Teaching public funding is skewed to STEM and health-related courses

With the government now publishing data on students by funding cluster we can get a clearer idea of where Commonwealth Grant Scheme money goes.

My calculations are for 2018, and based on multiplying equivalent full-time student numbers in Commonwealth supported places by the relevant funding cluster rate. Due to the demand driven funding freeze and some universities over-enrolling allocated places the overall total exceeds what universities were actually paid. However, as it is usually not possible to specifically identify ‘over-enrolled’ students I am going to assume that this does not affect relativities between the clusters.

As the chart below shows the science, engineering and surveying funding cluster is by far the biggest recipient of Commonwealth funds, at $1.8 billion in 2018 (and this is missing the maths and statistics buried in another cluster). The health-related clusters between them received $1.6 billion, and this is also an under-count due to some health courses being in other clusters.

funding cluster spend 2018 (all)

As is the case with public research spending, public tuition subsidies are skewed to STEM and health clusters. They have 32 per cent of EFTSL but 48 per cent of funding. The humanities, which are the subject of much of the controversy around higher education, received the least money of any cluster, $151 million in 2018. This is 2.1 per cent of the total.

However, it should be noted that other subjects typically taught in Arts faculties are in other funding clusters. For example, fields such as politics and sociology are in the second largest funding cluster by dollars (which also includes psychology, social work, and similar fields) and in the fourth largest funding cluster by dollars, which includes foreign languages and media and communications, which despite a recent downward trend has grown significantly over the last decade.

(Last paragraph added after original publication after Twitter commentary.)

What is going on with domestic bachelor-degree completions?

Historically, increases in commencing bachelor-degree students flow through into increased completions in the three to five years afterwards. And initially the demand driven boom of 2009 to 2014 looked like previous patterns. The increased commencing cohort sizes, shown lagged by four years by the orange line in the chart below, are evident in larger completing cohorts between 2012 and 2015 (blue line). 4 year lagged commencers and completors

But then growth in completions slows to a near stall in 2017, which had 0.3% more completions than in 2016. In 2018 there were 2.2% more completions than in 2017, but this still looks surprisingly low. If there had been the same relationship between completions and commencements four years later in 2018 as there had been in 2008, nearly 26,000 more people would have finished their degrees in 2018 (grey line in the chart above). Read More »

The popularity of online self-education

A couple of weeks ago I posted on the surprising apparent decline of reskilling and retraining. Mature-age undergraduate, postgraduate, vocational qualification, ABS work-related training, and ATO self-education expenses have all trended down in recent years. These trends did not seem consistent with the oft-repeated claims of workplace change and the need to reskill and retrain.

Especially on LinkedIn, much of the reaction to the post suggested that this was due to online self-education as a substitute for credentialed and uncredentialed courses and training. While I haven’t found any time series data on how online self-education  has grown, I am persuaded that this must be a significant part of the explanation.

In a recent Pearson global survey of learners, employed respondents who required further training were asked how they did it. In Australia, organised courses or training are still more widely used than online self-education. But a third of the sample had used this method (chart below).

use Pearson

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Contrary to expectations, reskilling and retraining seem to be in decline

We are regularly being told that in an era of technology-driven labour market change we will need to reskill and retrain much more than we did in the past. Perhaps we will. But it is hard to find evidence for this in the available data.

Let’s start in higher education. As I have noted before, mature-age undergraduate education is trending down. But domestic postgraduate coursework commencing student numbers are also down on their 2014 peak, as seen in the chart below. Education and business courses are driving the decline. Only health and IT courses have enjoyed enrolment increases since 2014.

Total student numbers are still high by historical standards. But with record numbers of eligible students (people who already have degrees), and undergraduate initial professional entry courses being converted into postgraduate qualifications, we would expect strong growth in this type of qualification. It is not happening.

postgraduate commencers

In vocational education too enrolments are trending down, including for people who already have a Certificate III or above qualification (taking the Certificate III as more clearly a career qualification than Certificates I or II). Read More »

Will the number of Commonwealth supported student places fall?

