Category: Higher education

Graduates three years on

~ Andrew Norton ~ 8 Comments

Graduate Careers Australia has released Beyond Graduation 2009, a follow-up survey three years on of graduates they first surveyed in 2006.

A few points of interest on topics of particular interest to me:

* The proportion of their sample who were overseas had doubled from 3.2% to 6.8%, which means that they will not be repaying their HELP debt. People with qualifications in ‘architecture and building’ are most likely to be overseas (12%).

* The graduates in non-graduate jobs generally don’t want to be there, though this is is more true of ‘sales workers’ than ‘clerical and administrative workers’. The second most frequent reason (‘to earn a living’ had a majority response for all occupations) for taking a clerical job was ‘to develop general skills’, but only 7% of sales worker respondents gave that reason. By contrast, 47% of sales workers say they took their job because it was the only one they were offered, compared to 23% of clerical workers. Continue reading “Graduates three years on” →

The financial benefits of higher education

~ Andrew Norton ~ 17 Comments

The ABS has an interesting new publication out today on the financial benefits of higher education.

ABS anlayst Hui Wei uses data from the 1981, 1986, 1991, 1996, 2001 and 2006 censuses to provide estimates of rates of return for investment in higher education. In the figure below, the rates are based on post-tax earnings of graduates compared to someone who finished their education at year 12 (say a Year 12 completer earned $800 a week and a graduate $1,200 a week – the graduate premium would be $400). The graduates are aged through the census of the stated year (eg it assumes that a 1996 graduate would at age 40 earn what a 40 year old graduate earned in 1996).

The costs are assumed to be the opportunity cost of four years out of the workforce with no earnings in that time, plus direct costs such as HECS.

Continue reading “The financial benefits of higher education” →

What now for higher education policy?

~ Andrew Norton ~ 7 Comments

What might a hung parliament mean for higher education policy?

Even with a Liberal government, it is possible that a compulsory student amenities fee might return. A quick Google search this morning indicates that all three rural independents have supported such a fee in the past, though it may need ‘political’ funding to be quarantined (Labor’s policy specifically created a role for their comrades in the student unions). So it is possible that a revised bill that passed the new Labor-Green Senate post-1 July 2011 would also pass the House of Representatives.

If a Liberal government is formed, there are things that could be done by regulation – or lack thereof. Labor is promising a red-tape extravaganza with its so-called ‘compacts’ between the government and universities, its equity and participation funding, and an even more ill-conceived ‘performance’ funding program. All of these are based on departmental/ministerial discretion given force by legislative instruments.

The significance of these legislative instruments is that they are disallowable by either house of parliament. In the event of an equal vote the disallowance motion will be lost. So there is an asymmetry between legislation and guidelines: the government needs a majority to pass legislation, but it only needs a tie to defend its guidelines. Continue reading “What now for higher education policy?” →

Two modest higher education policies

~ Andrew Norton ~ 5 Comments

Just when I thought that neither major party was going to bother with higher education policies, both put out statements today. The Liberal statement is here; I can’t yet find Labor’s policy on its website.

Most attention seems directed at the Coalition’s decision to cut by about two-thirds the money Labor was planning to give universities according to their enrolments of low socioeconomic status students. The higher education sector is opposed to this, but I will support it. The Coalition’s policy document observes that the main problem is not the unwillingness of the higher education sector to offer places to low SES students, but that too few people from low SES backgrounds have the necessary academic preparation to go to university. The Liberals talk about their school policies as alternatives.

I have also argued that the government’s equity policy is based on an arbitrary definition of SES and assumes, contrary to the available evidence, that low SES students have much higher academic needs than other students. The program needs to be substantially reformed as well as its funding reduced.

The Coalition is also on the right track in effectively abandoning its policy to re-introduce full-fee domestic undergraduate places, accepting the criticisms made of it: Continue reading “Two modest higher education policies” →

Alan Gilbert, RIP

~ Andrew Norton ~ 6 Comments

Professor Alan Gilbert, who was my boss for the last four of his eight years as Vice-Chancellor of Melbourne University, died yesterday in Manchester. He had recently completed a term as Vice-Chancellor of the University of Manchester.

I first met him in the late 1990s, during my time as then Education Minister David Kemp’s higher education adviser. He was very noticeable among the VCs who came through or approached our office. Most of them just wanted another cash hit to feed the sector’s great addiction to public money. Alan knew that game was up and that universities would have to do more to earn their own income.

