A draft of the long awaited Hunt Report is available here. The draft is dated August 8th so it possible that the published version will differ: after all why else wait 5 months?
It is a long report and covers a lot of ground so I haven’t read it all carefully. But from what I can see it is a lot like other such reports, fairly bland and uninspiring. There are many worthy statements that no one is likely to disagree with. That’s a bad sign in my view. Whether it adds much, or differs much, from the OECD’s recent report I don’t know. The committee that produced this report, though containing a range of very able people, looks to be dominated by insiders to the system. That’s also a bad sign in my view.
I confine my views to the issue of access to higher education by low income/low SES groups. This is mentioned in a few places. On page 13 it recommends widening access by such groups “by additional weighting”. What this means does not appear to be specified unless I have missed something.
Section 1.3 discusses “Broadening participation in Irish higher education”. Table 2.1 shows the dramatic differences in access rates by socio-economic background. This is all very well known but worth reminding ourselves of nonetheless. While it comments that pursuit of equality has been a mainstream concern of policy since 1966 it declines to mention that policy in this area has systematically failed, hence Table 2.1. After 40 years of failure, is some readically new thinking not required? This is something of an oversight.
As far as I can the only other place this issue comes up is Section 9.2, page 99 in the section “Maintaining equality of access”. The word “maintaining” should really be “achieving” since you cannot maintain something that has never existed. It comments that “One of the principal barriers for entry to higher education affecting students from lower income groups is their relatively lower levels of school completion and lower levels of attainment in the Leaving Certificate”. Well yes but it would be more precise to say, since this has been demonstrated, that it is THE principal barrier.
What this means, is that the problem with improving access to third level education lies elsewhere, in first and second level education (if not before). It may well have been beyond the remit of the report to recommend changes there but at least it should have noted this.
It comments further that “…students from lower income groups who do achieve the necessary prior levels of attainment, financial constraints… can and do affect participation. These financial barriers, which can be significant…”
No evidence to support this is given. It seems unusual that statements like this are made in an important document but with no reason to take it seriously. I suspect that this is because no such evidence exists & evidence implying the opposite does exist. It has been demonstrated that the abolition of university fees was not associated with a change in the socio-economic gradient in university access which suggests to me that fees are a side-show.
Showing posts with label Fees Debate. Show all posts
Showing posts with label Fees Debate. Show all posts
Friday, January 07, 2011
Wednesday, January 05, 2011
Who gets the higher education grant?
The Irish Independent has an interesting piece on the socio-economic background of higher education grant recipients. In particular it documents how a significant number from professional & employer backgrounds receive the grants, more in fact than from semi- & unskilled backgrounds.
Tuesday, December 07, 2010
Education and the budget
Lots could be, and doubtless will be, said about the budget. But it is worth looking at some of the changes regarding education. The increase in higher level fees is 500Euro and only for the first child in the family (no increase for the second kid). So the government has gone out of its way to protect the relatively well off who dominate university. Meanwhile the Educational Disadvantage Budget has been slashed by 60% and student grants are to be cut by 4%.
Well at least you know what the government's priority is: protect the middle class.
Well at least you know what the government's priority is: protect the middle class.
Thursday, November 18, 2010
Shocking news about progression to university in Ireland
The news from this years' Irish Times "feeder lists" is... well not news at all since it tells a depressingly familiar tale of unequal access to university.
Going to university and higher education generally is not, of course the be-all and end-all of secondary education but the government does not allow any other comparative data on educational attainment to be published at the school level, lest people be allowed to make informed decisions.
Going to university and higher education generally is not, of course the be-all and end-all of secondary education but the government does not allow any other comparative data on educational attainment to be published at the school level, lest people be allowed to make informed decisions.
Wednesday, November 03, 2010
"Free college tuition has failed to open doors to all"
Sean Flynn in the Irish Times today emphasizes that socio-economic factors are still key in deciding whether someone attends university or not.
Tuesday, November 02, 2010
How education policy is made
Martin has posted a link below to a very interesting lecture on Research and Policy Making given by Frances Ruane, director of the ESRI. The following observation I found striking:
"Getting something into the ‘programme for government’ in effect ensures that a policy is likely to be adopted, but perhaps just as importantly, has the effect of terminating any substantive debate subsequently on the issue. From what I can see, this is what happened to the De Buitléir Report on student grants mentioned earlier: there was a commitment to increasing access to higher education in the 1993 programme (which led to the report being commissioned) but in the negotiations of the 1995 programme that shifted to a commitment to ‘free fees’. This decision ran counter to the report’s evidence that this approach would not be the most cost effective or fair way of improving access, and consequently the report was kept out of the public domain until after the decision was made. What can we learn from this? Unless research is publicly available to inform the ‘programme for government’ process, its potential influence may be quite limited; even when it is available, it may be ignored."
"Getting something into the ‘programme for government’ in effect ensures that a policy is likely to be adopted, but perhaps just as importantly, has the effect of terminating any substantive debate subsequently on the issue. From what I can see, this is what happened to the De Buitléir Report on student grants mentioned earlier: there was a commitment to increasing access to higher education in the 1993 programme (which led to the report being commissioned) but in the negotiations of the 1995 programme that shifted to a commitment to ‘free fees’. This decision ran counter to the report’s evidence that this approach would not be the most cost effective or fair way of improving access, and consequently the report was kept out of the public domain until after the decision was made. What can we learn from this? Unless research is publicly available to inform the ‘programme for government’ process, its potential influence may be quite limited; even when it is available, it may be ignored."
