At least if we are to believe the results of an ‘adult competencies’ survey:
Literacy:
Numeracy:
Category: Higher education
Uni scholarship donations not so praiseworthy
I saw the PM on the news tonight praising Graham Tuckwell’s $50 million donation to the ANU to fund undergraduate scholarships. No doubt there are worse ways for a rich man to spend $50 million, but there are also much better ways.
Like many scholarship schemes, the Tuckwell scholarship will go to people who already have plenty of potential that is unlikely to go to waste. They will go to university anyway, find mentors anyway (one of the claimed benefits of the scheme), and make something of their lives. They are not the people who need help.
Instead, these scholarships are used for essentially wasteful positional competition between universities. The ANU will use the Tuckwell’s scholarships and the associated publicity to try to take top students away from Sydney, Melbourne and other universities that buy talented students .
If I had $50 million to spend on higher education I would put it into MOOCs. I don’t know if they will really turn out to be the next big thing in higher education. But Coursera, for example, on a capital base of US$22 million has already attracted 2.5 million enrolments. It includes many people from developing countries with little prospect otherwise of higher education. It can make so much more difference than adding to the advantages of people who have so many already.
Government rejects higher ed funding review’s main recommendations
To nobody’s surprise, the federal government has rejected the 2011 base funding review panel’s main recommendations (media release here).
The biggest policy change suggested by the BFR panel was that every student should pay 40% of the Commonwealth-supported funding rate, with taxpayers paying the other 60%. With students currently paying between 28% and 83% of their course’s funding rates (details at p. 52 of Mapping Australian higher education), that would have meant some students paying less (eg law, business) and many others paying more (eg medicine, nursing, engineering, science, education).
Logically and empirically, 40/60 was always dubious. It was based on the idea that government should pay the anticipated future value of higher education’s public benefits. Graduate Winners argued against that idea, proposing a framework in which the public aims to profit from its higher education investment.
The flat 40/60 was based on the idea that public benefits were similar between disciplines. As one of the main public benefits was increased tax revenue, that assumption is clearly false (data also in Graduate Winners, but easily inferred from the BFR background paper on private financial returns). And even if this was true, it logically leads to a flat rate subsidy and not a proportion of total funding rates, which have nothing to do with subsequent benefits.Read More »
Is the university experience worse than 40 years ago?
”I don’t think the university experience is nearly as good for students as it was 40 years ago. There are a number of changes, but most important is teaching is taken much less seriously than it used to be.”
– Robert Manne, The Age, 19 January 2013
I suspect he’s right that senior academics spend less time talking to and mentoring the most intellectually engaged and able undergraduate students than they did 30 or 40 years ago. But for the average student academics generally probably do a better job of organising and presenting their course materials, and this is showing in increased student satisfaction with teaching.
The data is from the Course Experience Questionnaire, run by Graduate Careers Australia. The figure appears in the 2013 edition of Mapping Australian higher education, to be released tomorrow night. (Update: out now.)
Do higher education subsidies produce public benefits?, 1985 version
I spent the last day of 2012 tidying up my chapter in a book I am co-editing on the Dawkins higher education reforms (the aim is to publish in mid-2013 to coincide with the 25th anniversary of the government white paper). The subject of my chapter is the Liberal response to the Dawkins reforms, which turned into a story about the Liberal role in the long, convoluted path from the state-dominated higher education system created in 1974 to a more privately-funded, market-based system.
Mid-1980s Cabinet papers released today provide a bit more of the background. At this point, Labor was still committed to free education for domestic students. But the Department of Finance thought that this was a bad idea, and wrote a memorandum explaining why.
It has the usual material about free higher education not changing the socio-economic profile of students. But it also contains a version of the key argument in my Graduate Winners report:
While these external benefits [better organised and functing political and social systems, potentially lower crime, sickness, disease, application of research undertaken in conjunction with education] are of course very difficult to measure they are widely believed to exist. To acknowledge their existence however is not to make a case on efficiency grounds for the full public subsidisation of higher education: full susbidies would only be warranted if there were no private benefits at all which is not likely to be the case; most people would expect extra income, status, and work satisfaction as a result of tertiary education…
It goes on to note that there is no public benefit from hobby or recreational study, and there is a risk of over-investment – ie, there could be greater economic and social well-being from investing the same money elsewhere.
