Why Higher Education Should Be Free?
Free College Would Drive Economic Growth – The increase in post-secondary education is the key that propels the economic development of nations (Deming, 2019). This springs up the question, “Should higher education be free?” In different types of economies, as college students graduate without debt, this would give them the ability to earn, save and spend immediately, which could stimulate the economy.
This spending will create more demand and more employment opportunities, a significant economic impact of free college as claimed by free tuition advocates. A recent study of students beginning at a four-year public university in Texas by Denning, Marx and Turner (2019) found that free college facilitates led to an increase in degree completion and postgraduate earnings.
Although advances in technology have increased productivity, and, thus, reduced the demand for manufacturing workers, the growing importance of technology to the overall economy has upsurged the demand for educated workers. Overall production output encompasses innovation in work processes that result in increased value.
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- 1 Is uni free in England?
- 2 Why did university stop being free in Australia?
- 3 Is college free in UK?
- 4 Why do California schools have less of everything?
- 5 Who is the largest financer of education in developing world?
- 6 Is college free in Netherlands?
- 7 Is Uni free in Germany?
- 8 Why is college no longer free in the UK?
- 9 Are universities free in Scotland?
- 10 Is university free in USA?
- 11 Why is education free in Australia?
- 12 How much would it cost to make university free in Australia?
- 13 Is going to university worth it Australia?
Who benefits most from free higher education?
1. Free college programs benefit higher-income students the most. – Contrary to their reputation as “progressive,” free college programs overwhelmingly allocate taxpayer dollars toward upper- and upper-middle-class students, giving them a further head start than they already have in the higher education system.
- The worst offenders are “last dollar” programs (see Appendix for details on types of free college programs), which pay for the tuition balance that remains after all other grants have been applied.
- Ultimately, that means picking up a bigger check for students who don’t qualify for need-based aid, like a federal Pell Grant.
For example, if two students attend college—one a low-income student receiving a Pell Grant and the other a wealthy student not receiving any other financial aid—tax dollars from the free college plan would flow to the wealthy student (who is already more likely to go to college in the first place and be able to afford it) because they will have greater tuition expenses not already covered by existing aid. This becomes a big problem when you add up all the money being spent on these programs. One analysis of a federal free college proposal found that families from the top half of the income distribution would receive 24% more in dollar value from eliminating tuition than students from the lower half of the income distribution.5 While targeted programs like the Pell Grant were meant to increase access and make college more affordable for low-income students, free college programs would overwhelming direct tax dollars to subsidize the college tuition of those whose income is too high to make them eligible for need-based aid—proving that what sounds like equality does not always provide true equity.
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Should university be free in Australia?
The average student takes about nine years to pay off their degree. Some never do. There’s two ways to get students to pay back their HELP debt sooner. Make them pay at a higher rate, or make them pay it back earlier. The government is trying to do both.
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In 2017, the unemployment rate for people without a post-school education was more than double the rate for people with one. And people are responding to this trend the way you’d expect people to respond. Today, 45% of women in their late 20s have a university degree, compared to 12% when HECS was introduced in 1989.
And as any economist will tell you, an increase in supply will push down prices. For graduates, that price is your wage. In other words, in modern Australia, you don’t get paid much more for having a degree; you just have a hard time getting paid work without one. We give everybody access to a free, publicly-funded school education because we’ve recognised that an school education is a necessity but not everybody can afford to pay for this necessity.
But we haven’t yet taken the next step in this logic by recognising that a post-school education is now a necessity as well, and should be treated the same way. That means making university fee-free. When it comes to overcoming economic inequality, education is the closest thing we have to a silver bullet.
- It’s a proven means to prepare ourselves for the upcoming head-on collision with a labour market cleaved by the effects of automation and technology.
- Rather than letting kids from low-income families be the ones who fall into the widening gap between secondary and tertiary education – and with that, left at a disproportionate risk of long-term unemployment – we can funnel them into training and education.
Automation threatens up to a third of all existing jobs, but there are some jobs that can’t be replaced with robots. Future proofing our economy means future proofing our workforce. This brave new world is going to need trained nurses, aged care professionals and teachers.
- We don’t have enough people being trained for any of them.
