Is declining higher education demand a concern?

In the last couple of years demand for higher education has trended down, with enrolments falling slightly in 2018 compared to 2017. This post explores some reasons why this might be happening.

Demographic trends are always important to enrolments and participation rates.  Unfortunately no data source tells us in total or by age how many people meet the eligibility criteria for a Commonwealth-supported place.

The size of the birth cohort has a significant influence, but under-counts eligible persons due to migration. With 22 per cent of domestic students born overseas migration is important to demand. ABS demographic data includes migrants, but because of long-term temporary residents over-states how many people are eligible for a CSP.

As universities generally require students to have completed Year 12, final year of school enrolments are also a guide to potential demand. However, this is also an imperfect indicator, due to temporary migrants and not all Year 12 students taking subjects that qualify them for university entry.

With all these caveats, the chart below shows that none of the potential population indicators suggest that, holding participation rates constant, that demand for higher education should be up in aggregate terms. The (temporarily) falling size of the birth cohort and the slight dip in Year 12 students would suggest that demand might trend down.

potential uni students

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Has the university funding freeze caused commencing enrolments to fall?

The 2018 higher education enrolment data, published yesterday (yes, it should be released much earlier than late October), showed a rare fall in public university domestic commencing bachelor degree students. Both a headcount and full-time equivalent count show a decline of about 0.8 per cent compared to 2017.

2018 was also the first year post the demand driven system, the practical implication of which was that universities would not be paid Commonwealth contributions for enrolling additional students. Indeed, there is a financial incentive to let the number of student places fall.

So is this cause and effect, with changed funding rules causing enrolments to decline? I have no special insight into the strategic decisions of universities, but overall this trend looks to be driven by weak demand more than an unwillingness to supply student places.

As the chart below shows, applications trended down in 2018 and 2019 and offers (willingness to supply) followed this trend. Offer rates were stable: 83.2 per cent in 2017, 83.8 per cent in 2018, and 83.6 per cent in 2019. If universities were actively trying to reduce numbers we might expect offer rates to go down, but this isn’t happening.

applications down 2019

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How bad is the international student English language problem?

The English language abilities of international students keep coming up as an issue. Despite reassurances from the regulator and universities, there is little publicly-available evidence to support a conclusion that the language issues are too infrequent or not serious enough to be a major concern.

Although we should always be careful with statistics on self-assessed abilities, they can provide a rough guide. If someone says that they do not speak English very well chances are that they will struggle in an English-speaking university.

One source of data on self-assessed English is the 2016 Census. The Census does not directly identify people on student visas, but I have used a number of filters – enrolled full-time in university, non-citizen, and arrived in Australia 2014-2016 – to identify likely international students. I also removed people who are monolingual English speakers. It’s likely that the data still includes some visitors to Australia and domestic students, such as those on humanitarian visas, but it should be dominated by international students.

As the chart below shows, the vast majority of likely international students say that they speak English well or very well. However, 9 per cent say that they do not speak English well.

English language overall

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Why is mature-age university demand trending down?

In 2018, applications from school leavers for university entry were much the same as in 2017. But from non-Year 12 applicants, demand dropped by more than 5 per cent. Full 2018 enrolment data is not yet available, but first-semester domestic commencing undergraduate enrolments fell by 1.8 per cent. Various media reports suggest that demand in 2019 will be lower than in 2018.

As the chart below shows, the largest absolute drop in applications is for people aged 20 to 24, but in percentage terms the older groups dropped at around the same rate. decline by age

Looking at the data on prior education for the non-Year 12 group, application numbers are holding for people with sub-bachelor and vocational qualifications. But the no prior tertiary education and repeat-customer higher education groups are both in decline.

People changing courses or taking another course have long been a significant component of each year’s commencing students, but during the demand driven era they increased from 23.5 per cent in 2008 to 29 per cent in 2016.

Because repeat customers are such a large part of each year’s commencing students, this hid the fact that the number of new-to-higher education students started decreasing in 2015, three years before the total number of commencing students went down.  As with the more recent data, the decline was concentrated in the older age groups, as the chart below shows.Read More »

How could Labor make unis increase admission requirements for teaching courses?

At the weekend, Labor announced that it would require universities to increase admission requirements for teaching students. Shadow education minister Tanya Plibersek says that:

“Labor wants the best and brightest Australians studying teaching. If universities don’t do the right thing and fix this themselves, a Labor government will make them.”