Monday, November 01, 2010
The general theory of stupidity, university fees and utter baloney
This Irish Times article discusses the Green Party's apparent aversion to a new system of student charges that - apparently- the government is considering introducing. The proposal is for a new "student contribution fee" on top of the existing student registration charge.
According to their spokesman, a Mr Gogarty, this would conflict with the Program for Government which agreed that “This Government will not proceed with any new scheme of student contribution to third-level education.” Yes, it certainly sounds inconsistent.
The spokesman adds " “We have conceded that the new student charge that’s coming in is going to be higher than the registration fee it replaces, but the question is, how much higher? If it is too high, then it’s basically fees by the back door....That’s non-negotiable as far as I am concerned,”
A fee is a fee whatever you call it. Just as calling a tax a "contribution" or a "levy" makes no difference. So if you concede that there is a new charge being introduced then it is a fee on top of the fee that is already there. To say "if its too high then it's basically fees by the back door" is risible in my view. It is fees by the front door and irrespective of the level set.
And what is "too high" anyway? If it was €10 would that be too high? Eh, no. €10,000? Eh, yes. So it is negotiable actually.
In the discussions about how the government's book-keeping deals with expenditures related to the banking rescue it has been emphasized again and again that international markets see through any creative accounting. These people are not stupid. Likewise students and their parents are not stupid: they know a shake-down when they see one. So why is it so hard for politicians to be transparent and honest about such an important issue?
It seems that the "Fees debate" will continue to attract incoherent thinking, dissembling and general woolly-mindedness.
According to their spokesman, a Mr Gogarty, this would conflict with the Program for Government which agreed that “This Government will not proceed with any new scheme of student contribution to third-level education.” Yes, it certainly sounds inconsistent.
The spokesman adds " “We have conceded that the new student charge that’s coming in is going to be higher than the registration fee it replaces, but the question is, how much higher? If it is too high, then it’s basically fees by the back door....That’s non-negotiable as far as I am concerned,”
A fee is a fee whatever you call it. Just as calling a tax a "contribution" or a "levy" makes no difference. So if you concede that there is a new charge being introduced then it is a fee on top of the fee that is already there. To say "if its too high then it's basically fees by the back door" is risible in my view. It is fees by the front door and irrespective of the level set.
And what is "too high" anyway? If it was €10 would that be too high? Eh, no. €10,000? Eh, yes. So it is negotiable actually.
In the discussions about how the government's book-keeping deals with expenditures related to the banking rescue it has been emphasized again and again that international markets see through any creative accounting. These people are not stupid. Likewise students and their parents are not stupid: they know a shake-down when they see one. So why is it so hard for politicians to be transparent and honest about such an important issue?
It seems that the "Fees debate" will continue to attract incoherent thinking, dissembling and general woolly-mindedness.
Sunday, September 26, 2010
Deferred fees for universities:a UK proposal
The issue of university fees and financial support for students is both complex and divisive. The need for some original but well-thought-through ideas has never been greater. The UK is also re-assessing its system of student financing. A recent proposal by Neil Shephard (Oxford University) is worth looking at. Its recommendations are below:
1. Make student financial support available to cover all tuition and a modest cost of living.
2. Allow graduates to repay according to earnings with protection for poorer graduates.
3. Call HEFCE teaching grants “scholarships” and make students aware of their value.
4. Cap the level of funded fees plus HEFCE grant at the current level.
5. Allow universities to charge deferred fees.
1. Make student financial support available to cover all tuition and a modest cost of living.
2. Allow graduates to repay according to earnings with protection for poorer graduates.
3. Call HEFCE teaching grants “scholarships” and make students aware of their value.
4. Cap the level of funded fees plus HEFCE grant at the current level.
5. Allow universities to charge deferred fees.
- When they are paid the money goes to the student’s university not to the state. These
- fees have no fiscal implications.
- Bring some of the cash flow from deferred fees forward by working with a bank.
- Providing more realistic cost of living support for all students.
- Removing means-tested university bursaries for cost of living expenses.
- Removing means-tested grants to students provided by the state.
Monday, September 20, 2010
"If we had to pay fees, we'd take it more seriously"
In the sometimes heated disputes about the abolition of university fees & their possible re-introduction the focus is generally on the effect that it might have on progression to university and on the issue of educational inequality. There has been relatively little discussion about how student behaviour might change.
The Irish Times has an interesting article by Roisin Ingle based around interviews with students in UCC and one theme that emerges is that students might take their courses more seriously if they were paying fees. Another theme was that while some students saw the merits in the re-introduction of fees there were very strong social pressures not to reveal this.
Of course one cannot infer anything from a few interviews like this but the article is nonetheless worth reading.
The Irish Times has an interesting article by Roisin Ingle based around interviews with students in UCC and one theme that emerges is that students might take their courses more seriously if they were paying fees. Another theme was that while some students saw the merits in the re-introduction of fees there were very strong social pressures not to reveal this.
Of course one cannot infer anything from a few interviews like this but the article is nonetheless worth reading.
Wednesday, August 25, 2010
Social class and educational attainment of Irish children
It is well known that children from high SES backgrounds do much better in school and this explains, at least proximately, the very sharp SES gradient with regard to university entrance. Or, to put it in English, working class kids get, on average, much worse Leaving Certs and this is why they are much less likely to get to uni' and certainly less likely to get into the more remunerative professional programs. The recent hullaboloo about "Free fees" , on the occasion of my paper on the subject, more or less ignored this inconvenient truth.
