If you want to get more poor people to uni, why not offer policies that focus on the poor?

Andrew Norton argues that Jenny Macklin is putting students off university with her talk of big student debts.

It’s hard to say for sure whether Labor’s previous campaigns on ‘$100,000 degrees’ have affected student demand, which was lower this year than last. It seems more likely that the booming job market, including a recovery in the number of full-time jobs for teenagers, is the main cause. But anecdotally many people who should know better assume that university is much more expensive than is truly the case. For example, in an interview Macklin did this morning a journalist asked her: “Does it come down to the stage where the poor are just not in the race to get into these degrees any more?”

Most middle-class families with teenagers will presumably inform themselves of the real options. But working-class parents who just notice headlines about $200,000 degrees may not realise that they would pay about 10% of that, and give their kids expensively wrong advice.

Andrew may be drawing a longish bow, but I’m constantly amazed that Labor – the party that gave us HECS and did most to put in place the means-tested welfare state – is now eschewing any targeted measures when it comes to higher education.

In Imagining Australia, we proposed abolishing the “dollars-for-points” university entrance system (which allows those who pay more to get in at a lower standard), and argued that the cap on HECS be removed (on the basis that students from regional universities should not have to pay the same prices as those from city universities).

Both of these are pretty free-marketish reforms. We then argued that there were two straightforward ways of boosting university attendance by the poor:

To increase the number of talented, but poor, students entering higher education, we propose that parental resources be considered when determining university admissions. The admission scores for students in the poorest quarter of the population—who are unlikely to have had access to the educational resources of their more affluent peers—should automatically be adjusted upwards by a few percentage points, on a scale that tapers off as parental income rises. To administer the scheme, students from the poorest backgrounds could supply the tax file numbers of their parents during the admissions process. University admission centres could then calculate parents’ five-year average income, which would be used to add points to the official Tertiary Entrance Rank of poorer students. Although some people may be uncomfortable assisting the disadvantaged according to a formula, the rigidity of the current standardised formula is no fairer and does not assist the neediest at the margin. Essay-based entry systems are also an inferior alternative to boost the numbers of students from poorer backgrounds. Experience in the United States suggests that while personal statements provide the chance for students to tell their life story, they too often create a ‘disadvantage Olympics’ in which those from privileged backgrounds are better able to articulate their tales of woe.

Increasing the university attendance rates of the least privi-leged Australians also involves addressing the question of debt. Students from poor backgrounds tend to be more wary of incurring debt than students from middle and higher income families, discouraging them from pursuing higher education. Although, as discussed earlier, poorer graduates also receive a boost in their lifetime earnings, we need to reduce the risk that underprivileged students will be deterred from higher education by their perceptions of the difficulties of servicing a HECS debt post-graduation. For the poorest quarter of the population, we should trial a HECS discount of up to 10 per cent. Representing a small reduction in actual fees, it sends a positive message to prospective students that Australia is encouraging them to seize every opportunity to better their lives.

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20 Responses to If you want to get more poor people to uni, why not offer policies that focus on the poor?

  1. Kevin Cox says:

    Another way would be to reduce the cost of Australian degrees. If you look at the expenditure in Universities in such ways as the proportion of employees involved in face to face teaching (or terminal to terminal teaching) you will get a nasty shock. I did the calculation in 1990 and the figure was about 40% actually involved in face to face teaching. Other simple measures are the depth of the “command” structures. How many levels are there between the Vice Chancellor and the tutor in economics?

    The new Institute of Technology Australia http://www.iota.edu.au/ is a virtual University delivering Australian degrees for a cost of around $500 a subject. This is mainly achieved by cutting out all the non teaching functions of a University and concentrating solely on teaching and by automating almost all administration. While we would all argue that the non teaching functions are important we have to ask are they really worth that premium?

  2. Russell says:

    Kevin – would you cut out libraries ? a fairly expensive item for any university. You would think good libraries essential for arts & humanities courses at least, but it would be interesting for someone to research how many students sailed through their degree without using the library.

  3. Andrew Whitby says:

    Andrew,

    I am not familiar with the literature or the data in this area, but does the second part of your IA proposal actually address a real problem? Does the cost (real or peceived) of university actually influence students’ application decisions?

    One of the advantages of income contingent loans is that there is no downside risk to students. Certainly, when I was at school, although I knew about HECS I still thought of university as effectively free (opportunity cost aside). But I am just one data point and would not have been in the target group for a 10% discount.

    On the other hand, I can easily believe that socioeconomic factors influence entry scores in ways that do not accurately reflect a student’s university potential, and would support carefully constructed policies to account for this. How you defend this policy to the marginal student who is rejected in favour of a student with a lower score but lower income, is another thing.

