University education is a privilege, not a right, and if we treated it that way we might just get better results

Great universities cost big bucks. Government funding, benefactor donations and student fees all add up to support excellence… The debate in New Zealand last month was all about the fees.

It costs approximately £9000 a year in fees to attend university in Britain. To study at Harvard as an undergraduate involves fees of almost US$39,000. In New Zealand the fees are generally less than $6000. 

Vice Chancellor of The University of Auckland, Professor Stuart McCutcheon, has been castigated because he suggested that New Zealand should have a great university - and that in order to achieve world class excellence, charging higher fees should be allowed. Unsurprisingly, there was an outcry from the Students’ Association. But the reality is that New Zealand universities are slipping down the global rankings at least in part because of poor funding.

For New Zealand, the rankings are important because they indicate ability to educate the future workforce. If we can’t do it as well as other countries, the ‘best and brightest’ will vote with their feet, lured by scholarships and fee deals that are available to the elite performers. There is no guarantee that they will return.

New Zealand’s approach to education is egalitarian, and is part of the overall problem. Education is more of an entitlement than the privilege for top academic performers that it used to be. Entitlement has been linked by researchers at the University of Otago to poor performance.

Open access underpins entitlement – most school leavers engage in tertiary education and 47% complete a degree qualification (58% if international students are included); the figure for domestic students in Australia is 34% and in the US is 35%.                                                                                                                                                      Engagement is facilitated by government support. Over 90% of students in New Zealand have access to government support through allowances, fees and scholarships. OECD data published in Education at a Glance 2014 put New Zealand and Sweden as the most generous countries; Australia has just over 80% of students supported, the US has 76% and the UK has 70%. 

Of note is that despite student perceptions to the contrary, the fees they pay are only a small component of the cost. In dollar terms (adjusted for PPP GDP) the amount going to New Zealand universities in fees and government support per student is just over US$14,000; in Australia it is $21,636 and in US it is over US$31,000. Although New Zealand students pay a higher proportion of the costs (23% according to the OECD) than students in Australia and the US (17%), in actual dollars their input is small.

The OECD also reports that New Zealand’s expenditure on tertiary education is slightly higher than the OECD average (1.9% of GDP cf 1.4%). 

The problem for the universities is that a considerable proportion (approximately half) of the government funding goes to the students either as loans (35%) or scholarships (14%), not the tertiary education providers. This is in contrast to the rest of the world; the OECD average is 12% scholarships and 10% loans. This level of government support also supports the entitlement attitude.

Despite the relatively supported position of students, many of them are in paid employment while studying. 

In 2012, almost 12,000 students were surveyed about their financial arrangements by Universities Australia. Key findings were that the average income of full-time students in 2012 was substantially higher than in 2006, but that reliance on income from family and from government student allowances had increased. Despite this extra funding, students indicated that they were experiencing far greater financial stress in 2012 than in 2006, and reported higher debt. Expenditure for undergraduates increased from A$27,319 in 2006 (adjusted for CPI) to A$37,020 in 2012 – (which is greater than the minimum wage for full time work).

To enable this expenditure, over 80% of students worked (in comparison with 85.5% in 2006) and the average employment for undergraduates was 16 hours a week, up from 14.8 in 2006. Overall, a quarter of the employed undergraduate full-time students were working over 20 hours a week. 

The students acknowledged that employment decreased their capacity to learn. Over 50% of full-time undergraduate students reported that increased hours of work affected their performance at university. This was a 10% increase from 2006. A third of domestic students reported missing classes regularly because of work commitments.

For these students, work and lifestyle were more important than the education for which society still pays the bulk.

Research from The University of California reported in 2010 that full-time students allocated 40 hours per week towards class and studying in 1961. By 2003 the time allocation was down to 27 hours (16% of a week). More recently Professor Richard Arum of New York University led research which surveyed over 2,300 students in four-year college courses. On average students in a typical semester spent approximately 15 hours a week attending lectures and labs, between 12 and 14 hours per week studying, but a third of the time studying was spent with peers in social settings ‘which are not generally conducive to learning’.