- Free university education does two things: it arrests the widening gap between the rich and the rest, and it gets our community and nation ready for the future of work.
- Making university tuition free would boost enrolments, particularly among low-income families.
It’s a furphy that because we give low-interest loans to students, they don’t actually mind about the price. The Department of Education’s own estimates suggest that students are responsive to price, and they’re not so naive as to think that, just because they put off paying it, doesn’t mean they won’t have to.
- And using those estimates, fee-free university tuition would boost enrolments by an additional 8,100 next year.
- That’s 8,100 people who would otherwise not go to university because the cost of tuition is simply too high.
- And for them, those low-income households are benefited with more jobs paying higher wages.
A Deloitte study found, after controlling for innate ability and other attributes, full-time employed graduates in 2011 earned $24bn more in 2014 due to their university education than if they’d only completed high school. And it’s not just university graduates who benefit.
- Everybody’s wages go up when we increase the number of graduates.
- One international study found that a 1% increase in graduates creates a 2% increase in wages for those who did not complete high school.
- In Australian terms, this would represent around $1.7bn more in annual wages for some of the lowest paid members of society.
Free university tuition would boost enrolments, strengthen Australia’s economic output, lift labour productivity and ultimately mean higher wages across the economy. It would make the country wealthier, healthier, more innovative and more resilient. But most of all, it puts us on a sure footing towards a “caring economy” that makes sure our vulnerable people are looked after, not left behind.
- Today’s university graduates leave with decades worth of debt and enter an increasingly competitive job market, where you can’t afford not to have a massive debt hanging over your head.
- They’re not saving to start a family, put together a deposit for a house, or even save something for a rainy day.
- They’re paying for an education that’s become a necessity, but our old-fashioned thinking treats like a luxury.
We could give them a better deal. We could make university free. And if we did, we would discover that what goes around, comes around.
Sarah Hanson-Young is the Australian Greens spokesperson for education and a senator for South Australia.
Is uni free in England?
What are tuition fee costs? – Tuition fees are the headline costs of going to university. Universities can charge up to a maximum of £9,250 per year for your course. So for a three-year course, you’ll need to apply for a student loan that covers the £27,750 tuition fees for your course.
Depending on where you live, you can apply for a student loan from Student Finance England, Student Finance Wales, Student Awards Agency Scotland (SAAS), or Student Finance NI. However, an interest rate is also applied to your loan. The amount of interest charged is pegged at the Retail Price Index (RPI), meaning that if this rises, so will the amount you need to pay back.
As inflation is currently rising quickly in the UK, there are concerns that student loans will grow dramatically as the RPI rises. The amount you need to repay in tuition fee loans will be the total of your initial course fee and the interest rate applied.
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Why did university stop being free in Australia?
Abolition of university fees – During the early 1970s, there was a significant push to make tertiary education in Australia more accessible to working and middle class Australians. The Whitlam Labor government abolished university fees on 1 January 1974.
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Is college free in UK?
UK tuition fees – UK/EU students – There are two levels of tuition fees at publicly funded UK universities: home student fees (including EU students) and international student fees. For home students, institutions in England can charge up to a maximum of £9,250 (~US$13,050) per year for undergraduate degree programmes.
In Wales, the maximum fee is £9,000 (~US$12,700), while in Northern Ireland the limit is £4,160 (~US$5,900) for EU and Northern Irish students, and up to £9,250 for students from the rest of the UK. In Scotland, an undergraduate degree is effectively free for students from Scotland and the EU. This is thanks to a subsidy from the Student Awards Agency for Scotland (SAAS).
The SAAS also offers a tuition fee loan of up to £5,500 (~US$7,770) for home postgraduate students. It should be noted that the Scottish definition of “home” student differs slightly, in that it doesn’t include students from the rest of the UK – i.e. England, Wales or Northern Ireland.
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What university has the most funding?
What Are Some Examples of Research and Development Expenditures at Colleges? – Research funding and expenditures at postsecondary institutions can take many forms. The colleges with the highest research and development funding tend to spend a large majority of those funds on the sciences.
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Why do California schools have less of everything?
THE REASON: California is spending less on education because of policy choices it has made. The state directs fewer resources to education than do other states, and its chosen tax sources are volatile, making education funding vulnerable during economic downturns. –
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Who is the largest financer of education in developing world?
