But not all students are in this category.
In an ABS survey, about 10 per cent of bachelor degree students gave interest or enjoyment as their main reason for study. Purely interest motivated students can’t so easily justify paying increased student contributions as still a good investment in increased lifetime earnings. They need to consider whether the study experience itself is worth the fees they will pay.
My attempts to use the ABS training survey to identify the interest or enjoyment motivated students hit a wall of high relative standard errors. Even after combining fields into clusters of plausibly related fields only one, arts and creative arts, reached statistical significance. Although due to sample size issue we can’t reach firm conclusions from this source, it seems plausible that arts and science would have the highest proportions of mainly-for-interest students.
The annual price of a science course would drop by $2,000 a year under the Tehan plan; anyone willing to pay $9,700 out of interest will pay $7,700. But with humanities other than English and languages increasing from $6,800 to $14,500 a year there may be some second thoughts for some prospective arts students.
There may also be course-demand effects beyond those who tell the ABS their main reason for being at university is interest. In 2016, the last year for which I have data, eight per cent of students were in combined degrees. Course Seeker shows lots of pairings between arts and more vocational degrees: arts/law, arts/commerce, etc. Perhaps for some prospective combined degree students arts will become an overly-expensive luxury.
Another group who might think again are prospective students who are uncertain about their direction. Their share of respondents in the first-year survey increased in the two decades to 1994, to about 20 per cent who say that they are just ‘marking time’ at university, as seen in the chart below.
The survey report says that three-quarters of marking-time students were clear about why they were at university. And most of them must have agreed that studying something that interested them was a reason for enrolling.
But clearly they are not strongly committed to whatever course or university they have chosen. According to the survey report, a third of marking time students were enrolled in ‘cross-disciplinary’ (combined degree?) fields. Another fifteen per cent were enrolled in ‘society and culture’ courses (which include the humanities). Spending $14,500 ‘marking time’ in an arts degree would be an expensive way of deciding what to do next.
On the other hand, cutting student contributions in teaching and nursing courses to $3,700 a year perhaps encourages speculative enrolments from students who are uncertain what to do next. A first-semester trial enrolment would cost $1,850.
In drawing attention to student contribution increases, humanities advocates may also be making price more salient in the minds of still-wavering applicants for 2021 admission. Prospective students who have already psychologically committed to a choice are probably less likely to change course preferences than those still in the decision phase. However, publicity effects will wear off as the political debate ends.
And, as I noted last week, permanent residents and New Zealand citizens who must pay their student contributions upfront might reconsider whether courses with increased fees are feasible.
Overall, then, I think the newly high-priced courses might suffer some loss of market share from applicants who are not expecting a financial return, or who are not firmly committed to their choice.
This would affect arts more than business or law, partly because arts has more current students in these categories, and partly because high student contributions are factored in to existing business and law applications. $11,355 a year is already an expensive way of exploring interests or marking time.