‘Fairness,
Fees and Equity in Higher Education’
AFR Higher Education Summit
3 April 2007
Professor Glyn Davis
Vice-Chancellor
University of Melbourne
‘Will I get into university, and can I afford it?’
This simple inquiry, raised every year in families across Australia, has no straightforward answer. It is a question about the most obvious aspects of higher education
equity and access policy – numbers of places, tuition subsidies, price control, student
income support and selection mechanisms. Yet it is also a question about the quality
of schooling and more broadly the impact of socio-economic circumstances.
Prospective students and their families are unlikely to venture far into this policy
complexity; they can only hope that, somewhere amid the detail, fairness resides.
In this speech I hope to unpack some dimensions of access and equity in public
universities. My focus is not on what individual universities do to promote fairness of
entry and opportunity, but the broader context – how does the Australian higher
education system engage with the challenge of fairness?
The Big Picture: who pays?
Recently the National Union of Students issued its manifesto for the federal election.
NUS repeated often-cited figures on declining public funding and rising student
charges, and called for fully-funded and free tertiary education. The logic suggests
that without free education, personal and family income and wealth will determine
who does and who does not attend university.
This is a call for a return to a brief interlude in Australian higher education policy.
Universities have taught in Australia since 1852. For only one brief shining moment,
from 1974 to 1988, was university education free. Otherwise access has always been
governed by fees, tempered until 1974 by Commonwealth and state scholarships, and
since 1989 by an income-contingent loan scheme.
So Australian students and their families have usually paid for university education.
Since the introduction of HECS under Minister John Dawkins, the cost of attending a
public university in Australia has increased sharply. OECD comparisons place
Australia among the most expensive nations in which to attend university.1
OECD coverage is heavily weighted toward Europe, where free higher education, or
access with only modest contributions, remains common. With the exception of
Ireland, the English-speaking world tends to higher fees for a university education.
Consider average tuition fees in Australia, Canada, England, New Zealand and the
United States. What students actually pay can vary between courses and institutions,
but across the English-speaking world, Australia imposes mid-range fees, with our
average just slightly above the average of these five countries.
1
OECD, Education at a Glance2006 (Paris: OECD, 2006), Table B5.1.
1
Table 1: Average annual university tuition fees 2006
$A
Australia
6030
Canada
5245
NZ
4112
US
6988
England
7371
Average
5949
Sources: Australia: DEST student contribution amount tables, weighted average.
Canada: Alex Usher, Beyond the Sticker Price: A Closer Look at Canadian Tuition Fees (Educational Policy Institute)
United States: College Board, Trends in College Pricing 2005
England: Universities and Colleges Admissions Service website
New Zealand: New Zealand Vice-Chancellors' Committee website, unweighted
It is no coincidence a similar pattern emerges across most English-speaking countries.
Compared to continental Europe, these countries show a greater reluctance to accept
high taxation, with a preference for private rather than government financing and
delivery of services.
As a consequence, the tax rates in most English-speaking countries are lower than in
Europe, but citizens must pay, at least in part, for services provided free for those
living in Europe.
This pattern extends far beyond education. OECD statistics on share of GDP show
the aggregate effects of these policy choices. With Ireland as an exception,
government is large in countries without university tuition fees, and relatively small in
countries that do charge tuition fees. In this sense, higher education is not being
singled out: in Australia it is part of a broader policy package that includes meanstested welfare, private retirement savings, high private school enrolment, and a large
private health sector.
2
Table 2: the relationship between government share of GDP and tuition
charges – government receipts as a percentage of GDP
Countries with free tuition
Denmark
Finland
Iceland
Ireland
Norway
55
52.7
45.8
34.5
60.3
Countries with high tuition charges
Australia
Canada
New Zealand
United Kingdom
United States
35.7
41.2
46.6
42.2
32.9
Source: OECD Economic Outlook
This policy pattern is well established, and has survived several changes of
government since the 1970s. It would be a mistake, therefore, to assume that current
university fees are just an unwelcome phase in the political cycle that will pass.