But when in the lifecycle does disadvantage set in? Clearly it doesn't just happen at 18. The Growing up in Ireland data allows us to take a snapshot of this gradient when children in Ireland are about 9 years of age.
This graphs the mean maths score by household social class and one can clearly see a pronounced association. Social class is based on the highest class of the two parents - if there are two around. Even at age 8 or 9 coming from a professional/managerial household makes a big difference. Alternatively one could look at the education of the primary carer (usually the mother):
Its still the same old story: if your parents have low education then you are at a considerable disadvantage. Doing some simple multivariate modelling, both factors have an independent effect, as does income and other variables. Girls do worse for example though as is well known the reverse seems to be the case when it comes to doing the Leaving Cert.
To get an idea of the magnitudes involved, the mean and standard deviation of the maths test (which is the Drumcondra test) are respectively-0.64 & 0.92 respectively. When one does the regressions one finds that a child of a graduate mother can expect a score that is about .5 higher than a child of a mother with only minimum education (so about 55% of a std dev). For social class the gradient is flatter: the average difference between the top and bottom social classes is about .26. By comparison, the "penalty" to being a girl is 0.1.
Whether the childrens subsequent education exacerbates or reduces this pattern we cannot say. But Jim Heckman, for example, has argued strongly in favour of dynamic complementarities i.e. that learning begets learning which implies that, if anything, early inequalities get worse over time.
So one lesson from all this is I think, that early intervention is necessary if we are serious about addressing socio-economic inequalities in education. Alls we need to do is get serious about it.
But when in the lifecycle does disadvantage set in? Clearly it doesn't just happen at 18. The Growing up in Ireland data allows us to take a snapshot of this gradient when children in Ireland are about 9 years of age.
This graphs the mean maths score by household social class and one can clearly see a pronounced association. Social class is based on the highest class of the two parents - if there are two around. Even at age 8 or 9 coming from a professional/managerial household makes a big difference. Alternatively one could look at the education of the primary carer (usually the mother):
Its still the same old story: if your parents have low education then you are at a considerable disadvantage. Doing some simple multivariate modelling, both factors have an independent effect, as does income and other variables. Girls do worse for example though as is well known the reverse seems to be the case when it comes to doing the Leaving Cert.
To get an idea of the magnitudes involved, the mean and standard deviation of the maths test (which is the Drumcondra test) are respectively-0.64 & 0.92 respectively. When one does the regressions one finds that a child of a graduate mother can expect a score that is about .5 higher than a child of a mother with only minimum education (so about 55% of a std dev). For social class the gradient is flatter: the average difference between the top and bottom social classes is about .26. By comparison, the "penalty" to being a girl is 0.1.
Whether the childrens subsequent education exacerbates or reduces this pattern we cannot say. But Jim Heckman, for example, has argued strongly in favour of dynamic complementarities i.e. that learning begets learning which implies that, if anything, early inequalities get worse over time.
So one lesson from all this is I think, that early intervention is necessary if we are serious about addressing socio-economic inequalities in education. Alls we need to do is get serious about it.
Thursday, June 17, 2010
Fairness and efficiency in university admission
My recent paper on the non-effect of fee abolition in Ireland emphasized the socio-economic gradient in secondary school attainment: low SES means low points and therefore a low probability of progressing to university. Fees are a side-issue, at best.
This problem is not unique to Ireland, of course: exactly the same pattern was described in a recent study for the UK. A recent book published by the Brookings Institution suggests ways of dealing with this issue in the US where there is a pronounced SES gradient in the SAT tests. One suggestion is for expanded use of affirmative action programs beyond their traditional emphasis on race. In essence, the idea is that universities take into account the fact that for some people doing well is harder and not because of their innate ability.
Access Programs here, like UCD's New ERA, do this although the scale is necessarily small, see here for an evaluation of its effectiveness we did at the Geary Institute. Some people might take the view that moving away from our simple points-based CAO application system would be messy and expensive. But, on the other hand, the present system is hardly efficient from a national point of view given that it means a huge chunk of our potential labour force is not getting the education that it needs to be at its most productive. Relative to the huge losses arising from not educating our population adequately (for evidence see here), the administrative costs are peanuts.
My own view is that making such adjustments at the point of progression i.e. adjusting the admission criteria to take account of SES, while worth pursuing, is not the best solution. We need to address the causes, not the symptoms of the problem. That is, we need to address the reasons for under-achievement at school level. Access programs do this too as do some government initiatives although their effects are largely unknown.
This problem is not unique to Ireland, of course: exactly the same pattern was described in a recent study for the UK. A recent book published by the Brookings Institution suggests ways of dealing with this issue in the US where there is a pronounced SES gradient in the SAT tests. One suggestion is for expanded use of affirmative action programs beyond their traditional emphasis on race. In essence, the idea is that universities take into account the fact that for some people doing well is harder and not because of their innate ability.
Access Programs here, like UCD's New ERA, do this although the scale is necessarily small, see here for an evaluation of its effectiveness we did at the Geary Institute. Some people might take the view that moving away from our simple points-based CAO application system would be messy and expensive. But, on the other hand, the present system is hardly efficient from a national point of view given that it means a huge chunk of our potential labour force is not getting the education that it needs to be at its most productive. Relative to the huge losses arising from not educating our population adequately (for evidence see here), the administrative costs are peanuts.
My own view is that making such adjustments at the point of progression i.e. adjusting the admission criteria to take account of SES, while worth pursuing, is not the best solution. We need to address the causes, not the symptoms of the problem. That is, we need to address the reasons for under-achievement at school level. Access programs do this too as do some government initiatives although their effects are largely unknown.