  4. Sukrit says:

    HECS is an amazingly generous scheme. I don’t know anyone who is actually concerned about it adding to their debt levels. Plus you can just move overseas. Or not work at a level that earns more than $36 grand in Australia to avoid paying it.

    Andrew, while being poor probably would merit a lower ENTER score, I don’t see why going deeper and tackling the underlying reasons for that low ENTER score – the actual poverty, the poor primary and secondary education – shouldn’t be the priority, instead of ad hoc (and admittedly easy, because the effects would be visible in the short-term) solutions as the ones you suggest (I haven’t read your book so there might be something I’m missing here).

    Not that I’m disagreeing with the book’s proposals. Just a bit concerned about who would implement them, the universities of their own volition or governments?

  5. Sukrit says:

    I’d also add that HECS does seem a bit perverse insofar as it is actually creating an incentive for young Australians to move abroad, or earn at specified levels (this presumably also having implications for the interaction with the welfare system). Have there been any attempts to quantify this?

  6. Russell says:

    “I don’t know anyone who is actually concerned about it adding to their debt levels. Plus you can just move overseas. Or not work at a level that earns more than $36 grand in Australia to avoid paying it.”

    Sukrit – I do know someone: my nephew who is married with a child and recently started work as a social worker with his new expensive qualification – he can’t just move overseas and he can’t support his family on less then $36,000, yet as he did his degree as a mature age student (a step-up from working as a prison guard), and he’s working in that field, he’s never likely to earn a lot.

    The kind of cost that repaying that debt is to him can’t be compared to the cost of HECS to his younger sister who did law, worked in Tokyo, HK and London, and is now working in Sydney.

  7. Matt Cowgill says:

    I think there is far too much emphasis on HECS/HELP as a deterrent for students of low-income backgrounds entering uni. The low level of income support while studying is, I believe, a far greater deterrent. The structure of the EMTRs means that your income while on Youth Allowance is effectively capped at around $300 per week, which is not a hell of a lot for student who are required to be self-sufficient by virtue of their parents’ inability to provide support. I would argue that the need to subsist on such a low income for three or four years is a far greater deterrent than the distant threat of losing a few extra percentage points of your gross full-time, post-graduation income.

    [I speak as someone who has recently completed a BA/BEc with Honours at UWA after graduating from Craigie Senior High School, a then-crumbling outer-suburban Perth school that has been demolished].

  8. Geoff R says:

    Labor is very G8 focused. It is the old charmed circle G8 student politics-NTEU-Macklin’s office. From sitting on Academic Progress Committees hearing student appeals against exclusion I agree with Matt that income while studying is a problem.

  9. Personal equity contracts, as previously discussed on this blog, provide a mechanism for students to obtain up-front income support in return for a percentage share of their future income:

    http://andrewleigh.com/?p=43

    They also link the scale of repayments to income actually earned, which goes some way to addressing the kind of problem that Russell describes.

  10. Christine says:

    There’s strong enough evidence out there that university costs do deter some students from attending, though it’s not clear that’s a bad thing of course. There’s also some interesting work from over Canada way that relatively disadvantaged youth do tend to overestimate the costs of university – survey evidence that kids from families with less than $30,000 income estimated tuition fees at $6800 vs those with incomes over $60,000 estimated fees at $5000 (they were $3800 or so, and less if you count tax credits). Benefits tend to be rather underestimated too, apparently. See:

    http://www.educationalpolicy.org/pdf/littleknowledge.pdf

    But if there’s been a downturn in applications recently, I’d be looking more at job availability, and all the recent publicity about how university is over-rated, and how Australia needs more tradespeople. Given which, is there any gender difference? (Sad to say, but the we need tradespeople argument is going to appeal more to young men than women.)

    Sukrit: as someone who started uni at the same time HECS was introduced, then went overseas after I’d paid it all off, I just want to say GRRR. I think Andrew previously cited some work on income bunching at HECS increase points (not too much?), and I really doubt there’s a seroius problem with people moving overseas to avoid it – although I gather the UK was worried about this in thinking about their similar system and found a way around it.

    The idea of Australian universities taking into account something other than TER is interesting. But why parental income? Why not school attended, for instance? That would seem easier to me, and probably more accurate in measuring overall education investments, including parental, than income. The Qld system, where there’s some degree of cross-school grade adjustment (based on a general ‘skills’ test) would seem to make such an approach fairly easy to implement. Of course, Sukrit’s point about tackling the underlying problem fits better with the Heckman argument that it’s cheaper to fix the inequities in parental investments.

  11. Andrew Norton says:

    A few points:

    1. Andrew’s points bonus scheme is unlikely to make a difference, because it is just a variat ion on what is already done, ie let people from disadvantaged backgrounds in on lower scores. In fact, (taking up Christine’s point) it’s probably worse than current schemes which can take account of a wider variety of disadvantges than just low income, though only slightly so given the overlapping nature of disadvantages.

