International students and the COVID-19 recession

For Australian higher education the situation of international students in the COVID-19 crisis is especially concerning. They lack the local family and social security back-ups of domestic students. It leaves them particularly vulnerable as large parts of the student labour market collapse.

And if international students have to go home or cannot pay their fees, that is the most likely trigger for a broader higher education sector crisis. At best, thousands of higher education workers will lose their jobs. At worst, many universities will need government intervention to survive.

This morning the government issued a summary statement on the situation of international students during the COVID-19 disruption.

International students working in nursing and aged care have had their 40 hour per fortnight cap on working eased, as have students working in supermarkets until 1 May. While that is helpful for some students, as of 2016 the majority work in other occupations, as the chart below shows. Read More »

COVID-19 means that universities should not be held to performance funding targets

Update 6/4/20: Since this post was written, the minister has indicated that performance funding is being reconsidered due to COVID-19.

The government’s university performance funding scheme was always based on  questionable assumptions. Among them is the belief that we can reliably distinguish a university’s contribution to various outcome indicators from the other influences on those same numbers.

I’m sceptical enough of this in normal times. But COVID-19 means that, despite the extraordinary efforts of academics and other university staff to provide continuity of education and student support, three of the four performance indicators – graduate employment, student satisfaction, and equity group enrolment share – will or are likely to worsen compared to recent years. The fourth – attrition – will probably show a positive trend that also has little to do with university performance.

Due to the total amount of performance funding being linked to population growth, COVID-19 driven changes to migration levels will also reduce how much performance money is on offer.

Graduate employment

Let’s start with graduate employment, which has a 40 per cent weighting in the performance funding formula. As I argued in a blog post on Monday, previous record-bad employment results in 2014 will be significantly exceeded. Read More »

Graduate employment prospects during the COVID-19 recession

This post looks at the history of economic downturns and graduate employment since the early 1980s – specifically the early 1980s recession, the early 1990s recession and the end of the mining boom in 2013 – to draw out potential implications for the COVID-19 recession.

Historically, each downturn peaks at worse graduate employment outcomes than the previous one. The COVID-19 recession is likely to fit this pattern and deliver record high graduate unemployment. Not only is it likely to be the most severe recession in living memory, but it has already caused massive job losses in industries that are significant graduate employers.

Past recessions

Thanks to old graduate destination survey reports being put online (scroll down here),  the employment effects of past recessions are easier to examine. The early 1980s recession triggered a four percentage point increase, on the best recent outcome in 1980, in university graduates still looking for full-time work four months after completion. But the negative effects were short-lived. By the mid-1980s employment outcomes were better than they had been in the late 1970s (chart below). Graduates of Colleges of Advanced Education had higher proportions looking for full-time work, but this appears to be mostly due to trends that started before the recession. Their results also recovered quickly.

1980s recessions

Read More »

Migration has outpaced demand driven funding as a source of additional graduates

As the latest OECD Education at a Glance publication confirms, Australia is a high tertiary education attainment country. But large-scale migration makes it hard to interpret Australian figures – what is the result of policies aimed at educating Australian citizens, and what is due to our commercial international education industry and skills-based migration program?

Although demand driven funding increased the annual number of people completing bachelor degrees, on my calculations using the ABS Education and Work survey additional citizen graduates of Australian universities account for slightly less than half of the increase in graduate numbers since 2013 — 406,000 additional Australian or New Zealand citizen graduates of Australian universities and 421,000 extra graduates who hold degrees from overseas universities or are non-citizen holders of Australian university degrees.

20-64 overseas and domestics

The chart below attempts to break the numbers down a bit further, although the categories are not straightforward.

Education and Work separately identifies people on a student visa, which it puts at 142,000 in 2018 (80 per cent with overseas degrees). I have deducted these from the other non-citizen categories. As postgraduate international enrolments have been growing more quickly than undergraduate in recent times, I expect this category to grow in future years. types of overseas grad

In Education and Work, the ABS continues its irritating standard practice of not identifying permanent residents, who are entitled to a Commonwealth supported place and to remain indefinitely in Australia. There were 36,000 domestic students with PR in 2017. This means the ‘non-citizen with an Australian degree’ category is a mix of them (after they graduate) and former international students on temporary or permanent visas. With increasing numbers of completing international students getting 485 visas, I expect that this will be a growing category.

What I find most interesting in this data is the very large number of people with overseas degrees – more than a million in total. About 45 per cent have have taken out citizenship. Most of them would be the product of Australia’s skilled migration program, although there were also 58,000 New Zealand citizens, who can come to Australia without going through the usual visa system, with an overseas degree.