Over a third of students reported that they spent five or fewer hours per week studying alone. 

In New Zealand the Sovereign Well-being Index released last year indicated that young people felt the most ‘unconnected’ in New Zealand and 60% of young people reported that they felt depressed because ‘they often lack the money to interact in many real world situations’. At the same time, tertiary students were reported in the news as saying ‘they are living in poverty and that the current living costs loans need to be increased substantially’.

In response, Minister Steven Joyce suggested that students should approach their tertiary education decisions as they would any other major investment decision. "They [should] think carefully about their options, what they want to achieve, the costs, the career opportunities they will get, and the kinds of support available to them." "Many of those on student allowances or student loans top that up with part-time work and/ or support from family,” he said. "That has always been the case."

The difference is in how many people engaged in tertiary education.

In the 1960s under 5% of school leavers went to university, and tertiary education was treated as the ‘job for the next three years’. Earning money for fees (minor) and books (expensive – the web hadn’t been invented and nor had study guides) happened between semesters.

Now most school leavers enter tertiary education, and a relatively small proportion of costs are paid as fees. Top students (more than 3% of school leavers) are on scholarships which pay fees and some have sufficient funds for living expenses as well. Top students usually attend lectures and study in the library. Some of them are also in employment – but in between lectures. Their priority is learning. 

A considerable amount of tax payer money goes into supporting universities and student loans with the goal of creating an educated workforce. Professor McCutcheon has stated that quality comes at a price. He has also reported that Australian universities operate on approximately twice the income per students as those in New Zealand whereas Massachusetts Institute of Technology (MIT - but not to be confused with the south Auckland institution), has seven times the funding per student. 

Students in New Zealand are not disadvantaged in terms of access to study, but to create a better funded education system requires growth in the economy – and that requires technological change which in turn is facilitated by educated people.

Students are the future. Feeling grateful for the support they are given and concentrating on absorbing knowledge, would assist the change, but they won’t be able to facilitate the change unless they take study seriously; it is difficult to learn in absentia.

The fundamental problem with attendance is not the level of fees paid – the US and Australian students pay more fees but still skip classes… it is the general expectation that tertiary education is a right.

Making university entrance a competitive process could reinvigorate the system. New Zealand universities could then concentrate on enabling top performers to achieve great heights, which is what great universities do….


Comments (14)

by Chris de Lisle on November 12, 2014
Chris de Lisle

Rather than entitlement to an education, I've mostly experienced expectation of an education. Employers want the degreed but wthere is generally rather little interest in what a job applicant might have learnt in getting that degree - as shown by the cliche contrast between university and "the real world" (Or, to take a more specific example, look at Bob Jones' comments about commerce graduates - whose university educations ought to be turning them into exactly what he wants in a new employee). So if the knowledge is not valued, why spend valuable time getting it?

On the other hand, a graduate who has never or barely worked is at a disadvantage on the job market (a prospective employer worries whether they understand the nine-to-five corporate culture and whether their lack of employment reflects laziness). So, working through university seems a reasonable and forward-thinking decision.

I don't think you'll get more students in your classes unless you can make the specific facts or skills that they are assessed on valued by their employers. At the end of the day, they will certainly get what they feel entitled to.

by Fentex on November 12, 2014

New Zealand universities could then concentrate on enabling top performers to achieve great heights, which is what great universities do….

As a taxpayer I've no particular ambition for any New Zealand universities to glory in being 'great'. It isn't what I'm paying them for.

And if students aren't studying hard enough shouldn't they be failing their subjects? Isn't that supposed to be the arbiter of success in studying at University?

The idea that our universities aren't great because students slack off and fail to appreciate opportunity through feeling entitled seems to beg the question of how students get away with slacking.

