Category Archives: Higher education markets

Scholarship scepticism confirmed

Eighteen months ago I was much less full of praise than others for Graham Tuckwell’s $50 million scholarship donation to the ANU. I said:

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 .

The announcement today of the 2015 scholarship winners highlights my point. The schools represented from my home state of Victoria (below) hardly suggest that the scholarships are opening up opportunities for the under-privileged. Instead, they are the ANU poaching students from the University of Melbourne.

Melbourne Grammar School, Westbourne Grammar School, Geelong Grammar School, Melbourne High School, Geelong Grammar School, Ballarat Grammar School St Kevin’s College, Presbyterian Ladies’ College

As I said last year, there are much worse ways a rich man could spend his money. But there are also much better ways.

Update: A reader who likes empirical data has sent me the socioeconomic background data of the successful schools. Three of the students are from schools that have more than 25% of their students from low SES backgrounds. But that isn’t enough to change the overall picture of massive over-representation of the top quartile.

SES schools

What other degrees do science graduates hold?

This morning The Conversation ran another article by me on the employability of science graduates.

I used some data from the ABS Learning and Work survey. Unfortunately access to their micro-data is not free, but it does allow more detailed exploration of graduate qualifications and outcomes than most other sources. Most ABS surveys, for example, just ask about a respondent’s highest qualification. Learning and Work asks about multiple qualifications.

Learning and Work estimates that there are about 348,000 people with a bachelor degree in science. However, 35 per cent of the report as their highest degree either a postgraduate degree in science or a degree in another field. The most common other fields were education, management, health and IT. [Note: The figures in the table were corrected on 24 June. The figures in the text were correct.]

corrected science

So while employment prospects in some disciplines are sometimes not great, people often adapt to this by seeking higher or different qualifications that improve their job prospects.

Science demand keeps increasing, despite a higher student contribution

Science has been one of the most popular university courses over the last few years, with strong increases in applications year after year since 2009. The demand shift coincided with a slashing of student contributions by about 40%. This had seemed to be a possible exception to the general empirical rule that changes to student contributions don’t affect demand (some of the history is in Graduate Winners, pp 77-79).

As part of a long series of measures to reduce higher education spending, science student contributions were put back up to pre-2009 levels for 2013, an 80% price increase in one year. If the discount was driving demand, we would expect to see higher student charges reduce demand. New statistics released today show that this has not happened.

In fact, as can be seen in the chart below, numbers continued to grow strongly. They were up another 4%, in a market that was up only 0.5% overall. Only agriculture grew by more in percentage terms, and only health grew by more in absolute numbers. Science offers increased by 3.3%, with overall offers up 0.6%

science apps Read more »

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.

Read more »

All government-subsidised undergraduate science students to pay more

Rather surprisingly, last night’s budget was pain free for universities. But their students were not entirely spared. The previously announced decision to restore previous student contribution amounts for new science students was extended to include continuing science students.

While in my view the discount for science students should never have been offered, the change again highlights the problems caused by the instability of higher education policy, with constant introductions and withdrawals of incentive policies. DEST/DEEWR/DIISR incentive programs rely on the naivety of the punters to work, because anyone who observed this policy area over time would assume that incentive policies lack long-term credibility, and not change their behaviour.

(Of course prospective students are unlikely to follow this detail, so temporary discounts may work. Oddly, a couple of articles (here and here) in today’s budget coverage repeat the Ian Chubb/ government line on science – too little demand for science university places, too little supply of university places, and too few scientists. The evidence does not support any of these propositions. A 2012 report on university applications showed not only that for the third successive year science experienced very large increases in applications and offers, but that science was doing exceptionally well in the 90+ ATAR group. And the argument that we are short of science graduates is not evident in any employment survey.)

Higher ed price problems not fixed

The ‘demand driven’ funding policy starting next month combines deregulated places with regulated prices for student places. This is a potential problem. When the government no longer allocates places between institutions and disciplines the prices universities receive for each place are a key steering mechanism. If the price they receive is unattractive, they can not take Commonwealth-supported students.

The base funding review commissioned a study of costs, and it was able to shed some light on prices relative to costs, as they were in 2010. The figure below shows median, mean, maximum and minimum teaching and scholarship costs in a sample of eight universities.