Sunday, October 04, 2009
College Costs and College Take Up
New NBER Working Paper by Deming and Dynarski
Fascinating discussion of the interplay between the benefits of targetting programmes and the costs of doing so in terms of administration burden and so on. Also presents some evidence that the type of simplification interventions being actively discussed in the behavioural economics literature may have effects on college enrollment.
NBER Working Paper No. 15387
Issued in September 2009
NBER Program(s): CH ED LS PE
We review the experimental and quasi-experimental research evidence on the causal relationship between college costs and educational attainment, with a particular focus on low-income populations. The weight of the evidence indicates that reducing college costs can increase college entry and persistence. Simple and transparent programs appear to be most effective. Programs that link money to incentives and/or the takeup of academic support services appear to be particularly effective.
This paper is available as PDF (160 K) or via email.
Machine-readable bibliographic record - MARC, RIS, BibTeX
Fascinating discussion of the interplay between the benefits of targetting programmes and the costs of doing so in terms of administration burden and so on. Also presents some evidence that the type of simplification interventions being actively discussed in the behavioural economics literature may have effects on college enrollment.
NBER Working Paper No. 15387
Issued in September 2009
NBER Program(s): CH ED LS PE
We review the experimental and quasi-experimental research evidence on the causal relationship between college costs and educational attainment, with a particular focus on low-income populations. The weight of the evidence indicates that reducing college costs can increase college entry and persistence. Simple and transparent programs appear to be most effective. Programs that link money to incentives and/or the takeup of academic support services appear to be particularly effective.
This paper is available as PDF (160 K) or via email.
Machine-readable bibliographic record - MARC, RIS, BibTeX
Thursday, August 20, 2009
Wednesday, March 25, 2009
The Time Value of Exchequer Funding, and the Fees Debate
In an article in today's Irish Times, Sean Flynn reports that parents will get a discount of about 20 per cent for those who pay upfront – in order to generate funds for the exchequer in the short term. This is in the context an "income-contingent loan scheme" for financing higher education, a being considered by Minister for Education Batt O’Keeffe.
The article doesn't say, but I assume that 'paying upfront' means paying fees at the start of each academic year, rather than paying fees for an entire course at the start of the course. A question that parents with cash may ask themselves at the start of each academic year is "Can I earn 20 percent (risk-free) on this lump-sum over the next year?". I would be very surprised if anyone answered yes to this question (even in boom times), so it seems like a highly-loaded incentive scheme, in relation to the time value of exchequer funding.
In relation to the wider debate on the financing of higher education, Richard Layte, Selina McCoy and Philip J O'Connell (from the ESRI) have an article in last Friday's Irish Independent which argues that college fees are a minor part of the story (if the objective is to increase participation by low-income students). They mention the importance of investment in early childhood education (as discussed by Prof. James Heckman in the lecture linked below), the eligibility of and level of maintenance grants (mentioned recently on the blog here) and the need for quality Access programmes at third-level (which relates to one of Geary's evaluation projects).
"At present, the State pays €350 million to the third-level system in lieu of fees each year. Sources say the plan to offer a discount of about 20 per cent for upfront payments could yield €70 million."
The article doesn't say, but I assume that 'paying upfront' means paying fees at the start of each academic year, rather than paying fees for an entire course at the start of the course. A question that parents with cash may ask themselves at the start of each academic year is "Can I earn 20 percent (risk-free) on this lump-sum over the next year?". I would be very surprised if anyone answered yes to this question (even in boom times), so it seems like a highly-loaded incentive scheme, in relation to the time value of exchequer funding.
In relation to the wider debate on the financing of higher education, Richard Layte, Selina McCoy and Philip J O'Connell (from the ESRI) have an article in last Friday's Irish Independent which argues that college fees are a minor part of the story (if the objective is to increase participation by low-income students). They mention the importance of investment in early childhood education (as discussed by Prof. James Heckman in the lecture linked below), the eligibility of and level of maintenance grants (mentioned recently on the blog here) and the need for quality Access programmes at third-level (which relates to one of Geary's evaluation projects).
Tuesday, February 03, 2009
Should Irish Students Turn Their 'Free-Fees' Campaign Towards Higher Education Grants?
Yesterday the HEA published the third Eurostudent Survey to be conducted in the Republic of Ireland; the report is available on the HEA website here. There is a short discussion of the report in today's Irish Independent (here), which quotes the report saying that "there are substantial negative effects of working beyond 20 hours per week. Up to this point, the effects of working extra hours do not seem to be important." Other findings are that:
- Some 65pc of students earn at least some income from employment
- Students' spending averages €1,086.64 per month
- The most popular job held by students is shop assistant, followed by working as waiters or waitresses and then bar staff
The third Eurostudent Survey reports on 2007 field-work that was conducted here with colleagues at the Geary Institute. Now we are at the start of 2009 - and with economic recession underway - the concern of working more than 20 hours a week during college is mostly a thing of the past. Despite this, student expenditure costs of approximately €1,000 a month (or €12,000 a year) still have to be financed. So average living costs of a four-year undergraduate degree are circa €50,000, and somehow they must be paid.
According to a report in today's Irish Times, over 20,000 students are expected to take to the streets of Dublin tomorrow to oppose the reintroduction of third-level fees, and to highlight the role they feel education should play in any economic recovery plan. It might be the case that a better use of the protest would be to re-direct the campaign towards a call for improved higher education grants.