In Australia, the major parties may disagree over how much should be charged, but
free university education is not on the policy agenda. The Whitlam era remains the
brief exception to a long tradition of requiring students and their families to fund a
significant portion of the cost of tertiary education, with the balance made up from
Commonwealth outlays and entrepreneurial activity by universities.
How is equity and access affected?
The ‘low tax, more private cost of provision’ approach remains contentious but
reasonably pervasive in Australian social policy. It is both attacked and defended for
real or presumed effects. Thus the National Union of Students links tuition fees to
concerns about access and equity. Yet tuition charges were re-introduced in 1989 in
the name of equity – that as higher education disproportionately went to the alreadyaffluent, and even more disproportionately led to affluence among graduates, it was
only fair that students made a contribution. Curiously, the new policy hedged its bets
– despite rhetoric about a private contribution being more equitable, price caps were
maintained.
The 1989 policy settlement in higher education, which remains with us still, allowed
policymakers to solve simultaneously the three related problems of funding system
expansion, ensuring affordability, and imposing some private contribution to reflect
the private benefits of higher education. In introducing lending to higher education
finance, Australia became the first country to adopt income-contingent loans. HECS,
the Higher Education Contribution Scheme, was the result. Since 2005, the loans
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system for Commonwealth-supported students has been called HECS-HELP, with a
similar program, FEE-HELP, for full-fee students.
From an access perspective, income-contingent loans have two major advantages over
conventional loans. First, government takes the risk that a higher education
investment will not pay off for the student. People with HELP debts who earn less
than $38,000 in 2006-07 pay nothing. The second advantage is that re-payments vary
according to income, instead of fixed repayments under a loan. This helps avoid
crippling re-payment requirements. These provisions are particularly valuable to lowincome students and to women, who earn incomes on average lower than men, and for
whom workforce participation is more variable.
Though debates about Australia’s combination of tuition charges and incomecontingent loans continue, they can now be informed by a considerable body of
evidence. This points to two conclusions. The first confirms that people from low
socio-economic backgrounds, relative to their population share, remain substantially
under-represented in higher education. Curiously, the second conclusion is that fees
with loan schemes do not discriminate against the poor. Rather, the explanations for
participation differences are found outside the higher education system.
To explore why socio-economic disadvantage persists in higher education, consider
census data which tracks 18 and 19 year olds living at home and attending university
by parental occupation, usually of their father. As can be seen for both 1991 and
2001, the children of managers and professionals are much more likely than the
children of people in other occupations to attend university. The figure also shows
that all groups increased their attendance rates over the decade, despite the
introduction of differential HECS in 1997 which substantially increased the cost of
most courses.
Figure 1: 18 & 19 year olds living at home, by university attendance rate
and parental occupation
40
35
30
25
1991
% 20
2001
15
10
5
0
Managers
Professionals
Clerks
Tradespersons
Labourers
Total
Source: Australian Bureau of Statistics, Census data.
Two things proved more important than cost. One was an expanded proportion of
young people reaching the threshold requirement for attending university, completing
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Year 12. The other was that universities accepted more students, the result of
additional places in part funded by HECS revenues. The benefits of system expansion
were spread across the socio-economic spectrum.
What did not change between 1991 and 2001, however, was the proportionally low
number of students drawn from families supported by clerks, tradespersons and
labourers. Attendance rates vary markedly between socio-economic groups, and this
persists even as absolute participation rises. To explain this pattern, we should look
to research published last year in a paper by Buly Cardak of La Trobe University and
Chris Ryan of the ANU.2
Cardak and Ryan used a longitudinal study to track young Australians through their
later school years and on to post-school choices. They had access to crucial data
missing from many previous studies of university access - school performance – along
with detailed information about socio-economic background.
The Cardak and Ryan study was divided into three groups. In the figure, the ‘nonconstrained’ group were those thought least likely to face financial constraints. Such
young people were drawn from the top socio-economic quartile, based on their
parents’ occupation and the occupation of the parents of other children at their school.
All attended a non-government school, with families already paying for education.
The ‘likely constrained’ group was in the bottom SES quartiles, and the ‘potentially
constrained’ was the middle 50 percent.
