Aussie universities hoover-up the great unwashed

By Leith van Onselen

Last year, The Australian revealed that drop-out rates for first year university students had hit an all-time high one-in-five, with the Grattan Institute’s higher education policy expert, Andrew ­Norton, claiming there was a correlation between drop-out rates and increasing enrolments, particularly among low-Australian Tertiary Admission Rank (ATAR) students.

Then in June, the Higher Education Standards Panel released a discussion paper, which found that 56% of students commencing bachelor degrees were admitted based on criteria other than their ATAR in 2015 – the highest proportion in a decade – and that average ATAR entrance scores have fallen considerably:

The report also found “that the likelihood of withdrawing from study is generally correlated with ATAR (see Figure 7)”:

Then in November, the Department of Education released a report assessing completion rates of university students commencing courses between 2005 and 2015, which showed an alarming fall in the number of students completing their degrees since the ‘demand-driven’ university system was implemented in 2012.

Today, The ABC reports that even fewer undergraduate students were admitted based on their ATAR in 2017 [my emphasis]:

The report found 131,555 people did not go through the typical ATAR application process, up 9.1 per cent since 2016. This includes high school graduates and mature-age students…

“Much of this change is consistent with policy goals to increase overall levels of tertiary education participation and attainment, and to facilitate access for students from non-traditional backgrounds”…

The report found the courses where the highest numbers of non-ATAR offers were made — seven out of every 10 — included health and teaching.

The report followed a shift to a demand-driven system for university places, which has, over time, eroded the use of ATARs.

Under the policy change, government funding follows students, meaning there are not caps on university places.

“There’s now not such a need to ration university places, so universities are looking at different ways they can select students,” Ms O’Connell said.

“They are really looking at supplementary and alternative measures to make sure they get the right students for the right courses.”

That right there is Australia’s university quantitative easing policy in action. This model has turned Australian universities into “degree factories” because it rewards universities for enrolling as many students as possible, since they get paid for each student enrolled, irrespective of whether the student is capable or completes the course, or can get a job in the field of study. The student then owes the government the amount of the loan, but they only have to repay it when their income reaches a certain threshold. And since many never reach that level of income, they never pay, so the taxpayer foots the bill instead.

This is why tertiary entrance scores have fallen to appallingly low levels, or have been junked altogether, as shown above.

It is why we have seen a rapid escalation of students undertaking bachelor degrees:

Despite poor job prospects:

A point that was also acknowledged in a recent Productivity Commission report:

For those who do complete their degrees, post graduation outcomes have been getting worse. Full-time employment rates for recent graduates have been declining, even as the Australian economy has continued to grow (figure 3.3). Many of those who do not work full-time are not in that position by choice, with the underemployment ratio among graduates at 20.5 per cent in 2016, compared with about 9 per cent in 2008. Graduate starting salaries have also been growing slower than wages across the broader economy (declining from nearly 90 per cent of average weekly earnings in 1989 to about 75 per cent in 2015)…

Further, over a quarter of recent graduates believed they were employed full-time in roles unrelated to their studies, to which their degree added no value. To the extent that someone without a costly university education could have undertaken these roles, this can then have cascading employment and income effects down the skills ladder.

Many employers are also not satisfied with the quality of recent graduates, with about one in six supervisors saying that they were unlikely to consider or would be indifferent to graduates from the same university…

University students are also not satisfied with the teaching in their courses…

And it is why we have seen total outstanding HELP debt escalate rapidly, placing increasing strain on the Budget since much of it won’t be repaid:

The problem is accentuated by the proliferation of international students, whereby degrees are sold to maximise profit at the expense of dumbed-down standards, with foreign students also enticed with the prospect of gaining permanent residency once they finish their courses, thus maintaining the population ponzi.

The more people that have a degree, the more this becomes a basic expectation for employers, leaving those without one further behind. Meanwhile, those that do obtain a degree are experiencing a gradual diminution in their pay.

In a similar vein, employers in Australia no longer bother recruiting school leavers and training them up. Instead, they tend to recruit university graduates and then complain when they don’t have the requisite skills. In the meantime, students are forgoing earnings while they study, while sinking tens-of-thousands of dollars of sunk costs into gaining their increasingly worthless degree.

What is tertiary education actually for and who does it benefit? Is it a public good used to boost the nation’s productivity and prosperity, or is it merely another commodity to be sold for short-term profit to line the education sector’s pockets?

[email protected]