The World Bank Group is the largest financier of education in the developing world, working in 90 countries and committed to helping them reach SDG4: access to inclusive and equitable quality education and lifelong learning opportunities for all by 2030.
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Is college free in Netherlands?
FAQs – Q. Is it free to study in the Netherlands? A, Higher education in the Netherlands is not free, however, it is subsidized by the Dutch government, making it affordable for Dutch students and also fairly accessible for international students. Students can check the scholarships program offered by the Netherlands universities to international students.Q.
Can international students study for free in the Netherlands? A, No, International students can’t study for free in the Netherlands. In general, there are no tuition-free options. The best way to study in the Netherlands for free is to obtain a scholarship. There are various scholarship options for international students, with some excellent opportunities for non-EEA students.Q.
Is Bachelor Degree free in the Netherlands? A, No, Bachelor’s Degree is not free in the Netherlands as the public universities in the Netherlands for international students charge tuition fees regardless of their country of origin. However, students coming from the EU/EEA, Switzerland, and Surinam often pay lower tuition fees than non-EU/EEA students.Q.
- Which are the popular scholarship to study in Netherlands for Indian students? A,
- The popular scholarship to study in Netherlands for Indian students are Leiden University Excellence Scholarships, University of Twente Scholarships (UTS), Radboud Scholarship Programme for International Students, Utrecht Excellence Scholarships for International Students, Delft University of Technology Holland MSc Scholarship, etc.Q.
Which countries give free study to students? A, Nordic nations Denmark, Finland, Iceland, Norway, and Sweden all offer opportunities to study free or at low cost: In Norway, university study is available free of charge to all students, regardless of study level or nationality.
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Is Uni free in Germany?
Who can study in Germany for free? – Everyone can study in Germany tuition-free! That’s right: Germans, Europeans, and all non-Europeans can study in Germany free of charge – without tuition fees. It does not matter if you are from the EU or EEA. This applies to almost all study programmes at public universities.
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Is Uni free in Norway?
Course fees – Most higher education institutions in Norway are funded by the Ministry of Education and Research, and don’t charge tuition fees. This means that undergraduate and postgraduate students, both local and international, study for free. However, if you choose to study at a private institution, you will be required to cover tuition costs, although these are usually cheaper than their UK and European counterparts.
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Why is college no longer free in the UK?
What Happened When England Offered ‘Free’ College Proponents of “free college” would have you believe that getting rid of tuition fees is all it takes to create a high-quality, equitable, and accessible higher education system. But a indicates that in England, removing tuition fees from students achieved the exact opposite result.
Free” college in fact created a system where the wealthy benefited, and the poor were left behind. Starting in the 1960s, England removed tuition fees for its citizens who were full-time students. As one might expect, this caused a massive uptick in the number of students going into higher education.
After years of concerns about financial sustainability, England started to slowly introduce tuition fees in the late 1990s. Authors Richard Murphy, Judith Scott-Clayton, and Gillen Wyness studied the impact that charging tuition had on student enrollment, equity in college attainment among different income levels, and education quality.
The authors found that after tuition fees were introduced, the number of low-income students enrolling in higher education actually doubled between 1997 and 2015. This seems counterintuitive, considering that low-income families would seem to struggle the most under the new tuition-based system. As with most government-run programs, the old tuition-free system in England ended up hurting exactly the people it set out to help.
With the massive influx of students under the free system, the quality of the system declined and struggled financially to keep up with demand. In response, in 1994, the government capped the number of students that could enroll in each university under state funding.
- The result? The wealthiest students ended up receiving more of the free college tuition subsidies, since they were typically the most qualified and therefore most likely to succeed when competing for limited seats.
- Just as we have seen with experiments with universal health care, government control and financing leads to rationing.
As England’s experience demonstrates, removing market competition from higher education did not help low-income students—instead, it restricted their access even further. The authors also found that the amount of funding an institution could devote to each student increased once England introduced tuition fees, as did student enrollment numbers.
- The story of England’s experiment with “free college” should be a cautionary tale for Americans.
- The concept has certainly gained some traction in the United States already.
- Politicians such as Sen.