The figure shows the university attendance rates in 2002 of young people who
undertook Year 9 in 1998. The study found hardly any difference between the
groups. What matters is not a student’s socio-economic status, but school
performance compared to her or his contemporaries, as expressed in the ENTER
score. The higher the ENTER score, the more likely she or he would attend
university, regardless of social background. The slight tailing off for the low SES
group at high ENTER levels is based on a small number of people and, according to
Cardak and Ryan, not statistically significant.
In short, high-performing students in each cohort go to university, regardless of
financial constraint. The currency of university admissions is school results, not
money. Instead, socio-economic status has its biggest impact before the transition
between school and university. Though differences go back to early childhood,
Cardak and Ryan find that students from low SES families do not convert the
academic potential evident in Year 9 to Year 12 results as effectively as students from
high SES groups. They are lost to higher education during the final years of school.
Buly Cardak and Chris Ryan, ‘Why are high ability individuals from poor backgrounds underrepresented at university?’ Discussion paper A06.04, La Trobe University School of Business.
2
5
Figure 2: University enrolment by ENTER and SES background
Source: Buly Cardak and Chris Ryan, ‘Why are high ability students under-represented at university?’,
La Trobe University School of Business Discussion Paper A06.04, 2006
The situation is more serious for young Indigenous students. As school literacy and
numeracy results released last week confirm, as early as Year 3 Indigenous students
perform on average well below the national average. This translates into a Year 12
completion rate that, though improving somewhat over recent years, is still only just
over half the national average. Indigenous students represent the most extreme
example of social background creating obstacles to higher education.
The risk to equity: student support
The tone of this presentation has been to suggest some scepticism about links often
drawn between fees, access and equity. Thanks to the policy innovation of HECS,
cost is not a major constraint on participation at an Australian university.
Yet there is an important caveat to this argument. While HECS makes tuition costs
affordable students need financial support through their years of study. For most
undergraduates, families will be an important part of this picture. For some, however,
welfare support is essential. If the social security system does not provide a genuine
‘safety net’, then universities will indeed only be accessible to those from wealthy
backgrounds.
The recent survey of student finances commissioned by the Australian ViceChancellors’ Committee indicates that a significant minority of students feel they
must skip classes and study to engage in paid employment. Smaller but still
significant minorities report that they go without food or other necessities because of
financial hardship.
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Table 3: Percentage of students regularly missing classes or other study
commitments to attend paid employment
Undergraduates
Coursework postgraduates
Full-time
part-time
23
25
37
28
Source: AVCC, Australian Universities Student Finances, 2006
Such privations must, in hard-to-quantify ways, detract from the quality and benefit of
higher education. Poverty is a more direct threat to equality of opportunity than
tuition fees because it is immediate.
There are government programs designed to address student support, though no policy
measure matches the universal application of HECS. Putting a total figure on social
security support available for students is difficult, given some payments are contained
within broader family allowance and other schemes. Spending that can be identified
or estimated totals suggests that between $900 million and $1 billion is spent each
year on student support, or what we might consider broadly as equity measures. This
is less than one-third the amount invested in teaching programs, as illustrated in Table
4.
Table 4: 2005 Higher Education Spending
Equity spending
$ millions
Austudy uni income support
YA uni income support
Abstudy income support
Equity support programme
Indigenous support programme
Disability support programme
Commonwealth Learning Scholarships
Doubtful HELP debt
Total
78
526
17
11
27
7
42
236
944
Teaching-related spending
Commonwealth Grant Scheme
Learning and Teaching Performance Fund
Total
3,137
54
3,191
The AVCC survey of student finances suggests current support programs are not
always well0targeted or fair. Eligibility criteria remain controversial and, some argue,
open to manipulation. Rules for programs such as Austudy and Youth Allowance
reflect policy design under a previous era, when professional qualifications typically
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were attained through undergraduate study. A comprehensive review of student
support programs is overdue – and crucial – if equity and access are to be realised.
Conclusion – ‘Can I afford to go to university, and will I get a place?’