    2. Giving discounts is, absurdly, illegal under the current system – though scholarships can be provided to bring down the effective price.

    3. Among some daft options for reducing HECS, Labor’s new higher education policy does include targeted scholarships, which may have the desired effect. But Sukrit’s right – the basic problem here is poor school results, and anything universities do is merely playing at the margins.

  12. Matt Cowgill says:

    Some further points I’d like to make:
    1) In WA (I don’t know about other states), there is already some degree of ‘grade compensation’ for students from a low socioeconomic background. When the raw tertiary entrance marks are scaled, one of the factors that is used in scaling is the performance of other students at the school (both in that year’s cohort and in previous years).

    2) I have a number of friends go to TAFE, and I get the sense that fees are quire a large issue to them. Despite TAFE fees being much, much lower than HECS/HELP fees, the fact that TAFE charges their fees upfront (in WA at least) poses quite a problem for some people.

    3) The Student Financial Supplement Scheme (though deeply flawed) at least provided some opportunity for students to borrow against their future income in order to support themselves.

    4) Comments such as Sukrit’s (“HECS is an amazingly generous scheme. I don’t know anyone who is actually concerned about it adding to their debt levels”) probably reflect the views of those individuals (myself included) who were fortunate enough to enrol at uni pre-2005. Although my HECS debt tops $30000, it would have topped the $40k mark if I had enrolled last year rather than in 2000. I think HECS debts are starting to creep up to a point at which people may think of them as ‘real’ debts.

  13. Matt Cowgill says:

    I have to learn to read my comments before clicking ‘submit’.

  14. Kevin Cox says:

    Russell physical libraries are unnecessary in a teaching university provided you have good online access to materials.

    If I was starting a University today I would not have a physical library with books and magazines. I would have lots of electronic reference facilities including online help and online reference services like the Google Answers service but targetted and only available to students and staff. These could be staffed by second year students to help first year etc. For physical books and magazines I would have print on demand facilities and send the royalties to the authors and publishers.

  15. Russell Hamilton says:

    Kevin – if you can speak with a university librarian ask them how many people are employed just to keep those electronic resources available, connected to the catalog etc – it’s much more complex than appears from your screen!

    Another thing is browsing and reading – would I want to pick up Don Quixote and read it online? if I go to the shelves to get it I’ll easily see a range of related quality resources – chosen for their quality, not for how much profit a company will make by selling me a mix of rubbish and good stuff. And there’s a lot of stuff students should have access to that isn’t online at all.

    A good university needs a good library, and it will cost a fortune.

  16. Kevin Cox says:

    Russell,

    I am talking about the resources needed for teaching. Libraries can be expensive whether they are online or physical. My point is that we can have cheaper education if we concentrate on what is most important for learning. (As an aside my belief is that the most important part of learning is interaction with staff and other students but that this has been largely forgotten)

    Libraries are interesting as they are crucial in helping provide information for learning. However, their structure and overheads can be changed if we look at the functionality needed for student learning. It will be different from current services but it can be better for student learning outcomes.

    Librarians are trying to fit other approaches into their existing framework and budgets as they move to the electronic library but you will find they are keeping their total costs about the same.

    Librarians are not about to do themselves out of job by looking at what is most cost effective for student learning anymore than the 60% of non teaching university employees including most of the University hierarchy are going to recommend radically different approaches to the delivery of educational services that involves them losing their jobs and more importantly their status.

    Take a look at any traditional University and take a count of the people who are involved in learning outcomes for students that involves some form of human interaction related to learning. Take a look at how many people you have looking after computers, look after student admissions, look after the grounds, look after other people. Take a look at the people who have been “kicked” upstairs because they could not do their jobs or fell out of political favour.

    It is depressing – mind you it is not only Universities but applies to most institutions where competition is muted like banks, like most infrastructure instrumentalities, like big oil, like all governments. If we want to make big productivity gains in society the low hanging fruit is in the structure and operation of modern organisations.

    (In answer to your question about Don Quixote I would prefer to pick up a talking version online and listen to it on my player while doing some other mindless activity then I would like to see what other people I respected who liked the Don also found enjoyable).

  17. Matt Cowgill says:

    i shouldn’t comment on these blogs…

  18. Russell Hamilton says:

    Yikes Kevin, your study advice is to listen to a “talking version” while doing ‘some other mindless activity” ! Not exactly a close reading of the text. So how many critical works – on literature, history, philosophy, anthropology etc – are available online? I would guess very, very few. Maybe in the future your scenario will be possible (after Google finishes scanning everything), but for now you need books on shelves – lots of them, not just the set texts.

