Last month, the latest Household, Income and Labour Dynamics in Australia report found that graduates of the more applied universities earned, on average, more than their Group of Eight counterparts.
Predictably, the Australian Technology Network and the Innovation Research Universities cheered, while the Group of Eight questioned the methodology, citing a lack of control for field of study and exclusion of the self-employed and business owners.
This debate speaks to one of the issues in contemporary higher education — how to judge the outcomes of public and private investment in universities when a degree is no longer the preserve of an elite.
If “too many” people seek a degree, at what point do the returns become insufficient?
If a degree is a ticket to decent pay and the middle class, is the HILDA report right to suggest that more “practical” courses may be the best fit, or do globalisation and technological change render a liberal education invaluable?
Data from Australia and other countries shows that a degree continues to be associated with a wide range of benefits, such as good health, marital stability and civic participation, as well as employment and earnings.
But there is also evidence that the average wage return on this investment is slipping. Using constant dollars, the US Bureau of Labor Statistics found that across the past decade average earnings fell at all levels of education. The fall was less marked (about 10 per cent) for bachelor’s and graduate degrees. By contrast, those without degrees suffered a greater than 20 per cent drop.
Student learning is also a concern. In 2012, 37 per cent of Australians aged 25 to 34 had a degree, but only 21 per cent were able to complete commensurate literacy tasks as measured by the OECD’s Survey of Adult Skills (part of the Program for the International Assessment of Adult Competencies). Degree attainment is no guarantee of capability, and this gap is evident across OECD countries.
What accounts for wage slippage and skills gaps? The National Association of Colleges and Employers surveyed recent US graduates and found lower rates of unemployment among former students of liberal arts and specialised institutions. Large, comprehensive institutions, which in the US typically mean public universities, exhibit the highest rates of unemployment. Regardless of institutional type, most recent graduates reported employment or further education.
The NACE data suggests those institutions on the sharp end of widening participation enrol a growing number of students for whom degree attainment is a poor proxy for learning and the transition from degree to employment is problematic.
The history of higher education is a series of contested and incomplete rationalisations, from small to large, liberal to specialised, idiosyncratic to corporate. Another rationalisation is on the horizon: disruption of the degree itself. May some standard elements of a degree — length, cost, uneven student experience, university mission complexity, ambiguous alignment with employment — be considered bugs rather than features?
In other industries, to widen access, innovation means time and cost reduction while improving quality. A new breed of degree alternatives suggests some possibilities. Witness the groundswell of boot camps, transition pathways and business incubators that are developing short, intensive-learning experiences designed to make raw talent job-ready.
Look to companies such as Fullbridge, General Assembly (which now operates in Melbourne and Sydney) and Galvanize. Udacity offers “nanodegrees” that may be completed in months for hundreds of dollars. Some of these innovations address the tech-boom skills shortage; others focus on general capabilities. Some use in-person teaching and student cohorts; others are self-paced and online. Some are high cost; some inexpensive.
Back to the HILDA controversy. It is too simplistic to argue that a difference in average earnings by university type or subject says something definitive. The way a course is taught at a given university — and the perspectives, confidence and ambition it may or may not instil — is a variable in labour market outcomes. Categories such as “applied” or “liberal” education reveal little about the student experience, differences across courses or unrealised potential. Do these new ventures represent uncluttered good practice where cause and effect is more transparent and consistent?
Few of these ventures explicitly compete with universities, and some partner to market cut-price degrees. A few universities are trying to stay ahead of possible disruption. In Australia, Deakin Digital, a subsidiary of Deakin University, accredits the capabilities of experienced adults put off by the time and cost of a master’s degree. Deakin Digital awards its own credentials in areas such as collaboration and digital literacy, aligned to Australian Qualifications Framework level 9 (master’s level).
It is premature to judge these start-ups. Universities have outlived or sidelined many a pretender but must ask whether the value of a degree may be delivered more efficiently and effectively at scale.
The pressures of greater access and constrained funding will only intensify. The degree is the prize but also the problem