- Bernie Sanders, I-Vt., propose offering four years of “free” college tuition to all students at public universities, and New York recently became the first state to offer a two- or four-year degree to residents making $125,000 per year or less.
High student loan debt is a problem for many Americans. But the solution is not to follow failed policies that transfer costs to other taxpayers (most of whom do not hold bachelor’s degrees themselves) and to disadvantage low-income students. A better approach is to pursue policies that cut off the drivers of tuition inflation.
- Economic evidence suggests that unrestricted access to federal student loans has led to an unprecedented rise in college tuition.
- Heavy-handed government intervention in higher education does more harm than good.
- England has demonstrated that when competition and market forces enter the mix, more students gain access to a high-quality education.
American policymakers should take note of this policy shift across the pond, and avoid the temptation of making the same mistakes inherent in “free” college. This piece originally appeared in The Daily Signal : What Happened When England Offered ‘Free’ College
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Why isn’t college free in the UK anymore?
Of course it was not free, it was paid for by the state. However, the basic rate of tax was 13% higher than now. Various politicians decided that as graduates earn more, it was unfair to use taxes to pay for the education. The fact that they paid more tax seemed to pass them by.
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Are universities free in Scotland?
Students ordinarily resident in Scotland and doing their first degree will generally be eligible for free tuition. SAAS will pay the tuition fees of eligible students for five years in total.
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Is Oxford University free?
Course fees – This is what is paid for course teaching and facilities.
An Oxford degree costs the same as most UK universities.The exact course fee depends on whether your child is a UK (Home fee status) or international (Overseas fee status) student.A UK student’s annual course fees are £9,250 for 2023-24. For more details, go to our fees pages,
Is university free in USA?
CAN I STUDY FOR FREE IN THE USA? IF NOT WHAT IS THE COST OF STUDYING IN THE USA? There are many universities in the USA that provide scholarships, grants, and work-study schemes to their students to cover up their tuition and other expenses. Some of these grants are available for the financially needy students and some are for the high scoring students.
- Some universities provide financial aid, especially to international students.
- Schedule a FREE online consultation with study in USA expert Free Universities and Colleges Some universities and colleges are totally operated on donations and endowments while many are such which require you to work.
- Despite the free tuition, these universities provide quality education and also have reputational rankings.
Universities with free tuition costs for international students in the USA: – – Berea College – Web Institute – City University of New York – Curtis Institute of Music – Deep Springs College – The United States Naval Academy – Washington State University – Alice Lloyd College – College of the Ozarks – Warren Wilson College – Franklin W.
Olin College of Engineering – Curtis Institute of Music – US Academies Schedule a FREE online consultation with study in USA expert Universities with fully funded scholarship options: – There are other universities that are not entirely free but offer generous scholarship options that almost cover all your tuition costs for international students.
Check out a few options below: – – University of Alabama – Harvard University – Yale University – MIT – Princeton University – Cornell University – CalTech University – University of Chicago – Duke University – Notre Dame University – Rice University – Louisiana – University of Pennsylvania Schedule a FREE online consultation with study abroad expert Other sources of scholarships in the USA which offer or contribute to the financial aid for international students – American universities scholarships – Amherst College Scholarships – Berea College Scholarships – Clark University Scholarships – Colby-Sawyer Scholarships – Columbia College Scholarships – Michigan State Universities International scholarships – New York University Wagner Scholarships – Oregon University Scholarships – Concordia College scholarships – Iowa State University International Merit Scholarships Government Scholarships:- – Foreign Fulbright Student Program: – This program offers scholarships for international students who want to pursue a master’s or a Ph.D.
Degree. The scholarship includes tuition fees, airfare, a living stipend, textbooks, and health insurance. – Humphrey Fellowship Program: – This program is for experienced professionals who want to strengthen their leadership skills while interchanging the learning about the common issues of the USA and the professional’s home country.
Other ways you can fund your studies or study free in the USA are:- – You can always volunteer at https://www.gooverseas.com/volunteer-abroad for which you can get paid and also receive accommodation and food. – You can work within the university where you are studying as a professor’s associate or apply for campus jobs.
- There are many opportunities for working within the campus especially for international students.
- You can attain internships at several companies located near your university or home based on your previous education and professional experience.
