OnPoint by Keith Ng

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OnPoint: 3 News Exclusive Investigation Newsflash: Government Not Profitable

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  • Bart Janssen, in reply to Lucy Stewart,

    I think this is the one that people choke on, because it’s meritocratic rather than egalitarian.

    Yup. that is a pretty standard argument about selecting only the brightest to go to Uni. Oddly we don't demand that average blokes should get to play for the ABs or argue that folks that can't remember which is phase and which is neutral should be allowed to do wiring.

    Note I'm not suggesting for a second that having the aptitude to learn in a way that is suitable for university training makes you a better person. In fact I have pretty good experience suggesting otherwise.

    However I am saying that without that natural ability there is less likelyhood (not zero) that you will gain much from Uni.

    Note also that the old system used to say "if your really bright can can go to uni straight after school, but if by the time you reach 23? or 25? you still want to go to Uni then that's fine too". And often those slightly older (more mature?) students perform really well. Part of that is desire and part of it is learning how to learn in the 17 to 25 period.

    Auckland • Since Nov 2006 • 4460 posts Report Reply

  • Sacha, in reply to Bart Janssen,

    I read fleetingly that Joyce is canning loans for over-55 tertiary students. Haven't seen detail yet. Media probably won't cover it unless someone throws a tea party (or a lamington).

    Ak • Since May 2008 • 19728 posts Report Reply

  • NBH, in reply to Lucy Stewart,

    Then how come I have a rather official-looking certificate saying I passed NCEA Level 4? Or have they switched up how the Scholarship-level subjects work since I was a guinea-pig?

    I'm assuming that would be an issue related to Scholarships, and I'm not sure what the qualification status is of those these days. Certainly it's fair to say that NCEA in practice only goes up to L3 - especially since NZQA itself says that "There are three levels of NCEA certificate": http://www.nzqa.govt.nz/qualifications-standards/qualifications/ncea/understanding-ncea/how-ncea-works/ncea-levels-and-certificates/ :-) Note that you can use credits from standards at higher levels of the qualifications framework (which theoretically goes up to 10) to meet the requirements of NCEA.

    In terms of grad tax - with the proviso that this is my leaning rather than any sort of concrete plan or idea - I'd be thinking of a small (0.5-1%) across the board tax increase for all those with degrees or higher. That means that for early graduates the repayment equivalent taken out of their pay would be miles lower than the rates for student loans (which the GT would largely replace), while ensuring that there would be a constant contribution throughout someone's life - the specialist tax lawyer earning hundreds of thousands per year would still be making a contribution that recognises the private benefit they obtained from their qualification years after they would have repaid their student loan. Regarding equity issues, you could say that it only cuts in at the $48K+ income category.

    I don't think the "all-but-complete" would be an issue for a couple of reasons (including the performance measures in our current funding system), but the most significant is simply that not having a qualification means that you'll lose out on future opportunities for employment, study etc. What it would do, I think, is make people think twice about going into degree-level study as a default option, and make other pathways (like the traditional trade and technician occupations, where I think it's near-universally acknowledged we have a significant skills policy problem) a more attractive option.

    As I say though, this is more of a half-formed idea than My Five-Year Plan For Tertiary Education, and it would need to be part of a broader overall reform of both provider funding and student support systems. I also acknowledge that it's an idea that realistically doesn't have the faintest chance of being implemented. :-)

    Wellington • Since Oct 2008 • 97 posts Report Reply

  • Lucy Stewart, in reply to Bart Janssen,

    And often those slightly older (more mature?) students perform really well.

    I had actually understood that people who entered under adult entry (by virtue of being over 20) had much higher non-completion rates than people who got in with UE at 18. (Would love to see some stats either way, couldn’t find any with cursory Googling.)

    I imagine there are some who do very well, having learned to learn, but a lot of others who didn’t pass UE, waited around until they qualified by age, and still hadn’t picked up the learning skills they needed. By and large I think requiring *some* sort of preparatory course for people without UE – whether through the university or at another tertiary institution – is probably a good idea.

    I’m assuming that would be an issue related to Scholarships, and I’m not sure what the qualification status is of those these days. Certainly it’s fair to say that NCEA in practice only goes up to L3

    They must have changed something, though, because I remembered also that my official UC transcript says I was admitted to university by virtue of having passed NCEA Level 4. It may not be a *common* thing (and it certainly wasn't in my year, which was the one where only 90-odd people passed Scholarship Chemistry, 30-odd Scholarship Physics, 9 people Scholarship Biology, etc, countrywide, due to some really whacked-out marking rubrics) but it was definitely A Thing.

