Wednesday, January 05, 2011

The Hunt Report: Key Recommendations

Key recommendations from the Hunt Report (or National Strategy for Higher Education) have been announced today in the Irish Independent. The Hunt Report has been discussed by Kevin and myself before on this blog. On a previous occasion, I also flagged a report entitled: "Policy Options for New Student Contributions in Higher Education", which dates from July 2009. There is no sign of the Hunt Report on the websites of the Higher Education Authority or the Department for Education and Skills. However, the Education and Skills website does have a link to "Strategy for Higher Education" on its homepage; but this link does not appear to be working. The key recommendations from the Hunt Report, as announced in today's Irish Independent, are as follows:

* Means test for families of students applying for higher education grants to be extended to include assets.
* Mergers of institutes of technology and of smaller colleges.
* Lower fees in key subject areas where there are skill shortages.
* Performance-related pay for college staff but much greater transparency of their workload.
* Increase investment in research and development to 3pc of national income, nearly double the present level.
* No university status for the Waterford and Dublin institutes of technology.

Addendum: The above set of recommendations do not say anything about a student contribution, something that many observers had been expecting. of course, the recommendations listed above may not reflect the entirety of the full report. Also, the other report mentioned above - Policy Options for New Student Contributions in Higher Education - covers the issue of a student contribution comprehensively, for those who are interested. Update: According to another article in today's Irish Independent: "For years, an argument has raged as to whether tuition fees should be brought back or student loans introduced. Controversially, it (the Hunt Report) recommends both." According to a third article in today's Irish Independent, students would have the option of paying part or all of their fees up-front or taking out a loan. The third article also mentions that the report recommends a stronger Higher Education Authority - which would monitor performance by colleges and keep back some funding until they improved their performance. I discussed the potential pitfalls of such an approach before on the blog here.

In relation to the recommendation on means-testing, this issue was previously investigated by an expert group led by Dr Donal De Buitleir in 1993. That group made recommendations to improve the fairness of maintenance grant awards. It was proposed that family assets, including businesses and large farms, be taken into account as well as declared taxable income when eligibility for maintenance grants is being calculated. In addition, an OECD panel of international experts looked at the De Buitleir recommendation in 2005 and strongly urged that it be implemented. So it can be argued that the implementation of this recommendation is long overdue in Irish higher education. Myself and Kevin discuss the above, and other aspects of Irish policy relating to higher education in this blog-post: How Education Policy is Made.

12 comments:

Kevin Denny said...

The Independent article seems rather strange. Most of the recommendations are unremarkable. Is this what passes for strategy?
The idea of having lower fees for fields where there is a skills shortage looks pointless to me since fees are low anyway and the elasticity is probably zero. The constraints are on the supply side generally. Where are the places not being taken up and do you really believe it is because of prohibitive fees?

Martin Ryan said...

What I found strange was that there were three separate articles, each containing different information about the report. The first article I read lists out six "key recommendations" and seems like the main article on the Report.

However, two additional articles mention:
(a) the recommendation for introducing a student loan scheme
(b) the recommendation for the HEA to monitor performance by colleges and keep back funding if they do not improve their performance

The above drip-feed creates a potentially confusing situation, especially when there is no sign of the Hunt Report on the websites of the Higher Education Authority or the Department for Education and Skills.

Martin Ryan said...

Kevin, I agree with you that there are massive constraints on the supply side. Apparently the Department of Education and Skills "envisages rapid expansion in student numbers from an annual intake of just under 43,000 at present to a peak of 68,000 in 2027." Supplying a place for all of these students is a massive challenge, and according to the Hunt Report, this "will not happen unless the free fees regime ends."

I do think however, that it would not be desirable if science and technology courses were more expensive relative to other courses. Admittedly, this is a separate issue to today's announcements. I only mention it because Fine Gael propose charging students higher fees for certain courses such as Science and Engineering.

I agree with Ferdinand Von Prondzynski, former President of Dublin City University, who responded to the Fine Gael suggestion by saying:

"There should be a flat rate fee for degree courses. If you vary the cost of courses, it acts as a disincentive to students studying subjects such as Science."

The newspaper article about the Fine Gael proposal, and Ferdinand's response, is available here:

Study now, pay later - FG's plan to charge graduates college fees

I agree with Ferdinand because there is no apparent (or at least evidence of one that I am aware of) between the economic cost of providing education abd students's subsequent earnings. In fact, one can imagine scenarios where courses that are cheaper to provide will result in higher earnings for graduates.

Elasticity is of course important, but my conjecture is that the response to pricing becomes more sensitive in the context of a student loan scheme. Especially when individuals availing of such a scheme may be discounting hyperbolically.

Kevin Denny said...

