Month: June 2018

Should international students lose political rights?

Andrew Norton1 Comment

One of the biggest changes to Australia migration this century, and through it to Australian society, has been the rise of long-term residents without the rights created by permanent residence or citizenship.

International students make up a large proportion of these restricted-rights residents, with more than half a million in Australia this year. While most international students go home after finishing their studies or convert to permanent residence, some stay on successive temporary visas for ten or more years. Other large categories of restricted-rights residents include New Zealanders and people on temporary work visas.

The total number of residents with limited rights varies depending on which visa categories are counted, but more than 1.8 million people are in this category.

As well as having no or limited access to social security benefits, often insecure tenure in Australia, and no right to vote in elections, restricted-rights residents are caught up in recent moves against ‘foreign’ political donors.

In Victoria, the current campaign finance bill links the right to make a political donation to eligibility under Commonwealth social security legislation, adding to the disadvantages that legislation already creates. (There is a loophole, as entities with an ABN can donate, and you don’t need to be a permanent resident or citizen to get an ABN. So ‘foreigners’ can donate via their business interests but not otherwise.)

With a very low donations caps in the Victoria bill – only $4000 over the four year electoral cycle to a political party – nobody could have much influence via donations.  Even if ‘foreigners’ are a bad influence the problem would be already solved another way.

The Victorian legislation’s one redeeming feature is that it only applies in a limited context.  It covers donations for political expenditure with the dominant purpose of attempting to influence votes in Victorian elections. So other donations to political parties, and donations to third parties campaigning on issues rather than directly advocating a vote, would not be covered.

In practical terms, that means that international students could donate to campaigns on state issues that are important to them, such as crime and public transport concessions.

By contrast, the federal bill that would ban ‘foreign’ donations of $250 or more covers a very wide range of political activity. It covers any public expression of views on a political party or candidate, and any public expression of views on an issue that is, or could be, an election issue. As it is hard to know what could be an election issue, a cautious approach would read this as covering any potential political issue.Read More »

Is government spending on tertiary education getting more progressive?

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One long-made argument against tertiary education subsidies is that they are regressive. University students tend to come from more privileged backgrounds, and therefore high-income households receive a disproportionate share of government spending on higher education.

Based on gross household income, ABS data on the distribution of government benefits released today confirms that this is still true, as the chart below shows, although the ratio between the highest and lowest income quintiles is lower now than in the past.

Slide2

On an equivalised income basis, which takes into account household size, the distribution of spending is more even. This reflects the fact that although students tend to come from relatively affluent households, these also tend to be relatively large households containing a couple and their children. Making it disposable income makes it more even still, given progressive taxation. Read More »

Does ATAR measure more than SES?

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One reason ATAR is criticised is that it tends to reproduce socioeconomic status.

One of ATAR’s critics complains that it is

“…more likely to measure the relative wealth of schools, more than a student’s abilities. In fact, using a students’ postcode might work just as well.”

Similarly, another critic says that “ATAR scores align more closely to postcode than they do to human potential…”.

While ATAR is not this deterministic – there are a range of abilities in every part of the SES spectrum – it’s true that ATAR correlates with family background, student home location and school attended (the scale of school effects after controlling for SES  is contested).

But that the ATAR achieved is influenced by a student’s social background does not mean it isn’t measuring something real about likely academic performance.

As the chart below shows, fail rates increase as ATARs go down across the socioeconomic spectrum. For a given ATAR, there is very little difference by SES.Grattan ATAR_chartdeck

Similarly, attrition after first year is more closely associated with ATAR than SES, as seen in the chart below. attrit_atar_ses

Although differing slightly in some of the detail, this is consistent with my posts earlier this year arguing that SES has most of its effects prior to post-school education, with  university access, performance and outcomes being similar for low SES students as other students: the same results, or small positive or negatives. It is also consistent with our recent Grattan report on dropping out, which found more narrowly, but also with more statistical rigour, that low SES in itself only had a small negative effect on the completion rate.

Is ATAR still widely used?

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The recent Mitchell Institute report on ATAR created an impression that ATAR is no longer widely used as a basis of admission to university. Based on figure 3 in their report, it said that only a quarter of students are admitted to undergraduate courses based on their ATAR.

That figure is correct in itself, but easily misinterpreted.The standard university practice is to admit students based on their most recent relevant academic results. For many applicants, their most recent relevant academic result is not Year 12, but previous university studies or vocational education. These applicants have been trending up as a share of all newly admitted students.

For school leavers, their Year 12 results are generally still their most recent relevant academic results. For them, ATAR is used not in one-quarter of cases, but three-quarters, as the chart below shows.

For other commencing students using previous higher education as their basis of admission, their ATAR is no longer their most recent relevant academic result. But often it was used to admit them to the university in the first place.

The chart below shows that when we take 2016 commencing students back to their original admission to university, 46 per cent were first enrolled based on school education with a recorded ATAR. For the under-25 year olds, 56 per cent were admitted based on their school education with an ATAR.

So while it is true, and increasingly true, that low-ATAR students can find other routes into university, ATAR is still the major selection tool for young people.

admitted_atar

Source: Department of Education and Training, Higher education data collection

 

How predictive is ATAR of university results?

