The great tertiary education rip-off

The big problem with tertiary education isn't that people drop out before graduating. People can find themselves in the wrong course for all sorts of reasons and sometimes it's far better for the individual to simply cauterise the wound and move on. But although that's the case for students it doesn't mean the same logic should apply to the universities. Degrees have become commodified; just another product. The only difference is they operate in a hugely protected and subsidised market.

If there was a 10 per cent failure rate for anything else we bought we'd be outraged: yet we happily accept the massive waste and despair that comes each year as thousands drop out of uni. The taxpayer effectively hands over billions of dollars to fund a system where we know way over ten percent of the money will be wasted each year. If any other sector attempted such a heist we'd be outraged. It's way beyond time to examine the evidence and see if there's a better way.

The overall first-year attrition rate seems to be a tad over 12 per cent, although that figure's so general it's effectively meaningless. Probe further and other patterns become evident. A detailed, cohort study published last year by the Australian Council for Educational Research found that although between 2005 and 2008 only 8.2 percent dropped out in their first year, a further 14 per cent left later and, of all the students who began their study between the years, only an average of 73.6 per cent actually obtained a degree. That's an enormous waste.

By December it's likely that more than 27,000 of the people who enrolled in January will have left. The point is that some campus' and courses are far more sticky than others, although such information's hard to find. The ANU's dropout rate, for example, is relatively steady around five per cent. The University of Canberra, however, will lose something closer to 15 per cent of freshers. It's a big difference and yet, amazingly, the government that's funding this system has no way of knowing why.

Is it poor teaching, bad course design, or shouldn't the students have been enrolled in the first place? And why are students more likely to drop humanities subjects than, say, engineering? It's difficult not to suspect that if universities had to pay a financial penalty every time a student dropped out, admissions procedures would suddenly become far more rigorous.

Failures are, of course, an inevitable result of a broader enrolment policy and it's absolutely fundamental that an ATAR, obtained in the final year of high school, shouldn't determine anyone's future. But why do we believe that everyone needs a degree to have a good life, or that the country will be stuffed if people don't? Particularly when the evidence seems to be suggesting we've got far too many people with degrees.


No one doubts that obtaining, say, a legal degree or some communications qualifications are intrinsically worthwhile, but so is learning to fly. And look at the ratio of students to, say, legal practitioners. This year, there will be over 14,000 law graduates, but there are only jobs for around 66,000 practicing solicitors. And journalism? Fewer than 24,000 people work as reporters yet 5,000 are learning the subject at uni. The numbers don't add up, no matter how many valuable and transferable skills such people pick up along the way.

Education Minister Simon Birmingham's understandably exercised about reining in the huge spend on tertiary education. What he needs to do is simply encourage more transparency – then people will make their own decisions. There's a simple answer for anyone who trusts the market and that's to demand the provision of numbers. Very simple numbers. Not just the massaged course cut-offs, for example, but the actual lowest ATAR with which somebody managed to slip into a course. Together with drop-out rates and exactly why and when they left. A bit of transparency in return for all that public money.

Education is a business. That's why it's driven, no, powered, by money. It abandoned the pretension it could act as an agent of social change the minute it became an industry. Ever since the Dawkins reforms of last century the Commonwealth has proffered an open wallet and universities have helped themselves.

Government funding was the magic pudding allowing the sector to expand. Today the political dynamic has changed and the money isn't there. Forget all the flowery rhetoric about how 'knowledge' is somehow special. That may be true, but it still doesn't mean that what's happening in lecture theatres across the country has anything to do with greater human understanding, let alone the transmission of life skills.

We've allowed universities to pretend they're responsible players striving for social good long enough: the time has come to stop. A bit of transparency might help to introduce some accountability into a sector grown bloated and wealthy without feeling any obligation to justify its own shortcomings. It's time to challenge the system. University training offers people a chance to take their lives in new directions. So do trades. Both are vital for our future.

Nicholas Stuart is a Canberra writer.