A couple of opinion pieces about university performance funding last week suggested that the government’s policy is aimed at increasing student places with population growth. That may be the impression the government is trying to give, but their policy provides a financial incentive to decrease the number of student places.

The government’s promise is to increase nominal funding for bachelor-degree places in line with increases in the population aged 18-64, for those universities that meet performance targets. But because percentage population increases are likely to be below inflation,  total Commonwealth Grant Scheme funding will decrease in real terms each year, even if universities get 100 per cent of their performance funding.

Although maximum CGS payments will probably increase at less than the rate of inflation the underlying Commonwealth contributions are still being indexed to the CPI. As noted last week, the demand driven funding calculation is still going on as well, so that universities receive the lesser of their demand driven or maximum grant amount. The practical effect of this is that universities can decrease the number of Commonwealth supported places each year and still get their maximum CGS funding amount.

The chart below illustrates the logic, using nursing as an example. Under the Wellings review recommendations, universities are pretty-much guaranteed 60 per cent of their maximum performance funding. So on the left-hand side of the chart below I have indexed the maximum funding amount to that and divided it by the indexed Commonwealth contribution. Next year a university could offer 4 per cent fewer nursing places than in 2017 and still get its maximum funding amount. 100 per cent performance funding does not make much difference. Read More »

Current higher education policies are the unsatisfactory result of political misjudgements in 2017. There are better ways of balancing the interests of students, universities and taxpayers.

Higher education is one of the sectors most affected by Saturday’s surprise election result. Labor’s biggest promise, restoring demand driven funding from 2020, would have delivered universities funding for all bachelor-degree students, with Commonwealth  contribution rates 5.3% higher than they were were in 2017. This did not require legislation; the current funding freeze was imposed through university funding agreements and could have been ended the same way.

By contrast, if the Coalition’s current policies stay in place there will be no demand driven funding and most universities face limited nominal increases in total Commonwealth Grant Scheme funding for bachelor-degree students (a few unis have special deals that will deliver larger increases). The best-case scenario for most universities is an annual total CGS funding increase linked to growth in the 18-64 year old population, if they meet yet-to-be-announced performance criteria.

The mention of population gives the impression that the policy will respond to demographics, but this is not correct. As the chart below shows, the projected increase in the 18-64 year old population is below even recent low CPI increases. In real terms total funding for bachelor-degree students will continue to decline.

population funding

If universities decide to maintain per student funding they would provide fewer student places each year (the logic is explained in this submission). It’s not clear to what extent this will happen. Commencements were down in 2018, but quite possibly due to weak demand for student places rather than a reluctance to supply them.  Existing enrolment projections, based on numbers universities give to the Department, suggest modest growth to 2022. But whether this would be sustained long-term with annual real funding cuts is unclear.Read More »

Young people were less likely to enter higher education in the years after Whitlam than before. Demography and deficits were against them.

The three politicians with the greatest impact on higher education participation were Robert Menzies, John Dawkins and Julia Gillard. Yet I never hear anyone say, depending on their age, that “I only went to university because of Menzies/Dawkins/Gillard”.

Yet for Gough Whitlam the story is different. Last week USQ VC Geraldine Mackenzie was reported in the Australian saying “I was very fortunate to go to university after the Whitlam years when it was all free. Otherwise I may not have had that same opportunity.” And in February shadow education minister Tanya Plibersek told the Universities Australia conference that “it feels like every week, I meet someone in their 60s or 70s who reminds me about how Gough Whitlam was responsible for them going to university.”

I have argued before that Whitlam, Prime Minister 1972-1975, was very significant in the history of Australian higher education and has some lasting legacies. But I think the lesson from Whitlam’s time for now is that the biggest drivers of participation are supply-side policies on student places, and in particular how they interact with demography and fiscal policy. Because both these factors were significant in the free education era, the long-term trend towards increased higher education participation was interrupted.

Free education lasted from 1974 to 1986 (there were small charges in 1987 and 1988, before HECS started in 1989). The chart below shows that 19-year-old participation rates went up in 1976 but then fell and did not return to the previous peak until 1986. At the low point in 1982, the 19-year old higher education participation rate was 2 percentage points lower than it had been in 1975 (unfortunately, my data source starts in 1975).