    Wellington • Since Nov 2006 • 2105 posts Report Reply

  • Bart Janssen, in reply to NBH,

    In terms of grad tax

    I have no problem with paying more tax. I believe we all should and those earning more should pay proportionately more so kicking it in above $48k would be fine by me.

    BUT it would feel a lot like penalising graduates for learning skills we actually want in society in general. That might be an issue.

    However if it only kicked in at higher salaries it would favour those lower paying degree careers.

    Auckland • Since Nov 2006 • 4460 posts Report Reply

  • Lucy Stewart, in reply to Bart Janssen,

    BUT it would feel a lot like penalising graduates for learning skills we actually want in society in general. That might be an issue.

    I reckon you could sell a 1% tax rise way easier than student loans (if it were a replacement for them.) In effect, it wouldf *be* almost a straight top income tax rise, since a large majority of people earning over $50Kish will have gone to university, but it's an encouragement to follow career paths which are equally lucrative but don't require degrees. Not a terrible idea, if you could get it through Parliament.

    Wellington • Since Nov 2006 • 2105 posts Report Reply

  • Bart Janssen, in reply to Lucy Stewart,

    If it replaced loans it would take away that burden (real or imaginary) placed on recent graduates. Note just after you graduate is often when you do your best work so removing that from graduates minds would be a good thing.

    But I still think the real problem is the fees in the first place. If the fees went down and we stopped pretending universities should be run like a business you'd remove a lot of that pressure in the first place.

    Auckland • Since Nov 2006 • 4460 posts Report Reply

  • Sacha,

    Progressive tax coupled with universal provision is the way we used to deal with the costs of education, pensions, etc. If you earned more, you paid it back.

    Ak • Since May 2008 • 19728 posts Report Reply

  • Kumara Republic,

    Much of the student debt can be attributed to the sky-high bar for the student allowance ("borrowing to eat"), rather than actual tuition fees - in my own case, maybe 65% of my student loan was for living costs due to having an "upper middle class" father. The Clark Govt made steps in the right direction by pre-empting inflation rates, but the bar is still high compared with other countries.

    On a wider scale, student debt and other rising education costs are one of the big factors behind the weakening of the Western middle classes.

    The southernmost capital … • Since Nov 2006 • 5433 posts Report Reply

  • Fooman, in reply to Kumara Republic,

    I remember one year, my student loan was (roughly) split into 3: one part living expenses, one part fees and one part interest. The smallest figure of the three was not less than ~5.5k

    Friends don't let friends post-graduate.

    FM

    Lower Hutt • Since Dec 2009 • 87 posts Report Reply

  • NBH,

    Progressive tax coupled with universal provision is the way we used to deal with the costs of education

    Not with regard to university education – there it used to be progressive tax coupled with pretty restricted provision. :-)

    Much of the student debt can be attributed to the sky-high bar for the student allowance (“borrowing to eat”), rather than actual tuition fees

    This is a bit misleading – according to the most recent annual report on the scheme, in 2010 only 48% of borrowers accessed the living costs component (compared to 93% who borrowed to pay fees) and living costs only accounted for 25% of the amount borrowed in that year. You’re right that the student allowance scheme is a mess though. One of my personal bugbears is that the effective marginal tax rate for earning above the weekly threshold is over 100% (each cent you earn before tax over the repayment threshold reduces your allowance by the same before tax amount). Yet strangely the same people who whinge about interest-free student loans ignore that particular piece of economic lunacy…

    Wellington • Since Oct 2008 • 97 posts Report Reply

  • Rich of Observationz,

    [qualifications framework] theoretically goes up to 10

    10 is a Nobel Prize?

    11 would be discovering the Higgs Boson, or something impossible like general AI.

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • NBH,

    10's a PhD (http://www.nzqa.govt.nz/studying-in-new-zealand/nzqf/understand-nz-quals/) - but in practice at degree level and above the framework is more theoretical than anything else, since the universities have never really bought into the idea of it (being exceptionally resistant to the idea of competency-based education that underpins the framework).

    Wellington • Since Oct 2008 • 97 posts Report Reply

  • George Darroch,

    I knew that, but only because IRD makes you affirm the value of your overseas study for interest writeoffs. Thus, I had to pay NZQA $165 to investigate that my masters degree at one of Australia's top two universities was at least equivalent to a NZ undergraduate degree. I think I had a 9, but I was above the 7 cut-off, which is what mattered in this exercise.