- Cost of Studying in the USA Tuition fees:- The graduate program usually consists of 4 years, so the range of tuition fees is $5000 to $50,000.
The average cost of a four-year undergraduate course in a public university is around $26,500 per year. The same cost for a private university is around $35,500 per year. There is a cheaper option of Associate’s degree available which is a two-year public sector college also known as a community college with an average tuition cost of $3800 per year.
- However, you can’t complete a degree in two years, so you are transferred to a university for an additional two or three years for completion.
- Accommodation costs:- Generally, the Midwest region of the USA is cheaper in terms of living costs than the north-east and east regions of the USA.
- The average cost of a one-bedroom apartment is $500 and $3500 per month in rural and city areas respectively.
On-campus rooms are basically dormitories with two or three persons per room. The average cost for these rooms including board cost is around $11,000 for public universities and $12,000 for private universities per year. Other expenses:- The average cost of books and academic supplies is $390 per semester, which becomes $1200 per year.
- Other essential costs such as household expenses and phone bills cost around $45 per month.
- Electricity is around $50-$100 per month, and internet facilities count to $45-$50 per month.
- A public transport pass costs around $50-$60 per month, and there is a student discount in some areas for transportation.
Total expenses (Includes Tuition, on-campus accommodation, board, transport, and other living expenses):- For a public university Undergraduate student – Average $42,000 annually. For a private university Undergraduate student – Average $52,500 annually.
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Does London have free education?
Education in the UK – Any child residing in the UK may attend their local state school as long as they have the right of abode, In other words, they have the right to live in the country. The UK education system covers preschool, primary, and secondary schools. There are also many independent schools across the UK. These include private (public schools), international, and boarding schools, For example, Eton, Harrow, and Winchester are some of the UK’s best-known public schools. The government does not fund, nor partially subsidize these private schools. Parents therefore must pay tuition (and boarding, if applicable) fees, which can be expensive,
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Why is education free in Australia?
The Education Act, although contentious and accused of being politically motivated, was the first of its kind in the Australian colonies, and Victoria became one of the first regions in the world to offer free, secular and compulsory education.
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How much would it cost to make university free in Australia?
Push to abolish university fees for first-time students South Australian Senator Rex Patrick says he will undertake a “major political campaign” to make university and vocational education free for Australian students undertaking their first degree. Photo: Tony Lewis/InDaily Patrick, who is facing a tight contest for re-election in the Senate this month, said he is calling for a “revolution” in thinking about Australia’s higher education system and “strongly support(s)” the Nordic model of free tertiary education.
- Patrick also highlighted the New Zealand Government’s 2018 initiative to make each student’s first year of study free of charge as a possible first step toward implementing wider reform in Australia.
- “If re-elected to the Senate I plan to undertake a major political campaign, using all the Parliamentary opportunities and leverage I have, to achieve a restoration of a free first degree, certificate course or trade,” he said in a statement.
- “Labor Prime Minister Gough Whitlam’s abolition of university fees in 1974 was a visionary reform that provided many of our nation’s current political, business, scientific, engineering, and cultural leaders with opportunities that they would otherwise not have been able to access.
- “The progressive reintroduction of fees, starting in 1989, was a retrograde step leading to today’s highly commercialised higher education system that has sold Australia’s national interests short.”
- Patrick, who is one of 15 crossbenchers in the Senate, said he would be using “legislative initiatives and the Senate Committee process” to push for the reforms.
The senator received an estimate from the Parliamentary Budget Office that subsidising free first degrees will cost an average of $4.3 billion a year over the first 10 years, while fee-free first vocational courses will cost an average of $1.8 billion annually over the same time period.
- The PBO, however, noted the financial implications of the proposal are “very uncertain and highly sensitive to assumptions” surrounding tuition costs, withdrawals and volatility in demand for courses.
- An average bachelor’s degree in Australia currently costs between $15,000 and $33,000, according to StudyAustralia figures.
Australia’s current HECS debt system requires students to gradually repay their loans on top of their taxes once they earn more than $47,014 a year. The percentage of the loan the graduate is required to pay back increases in line with their annual income.