I don’t think Finance’s document quite describes the underlying logic of its argument, which 1) are there public benefits from a course? (if no, just leave it to the market); 2) If yes, are the private benefits large enough to attract students? (if yes to this question, just leave it to the market); 3) If the private benefits are not large enough, will public subsidies lead to enough public benefit to justify intervention?
But they are certainly right that a public benefit argument can’t possibly justify full public funding of higher education, as susbequent events showed.
Australia’s university with no courses or students
In October 2011, the for-profit Laureate International Universities group announced that it was opening a new university, Torrens University Australia, in Adelaide. Back then, I commented that it was just in time – that it was using provisions for new universities that were to be abolished under the new standards system enforced by TEQSA.
My comment about it being just in time for a while seemed premature, as when the TEQSA register of higher education providers was created in early 2012 Torrens was not there. The problem seems to have been that though there were transitional rules putting all existing higher providers on the register automatically, the definition of ‘higher education provider’ in the TEQSA legislation referred to an organisation offering or conferring a higher education award. As Torrens did neither, it was not automatically transitioned to the register.
That created significant problems, as the rules on creating new universities make it very difficult for this to ever occur. To become an Australian university, it is necessary to offer undergraduate and postgraduate degrees, including PhDs, in at least three broad fields of study (a specialist university can have one field – MCD University of Divinity is the only example). It is also necessary undertake research leading to ‘the creation of new knowledge or original creative endeavour’ in those three fields.
A version of these rules has been in place since 2000, and unsurprisingly no new Australian university has commenced operation since. Our existing private universities would not have met them in their earlier years, and Notre Dame is still only just likely to qualify (three fields of study get a rating in the Excellence in Research for Australia exercise). With restricted public research funding eligibility, few organisations can fund the loss-making research needed to qualify as a university.
It seems like a regulatory workaround was created in June, though I (and it seems most other people) missed it at the time. A new regulation was created retrospectively allowing higher education providers registered but not operating to be included in the transitional arrangements. So Torrens University now appears on the TEQSA National Register (and also has a website promising a 2014 start). It is Australia’s 40th full university, albeit one with no students or courses.
Torrens University is registered until the end of 2017, so it has five years to meet the three field of study course and research requirements. While drawing on foreign resources is the most plausible way a new university could be created, I’m not sure why a for-profit like Laureate would devote large sums of money to activities that are unlikely to deliver financial returns. If Torrens does not meet the threshold three fields, there will be a messy situation in which the regulator tries to strip an institution, its students and its graduates of the ‘university’ title. Perhaps they are hoping that between now and then the government will take a more flexible view of what constitutes a ‘university’.
Not so joined up government
The Government will make changes to the rate of funding for the Sustainable Research Excellence (SRE) program to ensure sustainable growth. … This is estimated to provide savings of $498.8 million over four years.
– Mid-Year Economic and Fiscal Outlook, 22 October 2012
By 2025, 10 of Australia’s universities will be in the world’s top 100.
– Australia in the Asian Century white paper, 28 October 2012
What do OECD comparisons tell us about Australian higher education funding?
In The Australian this morning, Simon Marginson suggests that there is something wrong with the methodology in Graduate Winners.
He starts by accusing Grattan of starting with conclusions and backing them with ‘selective studies’ and cherry-picking data from other sources. My colleagues who did the empirical work for Graduate Winners are very unimpressed with this impugning of their professional integrity. We started with the public benefits claimed in the base funding review, and looked for whatever primary Australian data we could find. There was no cherry picking, no selectivity – and nobody has come forward with anything Australian that we missed.
Particularly on the non-financial benefits, I can confidently say that nobody in Australia has ever analysed this issue as carefully and comprehensively as we did. Jim Savage’s work on this did not get the attention it deserved due to the political controversy over tuition subsidies, but his technical paper has to be the starting point for any future work in this area.
