But I should caveat that, because not all Commonwealth supported students are entitled to a HELP loan. HELP is a rare social support scheme that is linked to citizenship; it could be the only one (happy to hear of others, if anyone knows of them). The only general exception is permanent humanitarian visa holders.
On Twitter the new funding rates in the Tehan higher education reform package are being criticised for not covering costs in most fields. That’s a completely understandable concern, given that the government’s own discussion paper suggests that this will the case, by publishing the chart below.
Fortunately for universities, if this package makes it through the Senate, I think there is a mistake in the chart’s figures. I noticed this because I initially made the same mistake myself when analysing the underlying cost figures for this blog post last month. (Update 24/6: The latest version of the discussion paper has a lower overall average cost than the chart above.)
What I think are transposed numbers on the public-private division of Commonwealth-supported student funding are entering mainstream media.
Unless the enrolment outcome is very different from what the government and its critics both expect, and there is a boom in humanities, business and law enrolments, then we will not cross over into a majority student funded system of Commonwealth supported places.
If enrolments had the same distribution between disciplines as in 2018, then the system would move from 42 per cent student funded to 48 per cent, as seen in the chart below.
The Tehan higher education reforms aim for ‘job ready graduates’. In that, the government’s goals align with those of most students. In recent ABS surveys asking students about their main reason for study, more than 80 per cent of bachelor-degree respondents gave a job-related reason. About 10 per cent gave interest or enjoyment as their main reason (chart below).
However, interest and work reasons are not mutually exclusive. When multiple reasons can be given interest in the field of study is the most popular answer, with over 90 per cent of respondents saying it is important (chart below). Training for a specific job is nominated by about three-quarters of respondents, with another ten per cent hoping to improve their job prospects without having a precise occupation in mind.
Suppose annual Commonwealth research spending was 50 per higher across the last few decades, all of it paid through block grants rather than generating additional costs via competitive grants. Up until the year 2000, as the chart below shows, a 50 per cent increase in public funding would have covered all research spending. But in 2018 Commonwealth funding 50 per cent higher than it was would still have left over 40 per cent of research spending unfunded (although there is about $1.9 billion in non-Commonwealth research income).
Profits on international students have been used to help finance a massive increase in university research expenditure this century.* Growth on this scale was something universities chose to do, not a change forced on them by government policy.
Last weekend I posted some concerns about whether ABS research expenditure figures were over-estimates. They may attribute a higher proportion of academic working hours to research than a proper time-use study would show, and therefore put a too-high share of academic salaries into the ‘research expenditure’ column.
On the other hand, research output evidence is consistent with the 21st century research boom suggested by the ABS figures. The number of academic journal articles with at least one Australian author increased dramatically, as seen in the chart below.
Friday’s post and the comments made on them also link back to other recent posts that try to understand how universities finance themselves. The posts have consistently acknowledged data issues, and that precise dollar figures cannot be attached to most of the conclusions. At best, we can get to a credible range.
According to the ABS, which uses international definitions, research is ‘creative and systematic work undertaken in order to increase the stock of knowledge – including knowledge of humankind, culture and society – and to devise new applications of available knowledge’. Scholarship, by contrast, I take as activity leading to or maintaining in-depth understanding of existing knowledge.
It is hard to have research without scholarship. How can academics claim to have increased knowledge if they are unaware of the current state of their topic or field? The literature reviews that appear in many ‘research’ articles in academic journals are scholarship.
In my previous post in this series, I argued that international student fees help pay for under-funded government-sponsored research grants. But these research projects are not the only partially-funded research universities are trying to finance. They also have many teaching staff on contracts that include research time, but who do not attract equivalent research income.
For academics, the expected and preferred academic career is generally to have a teaching and research or research only role. For most academics, however, teaching is not their top priority. A survey about a decade ago found that, among teaching-research academics, nearly two-thirds leaned towards or were primarily interested in research.
Not surprisingly, most people who do PhDs are interested in research. In a 2010 survey, only six per cent of research students planning an academic career nominated a ‘mainly teaching’ role as their ideal job.
In a previous post, I doubted that inadequate public funding for Commonwealth supported students could, with a few exceptions, explain why universities have enrolled so many fee-paying international students. For publicly-funded research, however, structural changes in how funding is delivered have changed its economics.
In the 1990s, as the chart below shows, competitive grants made up less than a quarter of Commonwealth research spending on universities (counting Department of Education plus NHMRC). By the middle of the 2010s nearly half of Commonwealth funding was delivered through competitive grants, though with an easing off recently as ARC funding was cut.
In a previous blog post, I argued that stagnating or declining government revenues encourage universities to seek additional international student fee income. By 2018, international student fees provided 26 per cent of all university revenue, up from 10 per cent in 2000.
However, I doubted that aggregate public funding levels fully explained university dependence on international students, whose numbers grow when public spending is increasing as well as decreasing.
But in thinking about how government policy affects university decision making it is not just revenue that matters. The cost of the services universities deliver for their public money is also crucial to understanding university behaviour.
A recent article in The Conversation suggested that government student-linked revenue did not cover the full cost of growth in student numbers. Another Conversation piece this morning also suggested that universities have become reliant on international student fee revenue to cover the cost of teaching, as well as research and other activities.
However, a chart in my first post shows that since the mid-2000s average per student funding for Commonwealth supported students grew by more than inflation and then stabilised in real terms, although with a small recent decline.
But one point made in response to my original post was that wages usually grow by more than general inflation. This means that my CPI indexation of revenue does not fully adjust for the changing purchasing capacity of grants, given the bundle of goods and services universities actually buy. In 2018, 56 per cent of university expenditure was on wages.