suggests that they are quite capable of responding to market forces if given the chance. Who would have believed in the late 1980s, when the international student market was deregulated, that the public universities could create one of the nation’s biggest export industries, and in less than 20 years?

The problems in the higher education sector are overwhelmingly due to chronically poor policymaking in Canberra. Alas, neither party is offering us anything better.