Marginson’s alternative methodology is to look at OECD comparisons, stating that ‘it is significant that the Grattan report carefully avoids both the method and content of the OECD. It would have us believe Australian higher education has nothing to learn from global comparisons.’ Given how often this point has come up, in hindsight perhaps I should have included a section on this subject. But I don’t think the OECD funding data in itself tells us much other than that countries have very different mixes of state and private funding, and that these are reflected in their higher education financing systems. A high fee university system would not mesh well with Scandinavian tax rates. But it does fit with the lower tax rates in Australia, the US or Japan.
Similarly, I find Marginson’s claim that other countries report stronger relationships between education and social engagement uncompelling (we report this fact, he did not need to go to the OECD). American colleges and universities expressly inculcate civic values, Australian universities very rarely do so. The differences between the countries reflect the different histories of their higher education systems, and not public funding levels.
If I had 15 minutes to prepare a debating case on higher education, I probably would turn to the OECD for some handy facts and figures. The key OECD document is called Education at a Glance for a reason. But if as was the case I had months and the help of colleagues to explore the Australian data and think through the conceptual issues, that is surely preferable. In my mind the two big issues in higher education public funding are whether it causes significant additional public benefits (on top of those that would be derived from a market system), and whether there are access implications from fees. We focused on these big issues.
In any case, if we had used OECD data it would have tended to support our conclusion that the level of public funding is not the key variable in higher education systems. As I showed in an earlier post, there is no evidence that lower fees result in higher attainment. Indeed, the data suggests the reverse. One of my colleagues updated our analysis today with the latest Education at a Glance data, and (unsurprisingly) it shows again that high fees and high attainment tend to go together.
Even if OECD comparisons were a better methodology, they don’t always get Marginson where he wants to go.
Can more per student higher education public funding reduce higher education attainment?
One criticism of Graduate Winners was that I should have paid more attention to OECD comparisons. I am wary of ‘OECDitis’– taking OECD averages as normative when they are merely descriptive. In my view, higher per student public spending on higher education in some other countries reflects their overall political and economic systems, and does not make their higher education systems better.
But could higher per student spending make their higher education systems worse? I don’t think this is automatically the case. But I think high per student spending creates a greater risk of what I call the paradox of public spending: it may increase demand, but it also tends to decrease supply. Even big-spending European social democracies have budget constraints (as they are very painfully finding out). So if they can’t control spending by making students pay more, they control spending by reducing the number of students.
The figure below uses figures from OECD Education at a Glance showing average student fees at public institutions and overall higher education attainment rates. The Nordic countries tend to combine low fees and reasonably high attainment, but many other European countries have free or very cheap higher education and relatively low attainment.
Overall the higher fee countries have higher attainment than low fee countries (correlation of .35 between fees and attainment).
I don’t know enough about the particularities of each country to confirm my paradox. But given it is easier politically to control numbers than to increase fees (because the losers are less obvious, and less prone to rioting), it is likely that politicians in many OECD countries have capped supply of higher education, and reduced their rates of higher education attainment.
Misreadings and criticisms of Graduate Winners
The AFR published a response to Graduate Winners from Caroline McMillen, VC of the University of Newcastle. It provides an opportunity to respond to misreadings and criticisms.
Article starts, my responses in block quotes:
Access to a high-quality university education is the key to a stronger Australian workforce, economy and society. In turn, these are all important contributors to establishing a stronger place for Australia in the world.
An accessible university education is essential to ensure that Australia in what has been called the Asian century becomes a beacon for innovation and competitiveness.
The proposals contained in the Grattan Institute’s Graduate Winners report would jeopardise that future.
The report, which was made public last Monday, presents in measured language a reductive future for higher education in Australia, where students are motivated only by their graduate earning potential and the state withdraws its funding from what is currently recognised as a world-class university system.
Incorrect: The report shows (pages 56 to 59) that interest in the field of study is the top reason for choosing a course, and that a financially-based motivation model cannot explain why so many students with good ATARs choose humanities and performing arts, which have relatively poor employment and income outcomes.
The proposal is to shift the entire benefits and the risks of undertaking a university degree onto each individual student.
Incorrect: The report recommends a 50% cut in tuition subsidies for most courses; the taxpayer further takes risk through the HELP repayment threshold of $49,000 a year.
Andrew Norton 