I am on a panel discussion this evening called ‘A Farewell to Arts? On the Morrison Government’s University Legislation’. I will do my preparation in public via this blog post, working through the event questions.

Why does the Morrison Government want to dissuade students from enrolling in an Arts degree? [A reference to more than doubled student contributions.]

As the policy name ‘Job-ready Graduates’ suggests, the main stated reason for changes to student contributions is to promote graduate employment outcomes. Or as the JRG discussion paper puts it ‘incentives in the current funding system could encourage sub-optimal choices for students and institutions, leading to poorer labour market outcomes and returns on investment in higher education.’ The assumption is that if arts becomes more expensive students will instead choose a course with lower student contributions and better employment prospects.

Employment outcomes can be measured in many ways, but every method shows that graduates in fields typically taught in Arts faculties are at an elevated risk of disappointing outcomes.

The first slide below looks at proportions of graduates in professional or managerial jobs, which the ABS defines as typically needing a university qualification. In some humanities fields, the rates of professional and managerial employment are below 50 per cent. The second slide puts some nuance on this result. While less than half of working arts graduates say their job is in the same field as their degree, nearly 30 per cent say that their degree is relevant to their job despite the fields not matching. This may be a generic skills match.

Will their legislation succeed in its apparent object?

The deliberate mechanism for steering student contributions is price. Student contributions will increase in most humanities and social science fields from $6,804 per full-time place to $14,500. An exception is made for English and foreign languages, which get a reduced student contribution of $3,950 (despite having the worst employment outcomes among humanities fields; see the first chart above). In other fields favoured by the government, a few of which are shown in the chart below, student contributions are reduced.

Generally, I doubt these changes will affect student demand dramatically. Course preferences are mainly driven by student interests, which restrict the range of courses a person would potentially take.

This is not to say that employment and financial concerns don’t influence choices within that range of courses. Application patterns move with the labour market. Job and salary prospects are much bigger financial factors that student contributions, and they are already factored in to demand. It is probably not coincidence that arts fields experienced some decline (chart below) in enrolments after the post-mining boom spike in graduate un- and under-employment.

While higher student contributions will not put off many people who had their hearts set on arts, there may be some groups who are more open to influence. These could include people who are not strongly committed to higher education but enrol in arts while deciding what to do next, people doing combined degrees who might decide that the extra degree mainly for interest is a bit expensive, and people planning on a Melbourne Model or UWA bachelor degree/professional masters degree sequence. With a new total HELP loan limit of $106,000 at any one time, accruing more than $40,000 in HELP debt for an arts degree would constrain postgraduate study choices.

What impact will the more than doubling of the cost of an Arts degree have on the choices made by indigenous students and those from new immigrant communities on entering university?

I am not aware of any specific research on the price sensitivity of Indigenous university applicants. They are more likely to be enrolled in the broad ABS category of ‘society and culture’ (which includes arts, along with law, economics, social work, and librarianship) than non-Indigenous students, 32 per cent compared to 26 per cent.

Indigenous student enrolments have doubled since 2009, suggesting demand-side pressures are increasing, but with an open question as to whether the price signal will counteract that. Looking at the history of these things, claims that increased student contributions will reduce enrolments are to date always wrong over the long run. But there are cases where prices might have caused a temporary dip.

New immigrant communities have a complicating factor. Generally speaking, they are much more interested in higher education than established Anglo-Australian families. The chart below shows massive participation differences by language spoken at home. Parental pressure to go to university in some of these communities will not be deflected by student contributions.

But there is a problem, which is that permanent residents are not eligible for HELP loans (although they can get a tuition subsidy). Finding $14,500 a year to pay upfront would be much more than difficult than finding $6,800. People on humanitarian visas can get a HELP loan.

Supply-side factors are more important than demand-side factors

The government’s theory is that student contribution signals will move student demand, and in turn student demand will influence university supply. But neither assumption is robust.

The total funding rate – student plus Commonwealth contributions – will influence the capacity and willingness of universities to supply student places. For arts faculties, total funding rates increase for humanities and decrease for social sciences. Languages are neutral. If journalism is taught in arts it is getting a big cut. The discipline mix at each university will drive the net result, and whether/how Commonwealth funding rates flow through to faculties and departments will drive the detailed implications.

The subject smorgasbord approach to arts courses is likely to cause issues. Higher education is an economies of scale industry, and so big classes have lower average per student costs. The funding model is not designed to support academics teaching their research interests to a class of 20. This means that even if student numbers hold, they will have fewer subjects to choose from.

How has it come to pass that the Morrison Government is indifferent to what Australian conservative governments in the past took for granted—education in the humanities or the social sciences as one of the most vital purposes of the university?

For conservative governments the humanities and social sciences have lost credibility over the last few decades. The most common criticism, regularly voiced by the IPA in Australia, is that academics in arts faculties are pre-occupied with contemporary political agendas around race, gender and sexuality and lack intellectual diversity. Humanities ARC grants have been vetoed, seemingly on the grounds that their trivial topics do not represent value for taxpayer dollars.

That said, this is not an express motivation of Job-ready Graduates and generally pro-Liberal fields like business also face $14,500 student contributions.

The changes to funding rates are driven by a university teaching cost study, and affect other faculties such as science and engineering much more than arts.

Focus on what can be influenced

Job-ready Graduates is bad for multiple reasons, but individual academics, departments or faculties cannot do anything about it in the short run. They need to focus on what they can influence.

Keep in mind that the government is not imposing any restrictions on what universities can teach or students can study. The government is not directly trying to weed out ‘low-value courses’, as is happening in England. It is not restricting student loans and student income support to courses it approves, as it has done in vocational education. Its chosen mechanism of demand suppression, higher student contributions, probably won’t work very well.

Arts faculties can still attract and retain students and be financially rewarded for enrolments. How many farewell events need to happen depends on their success in these tasks.