A previous post on my new paper on tertiary student finances under COVID-19 showed that, despite two lockdown-caused crashes in employment, students generally did well out of the COVID-affected labour market. This post looks at the student income support system. It too did well in maintaining and increasing student living standards.
Bonus payments for student income support recipients
The base student income support payments are modest. When COVID arrived in Australia in early 2020 the fortnightly Youth Allowance rates were $304.60 a fortnight for 18 year olds living at home, and $462.50 if living away from home. But COVID-19 bonuses significantly increased the financial benefits of being on student income support.
Students receiving YA, Austudy or Abstudy on 12 March 2020 received a $750 economic stimulus payment. From 27 April to 24 September 2020 they received the $550 fortnightly Coronavirus Supplement. This supplement was then phased down, to $225 a fortnight from 25 September 2020 to 31 December 2020, and then $150 a fortnight from 1 January to 31 March 2021. A student continuously on student income support from March 2020 to March 2021 received more than $9,000 in COVID-related bonus payments.
From 1 April 2021 the base student income support rates were permanently increased by $50 a fortnight.
The number of students receiving income support increased
In the major 2020 and 2021 lockdowns tertiary student employment in the 24 years and under age group fell by over 100,000, or 20 per cent of the pre-lockdown total. Yet these losses proved to be temporary. As I discuss in a new paper, student employment rates and earnings recovered to record levels. While the strong Australian labour market is obviously a major factor, the sometimes significantly overlapping employment markets for students and temporary migrants made closed borders beneficial for students as workers.
Tertiary student employment rates
The strength of tertiary student employment is most obvious in employment rates, the percentage of the total student population with a job. Tertiary student employment levels and rates vary during the year, driven by movements in and out of both employment and enrolment. Comparisons of the same month in different years can help distinguish a trend from a normal seasonal change. December is not necessarily the peak month for total student employment, since course completions reduce student numbers. But student employment rates typically reach annual highs in December, as seasonal spikes in retail employment coincide with a summer holiday increase in student capacity to work.
As the chart below shows, employment rates fell sharply in April and May 2020 as lockdowns hit, but by August 2020 student employment rates were back at 2019 levels. In 2021 employment rates were consistently higher than in 2019, despite lockdowns in NSW, Victoria and the ACT causing a significant dip. In early 2022 student employment rates remain 10 percentage points or more above their 2019 levels.
Although more recent current total international enrolment figures are available, a few things in the recently released 2020 enrolment data tell us more than is publicly available elsewhere.
International bachelor degree students have much lower attrition rates after first year than their domestic counterparts. Flying to a foreign country and paying sometimes exorbitant fees is a strong incentive to get the degree. But while attrition for 2019 commencers into 2020 declined for domestic students, the international rate increased nearly 3 percentage points to 12.73 per cent. The most likely reason is that some international students could not get back to Australia due to travel bans.
Increased attrition meant fewer continuing students than would have been the case without COVID-19. But the prior boom years for commencing students meant that continuing students still increased in 2020 on 2019 figures. This is one reason why the overall decline in international students was contained to 6.6 per cent, despite an 18.2 per cent decrease in commencing numbers.
Overall domestic student trends were positive for both undergraduates, up 2 per cent after a decline between 2018 and 2019, and postgraduate coursework, up 14 per cent after six years of stagnation or low growth. Postgraduate research was an exception, down by 577 enrolments or 1.3 per cent. Including enabling and non-award students total domestic enrolments were 1,133,519, 4.4 per cent up on 2019.*
Student ‘load’ – full-time equivalent enrolments – was up by less, 2.6 per cent. The headcount share of part-time students, defined as less than 75 per cent of a full-time equivalent study load, is only up by .7 of a percentage point, suggesting more part-time students with light study loads and/or more full-time students not at a 100 per cent study load.
The updated funding agreements let us see how much the government paid to get Centre Alliance Senator Stirling Griff to vote for Job-ready Graduates, which is $68.6 million for South Australian universities over the 2021-2023 funding agreement period. Unlike much of the other additional money in the funding agreements, these increases are ongoing rather than temporary.
I am not sure what criteria were used in dividing the money between the South Australian universities. In 2021 Adelaide gets 1.9 per cent more than it presumably would have otherwise, Flinders 2.7 per cent, and the University of South Australia 3.1 per cent.
More short course places allocated
In my earlier post the allocated short courses fell short of the announced budget value of $252 million. Now they slightly exceed it at $258.7 million, divided between 256 undergraduate certificates valued at $102.9 million and 491 graduate certificates worth $155.8 million. My updated spreadsheet of short courses is here.
In 2020 the Australian government JobKeeper policy provided eligible employers and employees with a wage subsidy, which was designed to sustain employment during a COVID-related shock to the Australian economy.
Public universities were eligible for JobKeeper, but its regulations were changed several times to reduce the chance that they would qualify. I assessed the merits of the government’s university JobKeeper decisions in a previous post. No university received JobKeeper directly, although some benefited from it via their subsidiaries.
With most university annual reports now published I can partially investigate the effects of the government’s university JobKeeper decisions. As at 6 July 2021 I have 2020 financial results for 32 public universities. I am missing the South Australian universities, the University of Canberra, the University of Tasmania, and Charles Sturt University.
Time period of revenue loss
For all organisations JobKeeper eligibility involved comparing revenue in 2020 with the same period in 2019. Most organisations could choose a month or quarter, but for universities it was changed to the six month period from 1 January 2020. In my previous post, I rated this as the least defensible government university JobKeeper decision.
