Tertiary education reviewed again

OPINION: The Productivity Commission had released its latest report which is (yet another) review of the Tertiary Education sector.  Not surprisingly the Commission takes a very free market view of the problems – because that is its general attitude to most things.  Nevertheless, much of the report is very sensible in that that wants to open the system up, reduce regulation and improve flexibility and choice, as recommended by many other reports in the past.  But two of the “sticking points” in all of this are student loans and the connection of career development to higher education.

In both these areas, we need better solutions.

The Student Loan scheme was a disaster from the start but the sort of disaster it is hard to stop and reverse.  The Commission has recommended reintroducing interests payments and although the theory behind this is sound I think the Government is right in rejecting this out of hand.  It is having enough trouble getting repayment of principal.  The fundamental mistake, of course, was that of giving young people with limited judgment and experience almost unlimited access to free funds.

In the long term the only solution I can see is to close the loan scheme but do it in conjunction with new policies that provide a transition.  Otherwise, the problem will just get progressively worse.  The transition particularly needs to deal with students who a truly gifted but through family or other circumstances can’t afford tertiary education.  In cases like that some sort of special grant to essentially provide free education seems to be the best answer.  Students who are already in the system i.e. are going to university etc. and getting loan payments probably have to be “grandparented” through but I would serious think about introducing interest in these cases to discourage excessive take-up of the scheme.  As for those who are now out of the education system and theoretically paying the money back – no change!  We want the money repaid thanks.

So that leaves the bulk of students yet to enter the system.  The solution that appeals to me is one with two facets:

• For students who “qualify” the replacement of the loan scheme with straight-out grants which are enough to cover study costs and basic living expenses but nothing more.  There could be a case for hardship grants where this is not enough and it is impossible to fill the gap by other means such as holiday work, but I would make the tests pretty stiff
• For other students, the payment of full costs, which is not as bad as it sounds when you consider the range of tertiary education options now available, some of which are relatively low cost.

The key issue is that of qualification and that is where funding ties to the idea of career development.  Like many people, I am astounded that the level of careers advice given at school is still at a very basic level and given by the schools themselves.  I think the following things need to happen:

• Careers advice needs to be taken seriously and that means more resources and the direct involvement of employers.  The hardest part may be the latter given that small firms are already probably overloaded.  Many employers are already involved and there are some good schemes in place, but it needs to be near universal.
• Every school leaver who wants a grant for tertiary education has to have at least a rudimentary plan for progressing through education or training to employment. I say rudimentary because the aim is to get as many young people into the system as possible.  There would be flexibility to change direction – which is very common – but at last some sort of starting point.
• I would put more emphasis on this plan that on documents like University Entrance (UE). UE may still be appropriate in some cases but in a much more restricted way.
• The plan has to be accepted as sensible by the Tertiary Education provider

This will still leave a lot of young people, may be the majority, outside the system.  For many of them Tertiary Education as we currently know it may not be the answer anyway.  We may be talking apprenticeships and other sorts of training schemes.  The important thing will be to have somewhere for all young people to go when they leave school.

All of this would be very difficult and ambitious but unless we do something dramatic we will never break the patterns of the past.

By Bas Walker

This is another of Bas Walker’s posts on GrownUps.  Please look out for his articles, containing his Beachside Ponderings.