Is ATAR bad for school education?

The ATAR wars entered another round yesterday, with Victoria University VC Peter Dawkins and Professor Yong Zhao responding in The Australian to my Grattan Institute colleague Ittima Cherastidtham’s op-ed supporting ATAR.

This debate can get confusing, because semi-related arguments are blurred together.

The most impassioned opposition to ATAR seems to be about its claimed effects on schools. As Dawkins and Zhao say,

“…it is a sad indictment of our education system that maximising ATAR is the primary focus for far too many students, rather than following passions and preparing for the future by developing their talents…”.

Even though they later question whether ATAR is a good predictor of success, they could  accept that ATAR is useful in university admissions and still oppose it, on the grounds that the cost of ATAR to school education exceeds the value of its benefits to higher education.

I am sceptical of the idea that abolishing ATAR would let more students follow their passions (‘passions’ perhaps; but I prefer ‘interests’ as encompassing a wider variety of emotional  commitments), or prepare them better for the future.

ATAR meets a university need that will not go away. Some kind of selection rank system is needed for distributing student places when demand exceeds supply for a particular course. So the question is not whether ATAR  has flaws or some undesired consequences, but how ATAR compares to its likely alternatives. Read More »

Should HELP debts be capped?

The Council of Australian Postgraduate Associations has a paper out today opposing the government’s legislation that would cap HELP debt at $104,000 for most students, or $150,000 for students taking the high-end health courses. A media summary is here.

There is already a similar cap for students borrowing under the full-fee student HELP program, FEE-HELP.  The legislation would count HECS-HELP borrowing towards the total – this is the loan scheme used by the vast majority of domestic undergraduates paying student contributions for Commonwealth supported places.

Contrary to the impression given by the media article, adding in HECS-HELP would be prospective, only applying to debt accrued after 1 January 2020.

CAPA is right that a cap will tip more students into an at least partial up-front fee market. But given HELP’s overall design, this is not a knock-down argument against it.

As I have long argued, HELP has substantial costs in doubtful debt. And although the big debtors tend to be in fields with relatively good earnings prospects, the more someone owes the greater the risks for taxpayers – both because of the total amount owed, and because of the danger that the debtor will not spend long enough earning an income above the repayment threshold to repay in full.

Especially when it is hard to control costs by reducing repayment thresholds or abolishing the deceased estate HELP write-off, that creates pressure to reduce high-risk debt by limiting what students can borrow. The government can’t lose what it doesn’t lend. We are already seeing this in other parts of the system.

Loan caps can also usefully serve as soft fee caps in the fee-deregulated parts of the system. CAPA notes that even the current FEE-HELP cap isn’t enough for some JD courses. But if some universities are charging exorbitant fees for law courses that isn’t something public policy should encourage, especially when the fees end up being subsidised through HELP debt write-offs. There are plenty of much cheaper law courses out there.

There is room for debate about exactly what the cap should be. But $104,000 would allow most students to do an undergraduate degree and professional development postgraduate courses. In an amendment proposed by the government, debtors could replenish their cap by paying off some of their existing debt.

If we completely re-worked HELP, we could take a more actuarial approach to lending at higher levels – allowing it for low-risk borrowers, declining for high-risk borrowers. But that would be a radical conceptual change to HELP, with discipline, age, and gender all likely to significantly influence actuarial risk.

Staying within HELP’s current conceptual basis, we need general rules that support reasonable amounts of study but protect taxpayers from courses with excessive fees and from perpetual students. A cap on outstanding HELP loans is one such rule.

 

 

 

 

Will extra-curricular admission requirements improve low SES access to the ANU?

The Australian National University has announced some big changes to the way it admits domestic school-leaver students.

Although there a few hints in their public statements, it’s not really clear to me why they are doing this. Despite the current anti-ATAR bandwagon, my view is that generally using ATAR-based admissions sets a high benchmark  that alternatives need to meet or exceed.

At the ANU end of the student market, one benefit of ATAR, of identifying students at high risk of failure and attrition, is not highly relevant. With a floor ATAR of 80 for most students the risk of not completing is low.

What ATAR is used for in the more selective institutions is as a fair and efficient way of rationing places in high-demand courses. ATAR is meaningfully linked to the course; it is an academic measure for an academic project. Prerequisite subjects, and performance in those subjects, are good rationing tools.  Specialised aptitude tests are also a relevant way of choosing between otherwise similar applicants.

The main new academic requirement under the ANU plan is that from 2022 all students will need Year 12 maths as well as English to be admitted. That might be designed to encourage more students to do maths, but in practice it will limit the pool of applicants.  It’s hard to see how maths is essential for must humanities or writing-based subjects.

The main new information that ANU applicants will have to provide is information on their extra-curricular activities. VC Brian Schmidt seems to think that this is an access measure:Read More »

Has abolishing the discount for upfront payment of student contributions made a difference to upfront payment rates?