One of the Indo' articles says "Large numbers of lower middle-income households cannot afford to send their children to college because of the current system, it suggests."
I'd like to know what evidence there is to support this statement. Apart from my own work (which does not support this statement & which refers to the 1990s) I am not aware of any research on this question. Anyone any clues?

Martin Ryan said...

Erratum:

The second last paragraph should start as follows, including the word *link*

I agree with Ferdinand because there is no apparent *link* (or at least evidence of one that I am aware of) between the economic cost of providing education and students's subsequent earnings.

Kevin Denny said...

Is that right Martin? The money spinners I would have thought are Medicine, Engineering, Vet', Dentistry, Pharmacy...which would be more expensive on average. There are probably some expensive ones with low returns (like science) and maybe some inexpensive but high return ones (like law) but I would think there is still a correlation.
Whether fees should reflect this is a different matter.

Martin Ryan said...

Of course, I should mention that there are good grounds to expect a meaningful relationship between students' cost of attaining education (as opposed to the economic cost of providing education) and students's subsequent earnings. It is more expensive to attend Harvard than UCD, but what are our expectations about the relative earnings profiles for graduates from both universities? (Nothwitstanding the cross-ccountry comparison and the impact of many plausible "selection" stories).

Unlike the United States, where annual tuition costs average $13,424 at four-year public institutions ($30,393 at four-year private institutions), there have been no tuition fees for higher education in Ireland since 1996. In addition, the tuition fees that were charged prior to 1996 were never comparable to the full economic cost of providing higher education in Ireland’s (mainly public) institutions. According to the OECD (2004), the annual tuition fees paid by Irish students before 1996 covered approximately 30% of the operating costs of higher education institutions (HEI’s) in Ireland. These fees averaged approximately €2,500 per annum and accounted for about one-third of the total cost of attending higher education, the remainder being mainly housing and maintenance costs (OECD, 2004).

Given all of the above, the most appropriate way to investiagte the potential relationship between students' cost of attaining education and students's subsequent earnings, may be to restrict the analysis to American colleges. It costs more to go to a private institution in the States; is it more valuable to attend a private institution in the States?

Finally, variation in tuition fees (across institution, but not across subject area) has been the source of recent debate across the water in the U.K. An article in the Guardian considered the fair pricing of university places to "depend on students and their families being able to evaluate the premium that is charged over and above the cheapest available option... The worst outcome will be... creating the equivalent of a charge for being taught with students of similar social and educational backgrounds. The best outcome will be premiums based on objective and credible measures of educational gain."

The Guardian article is avilable here:

The social cost of variable tuition fees

A useful BBC article on the Browne Review (the U.K. equivalent of the Hunt Report) is available here:

At a glance: Browne report

Martin Ryan said...

Kevin,

Teasing through these nuances is important alright. I agree with you that there probably are some expensive courses with low returns (like science) and some inexpensive but high return courses (like law). I think an important distinction to make (which I tried to do above) is between:

(a) the economic cost of providing subject X at a given institution
(b) the students' cost of attaining a qualification in subject X at the given institution

And of course, we have grounds to expect that whether the institution is public/private will matter not just in relation to students' costs, but also students' earnings.

Interestingly, it is plausible to suggest that there is no bearing of public or private institutional status on the economic cost of providing a certain course of higher education. So one might assume that private institutions are charging for something "special": enhanced quality, more motivated staff, or even a more select peer group.

Martin Ryan said...

Kevin,

I meant to say also that I agree with you that there probably are some expensive courses with low returns (like science) and some inexpensive but high return courses (like law); but that on average the more costly a course is to provide, quite plausibly students will earn more afterwards.

Kevin Denny said...

To answer one question: why do people pay $42k to go to Duke University (private) and $8k to go to U. Kentucky (state) unless there is some return? The former charges more because they know people will pay. The return may not be entirely financial but I would be surpised if some of it wasn't.
If the US case undergraduate entry is general so you don't get variation across program as far as I am aware.

Martin Ryan said...

That's an interesting comparison Kevin. Dave C is currently visiting Duke, as you are probably aware. In fact, he flies back there on Saturday, probably just a few days before you return to Dublin?

Getting back to the Hunt Report, there is another story in today's Irish Times:

Contradiction between public policy and persistent underfunding laid bare

We are told in this article that the report will be published next Tuesday. There is also a much longer list of key recommendations in the Irish Times article, though perhaps not much that will surprise. If the report raises public consciousness about the current funding crisis (and the challenge of catering for future increases in student numbers), then one can argue that's at least something. I am also curious to hear more detail on:

(i) Mergers in the IT sector
(ii) Greater mobility of staff between higher education and the public and private sectors
(iii) A national survey system to capture anonymous feedback from students on academic performance

Kevin Denny said...

I just got back from Durham, home of Duke on Monday. Duke and UK are bitter basketball rivals.
This drip feed of news about Hunt is rather tiresome maybe just best to see the damn thing!