ESSA

ESSA

Should you be studying?


Alice He

By

February 17th, 2013


With everyone clamouring for further education for their own benefit, we may collectively stand to lose out. The negative impacts of rising education expectations and standards are examined in greater depth.


From discussing the possibilities of making tertiary education more accessible, I now segue to the other side of the debate: Are there too many people getting university degrees, and are they worth it?

The issue is exacerbated in the US, where the stakes are so much higher. A college education not only incorporates all the learning during the years of your degree, but is also the quintessential cultural experience of every middle-class youth: from madly rushing fraternities, to playing beer pong at the pre-football match tailgate party, to sharing the best places on campus for an all-nighter before finals – there comes a time in every man’s life, and college is not that time. But behind all the fun are the hours spent working and the years of family planning to accumulate the college fund necessary to pay for the degree.

Peter Theil, American entrepreneur, venture capitalist, hedge fund manager, first outside investor in Facebook and all-round success-story offers his two cents:

“Education is a bubble in a classic sense…It’s basically extremely overpriced. People are not getting their money’s worth…And at the same time it is something that is incredibly intensely believed; there’s this sort of psycho-social component to people taking on these enormous debts when they go to college simply because that’s what everybody’s doing.”1

The proportion of society’s resources going towards funding higher education has tripled over the past half-century and tuition costs are rising at a rate faster than inflation. Meanwhile, the market is being flooded with college graduates, leaving some of them to take jobs that require minimal qualifications, such as waitressing and bartending, in turn eliminating people without college degrees from taking these jobs. Richard Vedder from the Center for College Affordability and Productivity, claims that the US has “engaged in massive and costly credential inflation to certify competency for jobs.”2

For those who drop-out of college, the outcomes are bleaker. They face lower job prospects than their college-completing counterparts and still have large amounts of student debt to shoulder. Such high stakes prompt valiant efforts to put a value on college, with one finding declaring that 45% of students didn’t demonstrate any significant improvement in learning during their first two years of college, and that students gain more by studying alone rather than in groups.3 If so, may the frivolous expense of college be speedily replaced by no-frills MOOCs.

Yet despite all the debate, consensus is that college degrees are worth it. Over their lifetime, college graduates make vastly more than their degree-less peers and the lack of jobs for graduates may not reflect a surplus of bachelor degrees, but rather a society that is up-skilling. Put simply by Norton Grubb, professor of higher education at the University of California, Berkeley:

“Education has not stopped delivering its expected returns, not in terms of income or (un)employment. It has stopped delivering on the promise of a middle-class job = professions and managerial occupations, for which a BA was sufficient in the 60s, and for which an MA is now necessary.  So this leads to education inflation = middle-class kids seeking MA degrees and professional degrees, where a BA might have sufficed a generation ago.”4

In Australia the situation is a lot milder. Twenty-nine per cent of 25-34 year olds have degree level qualifications, with the Bradley review of higher education concerned that we are now ranked 9th among OECD countries, dropping from 7th a decade ago. To answer targets of up to 50% in other countries, the review has proposed a 40% target for Australia. It claims that with globalisation and growth of the information sector, Australia will need more graduates in order to meet the demands of the future economy and remain competitive. Furthermore, to increase our numbers, the review claims we must look to demographics where degree attainment has traditionally been low, for example, students of low SES backgrounds or those who reside in rural areas.

But does this mean that universities should open their doors to as many students as they can?

Primary and secondary education deliver the highest positive externalities, but as people progress (especially towards tertiary studies), the benefits of education are internalised and the externalities diminish. Thus, is there some optimal level of education for most (or all) people to attain? Given current legislation, society seems to place this level at about year 10. If the majority were to progress onto university, or if people who traditionally should not go to university ultimately do, then there are costs of:

  • foregone wages
  • labour skills shortages in the areas these students would’ve traditionally entered upon completing high school
  • time and effort of students and teachers, especially if the degree is not finished
  • teachers spending more time on less able students at the expense of the better students

There are also matters of efficiency – without considering the internalised benefit that university may develop a well-rounded character – do certain occupations need a university qualification? And if not, is it efficient to spend the time and money attaining a credential that isn’t relevant or required?

Then there are also dangers when universities start lowering ATAR prerequisites for courses in order to enrol more students. Earlier this year The Age reported dismal figures for entry rankings to study teaching in Victorian universities. Among them is the mere 43.35 required by Ballarat University’s Melbourne campus. Should these people be teachers and should they be going to university at all?

The more people going to university, the more bachelor degrees are devalued, and the more necessary postgraduate coursework becomes. Perhaps this is fitting since some Australian universities are trying to introduce a liberal arts system, yet there is concern that we run the risk of producing a generation of adults overqualified and too intelligent for manual labour. On the other hand, with the manufacturing sector playing a smaller role in tomorrow’s economy, is this such a pressing issue?