On right-hand side of the second chart I have a column ‘migrant citizen with an Australian degree’, representing just over 700,000 people, that in the first chart appears in the ‘domestic’ time series. Most of them, I think, would have been domestic students (just under half arrived in 1996 or earlier), but some largish proportion would have been people who arrived as international students and subsequently became citizens.

In 2018, 68 per cent of degree holders in Australia were Australian or New Zealand citizens with degrees from Australian universities. But because we cannot identify the former international students in this group, it is quite likely that more than a third of all degree holders in Australia acquired their qualification with no assistance from Australian higher education policy.

 

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

Read More »

Should international students lose political rights?

One of the biggest changes to Australia migration this century, and through it to Australian society, has been the rise of long-term residents without the rights created by permanent residence or citizenship.

International students make up a large proportion of these restricted-rights residents, with more than half a million in Australia this year. While most international students go home after finishing their studies or convert to permanent residence, some stay on successive temporary visas for ten or more years. Other large categories of restricted-rights residents include New Zealanders and people on temporary work visas.

The total number of residents with limited rights varies depending on which visa categories are counted, but more than 1.8 million people are in this category.

As well as having no or limited access to social security benefits, often insecure tenure in Australia, and no right to vote in elections, restricted-rights residents are caught up in recent moves against ‘foreign’ political donors.

In Victoria, the current campaign finance bill links the right to make a political donation to eligibility under Commonwealth social security legislation, adding to the disadvantages that legislation already creates. (There is a loophole, as entities with an ABN can donate, and you don’t need to be a permanent resident or citizen to get an ABN. So ‘foreigners’ can donate via their business interests but not otherwise.)

With a very low donations caps in the Victoria bill – only $4000 over the four year electoral cycle to a political party – nobody could have much influence via donations.  Even if ‘foreigners’ are a bad influence the problem would be already solved another way.

The Victorian legislation’s one redeeming feature is that it only applies in a limited context.  It covers donations for political expenditure with the dominant purpose of attempting to influence votes in Victorian elections. So other donations to political parties, and donations to third parties campaigning on issues rather than directly advocating a vote, would not be covered.

In practical terms, that means that international students could donate to campaigns on state issues that are important to them, such as crime and public transport concessions.

By contrast, the federal bill that would ban ‘foreign’ donations of $250 or more covers a very wide range of political activity. It covers any public expression of views on a political party or candidate, and any public expression of views on an issue that is, or could be, an election issue. As it is hard to know what could be an election issue, a cautious approach would read this as covering any potential political issue.Read More »

Should permanent residents lose their higher education tuition subsidies?

Under current law, access to the HELP loan scheme is a rare government financial benefit linked to citizenship rather than permanent residence. It may be the only benefit in this category.

Under the government’s proposed higher education reforms, permanent residents would become entitled to HELP.* But access to tuition subsidies under the Commonwealth Grant Scheme would instead be restricted to citizens, and permanent residents put in full-fee places. For undergraduates especially, this could cost them tens of thousands of dollars.

No universally applied rules govern who is entitled to what in Australia. But there are patterns of eligibility that suggest some broad principles. Generally speaking, longer and stronger connections to Australia lead to wider eligibility for government-financed benefits. Underlying this is the idea of a reciprocal welfare state; paying tax and receiving benefits are linked over a lifetime. People who aren’t committed to Australia, and who probably won’t finance as well as receive government benefits, have restricted entitlements.

The clearest example of this idea in practice is the distinction between temporary and permanent migrants. Temporaries are eligible for few benefits, while permanents get almost all. It would be unreasonable to require people to make long-term taxation contributions to Australia without making them eligible for the benefits those taxes finance. But people present in Australia for only short periods should not receive benefits they haven’t financed. The temporary/permanent distinction is not as robust as it once was because of the rise of long-term but legally temporary migrants. But that is a problem with the visa categories more than the underlying principle.

The Australian welfare state also makes sharp distinctions between residents and non-residents. Regardless of citizenship status, Australians living overseas generally aren’t entitled to social security benefits (or any higher education benefits; Australian citizens studying at the overseas campuses of Australian universities generally don’t get subsidies or loans). The main exception is the aged pension, but that is linked to past residence. Again, full legal membership of the Australian community through citizenship isn’t counting for much; being within reach of the Australian taxation system matters more.

Why are citizenship and higher education benefits linked in an unusual way?Read More »