He was an early and regular advocate of deregulating tuition charges for domestic students, but also knew that this was going to be politically difficult. So he turned to other ways of making money for the U of M – with the main strategies being international students, Melbourne University Private, and Universitas21’s commercial arm U21 Global.

The first of these was very successful; Melbourne had been a laggard in recruiting international students but this rapidly changed during the Gilbert era. But as Alan’s many critics repeatedly pointed out, the other two ventures were money losers. The problems of Melbourne University Private in particular generated much work for me in my first few years at the U of M. Continue reading “Alan Gilbert, RIP” →

Is there a higher education ‘market failure’ in engineering?

~ Andrew Norton ~ 9 Comments

An article in yesterday’s AFR education supplement (not online, sorry) reported mining industry representatives criticising Labor’s proposed demand-driven higher education system.

Chris Walton of APESMA said

Engineering is the pin-up to demonstrate that a demand-driven system will be a disaster for this country. … It’s the classic example of market failure and the consequences of that market failure for this country are very concerning.

In reality ‘market failure’ – or at least, other than a failure of markets to exist – is not likely to be a major issue here. In a paper I wrote for NCVER a couple of years ago I showed that university applications do respond to labour market shortages. Objective evidence of shortages of engineers emerged over 2003-04, and with a lag of a year demand for engineering courses grew from 2006 (from applications that would mostly have been made in 2005).

Figure: Engineering applications and offers

Source: DEEWR. Continue reading “Is there a higher education ‘market failure’ in engineering?” →

Should the Coalition re-introduce full-fee undergraduate places?

~ Andrew Norton ~ 20 Comments

In a rare campaign departure from populism, Opposition education spokesman Christopher Pyne has pledged to re-introduce full-fee places for Australian undergraduates if elected.

”It is absurd that … students from overseas are able to access Australian universities, and pay full fees for doing so, but there’s no percentage of Australian students that are entitled to do the same thing,” Mr Pyne told The Age.

However as Macquarie University VC Steven Schwartz correctly points out in the same Age article, the impending abolition of enrolment caps for Australian undergraduates signficantly undermines the rationale for a separate class of full-fee places. The main justification for the Howard-era policy was that because the number of places was held down by the government (through a mix of not wanting to pay subsidies for more students and not wanting to significantly re-arrange the historical allocation of places between institutions and courses), allowing full-fee places once all the HECS places were taken slightly alleviated mismatches between supply and demand. Continue reading “Should the Coalition re-introduce full-fee undergraduate places?” →

A true education revolutionary

~ Andrew Norton ~ 39 Comments

It is hard to imagine any Australian education minister giving a speech like this one by British Secretary of State for Business, Innovation and Skills Vince Cable. Particularly for a Liberal Democrat, he sends a remarkable number of higher education sacred cows – some of the sector, some of government – to the slaughterhouse:

Sacred cow number 1: Universties should get more public funding

Cable:

no one should be under any illusion that there will be any other than deep cuts in government spending on universities.

Sacred cow number 2: Students should pay less

Cable:

they almost certainly will have to pay more

Sacred cow number 3: We should encourage more people to go to university
Continue reading “A true education revolutionary” →

HELPing the government to save money

~ Andrew Norton ~ 9 Comments

The HELP loan scheme is very expensive to run. Its estimated program expenses are nearly $1.8 billion in 2010-11, mainly due to lending what I expect now exceeds $20 billion to students at only CPI interest, and annualised estimates of debts that are not expected to be repaid.

One thing that should be examined as a way of reducing these costs are the thresholds for repaying. Under current arrangements, in the financial year just finished HELP debtors will pay nothing if they earn less than $43,151.

Though that catches most new graduates in full-time work, my estimate from collating data from several sources is that at least one-third of HELP debtors in Australia in 2007-08 and not currently enrolled in a course incurring HELP debt did not make a payment that year.

I suspect that this proportion will increase over time because the thresholds are indexed according to movements in average weekly earnings. Over time, this is likely to increase at a higher rate than the earnings of new graduates. This is because AWE is influenced by ‘compositional effects’. For example, as relatively well-paid professional and managerial jobs have increased as a proportion of total employment this has helped push up AWE. Continue reading “HELPing the government to save money” →

Crean on VCs

~ Andrew Norton ~ 3 Comments

New education minister Simon Crean is a man with experience in the job, having been the minister from 1993 to the Howard government’s election in 1996.

According to an article Lauchlan Chipman wrote for Quadrant in 2000, this left Crean with a certain impression of the Vice-Chancellors:

Of course I cannot verify the truth of this claim. But if true it suggests that VCs will face a sceptical minister.