The rationale for this stems from the unemployment problem that students now face. Instead of worrying about whether they are working too many hours, or wishing they had a handier number, many students are now lucky to have any job at all. A discussion on this issue is provided by Bridget Fitzsimons in the current edition of the UCD University Observer: "No part-time means full-time trouble...". "Student Advisor, Aisling O’Grady has noted 'a definite marked increase' in those visiting (UCD) Student Advisors for financial advice after being unable to find employment." For any students in severe financial difficulties, some options for advice and support are mentioned in the article. One comment about the new conditions facing students is provided by Juan Houlihan in 1st Arts:
With the uncertain and unlikely prospect of getting a part-time job to cover living costs during higher education, students would gain considerably from an improved higher education grant. This could be a preferable option if there were to be an either/or scenario between 'free frees' or 'improved grants'. The re-introduction of fees in the context of an interest-free student loan system has been tabled by the Minister for Education, Batt O'Keefe. An interest-free lending initiative would mean that students would not have to worry about the cost of their higher education until they have secured post-graduate employment and are earning above a certain level of salary. In a detailed discussion of interest-free student loans on this blog, it was previously noted that the UK student loan system has the following features:
- repayments do not start until April of the year after students have completed their course
- repayments do not start until the student is earning more than 15,000 pounds
- the repayment is 9% of gross salary
- the repayment is transacted as an automatic deducation (through PAYE though this could as easily be a direct debit)
- there is no particular schedule for clearing the debt, but, if it has not been cleared 25 years after repayment began, or if the student turns 65 years old ---- then the remaining debt will be cancelled
In fact, the UK student loan system is a really good offer. Though it does mean that British taxpayers (particularly those that do not get the chance to attend higher education) sacrifice the time-value of their tax-pounds. In other words, they stump up cash so that other people can get a higher education. The money might otherwise be spent on things such as better policing, better healthcare or better primary school services. What's more, the loans on offer are subsidised by taxpayers so that there are some tax-pounds that will never go towards other public services. (What this means is that there really is no such thing as 'free fees' - as somebody else will pay the cost!). All that being said, the recipients of interest-free student loans shouldn't feel so bad, as there is such a thing as non-private returns to education (in other words, externalities - including more tax revenues for govt.).
So, it may be the case that some students would prefer to have 'interest-free student loans' as well as 'improved higher education maintenance grants', rather than just maintaining the status quo of 'free fees'. At present, to get a full maintenance 'grant' of €3,420, the maximum income limit for a family of four children is €38,675 a year. For more than eight children, it is €46,140 a year. Former education minister Niamh Bhreathnach, who abolished tuition fees, admitted she was disappointed at these figures. For more on the 'grant' and its history, see this previous blog post.
What we do know is that the annual maintenance support of €3,420 seems very low, and that it falls very far below the €12,000 that students are estimated to need for their annual expenditure (see Eurostudent 3). Without part-time employment opportunities to cover the difference, will every student comtinue to attend college? Furthermore, what about the students who are not entitled to a grant but can't get a part-time job? That is, those students from a four-kid family with an income above €38,675? A Geary working paper from 2007, "Household Characteristics of Higher Education Participants", suggests that eligibility for maintenance grants is an important factor for encouraging particpation in higher education.
All of this leads to the suggestion that a better use of tomorrow's protest would be to call for interest-free student loans and improved higher education grants (improvements to both the amount of the payment and the level of family-income at which the grant is payable). All that being said, 'interest-free student loans' combined with 'improved higher education grants' is a much more expensive prospect for the government compared to simply introducing interest-free loans, or for that matter, simply re-introducing student fees.
One thing is for certain, if the 'free fees policy' is definitely on the way out (and the govt. deficit is certainly putting this on the agenda), then students would be better served lobbying for an interest-free loan system rather than protesting against the inevitable. What might be needed now is some thought on how to generate short-term finance for interest-free student loans (and perhaps even improvements to grants). One suggestion is to issue ring-fenced special savings bonds. These bonds would bear interest in the same way as any other Irish govt. bond; however, the buyers of these bonds would also know that they are generating cash-flow to support Irish higher education.
- Some 65pc of students earn at least some income from employment
- Students' spending averages €1,086.64 per month
- The most popular job held by students is shop assistant, followed by working as waiters or waitresses and then bar staff
The third Eurostudent Survey reports on 2007 field-work that was conducted here with colleagues at the Geary Institute. Now we are at the start of 2009 - and with economic recession underway - the concern of working more than 20 hours a week during college is mostly a thing of the past. Despite this, student expenditure costs of approximately €1,000 a month (or €12,000 a year) still have to be financed. So average living costs of a four-year undergraduate degree are circa €50,000, and somehow they must be paid.
According to a report in today's Irish Times, over 20,000 students are expected to take to the streets of Dublin tomorrow to oppose the reintroduction of third-level fees, and to highlight the role they feel education should play in any economic recovery plan. It might be the case that a better use of the protest would be to re-direct the campaign towards a call for improved higher education grants.
The rationale for this stems from the unemployment problem that students now face. Instead of worrying about whether they are working too many hours, or wishing they had a handier number, many students are now lucky to have any job at all. A discussion on this issue is provided by Bridget Fitzsimons in the current edition of the UCD University Observer: "No part-time means full-time trouble...". "Student Advisor, Aisling O’Grady has noted 'a definite marked increase' in those visiting (UCD) Student Advisors for financial advice after being unable to find employment." For any students in severe financial difficulties, some options for advice and support are mentioned in the article. One comment about the new conditions facing students is provided by Juan Houlihan in 1st Arts:
"...I couldn’t go home every weekend for work, and I thought it would be easy to find work in Dublin. I’ve looked in a lot of places, but nowhere will even look at CVs. It’s difficult, and if I didn’t have grants to cover some expenses, I’d be in a lot of trouble. It’s hard to get through college..."