The cost of tertiary education in Australia rose by 6.3 per cent in the March quarter, according to Australian Bureau of Statistics data released last week, with the increase attributed to the introduction of the new band and fee schedule in the Morrison Government’s Job-Ready Graduates reforms. Higher education has been a significant part of the Labor Party’s federal election pitch, with the Opposition putting forward a $1.2 billion higher education policy to provide 465,000 fee-free TAFE places in priority skills areas.
The remaining $481.7 million of Labor’s package would go towards creating 20,000 extra university places over 2022 and 2023. Get InDaily in your inbox. Daily. The best local news every workday at lunch time. Thanks for signing up to the InDaily newsletter. The Morrison Government, meanwhile, is proposing to fund an extra 100,000 university places over the next decade. Its core plan for the higher education sector is a $2.2 billion, 10-year commitment to “supercharge research collaboration between universities and industry”.
- Patrick’s push for tuition-free first degrees brings him closer to the higher education policy of the Greens, one of his rivals for re-election in the Senate.
- The minor party, which has made South Australia a key focus of its Senate campaign, is running on a platform of tuition-free university and TAFE education for all Australian citizens.
- The Greens are also calling to abolish all student debt.
- Patrick said he didn’t support subsidising all university courses, such as double degrees and master’s qualifications, labelling the Greens policy “unrealistic” and arguing the federal government shouldn’t be subsidising students who undertake a “career of learning”.
- But he said the concept of retrospective student debt cancellation is worthy of “consideration” and floated the idea of wiping HECS debt for nurses who pursue careers in regional areas.
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Why should go to university in Australia?
There are many valuable skills and experiences to gain if you choose to study in Australia. Australian institutions provide an education designed to help you succeed in the global workforce. An Australian qualification will make you very attractive to potential employers in Australia, at home and around the world.
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Is going to university worth it Australia?
FOR those of you wondering whether it’s worth going to university, the latest OECD report provides some interesting answers. The report confirms what many might suspect — that if you’re a tradie, you’re probably not going to be short of a job. In fact employment prospects for young people who completed high school and some kind of vocational training including an apprenticeship, had employment rates almost as high as university graduates.
When you consider that Australians pay some of the highest uni fees in the world, and the financial benefits of a degree are much lower here than overseas, students may be wondering whether to skip this rite of passage. But of course there’s some fine print, here’s what we learned from the OECD report Education at a Glance 2017.
WE’RE A NATION OF UNI GRADUATES, OR ARE WE? At first glance Australia’s numbers look really good. Based on 2015 patterns of graduation, 70 per cent or more of young people (aged 25 to 34 years old) in Australia could be expected to graduate from tertiary education at least once in their lifetime, one of the highest rates and much higher than the OECD average of 49 per cent.
- But this number also includes international students and when they are taken out, first-time graduation rates drop by 31 percentage points, bringing the rate to 45 per cent, lower than the average.
- The good news is that overall 25 per cent of Australians aged between 25 and 64 years old have a bachelor’s degree or equivalent, higher than the OECD average of 16 per cent.
This looks even better when you consider 25 per cent of adults in China only have a primary school education and in India 46 per cent of adults don’t even reach this level. WE DON’T NEED A DEGREE TO GET A JOB In Australia, 84 per cent of tertiary graduates (aged 25-64) were employed in 2016 (the same as the OECD average).
Employment rates also drop depending on your level of education. Among those who finished high school the rate was 78 per cent, and those that didn’t graduate had a rate of 58 per cent. But employment rates have been fairly flat for young uni graduates aged between 25 and 34 years old since 2000, hovering around 85 per cent, slightly higher than OECD average of 83 per cent.
Among these younger workers, employment rates were only a bit higher than those who finished high school and completed some vocational training. But before you sign yourself up for a trade, the OECD noted some studies found that while young people may be able to find a job using vocational qualifications, over time they may be left behind.
- This is because they may be trained for specialised jobs that risk becoming obsolete over time, and have less ability to adapt to new technology.
- Jobs for this group of non-uni graduates has also been trending down slightly in Australia, although it’s still higher than the OECD average of 76 per cent.