Is being a great university simply being one with the courage to fail students?

by Emily-Kate Robertson on November 12, 2014
Emily-Kate Robertson

To be honest,  I wouldn't be opposed to paying more for my university fees if it meant that the facilities were better. The archway lecture theatres (where 90% of my lectures are) at Otago are terrible! It's pretty hard to learn in stuffy rooms where you can barely reach or see over the desks! 

by John Egan on November 12, 2014
John Egan

Full disclosure: I work at the University of Auckland. Previously I’ve worked at research-intensive universities in Canada and Australia as well. I completed my own studies in Canada and the US. 

When I started grad school in 1997 the low fees were appealing: around $2500 NZD a year, for a programme that one could conceivable complete in one year. However the library holdings were sparse, there were effectively no computers for students to use and no offices (or desks) for students in many departments. Staff had been in a wage freeze context for several years as well. In other words, we got what we were paying for. When the fees starting going up, the facilities improved dramatically. 

Many students still ratched up large debtseven with the low fees. For many (including myself), it was the expenses of living in an expensive city that required debt financing. Flatting, taking public transport, eating cheaplystill hard to do in an expensive city like Vancouver (or Auckland) if you dont live with someone who provides room and board to you with your having to pay for it. My 2 years of study led to $28k in loans. Which I paid off and have proven more than worth it, in terms of my employment prospects post-degree. 

Aucklands fees are still very reasonable when compared to similar calibre universities around the world. And the facilities are OK. The concerns I have are about how the extra revenue will be consumed: already a disproportionate amount of human resource costs goes to the executive levels of staff, whilst those on the coalface get meagre increases that dont keep up with the escalating costs of life in Auckland. 

by Tim Watkin on November 13, 2014
Tim Watkin

Jacqueline, while I don't doubt your evidence, I don't agree with the conclusion you reach, that the fundamental problem of attendance is because tertiary education is seen as a right. I'd think that when you were studying at university (and in other generations) tertiary study was an elite option, didn't require part-time work and was not a right, yet there were plenty of student dropping out, spending their time on protests and politics, bunking off, switching degrees and generally mucking about. There's nothing new in that.

And while I agree there should be room for an excellent university or two in New Zealand and there could be higher standards demanded of our students, I don't see why that has to come at the expense of our egalitarian roots.

The picture you paint is of students doing it tough and having to work their way through at the expense of their education. On problem there is perhaps one of expectations and lifestyle. Do students expect more than 20 or 30 or 50 years ago? Is a cold flat, bad clothes and no flash gadgets no longer acceptable?

But also there's a political choice at the heart of this. The bottomline is that universities need more money. Yes, they could get that from students. But they could also get that from taxpayers as a whole, via the government, if those taxpayers valued the tertiary excellence you seek.

by Charlie on November 13, 2014

Whilst Chris says employers "want the degreed", they want more of those with trades and technician/technologist training.

Many of the degrees being produced by NZ universities offer the graduate little or no hope of employment in their chosen profession, and I'm not just talking about the 'Maori Performing Arts' issue in the news this week.

For example, last year I was told by a partner in a well known legal firm that NZ universities pump out about 1000 legal degrees every year but the industry can't absorb a tenth of those. His call was to immediately close two of the four law faculties.

So maybe the government should consider a heavy pruning to reduce costs, improve standards and discourage innocent young things from entering courses which offer little or no chance of future employment.  Once they'd done that, maybe convert a few back to technical colleges...


by Lee Churchman on November 13, 2014
Lee Churchman

I'm not sure that this is right. I currently work in a university and have taught at several others. New Zealand is never going to have the money to compete in financial terms with elite universities overseas. It's just not going to happen, and there's honestly no reason why it should. I attended a fairly well off public university in Canada (U of T), and they were rolling in it compared to NZ universities. I think Harvard had ten times our endowment (my friend who did his PhD there certainly wanted for nothing).

by Chris de Lisle on November 13, 2014
Chris de Lisle

I think I agree with that, Charlie. I had in mind pretty generic office work rather than a "chosen profession" - I think possession of a degree still offers an advantage over a high school diploma in these positions. By contrast, as you say, technician/technologist courses do make it clear how the material being taught relates to future employment prospects. Medicine courses too put enormous stress on placements and assessing people on their ability to perform the job they will actually perform.

