Monthly Archives: July 2017

England and Australia: two higher education income contingent loan systems with very different consequences

The recent debate about student debt in England was triggered by this very interesting paper from the Institute for Fiscal Studies. I have used some of their analysis to think about how their situation differs from Australia’s, despite both having income contingent loans.

1) Total tuition costs. As I noted in my post last week, tuition charges are higher in England than in Australia, with most courses a flat £9,000 per year, or about $15,000 on current exchange rates. Australian annual student contributions this year range from $6,349 (arts, education, nursing) to $10,596 (law, medicine, commerce). The British pound has a low exchange rate at the moment; if we use $US purchasing power parity English courses are between 1.7 and 2.9 times more expensive than in Australia.

The high English tuition fees are partly because there are no tuition subsidies offsetting them in many courses, while all undergraduates at public universities in Australia receive tuition subsidies. But it is also because of their flat fee system, which means that students in low-cost fields are charged more than the total cost of their course.

While undergraduate courses are cheaper in Australia than England whichever way we compare them, in Australia we don’t have a good understanding of how HECS-HELP debt for undergraduate courses is interacting with FEE-HELP debt for postgraduate courses. But further study in full-fee courses is likely to be one reason why we are seeing strong growth in total HELP debts above $50,000. Read more »

Is university research activity increasing again?

Last year I reported, using ABS statistics, that the long boom in university research spending had stalled between 2012 and 2014. A combination of reduced Commonwealth research spending and couple of weak years for international student revenue in 2012 and 2013 were likely major contributing factors.

The research commercialisation survey results released yesterday also contain a question on total research spending for 2015. While universities are asked to use the ABS methodology, there is provision for estimates in non-ABS survey years (which 2015 was). There are also some universities that did not submit data.

With these caveats, on a same-university basis reported research spending increased by about 5 per cent in real terms between 2014 and 2015. However, other indicators suggest research activity was still flat in 2015. Research only staff on a full-time equivalent basis dropped by 5.6 per cent between 2014 and 2015, with a small increase in teaching and research staff.

In the same period, teaching-only staff (including casuals) increased by 8.5 per cent. It would need a detailed analysis to work out exactly what was going on, but possibly a more competitive student market after demand-driven growth slowed in 2015 was putting more focus on teaching.

The 2016 head count staff data (which excludes casuals) shows a 4.7 per cent increase in teaching only, a 1.8 per cent increase in research only, and 0.3% decrease in teaching and research staff.

With international student enrolments and revenue again booming in 2016 and 2017, these numbers suggest that teaching staff are increasing to meet the needs of additional students. International students are highly profitable in some universities, and the modest increase in research only staff is consistent with those universities feeling confident enough in future financial surpluses to expand their research activity.

Are English university students right to be upset about high fees?

Since the British Labour Party did unexpectedly well in last month’s UK elections, on the back of strong support from young people in particular, university fees have turned into a big issue there. The Australian‘s High Wired column hints that this ‘international narrative’ might arrive on our shores.

Both free and high-fee higher education systems can perform reasonably well on measures such as levels of educational attainment. The chart below has lagged fee data to capture the time 25-34 year olds went to university, but the broad patterns are evident. People living in high fee countries tend to have relatively high rates of holding university qualifications. Low attainment countries have low or zero fees, but there is also a cluster of low or zero fee countries with high attainment.

There are many country-level complexities in this analysis (for example, German low attainment may not be a problem given the structure of their economy and strong vocational system). But generally the cost of high attainment has to be met with high taxes or high fees. Read more »