Early on, before the six month period was introduced, some universities thought that they could qualify (eg Sydney and La Trobe in April).
The original one month comparison option, starting with a calendar month that ends after 30 March 2020, seemed to create opportunities for some universities. Government payments arrive in fortnightly instalments, while fees are paid around due dates. In particular months international student fees received for the next semester may be a large percentage of all university income. A big drop in fee revenue in one of those months might have triggered the revenue decline threshold that made an employer eligible for JobKeeper assistance (the relevant level is discussed below).
At least at Sydney, most first semester 2020 student fee due dates were prior to 30 March (I could not find La Trobe’s dates). And Sydney is one of the ‘China universities’ affected by a border closure to China from 1 February 2020. The ‘India universities’ are unlikely to have had a March trigger month, as Indian students mostly arrived before the international borders closed completely to routine travel on 20 March 2020.
The Australian Government’s JobKeeper program was intended as a temporary scheme to keep people in jobs during COVID lockdowns and business restrictions. It was originally scheduled to run until late September 2020. With some more limited extensions it finished at the end of March 2021. The government made several decisions that reduced the chance that a public university would qualify for JobKeeper support. This post evaluates those decisions from a public policy perspective. A subsequent post assesses how the various decisions affected public university JobKeeper eligibility.
In the rush to implement JobKeeper, the public university aspects were not well implemented or explained. University hopes were raised only to be dashed, feeding a sense of persecution as well as cutting off potential funding. I will argue, however, that the final policy position reached by the government, except for the time period for comparing 2019 and 2020 cash flows, was not wrong in principle.
More importantly, JobKeeper was never the right response to the higher education sector’s COVID-related problems. It was a short-term program aimed at helping employers maintain staff through domestic lockdowns and restrictions on activity. Regulations affecting the day-to-day activities of people in Australia were, and remain, very disruptive to universities but are not leading to a major loss of income. The financial problem is an international border closure that will last for more than two years. This will cause significant continuing revenue losses from international students into the mid-2020s.
The eventually announced extra government money for research and temporary new student places were more like what is needed. My critique of the government’s higher education response to COVID is that these policies were only announced late in 2020, and largely terminate before borders are predicted to re-open. Additional assistance for 2022 should be arranged.
In 2019 I wrote a series of posts on declining participation in formal education and training by people already in employment. Falling enrolments ran counter to claims that technology-driven disruptions to work would make further education more necessary than in the past.
The 2019 blog posts identified nine sources of survey and administrative data that should be trending up if the workforce disruption analysis was right. All seven data sources on individuals were instead trending down, while two employer surveys respectively showed a small increase in informal training and a larger increase in online training.
Informal training is not or is poorly measured in the individual person surveys. If it is increasing while structured learning is decreasing then this may signal a change in how people educate themselves after their initial formal education.
Prompted by this week’s release of new data on one of my trend indicators – ATO self-education expense claims – this post updates my 2019 analysis. Most indicators show signs of recovery but on the latest available data three are still trending down.
Postgraduate coursework education returned to growth in 2019. Commencing on-campus numbers continued to decline but were offset by online commencements. People moving straight from undergraduate to postgraduate study complicate my analysis, as they are trying to start rather than advance their careers. On the publicly available data I cannot distinguish the two groups.
Postgraduate numbers for 2019 remain below their earlier peak, but I expect 2020 and especially 2021 to be growth years. This is partly because I see postgraduate education as counter-cyclical, with COVID labour market disruptions in 2020 encouraging further study. If this hypothesis is right data noise complicates analysis of longer-term trends, but convenient online postgraduate options are attracting students.
COVID-19 has been bad for jobs in higher education. Last October, the NTEU estimated that since March 2020 more than 12,000 jobs had been lost. According to Universities Australia in February 2021 at least 17,300 jobs were lost in 2020. But how many jobs were there to begin with?
This is a surprisingly difficult question to answer. The official DESE staff statistics give us a headcount as at 31 March each year of people employed on an on-going or fixed term contract at public universities and Bond, Notre Dame, University of Divinity and Avondale University College. At the end of March 2020 these institutions had just over 130,000 employees.
But as the chart below shows, the full-time equivalent count is always higher than the on-going or fixed term headcount, because it includes casuals. On a FTE basis, about 18 per cent of all staff are casuals, including nearly a quarter of academic staff. But DESE does not collect headcount data on casuals.
I could think of a couple of plausible mechanisms. With children sent home from school and childcare restricted women might have given up study, at least temporarily, to look after their kids. The difficulty of doing required clinical placements and teaching rounds during COVID-19 workplace disruptions might have triggered deferrals, which would probably affect women more than men due to their their large majorities in health and education courses.
On the other hand, the quoted fall in female enrolments – 86,000 – was struggling to pass my ‘does it look right?’ test. And the source, Education and Work, which is conducted each May, has a history of rogue results. It is a sample survey of Australian residents rather than being derived directly from enrolment data. The further users drill down into Education and Work sub-categories – gender, type of enrolment, age group etc – the less reliable it gets (the ABS is upfront about this, and publishes relative standard errors).
Last November I used the TableBuilder version of Education and Work (expensive paywall; university staff can use it) to exclude international students. That caused the female decline in enrolments to go way and became a small increase, although with a narrowing of the gender gap. In 2019 Education and Work reported 1.5 female students for every 1 male student, which declined to 1.42 to 1 in 2020.