An article in The Conversation on incentives around student contribution payments made me wonder what difference the 2017 abolition of the 10 per cent discount for paying upfront was having.

The discount had a cost to taxpayers, since universities were compensated by the Department for upfront payment discounts. If students pay upfront, the risk of the remaining debt not being repaid is removed, as is the interest subsidy for the time that repaid debt is outstanding. The discount is only worthwhile from a taxpayer perspective if it induces upfront payments on a sufficient scale to reduce doubtful debt and interest subsidies by more than the cost of the compensation to universities.

At the time, I supported the decision to abolish the discount, because I doubted that it was generating a net financial benefit for taxpayers.

One reason for this is that various sources of evidence over the years suggested that upfront payments were coming from sources unlikely to be very sensitive to discounts. These include parents wanting their kids to be free of debt, employers, and scholarships. In the 2012 student finances survey, for example, 9 per cent of undergraduates reported receiving money to pay tuition fees. Read More »

The uses of ATAR

In the last few weeks, the Australian Tertiary Admission Rank (ATAR) has come under renewed criticism. A paper from the Mitchell Institute started this, and Swinburne University VC Linda Kristjanson followed up with an op-ed on one of their alternative entry systems.

These critiques have a history. More than 20 years ago, then education minister Amanda Vanstone gave a speech attacking the ‘tyranny of the TER’, an ATAR predecessor called the Tertiary Entrance Rank. ATAR’s decline has long been championed. But despite what the Mitchell paper suggests, ATAR is still used in the vast majority of school leaver university admissions (Mitchell’s numbers are due more to the rise of other academic results, such as past higher or vocational education, than non-ATAR school leaver admissions, although these are also increasing).

Some form of ranked school results has been used for university admissions since the 1960s. Previously it was enough to ‘matriculate’ (complete Year 12), but demand for higher education was exceeding the places available, and so school results were used to allocate places to applicants. But this history shows that there is an alternative – admit everyone who meets some basic threshold, and then cull them. University policy reviews from the 1950s and 1960s report fail rates that are very high by today’s standards.

There is something to be said for this admit-and-attrit approach to selection – let applicants try university and see how they do. It avoids proxies based on an imperfectly-analogous environment such as school, or admissions tests that can potentially be gamed or only measure some attributes needed for success at university. To a substantial extent, as a forthcoming Grattan report will show, trial-and-error selection after enrolment is still a major way of deciding who gets a longer-term university place.

But issues of fairness, efficiency, and student protection work in favour of retaining an active role for universities in selecting students. Read More »

Higher education inequality: do graduate outcomes differ by socioeconomic status?

In earlier posts in this series on inequality and higher education, I have suggested that the SES participation differences are largely driven by prior academic performance and that different SES groups seem to experience higher education in much the same way, but low SES students are less likely to complete their degrees. In this post, I will look at outcomes for the students who do complete their degrees.

First, are there differences in rates of getting a job? The 2017 Graduate Outcomes Survey finds that there are small differences. About four months after completing their bachelor degree, 73.6 per cent of high SES graduates who were looking for full-time work had found it, compared to 70.3 per cent of low SES graduates. However, of those who were working full time low SES students were slightly less likely to report not fully using their skills at work than high SES graduates (27.1 per cent compared to 28.9 per cent). It is difficult to say whether there is any direct SES effect in these results, as employment outcomes differ substantially by field of education, and SES differences in discipline choices could explain the results.

The Graduate Outcomes Survey also looks at starting salaries in the first full-time job after completing an undergraduate degree. Again, we find a small SES difference: the median starting salary for high-SES graduates in 2017 was $61,000, and for low SES graduates it was $60,000. This does not tell us whether there is any direct SES effect (such as not being able to access social networks to find professional jobs) or whether other factors such as discipline explain the result. A study using an earlier first year out survey had a limited control for discipline, as well as controls for weighted average marks, gender, and various other factors. It found no negative salary effect for low SES students, using a geographic measure of SES.

One possible cause of SES differences is that low SES students tend to attend the less prestigious universities, reflecting the school results issues reported in an earlier post. For example, 7.5 per cent of the University of Sydney’s students are low SES on a geographic measure, compared to 26.2 per cent of Western Sydney University students.

In theory, university attended should affect starting salaries. There are well-known differences in entry requirements between universities, which employers may take as a more reliable measure of ability than university marks, and employers may assume that the more prestigious universities have better teaching (can attract better staff, have more to spend – although student satisfaction surveys don’t support this conclusion). The first full-time job is when employers have to make greatest use of proxy indicators of potential, since most new graduates lack a track record in full-time skilled employment. Consistent with this, nearly 40 per cent of graduate employers say they have preferred institutions, mostly Group of Eight universities.

In practice, however, many studies have found no or small starting salary differences by university or university grouping (eg here, here, here, here and here). What course you take matters much more to your income than what university you attend. Read More »