But how will a Labor government make them do it? There is no history of the Commonwealth government directly setting entry requirements for university courses. For that reason, there is no specific power in existing higher education legislation to set admission requirements.

This blog post looks at what existing powers could be used to achieve this goal.

Directly targeting lower-ATAR students

The minister can, by legislative instrument, determine that ‘a specified course of study is not one in respect of which students, or students of a specified kind, may be enrolled in units of study as Commonwealth supported students’: section 36-15 of the Higher Education Support Act 2003 (HESA 2003), emphasis added.

The legislative instrument could then specify that students with an ATAR below 80 (the figure nominated by Labor) could not be enrolled as Commonwealth supported students in teacher education. The university would then not get Commonwealth or student contributions for such students.

Such a determination would need to be made at least six months before the start of the course: section 36-15(4), HESA 2003.

In making the determination, the minister must have regard to its effect on students: section 36-15(3), HESA 2003.

A legislative instrument can be disallowed by either house of parliament, which is one potential obstacle to this method.

A determination under section 36-15 lifts the prohibition on full-fee undergraduate students: section 36-30 (1), HESA 2003. If the student is not Commonwealth supported they can only be charged a tuition fee: section 169-15, HESA 2003. This would be awkward for Labor, which came to office last time promising to abolish full-fee undergraduate places.

To ensure that the policy complied with other Labor policies and that universities did not use backdoor methods to by-pass the ban, the minister could also determine that undergraduate teaching courses are not eligible for FEE-HELP: section 104-10(2), HESA 2003. The minister must have regard to the effect on students of making such a determination. The determination can  be disallowed by either house of parliament.Read More »

Does ATAR measure more than SES?

One reason ATAR is criticised is that it tends to reproduce socioeconomic status.

One of ATAR’s critics complains that it is

“…more likely to measure the relative wealth of schools, more than a student’s abilities. In fact, using a students’ postcode might work just as well.”

Similarly, another critic says that “ATAR scores align more closely to postcode than they do to human potential…”.

While ATAR is not this deterministic – there are a range of abilities in every part of the SES spectrum – it’s true that ATAR correlates with family background, student home location and school attended (the scale of school effects after controlling for SES  is contested).

But that the ATAR achieved is influenced by a student’s social background does not mean it isn’t measuring something real about likely academic performance.

As the chart below shows, fail rates increase as ATARs go down across the socioeconomic spectrum. For a given ATAR, there is very little difference by SES.Grattan ATAR_chartdeck

Similarly, attrition after first year is more closely associated with ATAR than SES, as seen in the chart below. attrit_atar_ses

Although differing slightly in some of the detail, this is consistent with my posts earlier this year arguing that SES has most of its effects prior to post-school education, with  university access, performance and outcomes being similar for low SES students as other students: the same results, or small positive or negatives. It is also consistent with our recent Grattan report on dropping out, which found more narrowly, but also with more statistical rigour, that low SES in itself only had a small negative effect on completion rate.

 

 

 

 

Is ATAR still widely used?

The recent Mitchell Institute report on ATAR created an impression that ATAR is no longer widely used as a basis of admission to university. Based on figure 3 in their report, it said that only a quarter of students are admitted to undergraduate courses based on their ATAR.

That figure is correct in itself, but easily misinterpreted.The standard university practice is to admit students based on their most recent relevant academic results. For many applicants, their most recent relevant academic result is not Year 12, but previous university studies or vocational education. These applicants have been trending up as a share of all newly admitted students.

For school leavers, their Year 12 results are generally still their most recent relevant academic results. For them, ATAR is used not in one-quarter of cases, but three-quarters, as the chart below shows.

For other commencing students using previous higher education as their basis of admission, their ATAR is no longer their most recent relevant academic result. But often it was used to admit them to the university in the first place.

The chart below shows that when we take 2016 commencing students back to their original admission to university, 46 per cent were first enrolled based on school education with a recorded ATAR. For the under-25 year olds, 56 per cent were admitted based on their school education with an ATAR.

So while it is true, and increasingly true, that low-ATAR students can find other routes into university, ATAR is still the major selection tool for young people.

admitted_atar

Source: Department of Education and Training, Higher education data collection