With the uncertain and unlikely prospect of getting a part-time job to cover living costs during higher education, students would gain considerably from an improved higher education grant. This could be a preferable option if there were to be an either/or scenario between 'free frees' or 'improved grants'. The re-introduction of fees in the context of an interest-free student loan system has been tabled by the Minister for Education, Batt O'Keefe. An interest-free lending initiative would mean that students would not have to worry about the cost of their higher education until they have secured post-graduate employment and are earning above a certain level of salary. In a detailed discussion of interest-free student loans on this blog, it was previously noted that the UK student loan system has the following features:
- repayments do not start until April of the year after students have completed their course
- repayments do not start until the student is earning more than 15,000 pounds
- the repayment is 9% of gross salary
- the repayment is transacted as an automatic deducation (through PAYE though this could as easily be a direct debit)
- there is no particular schedule for clearing the debt, but, if it has not been cleared 25 years after repayment began, or if the student turns 65 years old ---- then the remaining debt will be cancelled
In fact, the UK student loan system is a really good offer. Though it does mean that British taxpayers (particularly those that do not get the chance to attend higher education) sacrifice the time-value of their tax-pounds. In other words, they stump up cash so that other people can get a higher education. The money might otherwise be spent on things such as better policing, better healthcare or better primary school services. What's more, the loans on offer are subsidised by taxpayers so that there are some tax-pounds that will never go towards other public services. (What this means is that there really is no such thing as 'free fees' - as somebody else will pay the cost!). All that being said, the recipients of interest-free student loans shouldn't feel so bad, as there is such a thing as non-private returns to education (in other words, externalities - including more tax revenues for govt.).
So, it may be the case that some students would prefer to have 'interest-free student loans' as well as 'improved higher education maintenance grants', rather than just maintaining the status quo of 'free fees'. At present, to get a full maintenance 'grant' of €3,420, the maximum income limit for a family of four children is €38,675 a year. For more than eight children, it is €46,140 a year. Former education minister Niamh Bhreathnach, who abolished tuition fees, admitted she was disappointed at these figures. For more on the 'grant' and its history, see this previous blog post.
What we do know is that the annual maintenance support of €3,420 seems very low, and that it falls very far below the €12,000 that students are estimated to need for their annual expenditure (see Eurostudent 3). Without part-time employment opportunities to cover the difference, will every student comtinue to attend college? Furthermore, what about the students who are not entitled to a grant but can't get a part-time job? That is, those students from a four-kid family with an income above €38,675? A Geary working paper from 2007, "Household Characteristics of Higher Education Participants", suggests that eligibility for maintenance grants is an important factor for encouraging particpation in higher education.
All of this leads to the suggestion that a better use of tomorrow's protest would be to call for interest-free student loans and improved higher education grants (improvements to both the amount of the payment and the level of family-income at which the grant is payable). All that being said, 'interest-free student loans' combined with 'improved higher education grants' is a much more expensive prospect for the government compared to simply introducing interest-free loans, or for that matter, simply re-introducing student fees.
One thing is for certain, if the 'free fees policy' is definitely on the way out (and the govt. deficit is certainly putting this on the agenda), then students would be better served lobbying for an interest-free loan system rather than protesting against the inevitable. What might be needed now is some thought on how to generate short-term finance for interest-free student loans (and perhaps even improvements to grants). One suggestion is to issue ring-fenced special savings bonds. These bonds would bear interest in the same way as any other Irish govt. bond; however, the buyers of these bonds would also know that they are generating cash-flow to support Irish higher education.
Tuesday, August 19, 2008
Behavioural Economics and Higher Education
One point about the current debate is whether a model of human capital investment where students are making forward looking choices on the basis of achieving a return is sufficient to capture the complexity of their decision. A number of points below would be interesting to examine further:
As Kevin pointed out, it is quite possible that students may give too much weight to current market conditions when evaluating the decision to participate in college and course choice. In general, we dont know enough about how irrelevant factors enter in to course choice. To what extent are course choices driven by insufficient information, focusing illusions, hyperbolic time preferences, peer effects and other potential sources of "sub-optimal" decision making? Would it matter much from a welfare perspective if it was shown that all of the above were the real drivers of course choice?
Related to this, the extent to which features of the higher education system create unnceccessary form-filling and confusion should be looked at. Martin blogged before about a paper by Dynarski and Scott-Clayton that examined the potential for simplifying student aid formulas (see below). There is a large amount of evidence from the pensions literature (e.g. the Save More Tomorrow Work) that cognitive features of pension and savings options can have strong effects on decision making in that domain. If fees were to return in any form, it would be extremely important to take this literature in to account and to ensure that any complexity would not cause a distortion (though it may already be causing a distortion!)
http://ksgnotes1.harvard.edu/research/wpaper.NSF/rwp/RWP07-014
As Kevin pointed out, it is quite possible that students may give too much weight to current market conditions when evaluating the decision to participate in college and course choice. In general, we dont know enough about how irrelevant factors enter in to course choice. To what extent are course choices driven by insufficient information, focusing illusions, hyperbolic time preferences, peer effects and other potential sources of "sub-optimal" decision making? Would it matter much from a welfare perspective if it was shown that all of the above were the real drivers of course choice?
