In an earlier post, I looked at how the COVID-19 recession might affect school-leaver applications for undergraduate education. I concluded that although the lack of job opportunities would favour continued education over unemployment, the scope for applications growth was lower now than during the early 1990s recession.

School retention is much higher now than 30 years ago, and a much larger proportion of the cohort with a potential interest in university already attends. With the age cohort’s size not changing much in the short term there is less room to move.

Interpreting historical application numbers from older university applicants is complicated. It includes relatively young people, did not until the last decade count direct applications to universities (which are mostly from older applicants), and does not distinguish between applicants who are already students but hoping to change courses and those seeking to enter higher education.

With these caveats, the chart below shows a large increase in applications from non-school leavers in the early 1990s. In percentage terms it is larger than the school leaver increase. It is consistent with the recessions drive up higher education demand hypothesis. The scope for growth is high because it is not constrained by the size of recent Year 12 classes.

However, non-school leaver applications show volatility that does not correlate with unemployment (chart below). Demand peaks in 1996, when unemployment is dropping, and then rapidly accelerates again early this century despite unemployment continuing to decline. (There were some definition tweaks at the time, but the clearly explained differences should not have had a big impact.)

It’s possible that lowering the threshold for HECS repayment from 1997-98 might have affected mature-age student interest. More already-working students would have had to repay while still studying. Application numbers recover before the initial threshold is increased again for the 2004-05 tax year, but as the initial repayment threshold might have an influence it is worth noting that it was lowered again from 2019-20, and is now about $10,000 less than in 2017-18.

However, the threshold ($45,881 in 2019-20) would not affect people who are unemployed or have limited work hours, who are the main category of interest for this post.

As with the school leavers, another factor to consider with older people is that general levels of education are already much higher now than they were in the early 1990s, as seen in the chart below. However, applications data suggests that demand from people with no prior higher education has been holding up, with the recent decline observed in the first chart driven by people with prior higher education experience.

Especially if we include people who already have degrees in the potential market, the mature-age market is much less capped by demographic/Year 12 numbers than the school leaver market. There is scope for a COVID-19 recession spike in applications. But I would stop short of a confident prediction that it would be as large as it was 30 years ago.