Response to the Grattan Institute report Graduate Winners – Assessing the public and private benefits of higher education

At the University of Newcastle, we are clear that broad access to a high quality university education is the key to a stronger Australian workforce, economy and society. In turn, these are all important contributors to establishing a stronger place for Australia in the world. As highlighted in the recent Australian Workforce and Productivity Agency report, ‘Future focus: Australia’s skills and workforce development needs‘, higher skilled jobs are expected to grow at 1.6 times the rate of low-skilled jobs and the strongest growth in employment to 2025 will be in professional occupations. An accessible university education is essential to ensure that Australia in the ‘Asia Century‘ becomes a beacon for innovation and competitiveness.

The proposals contained in Andrew Norton’s report, ‘Graduate Winners‘, published this week by the Grattan Institute, would jeopardise that future. The report presents, in measured language, a reductive future for higher education in Australia, where students are motivated only by their graduate earning potential and the state withdraws its funding from what is currently recognised as a world-class university system.

The report proposes to shift the entire benefits and the risks of undertaking a university degree on to each individual student. Implicit in its calculation of public versus private benefit is that all students undertake higher education at the start of their careers; that all students who study subjects that have historically produced high-earning graduates will also earn high salaries; and that all students have a tolerance for a significant lifetime debt. This model would present difficult choices for those with, for example, law degrees keen to explore alternative careers with their legal education but under pressure to earn quickly and substantially. This dynamic would also have major consequences for public organisations and small businesses seeking to employ affordable lawyers.

Of key concern is that the report largely dismisses the impact its reforms would have on mature-age students, indicating that any evidence of a consequence for such students is ‘contradictory‘. The English university sector has recently been subjected to a variation of the reforms suggested in the Norton report. There, the balance of the financial burden of study has been placed onto students following drastic reductions in government subsidies. It is of note in this context that the Universities and Colleges Admissions Service in the UK reported that applications from mature-age students have declined 15-20% under the new fees regime. The Norton model is more extreme than the new UK system, and this raises questions about the viability of such a model for developing a skilled, educated and innovative workforce in regions such as our own.

Around 60% of domestic undergraduate offers made by the University of Newcastle are to non-school leavers. This is important given that the Hunter has a lower proportion of the population with a bachelors or higher qualification when compared to the whole of Australia (21 per cent vs 30 per cent nationally). The median household income in the Hunter is also significantly lower than the national median income ($904 vs $1,245 per week). These data, and similar stories from many regions around Australia, suggest it may be wise to pause before applying a ‘one size fits all’ model that would likely deter precisely those applicants with the most to gain from access to an affordable university degree. Needless to say, such a narrowing of access would also limit the capacity of Australia to build a productive and competitive economy.

Norton’s analysis also largely ignores the various safeguards for protecting low SES students for which the English sector lobbied successfully during the development of the new fees system. These include the government’s Office for Fair Access, the increased salary threshold for fee repayments and the commitment to bursaries for students from the poorest households. Norton’s view seems to be that a national salary threshold of $49,000 before repayments begin is a sufficient safeguard. The 2005 Callender and Jackson study published in the Journal of Social Policy, however, identified poorer students in the UK as being more debt-averse than their wealthier peers. The ‘Graduate Winners‘ model assumes that every student will be willing to take on significantly greater debts than they now accumulate on the promise of higher earnings in future. National participation rates in higher education for low SES students increased by 24 per cent between 2007 and 2011, and for Indigenous Australians the increase was 26 per cent. It is not clear why shifting the long-term funding responsibilities for higher education from the state to the student will do anything but reverse this progress. As a University with the highest number of enabling programs in the country and with proportions of low SES and Indigenous undergraduates close to double the national average, we at Newcastle consider fair ‘fair access‘ measures to be non-negotiable in any discussion of fee deregulation.

Beyond the materiality of the proposed changes to higher education, the power of the symbolism in the reforms suggested in the Grattan report run counter to the principles on which Australia’s universities were founded. To charge students the full cost of a degree sends a clear signal that Australia’s universities are the natural homes for only those who can afford to study, and implies that knowledge is only ever traded rather than shared. It is time for a broader discussion based on the principles that a world-class university system and intergenerational mobility are both critical if we are to build our productivity and competitiveness on the world stage. A proper investment in the healthy future of a high-performing university system by the state and the individual recognises the transformative power of education for all.