Related to this, the extent to which features of the higher education system create unnceccessary form-filling and confusion should be looked at. Martin blogged before about a paper by Dynarski and Scott-Clayton that examined the potential for simplifying student aid formulas (see below). There is a large amount of evidence from the pensions literature (e.g. the Save More Tomorrow Work) that cognitive features of pension and savings options can have strong effects on decision making in that domain. If fees were to return in any form, it would be extremely important to take this literature in to account and to ensure that any complexity would not cause a distortion (though it may already be causing a distortion!)
http://ksgnotes1.harvard.edu/research/wpaper.NSF/rwp/RWP07-014
Fees - Blast from the Past
I was looking for the email of an old colleague of ours, Gavan Conlon, when I came across this on the BBC website which relates to work he did with Arnaud Chevalier when Arnaud was at UCD. The paper referred to is also linked. The then Minister for Higher Education in the UK said at the time that 'if potential students thought and acted rationally, then they would be willing to invest more in universities that offered a better return on their investment'. This point seems a critical one to zone in on as this debate unfolds - I thought the article by HEA Chief Executive Tom Boland in the today's Irish Examiner was a really nice contribution I think, nailing the key issue of this all being 'both/and' and not 'either/or' in terms of the mix of government and student funding. See http://news.bbc.co.uk/2/hi/uk_news/education/3046985.stm and the LSE paper at http://eprints.lse.ac.uk/19477/
Monday, August 18, 2008
Does Private Tutoring Pay Off?
One large feature of the education debate is the perception that richer students can "buy" increments in their college entry examinations through extra spending by their parents on private tuition. One issue with this argument is that there may be a selection effect in to private tuition with more motivated and exam-focused students selecting themselves into taking tuition. Also, the fact that their parents can afford and are willing to pay for tuition will generally correlate with other potentially beneficial background factors such as peer expectations. In the extreme case, the tuition does not add anything at all. The best students simply select this and this becomes self-reinforcing over time. On the other hand, the very best students may not need it or want it so this could lead a simple analysis to potentially underestimate the effect.
As far as I am aware this has not been tested in Ireland but a recent IZA discussion paper (below) tests it for Turkey. Their results are not glowing in terms of the effectiveness of private tuition on placement, actually finding a negative effect in some of the tighter models. Their overall conclusion for Turkey is that large amounts of spending can have an effect on placement in to college but that the decision to take tutoring itself does not have a positive effect. How this applies to other countries is clearly difficult to tell but the idea of taking out the selection bias before making an overall assessment of the effectiveness of private tuition is a good one.
Does Private Tutoring Payoff?
by Ayfer Gurun, Daniel L. Millimet
(August 2008)
Abstract:
We assess the causal effect of private tutoring on the probability of university placement in Turkey. We find that tutoring increases the probability of being placed in a university when non-random selection is ignored. Moreover, among those utilizing private tutoring, greater expenditure on tutoring is also positively associated with university placement. However, we find evidence of positive selection into tutoring, but negative selection into greater expenditures among those receiving tutoring. Accounting for this pattern of non-random selection, we conclude that private tutoring has a negative causal effect on university placement overall, but conditional on receiving any tutoring, spending more on tutoring has a positive causal effect on university placement.
Text: See Discussion Paper No. 3637
As far as I am aware this has not been tested in Ireland but a recent IZA discussion paper (below) tests it for Turkey. Their results are not glowing in terms of the effectiveness of private tuition on placement, actually finding a negative effect in some of the tighter models. Their overall conclusion for Turkey is that large amounts of spending can have an effect on placement in to college but that the decision to take tutoring itself does not have a positive effect. How this applies to other countries is clearly difficult to tell but the idea of taking out the selection bias before making an overall assessment of the effectiveness of private tuition is a good one.
Does Private Tutoring Payoff?
by Ayfer Gurun, Daniel L. Millimet
(August 2008)
Abstract:
We assess the causal effect of private tutoring on the probability of university placement in Turkey. We find that tutoring increases the probability of being placed in a university when non-random selection is ignored. Moreover, among those utilizing private tutoring, greater expenditure on tutoring is also positively associated with university placement. However, we find evidence of positive selection into tutoring, but negative selection into greater expenditures among those receiving tutoring. Accounting for this pattern of non-random selection, we conclude that private tutoring has a negative causal effect on university placement overall, but conditional on receiving any tutoring, spending more on tutoring has a positive causal effect on university placement.
Text: See Discussion Paper No. 3637
Sunday, August 17, 2008
Fees set to return by 2010
According to the Sunday Independent, the Minister has told them that fees may be returned by 2010:
link here
A few points that are worth making at this stage include (and i am working with limited time on a document that will put some figures on some of this).
- Are we talking about only the universities or is it proposed to bring fees or contribution for the Institutes of Technology also? If the latter, then this debate becomes very different. If just the universities, then are the IT's going to end being favoured by students over the universities? Has anyone thought about this and the potential positive and negative aspects?
- Does anyone actually know the income distribution of households who have a member in college? Within our discussion, we have made various guestimates but a hard number would help this discussion particularly if, as the Minister has said often, this is just going to be restricted to high income earners.
- Are there any problems with basing fees on parents income? Most students are over the age of 18. Should assessment not be on their own means?