Meanwhile the bad news continues for those who didn’t finish high school. Their employment rate dropped 8 per cent in six years, to 56 per cent in 2016, which is lower than the OECD average of 59. NOT EVERY SUBJECT IS EQUAL Across the OECD, employment rates are lowest for graduates of arts and humanities, social sciences, and journalism (81 per cent) and highest for information and communication technology graduates (88 per cent).
- The average job rate for STEM fields (science, technology, engineering and mathematics) was 86 per cent.
- For education graduates it was 83 per cent, and for engineering, manufacturing and construction graduates it was 87 per cent.
- NOT THE MONEY SPINNER IT ONCE WAS Going to uni was once considered the path to getting a well-paid paid job but this is slowly changing and in Australia it’s not as lucrative as it used to be.
Across the 21 OECD countries, the earnings gap between those who had a uni qualification and those who completed high school declined slightly from 53 per cent to 50 per cent between 2005 and 2015. Even though Australia improved its relative earnings for tertiary-educated people by more than five per cent, graduates still get relatively low wages.
- In Australia, 16 per cent of adults with a tertiary education earned more than twice the median wage, compared to the OECD average of 25 per cent.
- Overall 61 per cent of graduates earned more than the median wage, compared to the OECD average of 69 per cent.
- For those that skipped uni, 41 per cent who completed high school earned more than the median, but only 7 per cent earned twice the median.
Of those who didn’t finish high school, just 28 per cent earned more than the median wage. The relatively low wages for uni graduates compared to the OECD average is possibly due to competition from the high proportion of tertiary-educated people in the country.
- But other factors can influence earnings beyond supply and demand.
- These include national minimum wages, hiring and firing costs, union power, division of jobs between the public and private sector and the recognised value of formal qualifications.
- This is why graduates in countries like US, Israel, Luxembourg, Ireland and Lithuania all still enjoy high relative earnings despite being countries with a high share of tertiary-educated people.
WE’RE ALSO PAYING MORE FOR OUR EDUCATION Tuition fees in Australia, England and the US are among the highest across OECD countries. Australians pays an average of $US21,200 for a university education, compared to the OECD average of $US9800. The report noted that in Australia, Japan and Korea, fees charged can vary widely depending on whether students attend a public institution or a private one, like Bond University.
It will also cost you more if you want to complete a master’s. In Australia and Spain, the cost for a master’s qualification is 50 per cent higher than a bachelor’s. The high costs for students is one reason why the financial benefits of completing tertiary education are not as high as for other OECD countries and lower than the OECD average.
Once you take into account the cost of degrees as well as lost earnings during the years at uni, the report found Australian men got an 8 per cent financial benefit from going to uni. This comes from things like increased earning potential. But this was much lower than the OECD average of 13 per cent.
Women did a little better with a 9 per cent internal rate of return, compared to the OECD average of 11 per cent. But despite the high cost, the OECD found university education for both men and women was still worth it. And in Australia, at least 75 per cent of students benefited from public loans and scholarships/grants, such as the FEE-HELP program that sees students defer the cost of their education to when they start earning over a certain income.
“Tertiary education promises huge rewards for individuals, but education systems need to do a better job of explaining to young people what studies offer the greatest opportunities for life,” OECD Secretary-General Angel Gurría said. Business, administration and law are the most popular careers in countries surveyed, chosen by around one in four students.
This compares to 16 per cent in engineering, construction and manufacturing, and less than 5 per cent of students study information and communication technologies, despite graduates in these subjects having the highest employment rate on average across OECD countries, exceeding 90 per cent in about a third of them.
SPENDING ON EDUCATION Australia spends more on educational institutions as a percentage of GDP than the OECD average but a higher proportion of this is covered by private citizens than in other countries. The country spends 5.8 per cent of its GDP on education including primary, secondary and tertiary, compared to the OECD average of 5.2 per cent.
- Tertiary spending makes up 1.8 per cent of GDP, compared to the OECD average of 1.5 per cent.
- But 1.1 per cent of this comes from private funding and only 0.7 per cent is public funding.
- The share of public expenditure on tertiary educational institutions has decreased from 45 per cent in 2005 to 39 per cent in 2014.
However, uni spending has increased since 2005, when 1.5 per cent of GDP went to tertiary education. Public funding also makes up a higher proportion of funding than private funding at primary and secondary levels.
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