Australia’s unforced error on tuition fees

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What a student studies in college shouldn’t be controversial, but it has become. People, politicians in general, increasingly want to direct students to majors that they believe will lead more directly and neatly to jobs – closing, postponing, or disapproving areas of study that they believe will lead them, will produce poor financial returns. In most cases, that means pulling heavy curtains on topics such as art, literature, history, and philosophy.

And when politicians and pundits don’t manipulate politics to favor one avenue of study over another, the market tries to do so. Income Sharing Agreements (ISAs), contracts that allow students to get money for college in exchange for a share of their future income, already in some cases make the study of the liberal arts more expensive than studying the rigorous sciences.

In Australia, the policy of favoritism is now less subtle. There, starting next year, their ‘Out-of-the-Box Graduate Package’ will cut science and engineering student fees and dramatically increase – up to 113%, media reports – to study in the fields of social sciences and human sciences. These reports quote Australian Education Minister Dan Tehan as saying that the changes “would encourage students to make choices that are more relevant to their work.”

This is the song we hear here too.

But there is only one problem. Well, just a major problem.

It turns out that in Australia the idea that engineering students have more jobs or better jobs is not true. Critics of the new policy have pointed out that there is little or no difference between the career prospects of those who study art and those who study the sciences.

The Australian Broadcasting Company recently produced a long and thorough fact-check on the matter and of course there is no difference. According to this report, “employment rates, covering full-time or part-time work, for both groups are roughly the same.”

In more detail, in Australia, research shows that “94.7% of science graduates were employed in 2016” while employment rates “for graduates in the humanities and social sciences ranged from 94.4% to 95%. , 8% ”. The projections also showed that graduates in the humanities were even more likely to be employed in the future than those in STEM (science, technology, engineering and math) subjects.

Mark Warburton, Honorary Principal Fellow at the Center for Higher Education at the University of Melbourne, said in the coverage: “It appears that decisions about whether to discourage or encourage particular disciplines have not been made in function on subjective preferences on what students should study. “

Subjective preferences? No kidding.

In fact, the job market has said loudly that students who study history, literature, and the humanities have better and longer-term employment prospects than those who study science and technology. At the very least, no worse. And it’s not just Australia’s business.

Just over a year ago, I wrote about the results showing that while STEM graduates tend to get good jobs with good incomes right after college, these benefits wear off when graduates enter. in their peak earning years. At 40, liberal arts learners have caught up and financially overtaken STEM folks.

From this room:

  • at age 40, male STEM graduates earned an average salary of $ 124,458. At this age, “majors in social sciences and history” were making $ 131,154. Even the average college graduate in any subject earned almost $ 112,000 by age 40, pretty much wiping out all of the financial boost STEM graduates immediately got. The trend was similar for female graduates.

It should also be noted that by the age of 40, the majority of STEM graduates were no longer in a STEM career.

Here is the required warning that salary and earnings are perhaps the worst way to assess the value of college. The gamble of reducing learning to dollars and dollars is a cynical mission. It’s like reducing life to a calorie count in and out – if that’s the goal, you’re probably missing the point.

Even so, relying solely on the pernicious “return on investment” metrics, it certainly seems that Australia has blundered and built a policy based on a flawed premise. For a policy designed to promote learning in math and science, this is an embarrassing irony. That social scientists and educators have pointed out that going out is poetic.

Australia’s mistake is important because Americans want to replicate it, based on the same prejudices and misconceptions – both about the purpose of the university and the types of education that actually pay off.

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