Read more »

Getting into university is becoming easier

DEEWR has finally released the 2011 applications data. This confirms my point last week that the government’s claim that the 2009 cut to student contributions had no influence on demand is unsupportable on the evidence (but still being supported by sector representatives in the media late last week). Since 2008 overall applications minus science were up 12.4%; science was up 42.5%. We can’t know for sure why science demand increased so much, but we certainly can’t rule out price effects.

I’ve also been interested in tracking the scores of applicants admitted based on their year 12 results. Combining the latest with earlier application reports, we can see that the strongest growth in acceptances is for applicants on scores 50.05-70, up from 14.4% in 2004 to 23.6% in 2011. However, that group’s share of all applications is unchanged on 24%. What’s changed is their chances of receiving an offer and accepting.

The 2011 report shows that among home state applicants in the 50.05-60 group application rates as a % of school leavers with results in that range are increasing. It will be interesting to see if this continues. Except for Open Universities Australia (which largely operates in a full-fee market) most higher education advertising is directed at people how have already decided to go to university, but not which university to attend (or perhaps course to take). This is logical given the system prevailing in recent decades, with the number of available places held below demand.

With the new uncapped system for public universities from next year, I wonder if marketing will change – that to fill empty capacity universities will start marketing to people who had not seriously considered going on to higher education. If that occurs and is successful, we will see higher application rates among weaker school leavers.

What’s happening with maths at university?

According to The Australian this morning,

THE Gillard government is under fresh pressure to counter the decline of maths at universities and at schools after scrapping an incentive plan that will see student HECS fees in maths and science almost double.

I don’t know what is happening at schools, but at universities there was a 13% increase in maths enrolments by commencing students between 2008 and 2010. However, this was a lower increase than other science subjects and the overall increase in all non-science subjects.

While there have been shortages of maths teachers at schools, there has never been any real shortage of maths graduates as such. Maths graduates have generally ‘underperformed’ relative to other graduates when seeking work. And in practice they pursue a wide range of careers:


(2006 census, male graduates whose main field of study in their highest degree was classified as ‘mathematical sciences’.)

Science degrees to cost $11,000 more

One of the policy decisions in today’s Mid-Year Economic and Fiscal Outlook is to rescind Labor’s cut in the student contribution amounts for science, maths and statistics subjects.

While students starting before 2013 will be grandfathered, those starting in 2013 will according to the government’s estimates pay $3,662 a year more, or about $11,000 over a three year degree.

I opposed the cut to student contributions at the time, among other reasons because I doubted that it would increase demand. The MYEFO repeats this argument, citing the Bradley review of higher education policy.

The Bradley review, however, reported shortly before the cut to student contributions came into effect. The student applications data since suggests that my prediction, along with Bradley’s prediction, was wrong.

In the two years after the cut took place, demand for science courses increased 32% in a market that was up 12% overall. Though the slow-moving DEEWR bureaucracy hasn’t yet published the 2011 applications data, media reports earlier in the year from the tertiary admissions centres suggests that science demand was up again.

Given that science graduates were having above-average difficulty finding work on course completion even before the demand surge converted to more graduates, cooling demand is not a problem if that is what occurs.

Though we can never tell for sure simply based on applications, a drop in demand following a price increase would help increase our confidence that relative prices were a science demand driver.

Why run an expensive ad for one PhD place?

Why would a business school buy expensive media space to promote its PhD scholarships? The advertisement below appears on page 3 of today’s Weekend Australian, offering a $50,000 PhD scholarship at the UQ Business School. The ad on its own would be worth a good percentage of the scholarship’s value. There are surely much cheaper ways of communicating with the smallish pool of potential business research students.

Is it some kind of branding exercise for the UQ Business School (‘Australia’s most recognised’, ‘international reputation for research’, ‘close links to industry’ according to the ad)? But if so I would have thought that there were better ways of doing it, and good outcomes for graduates would be more important. Keeping up the flow of fee-paying coursework students is the key to a successful business school (some of which have a history of losing money, which isn’t exactly a great endorsement of the business acumen contained within their walls).

I’d welcome any theories explaining this ad.