(Law, bizarrely, gives people a degree and only then expects them to acquire their professional qualification. The law schools are also clearly a rort - VUW takes 900 students into its first year intake and 150 into its second (numbers from memory of 2008). There's a clear financial benefit to taking on the 750 who won't get in, but it is a complete waste of their time and money. Clearly, from your friend's comments, even that 150 is too many...)

@Tim: On expectations and lifestyle, between 2008 & 2012 in Wellington, I think I had a cold flat and bad clothes. My furniture was a couple of cardboard boxes and a $10 bed from the Sallies which I carried across town myself to save on transport costs. I did have a laptop and an internet connection. I probably spent an average of $10 a week on alcohol. I might have spent $30 a week on food (but my workplace let me take home leftovers). So, Spartan but not terrible. The real expense was accommodation - I don't think I ever paid less than $150 a week. It certainly seemed that rises in the student loan living costs were accompanied by rises in rent prices. I know that I often signed very foolish lease agreements rather than risk being flatless and I think the fact that we all found housing as individual groups allowed prices to rise. I now wonder whether, rather than pouring money into building halls of residence,* the university could have been helping us to bargain collectively with the big letting companies in some way. 


* Incidentally, the sheer amount of pointless construction VUW engaged in in the 2000s and 2010s (Pipitea, the Hub) makes it hard for me to believe that universities have it all that tough.

by Lee Churchman on November 13, 2014
Lee Churchman

Incidentally, the sheer amount of pointless construction VUW engaged in in the 2000s and 2010s (Pipitea, the Hub) makes it hard for me to believe that universities have it all that tough.

Yes, the library at Waikato has been turned into a "Student Experience Centre". Quite what that is, I can't fathom.

by BeShakey on November 13, 2014

For example, last year I was told by a partner in a well known legal firm that NZ universities pump out about 1000 legal degrees every year but the industry can't absorb a tenth of those. His call was to immediately close two of the four law faculties.

I know lots of people with law degrees and only one that works for a law firm. The rest are working in jobs they couldn't have got without a degree, but still not in 'thje industry'.

From my perspective, in a changing economy lots of employers are looking for people that have demonstrated they can work hard, learn complex things, produce high quality work to a deadline etc etc. A university degree achieves this. The actual content of the degree is of lesser importance (of course this is a general observation, there are still lots of jobs that require a specific tertiary qualification).

by BeShakey on November 13, 2014

OECD data published in Education at a Glance 2014 put New Zealand and Sweden as the most generous countries.

Or not - that report said New Zealand's annual expenditure per tertiary student was below the OECD average (ranked 20 of 37), and the amount of private expenditure (i.e. student contribution) was above the average (12 of 34).

by David Crosswell on November 13, 2014
David Crosswell

My Lincoln experience was many years ago, when it was still annotated as a 'College' and not a University. But at that time, when money was shorter, fees were substantially lower, it was not so long since the Welfare State, Lincoln, along with Massey and Heidelberg University were together credited with being the three most highly rated agricultural/veterinary universities on the planet.

It has little to do with money. Throwing money at a problem has never been a New Zealand solution, but one that appears to have been imported to an increasing degree. Money is a resource, one of many, that must be invested astutely in order to gain an appropriate return, yes, but it's not a solution in itself.

At one time, The tertiary institutions of this country, and their staff, were interwoven with New Zealand's research institutions, for example. I had an uncle, head of Ruakura Research Station, who also delivered lectures. I had another who smuggled the first Charolais semen into New Zealand in the uterine tracts of rabbits, and set up the first substantial A.I. research centre, in that aspect, not far away from Ruakura. I had a cousin who was recognised as the foremost authority on the cell, as a generalised subject, on the planet, who was one of my lecturers when I was at Lincoln. Other lecturers had done things like set up a TB station in Fiji.

