The higher education reforms Dan Tehan announced last month make the idea of ‘national priority’ courses, which are often but not always linked to employment prospects, a central feature.
This is a significant conceptual shift in the funding system. Historically, deliberately steering the system by course has been a marginal aspect of policy. It has occasionally been done by allocating new places to preferred fields, especially in the mid-to-late 2000s. In the same period, some changes to relative student contributions, particularly in the case of science, were designed to boost demand. But universities, influenced by student preferences, largely decided how student places were divided between courses.
In the Tehan proposal, universities will remain the main decision makers. The government will not directly allocate money to national priority fields. Instead, the government will send price signals to students across all fields of education, with low student contributions indicating national priorities, and high student contributions discouraging non-priority fields. Altered student preferences will, if the policy goes to plan, cause universities to shift student places to priority areas.
Student contribution effects
To date, most discussion has centred on what effect the new student contributions will have. My own position on this is mid-debate.
Dan Tehan is the most regionally-focused education minister I can remember, and quite probably ever. Multiple new or expanded programs for regional campuses and students are part of his higher education plan.
But a sector-wide central feature of his policy, the closer alignment of discipline-level funding rates with average costs, poses particular problems for regional universities.
In recent posts I examined how various average teaching costs compared to the proposed new student funding rates. Average costs provide a rough guide to the decisions facing universities. Fortunately, the cost data has average costs for each field in each university in the sample. This detail offers a more nuanced understanding of how the new funding rates will affect universities.
The published cost data is from 32 universities and covers 20 fields of education. Not every university offers courses in all fields. In total, 551 fields are examined for profits and losses.
This turned on what kind of ‘average’ we were looking at. There are multiple versions of average 2018 estimated costs by field of education floating around – an average of averages (all institution average costs by field added up/number of institutions), a median of averages (institutional average cost in the middle of the range for each field), and a true average (total costs for field/EFTSL in field). I thought the chart might use an average of averages, which would over-weight low-EFTSL, high-average cost institutions.
But, having realised that I had the true average numbers when I thought I did not (in a file with a name that did not reveal this aspect of its contents), I now think the Department’s chart is based on true average figures.
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.
But I should caveat that, because not all Commonwealth supported students are entitled to a HELP loan. HELP is a rare social support scheme that is linked to citizenship; it could be the only one (happy to hear of others, if anyone knows of them). The only general exception is permanent humanitarian visa holders.
On Twitter the new funding rates in the Tehan higher education reform package are being criticised for not covering costs in most fields. That’s a completely understandable concern, given that the government’s own discussion paper suggests that this will the case, by publishing the chart below.
Fortunately for universities, if this package makes it through the Senate, I think there is a mistake in the chart’s figures. I noticed this because I initially made the same mistake myself when analysing the underlying cost figures for this blog post last month. (Update 24/6: The latest version of the discussion paper has a lower overall average cost than the chart above.)
What I think are transposed numbers on the public-private division of Commonwealth-supported student funding are entering mainstream media.
Unless the enrolment outcome is very different from what the government and its critics both expect, and there is a boom in humanities, business and law enrolments, then we will not cross over into a majority student funded system of Commonwealth supported places.
If enrolments had the same distribution between disciplines as in 2018, then the system would move from 42 per cent student funded to 48 per cent, as seen in the chart below.
The Tehan higher education reforms aim for ‘job ready graduates’. In that, the government’s goals align with those of most students. In recent ABS surveys asking students about their main reason for study, more than 80 per cent of bachelor-degree respondents gave a job-related reason. About 10 per cent gave interest or enjoyment as their main reason (chart below).
However, interest and work reasons are not mutually exclusive. When multiple reasons can be given interest in the field of study is the most popular answer, with over 90 per cent of respondents saying it is important (chart below). Training for a specific job is nominated by about three-quarters of respondents, with another ten per cent hoping to improve their job prospects without having a precise occupation in mind.