Here is the latest foray from the academic establishment in Australia into university fees:
The vice-chancellor of the University of Melbourne, Duncan Maskell, has joined the Greens and student unions in calling for tertiary education to be free. (The Guardian, 21 June 2023)
Professor Duncan Maskell tries to make the case that a free university access system for undergraduates, will help redress social inequities, and more importantly, that increasing numbers of graduates will deliver a greater benefit to society (presumably economic growth and prosperity).
Maskell argues: “What we have done by normalising the business of the students paying their university fees, is to entrench in our culture the idea that university education is only of private benefit to individuals – not public benefit to societies. This is a gravely mistaken emphasis.”
The first argument to redress social inequities may be laudable, but in the wider context of quality of life for individuals and the delivery of enhanced productivity and prosperity for the wider Australian community, is sadly misguided, and fails to grasp the enormity of the structural problems within university education.
Some facts from the UK may be useful. At least 20% of UK universities are running at a deficit. U. K. universities (like many Australian universities) are highly dependent on foreign students, who pay up to £38,000 per year on fees. And to quote Simon Jenkin from the Guardian: These exorbitant student fees “are in effect super-taxing their own, often poor, countries to cross-subsidise UK students.”
We see the same in Australia, where bachelor’s degrees for international students can cost between £100,000 and $180,000 at the University of Melbourne (source the Guardian’s Caitlin Cassidy, June 21, 2023).
Given the debacle in course delivery during Covid, most U.K. universities are cautious in asking for increased funding, but the current wave of industrial unrest in U.K. universities, with academics refusing to mark year end papers and exams, serves to underscore a myopic culture within academia.
There is no doubting the potential of universities to contribute significantly to the prosperity, cultural richness, and overall well-being of society, through R&D and the dissemination of new ideas and critical thinking. However, the value of the universities’ overall contribution to our nations’ economic and social well-being is undermined, by learning and qualification models which are increasingly unfit for purpose.
The Fallacy of a 4 Year degree
Under Professor Maskell’s scenario, the state would be paying for students to enjoy their four years, of what some may say are a ‘prolonged adolescence’, unencumbered by any future debt repayments.
And here we may find the crux of the problem; the four-year degree structure is fundamentally flawed, with 24 to 30 weeks of (often mediocre) teaching, at a cost of approximately £27,000 in England and up to $55,000 for a bachelor’s degree in Australia. Students are then left free to work in cafes, or as labourers during the remaining 22 to 28 weeks of the year, while academics get on with their research, and other noble activities.
And during this four-year adventure, students, as we know, accumulate significant personal debt. Student debt is becoming a major societal concern: high levels of debt can have long-term financial implications for graduates, affecting their ability to save, invest, or pursue other life goals. Moreover, in the U.K., it is estimated that 81% of students will not pay off their debts in full, and that only 38% of all student debt and interest will actually be paid (the UK Government’s own figures).
So, is the answer to this and to the question of redressing social inequity in access to higher education to make access to higher education fee free, as Professor Maskell would like? Hardly, while the wage premium from a degree may benefit graduates from lower social-economic backgrounds, the proliferation of individuals with degrees drives down the average real wage, as the supply of graduates rises relative to demand. This in turn leads to low growth in graduate salaries and accompanying underemployment of many graduates.
The ROI of a three or four-year investment in a university degree for the individual is diminishing every year, and the value of the investment for the wider society is also in question.
Are bachelor’s degrees delivering value?
Let us look at some findings about the value of a university degree programs to the society at large:
Skill mismatch:
A study conducted by the Confederation of British Industry (CBI) in the UK found that 39% of employers were concerned about the lack of employability skills among graduates, indicating a skill gap between graduates’ qualifications and employers’ needs. (Source: CBI, “Building for Growth: Business Priorities for Education and Skills,” 2017)
Oversupply in certain fields:
Research from the Australian Department of Education, Skills, and Employment found that fields such as creative arts, humanities, and social sciences had lower full-time employment rates compared to fields like health and engineering. (Source: Australian Government, “Graduate Outcomes Survey,” 2020)
Quality of education:
The UK National Student Survey (NSS) showed wide variations in student satisfaction across universities, indicating differences in the quality of education. In 2020, the overall satisfaction rate ranged from 66% to 91% among different institutions. (Source: Office for Students, “National Student Survey 2020”)
Absorptive capacity of the labor market:
Research conducted by the Organisation for Economic Co-operation and Development (OECD) found that some countries experienced high levels of graduate unemployment, despite increasing tertiary education rates. For instance, Spain had a graduate unemployment rate of 14.1% in 2020. (Source: OECD, “Education at a Glance 2021: OECD Indicators”)
Entrepreneurship and innovation:
The Global Entrepreneurship Monitor (GEM) provides data on entrepreneurial activity across countries. According to GEM’s 2020/2021 report, countries with higher rates of entrepreneurship often had more favorable economic conditions, such as supportive regulations and access to funding, beyond the number of university graduates alone.
Conclusion
These examples demonstrate the inherent risks in asserting that increased investment in undergraduate education will lead to high productivity and economic growth. Universities are vital hubs of cultural, scientific and technological value creation for our nations, but in the current modes of operation, they are at risk of obsolescence and decline.
The notion that expanding the output of undergraduates from universities, with no clear vision as to the capacity of the economy to provide them with productive and rewarding employment, is naïve at best. The notion that making higher education free of fees for all will create a more equitable society, while a large percentage of the graduates will be under-employed, or worse still unemployed as in Spain, is also fallacious.
Finally, the notion that taxpayers will be happy to fully fund the proposed fee free growth in higher graduation, estimated at around $69bn over 10 years), is verging on the delusional. The argument made that “the future positives of driving up university admissions would outweigh the economic burden” is also wishful thinking.
Radical reforms (such as more degree apprenticeships, shortening of degree programs, increased vocational education-university pathways, new hybrid learning pedagogies, and more individualised and career focused learning) are required in undergraduate education, and this will inevitably require courageous decision making by academic leaders, governments, and industry leaders alike.