    ETA: New Zealanders are considered Australian Commonwealth residents for postgraduate study purposes, and thus receive a full fees scholarship for any research degree. This is hardly known, and thus underutilised. You won't get a student allowance though, you'll need other financial arrangements, scholarships or to self-fund.

    WLG • Since Nov 2006 • 2264 posts Report Reply

  • George Darroch,

    I read fleetingly that Joyce is canning loans for over-55 tertiary students. Haven’t seen detail yet. Media probably won’t cover it unless someone throws a tea party (or a lamington).

    Oh FFS. This is serious, and this is awful. It speaks a profound ignorance of knowledge production, the nature of universities, the role of non-young-people in society, and of NZ's demographics now and in the future. Cutting off appendages is a terrible way to lose weight.

    WLG • Since Nov 2006 • 2264 posts Report Reply

  • NBH,

    FWIW, I had a spare minute and followed up whether mature students do have a better completion rate than younger students on the thoroughly excellent Education Counts website . NZ doesn't (as far as I'm aware) have a distinct marker for 'mature' in its official datasets, but from looking at the course and qualification completion rates by age for degree-level study it looks like Lucy's right, and older students don't have better completion rates than younger ones.

    ETA:

    New Zealanders are considered Australian Commonwealth residents for postgraduate study purposes, and thus receive a full fees scholarship for any research degree. This is hardly known, and thus underutilised.

    Absolutely, and this is another area where right-wing rhetoric about needing to be competitive with Australia is for some reason curiously absent.

    Wellington • Since Oct 2008 • 97 posts Report Reply

  • linger, in reply to NBH,

    older students don’t have better completion rates than younger ones

    But is that the right metric? i.e., is their purpose in taking university courses actually to complete a degree?

    Tokyo • Since Apr 2007 • 1931 posts Report Reply

  • NBH, in reply to linger,

    Oh yeah, those rates don't relate to whether people are getting what they want out of study - I was just responding to Lucy's note above that she'd be interested in stats on the topic. It is worth noting though, that the situation is the same for both qualification completion (completing a BA) and course completion (passing ANTH 101). If mature students are more skilled at learning but many don't intend to get a degree, you'd still expect course completion rates to be higher than those for younger learners.

    Wellington • Since Oct 2008 • 97 posts Report Reply

  • Bart Janssen, in reply to linger,

    is their purpose in taking university courses actually to complete a degree

    May not be their purpose. But the taxpayers purpose is to get completion because that is an indication of competence to fulfill a specialised role in society.

    However, the key thing for me is not that their completion rate is high or low for older students. What is important is that the cohort that does not qualify for Uni at age 17 then spends a couple of years to figure out if they really did want to try. Most of them choose something else during that time. A small percentage still want to have a go, some of those succeed. I'm happy enough with that.

    If you want to exclude groups based on success rate then have a comparison of completion rates for various schools. Some schools send huge numbers to Uni, the majority of whom fail to complete, probably because they never wanted to go in the first place.

    The key thing to to jig the numbers around until we produce "enough" graduates. And I really do know that "enough" is very hard to estimate. What I don't like is using "market forces" eg high fees and loans to control those numbers. I'd prefer to use talent as the selection criteria.

    Auckland • Since Nov 2006 • 4460 posts Report Reply

  • Rich of Observationz, in reply to George Darroch,

    My friend got well funded to do a PhD at Cambridge, despite being American. The SSRC looks at the research, not the person doing it. (This has probably changed as part of the UK’s policy of becoming a developing nation within 20 years through applied xenophobia).

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • BenWilson, in reply to Kumara Republic,

    The big problem with university education these days is that it doesn't really mean much in terms of extra wages. Only the jobs that actually require it ... require it. For the rest, NZ business doesn't really rate general education that highly (despite protestation that they do). Other worker qualities are nearly as valuable to them, like initiative, presentation, hard working, etc. This is the vast bulk of jobs.

    This is something that changed in NZ, and in the developed world generally, over the last 30 years. Was this directly related to how many people actually had such education? Seems likely to me. The skill stopped being scarce, and became commonplace, commanding no increase in wages. So when the cost of it suddenly increased (exactly the year I began tertiary education), it just started crippling people who chose anything that wasn't one of those carefully-kept-scarce degrees.