- The only real international alternative that anyone has suggested is the income-contingent loan system so I am assuming that this is the main method being considered. The articles posted in the last week here outline the main issues with this system including the administrative and default costs and the extent to which the government subsidises the scheme
- Is anyone going to give a coherent defence of the current system? The main defenders today are still using the line that the free fees system is good from a distributional perspective which is plainly absurd. This does not mean that free fees do not have other arguments in their defence. For example, some of the following arguments could be examined. I am not advocating any of these and feel free to savage them but they are closer to logical arguments in favour of the status quo than the plainly wrong argument that free fees are a redistributive tool.
(a) Free fees are a subsidy to human capital investment which in general increases economic growth
(b) Free fees are a reward for effort. By removing this scheme and leaving expenditure constant we will be effectively shifting tax burden from those who take higher degrees to those who dont thus disincentivising effort.
(c) Free fees are a powerful behavioural signal removing the uncertainty surrounding educational investments. Though the US and Australian experiences dont bear this out strongly.
(d) Added to this, there is behavioural evidence that young people find it difficult to process debt and this made lead to overly present focused decisions in the face of uncertainty. Again, the fact that rates of participation did not go down in the UK points against the argument.
(e) While middle class parents benefit disproportionately, they also pay more tax. The students going to college will also pay more tax, on average. Thus the "middle class hand-out" argument is unfair.
link here
A few points that are worth making at this stage include (and i am working with limited time on a document that will put some figures on some of this).
- Are we talking about only the universities or is it proposed to bring fees or contribution for the Institutes of Technology also? If the latter, then this debate becomes very different. If just the universities, then are the IT's going to end being favoured by students over the universities? Has anyone thought about this and the potential positive and negative aspects?
- Does anyone actually know the income distribution of households who have a member in college? Within our discussion, we have made various guestimates but a hard number would help this discussion particularly if, as the Minister has said often, this is just going to be restricted to high income earners.
- Are there any problems with basing fees on parents income? Most students are over the age of 18. Should assessment not be on their own means?
- The only real international alternative that anyone has suggested is the income-contingent loan system so I am assuming that this is the main method being considered. The articles posted in the last week here outline the main issues with this system including the administrative and default costs and the extent to which the government subsidises the scheme
- Is anyone going to give a coherent defence of the current system? The main defenders today are still using the line that the free fees system is good from a distributional perspective which is plainly absurd. This does not mean that free fees do not have other arguments in their defence. For example, some of the following arguments could be examined. I am not advocating any of these and feel free to savage them but they are closer to logical arguments in favour of the status quo than the plainly wrong argument that free fees are a redistributive tool.
(a) Free fees are a subsidy to human capital investment which in general increases economic growth
(b) Free fees are a reward for effort. By removing this scheme and leaving expenditure constant we will be effectively shifting tax burden from those who take higher degrees to those who dont thus disincentivising effort.
(c) Free fees are a powerful behavioural signal removing the uncertainty surrounding educational investments. Though the US and Australian experiences dont bear this out strongly.
(d) Added to this, there is behavioural evidence that young people find it difficult to process debt and this made lead to overly present focused decisions in the face of uncertainty. Again, the fact that rates of participation did not go down in the UK points against the argument.
(e) While middle class parents benefit disproportionately, they also pay more tax. The students going to college will also pay more tax, on average. Thus the "middle class hand-out" argument is unfair.
Learning to Live with Loans
A relatively recent paper that argues that the income-contingent loan financing mechanism offers an international model that can be transferred to other countries. A sister paper argues that such arrangements do not discourage access among marginal choosers
http://ideas.repec.org/a/eee/ecoedu/v24y2005i5p491-512.html
Learning to Live with Loans? International Policy Transfer and the Funding of Higher Education
Bruce Chapman
David Greenaway
http://ideas.repec.org/a/bla/worlde/v29y2006i8p1057-1075.html
Abstract
Over the last decade or so a number of OECD economies have migrated from providing higher education free at the point of consumption to levying user charges. However, rather than charges for tuition being paid up-front, contributions have taken the form of income-contingent loans. Graduates therefore contribute to the costs of their education, after they have graduated and when they are earning. The earliest example of this instrument was in Australia, with the introduction of the Higher Education Contributions Scheme (HECS). This paper argues that following their successful introduction in Australia, income-contingent loans offer a good example of successful international policy transfer, with elements of that scheme being adopted and modified for use in New Zealand, South Africa and the United Kingdom. The paper reviews the conditions for successful policy transfer and discusses the reasons why the arrangements have not proliferated in non-OECD countries.
Copyright 2006 The Author Journal compilation 2006 Blackwell Publishing Ltd. .
http://ideas.repec.org/a/eee/ecoedu/v24y2005i5p491-512.html
Learning to Live with Loans? International Policy Transfer and the Funding of Higher Education
Bruce Chapman
David Greenaway
http://ideas.repec.org/a/bla/worlde/v29y2006i8p1057-1075.html
Abstract
Over the last decade or so a number of OECD economies have migrated from providing higher education free at the point of consumption to levying user charges. However, rather than charges for tuition being paid up-front, contributions have taken the form of income-contingent loans. Graduates therefore contribute to the costs of their education, after they have graduated and when they are earning. The earliest example of this instrument was in Australia, with the introduction of the Higher Education Contributions Scheme (HECS). This paper argues that following their successful introduction in Australia, income-contingent loans offer a good example of successful international policy transfer, with elements of that scheme being adopted and modified for use in New Zealand, South Africa and the United Kingdom. The paper reviews the conditions for successful policy transfer and discusses the reasons why the arrangements have not proliferated in non-OECD countries.
Copyright 2006 The Author Journal compilation 2006 Blackwell Publishing Ltd. .
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