Andrew Norton1 Comment

In response to my Grattan Institute colleague Ittima Cherastidtham’s op-ed supporting ATAR, Victoria University VC Peter Dawkins and Professor Yong Zhao argue in The Australian that

“The focus on maximising the ATAR through Year 12 exams, however, tends to lead to coaching of exam technique, so students memorise answers to questions that are designed to promote critical thinking.”

Coaching can boost student results. I suspect it is one reason that students from private and selective government schools tend to slightly under-perform at university relative to students with the same ATARs from non-selective government schools.

If it was just coaching that explained ATARs, they would not have any predictive value for future academic performance at university, which does not offer school-level hand-holding, and at which students take sometimes quite different subjects. But ATAR does have predictive value.

As the chart below shows, as ATARs go down students become more likely to fail half or more of their subjects in first semester – a fail rate that will send them to the unsatisfactory progress committee unless improved.

low ATAR fail rate

Read More »

How big an obstacle is low ATAR to university admission?

Andrew Norton3 Comments

In response to my Grattan Institute colleague Ittima Cherastidtham’s op-ed supporting ATAR, Victoria University VC Peter Dawkins and Professor Yong Zhao say in The Australian that

“…good universities should be able to reduce the impact of ATAR on students’ futures by providing education opportunities to those who, for all sorts of reasons, did not achieve high ATARs in school. When universities simply continue the trajectory set by ATAR, they fail their mission to change lives, to alleviate the impact of inequity and to lift people out of the conditions they are born into.”

There is no doubt that people with high ATARs are much more likely to be at university than those with low ATARs. To a substantial extent, this is because they are more likely to apply, as the chart below shows.

application levels

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Is ATAR bad for school education?

Andrew Norton2 Comments

The ATAR wars entered another round yesterday, with Victoria University VC Peter Dawkins and Professor Yong Zhao responding in The Australian to my Grattan Institute colleague Ittima Cherastidtham’s op-ed supporting ATAR.

This debate can get confusing, because semi-related arguments are blurred together.

The most impassioned opposition to ATAR seems to be about its claimed effects on schools. As Dawkins and Zhao say,

“…it is a sad indictment of our education system that maximising ATAR is the primary focus for far too many students, rather than following passions and preparing for the future by developing their talents…”.

Even though they later question whether ATAR is a good predictor of success, they could  accept that ATAR is useful in university admissions and still oppose it, on the grounds that the cost of ATAR to school education exceeds the value of its benefits to higher education.

I am sceptical of the idea that abolishing ATAR would let more students follow their passions (‘passions’ perhaps; but I prefer ‘interests’ as encompassing a wider variety of emotional  commitments), or prepare them better for the future.

ATAR meets a university need that will not go away. Some kind of selection rank system is needed for distributing student places when demand exceeds supply for a particular course. So the question is not whether ATAR  has flaws or some undesired consequences, but how ATAR compares to its likely alternatives. Read More »

Should HELP debts be capped?

Andrew Norton2 Comments

The Council of Australian Postgraduate Associations has a paper out today opposing the government’s legislation that would cap HELP debt at $104,000 for most students, or $150,000 for students taking the high-end health courses. A media summary is here.

There is already a similar cap for students borrowing under the full-fee student HELP program, FEE-HELP.  The legislation would count HECS-HELP borrowing towards the total – this is the loan scheme used by the vast majority of domestic undergraduates paying student contributions for Commonwealth supported places.

Contrary to the impression given by the media article, adding in HECS-HELP would be prospective, only applying to debt accrued after 1 January 2020.

CAPA is right that a cap will tip more students into an at least partial up-front fee market. But given HELP’s overall design, this is not a knock-down argument against it.

As I have long argued, HELP has substantial costs in doubtful debt. And although the big debtors tend to be in fields with relatively good earnings prospects, the more someone owes the greater the risks for taxpayers – both because of the total amount owed, and because of the danger that the debtor will not spend long enough earning an income above the repayment threshold to repay in full.

Especially when it is hard to control costs by reducing repayment thresholds or abolishing the deceased estate HELP write-off, that creates pressure to reduce high-risk debt by limiting what students can borrow. The government can’t lose what it doesn’t lend. We are already seeing this in other parts of the system.

Loan caps can also usefully serve as soft fee caps in the fee-deregulated parts of the system. CAPA notes that even the current FEE-HELP cap isn’t enough for some JD courses. But if some universities are charging exorbitant fees for law courses that isn’t something public policy should encourage, especially when the fees end up being subsidised through HELP debt write-offs. There are plenty of much cheaper law courses out there.

There is room for debate about exactly what the cap should be. But $104,000 would allow most students to do an undergraduate degree and professional development postgraduate courses. In an amendment proposed by the government, debtors could replenish their cap by paying off some of their existing debt.

If we completely re-worked HELP, we could take a more actuarial approach to lending at higher levels – allowing it for low-risk borrowers, declining for high-risk borrowers. But that would be a radical conceptual change to HELP, with discipline, age, and gender all likely to significantly influence actuarial risk.

Staying within HELP’s current conceptual basis, we need general rules that support reasonable amounts of study but protect taxpayers from courses with excessive fees and from perpetual students. A cap on outstanding HELP loans is one such rule.