By most available measures, the Australian higher education system has a good story
to tell on access and equity. Overall higher education attainment rates are competitive
by international standards — 6th highest in the OECD.3 Studies show that strongly
performing students from every socio-economic category get to university, and in
about the same proportion. Many under-represented groups have significantly
improved their numbers at university. Women now participate in numbers beyond
their percentage of the population. The proportion of students with disabilities has
doubled since first calculated in 1996 (though some of this is better reporting).
Indigenous students did show some sign of improved representation, only to see
numbers decline again in recent years.
The overall success of equity and access goals for Australian higher education
reflects, above all, the role of HECS. Though the reforms of John Dawkins are often
criticised, on this he deserves praise. Given a return to free tertiary education is most
unlikely, it will be important for universities to defend the HECS system, and seek its
extension. It remains anomalous, for example, that vocational education students are
expected to pay fees up-front while higher education students can defer payment.
This deters study at vocational institutions, and so denies some Australians a pathway
through to university.
The second ingredient for successful access to university is the massive expansion of
places since 1989, financed in part by HECS revenues. Dawkins achieved his
laudable goal of making university education available across the nation. Indeed in
2006 and again this year some institutions appeared unable to fill their student quotas.
Thus our typical student, worried about affordability and access, can be reasonably
optimistic. For students with ENTERs of 70 or above only a handful did not receive
an offer in 2006, and there were still opportunities for students with lower marks.
And while the student support system is in urgent need of review and expansion, more
than 140,000 students accessed social security benefits designed to help them through
the years of study.
But in a community that no longer likes to talk about social class, the uncomfortable
fact remains that the least likely to study at university are the poor and disadvantaged.
Poor school results and the high attrition rates that follow block the path to university.
In a vicious cycle, poverty is inherited, with successive generations of young
Australians missing out on opportunities for study. This problem has not been solved
by general prosperity – indeed overall school retention rates have fallen slightly the
last two years, and remain distressingly low for Indigenous communities.
From this brief survey of equity and access policy, I draw two conclusions.
3
OECD, Education at a Glance2006 (Paris: OECD, 2006), Table A1.3.
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First, and most importantly, the work of addressing socio-economic disadvantage is
paramount if universities are to reflect the full range of Australian society. For a
significant number of citizens, Year 12 is an unlikely prospect and university
entrance, an impossibility. This pattern is found in many Indigenous communities,
but the same dynamic of disadvantage, early school-leaving, and then life-long
struggle to find meaningful employment is all too common. Such deficiencies can
only be addressed through serious investment in pre-school and beyond, allied to
improved support services and benefits for those struggling to study. The university
sector has an important role in providing research, expert advice and a sympathetic
destination for students who make it through. But the single biggest cause of
inequality happens years before tertiary study, and can be ameliorated but not solved
by equity programs in universities.
The good news is this problem can be addressed. The determined push by states and
territories to improve school retention rates in the 1980s and early 1990s saw an
improved flow of students from poorer circumstances to university. With a sustained
national effort, we can alleviate systematic educational disadvantage.
Figure 2: School retention to Year 12 from Year 7/8
Year 12 retention
100
%
80
60
Year 12 retention
40
20
20
05
20
02
19
99
19
96
19
93
19
90
19
87
19
84
19
81
19
78
19
75
0
Source: ABS, Schools, Cat 4221.0
The second conclusion is more contentious. The available data make clear that tuition
price has been no impediment to participation. The price caps that have kept costs
down to all students cannot be easily defended on equity grounds. For many students,
it is likely that these controls inflict costs of a non-financial kind—all the problems of
over-crowded classes and run-down facilities that have been the subject of many a
complaint over the years. The price caps restrict student choices, leaving little
difference between the 37 public universities all offering variations on a standard
university service.
We have reached the point where, as in the schools system, it is inevitable that
attention will turn to excellence and diversity, and with it greater scrutiny of the
policy impediments to these goals. We must always be alert to the equity
implications of such challenges, so that special assistance is available to those
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students whose choices may be adversely affected by higher costs. But nearly 20
years of experience with income-contingent loans shows that willingness to pay
depends on the perceived value of the course, and not on socio-economic background.
In deciding whether to go to university, prospective students look to what the future
holds for them, and not their past. It is possible to encourage a higher education
system in Australia made more diverse without sacrificing fairness.
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