    I don't regret the education, but I know it cost me a lot of money. I know this because all the people who didn't get one when I was that age have substantially more money than I do. They got 4 years more earnings and no debt. Because they were saving, they got into property sooner, and rode a 20 year boom. It didn't really matter that they earned less than I did at my peak (about 7 years after finishing study) - one of the things about a high income is you're expected to work your arse off, and to keep retraining too. So they could just rest at night and on weekends, where I feel like I've been playing catchup for my whole adult life.

    Most of these guys fit into the "Waitakere Man" mold, interestingly. They have moved from being left wing when they were young exploited trainees, to being in the middle as they got to decent wages, to being right wing now that they're small business and property owners. They see paying for student education as a luxury they couldn't afford and shouldn't have to pay for for anyone else. Not having had that education, they are blind to any value in it whatsoever, and certainly in their lines of work, it is of no value.

    Actually, to be honest, it's been of pretty limited economic value to me too. I don't think a diploma in computer science set me up as a programmer any better than just getting a job as a programmer as a kid would have. The value of such technical training declines very rapidly, you have to keep upskilling. My philosophy degree has been of nebulous value economically - I think it might have given me a mild advantage as a management trainee, useful for the 1 year it took me to realize that they couldn't pay me enough to do that kind of work. Did it make me a better thinker? I don't actually know. It enabled me to think and talk about abstract problems which mostly have no actual solution, something practically everyone does every day, with no more or less credibility than me.

    I don't have high hopes for free general tertiary education. Developed capitalist economies made the false assumption that it increases productivity more than the wage slavery of the developing world does. They've learned they were wrong and the overall answer is not to treat it as a right, as a gradually raising quality of human life issue, but as a luxury. So either the base model changes, or general education slowly devalues until only the very rich and the underclasses can really afford it.

    I think I'd actually rather that it went back to being a free meritocracy than that, and if there must be free tertiary, it should be in short technical courses. But of course the thing I'd most like to change is the base model that treats education as only of value for it's economic outputs. Currently, at least today, I'm feeling extremely pessimistic about the chances of that in the next 10 years in this country.

    Auckland • Since Nov 2006 • 10653 posts Report Reply

  • BenWilson,

    Sorry about the bumout above. I'm just feeling that NZ is on a race to the bottom of the wage heap, with a grinning banker in charge, rubbing his hands with glee at the idea that clean green socialist NZ will soon be changed into grubby oily factory NZ. And millions of people letting it happen, indeed making it happen. I'm not liking my home country so much right now.

    Auckland • Since Nov 2006 • 10653 posts Report Reply

  • Kumara Republic, in reply to BenWilson,

    Sorry about the bumout above. I’m just feeling that NZ is on a race to the bottom of the wage heap, with a grinning banker in charge, rubbing his hands with glee at the idea that clean green socialist NZ will soon be changed into grubby oily factory NZ. And millions of people letting it happen, indeed making it happen. I’m not liking my home country so much right now.

    You’re far from alone here. That we’re producing so much talent that winds up on the scrapheap – like my under-employed post-grad friends – is a symptom of what’s fucked up about the prevailing McMansion and Hummer orthodoxy.

    Maybe it’s about time to go underground…

    The southernmost capital … • Since Nov 2006 • 5433 posts Report Reply

  • NBH, in reply to BenWilson,

    The big problem with university education these days is that it doesn't really mean much in terms of extra wages

    I hate to be That Guy, but this isn't quite true according to the work that statsNZ and the Ministry of Education have done on the outcomes of tertiary education - particularly their EOTE work here. There are still significant premia for having degree-level quals (allowing for the usual caveats around analysis, variation etc.).

    What has changed is the extent to which a degree-level qualification has become the standard entry requirement for many firms and the expected pathway for 'success'. Ewart Keep from the UK's Centre on Skills, Knowledge and Organisational Performance has written some very interesting stuff on this, and the social problems that are created by the obsession of many politicians (and others) with 'knowledge economy'-type approaches to skills and education policy.

    Definitely with you on the rather depressing view of NZ's current trajectory though.

    Wellington • Since Oct 2008 • 97 posts Report Reply

  • DCBCauchi,

    Um, I thought universities weren’t really about the students but rather the research they produce. Supposedly pure research.

    And when I think of mature students, I think of them as at least over 25 and usually over 55. The ones who talk in tutorials when no-one else does. Remember them?

    All the polytechnics wanted to be universities, but instead all the universities became polytechnics.

    Since Feb 2011 • 320 posts Report Reply

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