As Steve Hind, former director of debates of the University of Sydney Union most elegantly puts it, “…at the end of the day, as much as we need people to sit atop the dreaming spires, we still need someone to wire them and to make their toilets flush.” 5

 

  1. http://www.economist.com/blogs/lexington/2011/04/higher_education
  2. http://online.wsj.com/article/SB10001424052970203960804577239253121093694.html
  3. http://www.economist.com/blogs/freeexchange/2011/01/education_0
  4. http://online.wsj.com/article/SB10001424052970203960804577239253121093694.html
  5. http://www.abc.net.au/am/content/2009/s2739189.htm

The views expressed within this article are those of the author and do not represent the views of the ESSA Committee or the Society's sponsors. Use of any content from this article should clearly attribute the work to the author and not to ESSA or its sponsors.

  • Oliver Jiang

    Interesting article. However, I couldn’t work out if you were advocating for fewer people to attend university, or more. You put a lot of information in about how tertiary education seems to be negative, how it costs so much and leads to credential creep, a positive reinforcement loop where more people studying tertiary degrees means needing to study more tertiary degrees. Normally I’d invoke Betteridge’s law, but you did claw back into the fencesitting position with “Yet despite all the debate, consensus is that college degrees are worth it”.

    As inefficient as the system is, tertiary education still manages to push that rare breed of individual to the forefront of his field, the Nobel Prize winners, the Time Magazine People of the Century. That, in and of itself, is a worthy achievement. But tertiary education also serves as a factor that creates further tiers in society. A society that isn’t thoroughly stratified is a Communist society, and economics doesn’t exist in a classless, moneyless utopia. Remember that before you start telling people to quit university.

    • http://www.linkedin.com/pub/dean-pagonis/1b/117/319 Dean Pagonis

      I’m not sure that Alice was making a case to have no one at University and hence make a classless society – it seems quite a tenuous link.

      Her piece is simply raising questions around the value of university, especially when more people enter the university space. This especially relevant, given that government policy over the last 2-3 years has been focused clearly on increasing the number of people at tertiary institutions.

      • Oliver Jiang

        I don’t know, if you’re going to question the value of something then isn’t it only logical to assume that you’d want to see it done away with? I’ll admit, the classless society bit is a bit of a stretch but university is an important means of both social mobility as well as social stratification, and if you do away with both of those completely (a whole range of factors, historical as well as social), then you would end up in a claseless society.

        But I digress. Look, Betteridge’s law states that any headline which asks a question can be answered simply with the word “no”. Going by that alone, it seems to indicate that at the very least, we need to stop opening up university places.

        • James Wilcox

          Maybe take a look at the Grattan Institute report Dean linked to earlier. Your claim that education improves social satisfaction is likely false. For example, according to that report job satisfaction is almost identical regardless of the person’s qualification level.

    • Alice He

      Hmm yes, I tend to raise more questions than I answered if I answered any that is. But as Dean said I mainly looked at what we stand to lose if everyone goes to university.

  • http://www.linkedin.com/pub/dean-pagonis/1b/117/319 Dean Pagonis

    Great article Alice!

    The over-supply is also caused by government subsidy in an area where public benefit is minimal (as you pointed out in your piece). A recent Grattan Institute report explores that in more detail: http://grattan.edu.au/publications/reports/post/graduate-winners-assessing-the-public-and-private-benefits-of-higher-education/

    • James Wilcox

      I thought it was a great article too! That Grattan report is interesting.

      • Alice He

        Thanks James! Here’s another interesting read: http://www.time.com/time/nation/article/0,8599,1838849,00.html

        It is irrelevant to what I wrote, but it talks about college students outsourcing their textbooks. American textbooks often have an international edition (that in some cases is pretty much identical) which they sell overseas for a much cheaper price – but which is illegal to sell in America.

        • James Wilcox

          In Australia it is illegal to import non-counterfeit books printed in other countries without the permission of the IP holder – parallel importation of books is illegal. The Productivity Commission recommended that parallel importation be made legal, and this would have the effect of reducing the cost of books in Australia including text books which are also quite expensive here too (Not as bad as the US fortunately!) Parallel importation of books reduces publishing companies’ ability to price discriminate. http://www.pc.gov.au/projects/study/books

  • Alice He

    Thanks Dean! Yes, the Grattan report is great, very insightful.

  • Hungy Ye

    This should be a much more topical issue than the attention the media cares to give it.

    Would like to hear more on your opinion of what the solution might be (Grattan report brings up interesting points). Also what do you think of MOOC’s?

    • http://www.linkedin.com/pub/dean-pagonis/1b/117/319 Dean Pagonis

      MOOC’s are creating an interesting problem for universities – now they must offer a ‘student experience’ beyond just their studies. This will become a bigger threat once these courses build a reputation for quality, and formal recognised accreditation.

  • Alice He

    hmmmm, well they say MOOC’s obliterate many barriers to learning but if you were able to access and afford it, I would still prefer the traditional way of learning. Of course, I haven’t actually taken an online course before. Who knows? I could love it.

    http://economicstudents.com/forums/topic/what-do-you-think-of-moocs/

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