    Actually my study method was based on the shelf layout of the UWA library – I had come from a school that didn’t have a library. When I had to read some recommended book – say something by Camus or Beckett – I’d get the book from the Library, read it, go back to the shelf and get the author’s other books and read all of them, find a biography and some critical works also there on the shelf, read them, go back and read the set text again (pencil in hand!) and find much more in it than from the first reading, then write the essay. I reckon this method using those resources is better than kids being left with “online resources”.

    Last week I gave a seminar on online searching to a group of experienced lawyers. At the end I was told things like “I thought I was quite good at searching ’till I heard that…” and “Can we have more of these sessions?”
    So your proposal that second year students could show first year students how to find information is cheap but not likely to be very effective.

  19. Kevin Cox says:

    Russell,

    There are some students who can benefit greatly from the current system. There are many that don’t and become turned off by the whole experience. One of the most salutory lessons I had was to see how students at a University scored on their attitude to learning. They came in full of hope and wanting the learn. They left as soon as possible with their only goals of passing their exams and the thirst for knowledge had gone long ago. Somehow the University had managed to transform these students from kids hungry for knowledge into cogs for industry.

    I also base my observations on watching closely and being involved in the an Open Learning Institute while being employed at a traditional University. The traditional University and spent lots of money on libraries, nobel prize winners, research facilities while the Open Learning Institute was modelled on the British Open Learning Institute which concentrated on learning materials and on a face to face tutoring system.

    When I looked at the feedback, personal attention, learning materials available at the Open Learning Institute then my qualitative impression was that the Open Learning Institute did a far better job at educating students than did the traditional University – for a fraction of the cost.

    I believe that we can do a much better job of education if we use technology to reduce costs but to do it in smart ways.

    Your comments about the second year students helping the first ignores the learning effect on the second year students. As we all know the person that teaches learns much more than the person who is taught. The idea of the second year helping the first year is based on that principle. It is not just for cost saving (even though that helps) it is for education of the second year student.

    We need to use technology appropriately and we need to look for more productive approaches that concentrate on learning outcomes rather than on external factors. As another aside the main learning reason for choosing a prestige University versus an also ran is that the quality of your fellow students will be better and we all learn more when we have stimulating colleagues and fellow students.

    The point is that Australian Universities need to lift their game with respect to learning and they need to do it with fewer resources. It can be done but it will not be done if we follow a bastardised version of an 1800′s English model of an educational institution

    With respect to your real world experience it is not hard to simulate and improve on your experience in the online world. Much more information can be collected on other people’s experience. You can use electronic notepads and use other people’s notepads and electronic pencils etc.
    You can even start to discuss issues with perhaps the only other person in the world who is going along the same path as you because you find them and correspond with them.

    Look at this forum. Perhaps you will not accept what I am saying but it is making you think and justify your position. In the “real world” it would have been most unlikely to have this conversation because we would never meet. The trick is to find good ways of using a very powerful set of communications technologies for our purposes.

    Kevin

  20. Russell Hamilton says:

    Kevin,
    I would like to agree with you, no one wants money wasted, but I think your proposal has costs too. When I worked in academic libraries all the books were bought as a result of recommendations from the academic staff – books for their students and for themselves. I’m sure that a lot of it will not be online, so what would you do – restrict what academics have access to?

    There’s an element of learning in just using a library – because nearly all the resources are chosen for quality, naive 17 year olds use the material and absorb what quality scholarship is – just leaving them with the WWW, aggregated serial databases etc may not facilitate learning what high standards are.

    I described how the layout of material in the UWA library gave me a study ‘method’ when I had never learned one before – it also saved me a lot of time: what I needed was handily there on the shelf – you can spend a lot of time searching online, I spent all my time reading. You’re right not all subjects and not all students need big collections – but what happens to the exceptional student who would make use of a big, browseable library with all its serendiptous opportunities if they’re restricted to a few subscription databases.

    Also, you don’t buy online resources, because platforms change etc, you subscribe. If you have a cutback and have to cancel a few subscriptions you lose access, you have nothing, whereas if you had bought the books you still have them on the shelves, hopefully not out-of-date for awhile. There’s been quite a bit of worrying convergence in the online marketplace giving monopolies in some areas; also, you build your online collection carefully and then some vital publications are removed from a database you’ve subscribed to and are only available in another ( as happened not so long ago with Fairfax newspapers) – what do you do? dump one whole database for another?

    Maybe we should have a PBS for online databases. The federal government can be the sole subscriber for Australia, bargaining the price down with the suppliers, and then making them available to everyone – we could use our new smartcard ID numbers as usernames.

    Finally I’m still not convinced that 2nd year students can teach information literacy to 1st years – you need knowledge, standards, keeping up to date, allowing for different levels of skill, presentation skills ….

    That said, I thing the internet is the best thing since the invention of printing and opens up fabulous opportunities for people who can’t easily be on a campus. But still think a good uni will need a good library.

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