New Zealand needs to find itself some balls. The present tertiary situation is nothing more than symptomatic of what we see in many other aspects of the New Zealand social context. Through the 'art' of imitation, it has lost a significant level of its own identity. We need to rediscover the value of adapting scientific, learned principle directly into the environment. We need to make that gap between the commercial and governmental investment realms disappear, so that once we have developed ideas within our tertiary education systems that are worth developing into the real world environment, so that our students become known, so that they have somewhere to go as soon as thay have finished their studies. Because they have been offered a position before they have finished their Masters or Ph.D project, which they have done, in coordination with industry.

We don't need to raise fees, we need to lower them.

Increasing the intellectual and social capital of a nation is the fastest way of getting that country ahead. If you want to look at a model for failure, look at the U.S., where many old age pensioners are still paying off their student debt. A national context does not get ahead by employing its future as a negotiable asset. The U.S. is now over $US17 trillion in debt, with a 43% interest rate of its annual GDP, and with 42% of its foreign debt owned by China. This continuous worship of all things U.S. is beyond inane. The American Dream is where Freddy Krueger resides.

If a student wants to skylark around, strut the cat-walk, diligently study the social scene: they will fail their exams. If they then have to repeat the year or semester to catch up, they pay top dollar. There are many lessons to learn in this life, and if parents don't want to meet that bill, they will assist little Johnny to comply, or assist him to get a job down at the local meatworks. That's a valuable educational process right there. Little Johnny can then go back and resume when they have passed an assessment exam, or redone the year they failed after paying for it.

Trite, prim little adages like: 'University education is a privilege, not a right' sound well and good until they are bleated at somebody who's been around a tad, and he advises you that 'so is waking up every day'.

We've made a mess of this place, but we owe it to our children to assist them toward a gainful future, and education doesn't begin at the tertiary level, or stop outside the classroom. It needs a whole of system approach, because if too many students are failing at tertiary level, they have failed before they arrived. If an educational process needs funding, the social context must be amended to the point where it can afford it. You don't just mentally condition children to a debt system, before they've even started earning, in order to compensate.


by Megan Pledger on November 14, 2014
Megan Pledger

1) Stuart McCutcheon wants there to be one great university - as long as it is his.   It's purely about self-interest as there doesn't seem to be any benefit to students in putting up the fees. 

2) At VUW,  (at least in my time) the first year course for Law only included two law papers so that those who failed to make it into year 2 of Law could switch to arts with no hassles.  Letting anyone who wants to give it a go in the first year makes it  a fairer playing field than using school results which benefits the kids from high decile schools.    Success in legal studies is pretty hard to assess from school work anyway because the skills and knowledge are different.

3) At the moment education policy in NZ seems to be about our ranking on various league tables - international university tables, PIRLS, TIMSS;  maybe because they are easy things to measure on some CEOs performance criteria.  The only trouble is that it is making people forget the point of education.

4) And the thing about Harvard - 70% of students get discounted fees and parents earning less than $65k pay nothing in fees.  The rich subsidise the poor.

5) it's getting a bit old to have baby boomers/near baby boomers take it out on young people for the mess the bbs/nbbs have created.

by DeepRed on November 14, 2014

Another thing to consider is that most lower-skill jobs are now done more efficiently by robots, and a number of white-collar jobs have been replaced with software and more recently the Internet of Things.

And unlike the 2 Industrial Revolutions, the new jobs being created by the 'Digital Revolution' have steeper learning curves than the ones they replace - in other words, degree level stuff at the very least. But what becomes of those made surplus to requirements by the Digital Revolution? Not everyone's cut out to be a software engineer, or for that matter, going to university itself - I found that out the hard way.

Short of state-sanctioned mass murder of the 'weak', one partial solution would be establishing some kind of new social contract that offers retraining assistance, and it doesn't have to be only a Govt-funded thing. The Mainstream Employment Program is a useful pointer.

Post new comment

You must be logged in to post a comment.