19 year old participation

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The proposed law against commercial cheating and the Constitution

Successive Commonwealth governments have been creative in finding ways to by-pass the Constitution. That has been very necessary in education, which was originally intended to remain a State responsibility.  The Commonwealth has no direct power to legislate on an education topic other than in the territories. This creates legal issues for the Commonwealth’s attempts to ban commercial cheating. Draft legislation was released at the weekend.

The Commonwealth’s main vehicles for education policy have been section 96 tied grants to the States (no longer used for higher education, but still used for school and vocational education), the section 51(xx) power to legislate on foreign, trading and financial corporations (which relies on universities being trading corporations; this power could collapse if they went back to full public funding) and section 51 (xxiiiA), the ‘benefits to students’ power, which is the main legal basis of Youth Allowance, the Commonwealth Grant Scheme, and HELP.

Because the Commonwealth can fully legislate for the territories, the draft bill would be effective in the ACT and the Northern Territory. But in the states the legal situation is more difficult.

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Higher education inequality: how much does performance at university differ by socioeconomic status?

In an earlier post, I argued that the Australian higher education system probably deserved about a 7/10 for equity of access. In line with some theory, the middle-class meritocracy continues to reproduce itself successfully, but the universities are open to talent: for a given ATAR, university participation rates are very similar across SES groups. But what happens when students arrive at university?

Intriguingly, many studies have found that low SES students or students from non-selective government schools do not do worse and indeed tend to get slightly higher marks, for a given ATAR starting point (eg here, here, and here and the literature cited within).

Various theories for this finding have been offered, but I suspect it is because the schools higher-SES students attend maximise ATARs through intense coaching and social pressure, but their less motivated and organised students don’t do as well in the much less structured university environment. By contrast, a lower-SES student who has done well in Year 12, quite possibly with much less school and social support than higher-SES students, is a motivated and resourceful person, and that pays off at university as well.

Student satisfaction is not reported directly by SES, but recent surveys differentiate between people who are first in family and those who are not. This gives much less nuance than I would like, but low SES students are much more likely to be first in family than high SES students. The Student Experience Survey finds first in family students are often slightly more satisfied with their educational experience than students who are not first in family. Maybe first in family student expectations are different, but generally they seem to be experiencing university in much the same ways as other students.

However, on actually completing a degree we do find some negative differences. Using a geographic measure, 69 per cent of commencing low SES undergraduates complete a degree within the nine years to 2015, compared to 78 per cent of high SES students. Read More »

How bad is student mental health?

The media this morning is reporting some dramatic figures on student mental health. According to Headspace, a youth mental health organisation, two-thirds of students responding to an NUS survey reported high or very high psychological distress over the last twelve months, and a third experienced thoughts of self-harm or suicide.

I’ve recently been doing some reading on this subject, as part of a project on student attrition. I’m convinced there is a problem, but I am not so sure that it is this bad.

The latest ABS National Health Survey from 2014-15 shows that the main student demographic, those aged 18-24, has worse mental health than any other age group. This is only moderately so for men, with 11 per cent reporting high or very high psychological distress on the Kessler scale, compared to 10 per cent for all adult men. But it is dramatically so for women, with 20 per cent reporting high or very high psychological distress, compared to 13.5 per for all adult women.

According to other ABS sources, about half of 18-24 year olds are students. An analysis of an earlier NHS (along with HILDA) found small overall differences between students and non-students, especially after adjusting for demographics, with students being on average younger and more likely to be female than the general population. The NHS survey found 10 per cent of its student sample were experiencing high psychological stress, while it was 21 per cent in HILDA.

One important reason for different results is that the ABS surveys and HILDA ask about mental health issues over the last month, while the Headspace/NUS survey asks about the last twelve months. Mental health issues tend to be episodic, so we should expect more people to experience one over a year than a month. There seem to be widely varying results even from surveys with similar methodologies, so mental health is clearly something that is difficult to measure at a population level. But Headspace/NUS getting triple the rate of the ABS or HILDA seems high. They have not published their detailed results, so perhaps we will have a better idea of why when they do.