THE PRESS FRIDAY, JULY 25, 1986. User-pays and universities

Press, 25 July 1986, Page 16

THE PRESS FRIDAY, JULY 25, 1986. User-pays and universities

The Minister of Education, Mr Marshall, is sounding as if he is under siege over university funding. Obviously, considerable pressure is being put on the expenditure for universities. Not for the first time, Mr Marshall has raised the argument that most of the students at universities come from families that may be classified as professional, managerial, or business. The implication is that the sons and daughters of some of the more privileged members of society make up most of the student population and that advantage or privilege will be perpetuated. The figures in New Zealand are that 55 per cent of the students come from such backgrounds and people who are in these positions make up only 14 per cent of the workforce.

Several conclusions may be drawn. The one that Mr Marshall draws is that those who are at university should pay for the privilege of that education. Mr Marshall cites the userpays principle and it is clear that he is being required to say why the user-pays principle should not be applied to university students. Further argument would be necessary before this proposition, even as it is stated, could be accepted.

While it might be true to say that people in the professions, in business, or in managerial positions probably have higher average earnings than the rest of the workforce, there are enormous differences in income within both groupings. The generalisation about a privileged sector is dangerous. Even if one or both parents have university degrees, they are not assured of a high income. If Mr Marshall is attempting to target the so-called privileged of society, he must notice that there are degrees in that privilege which need to be weighed.

Questions of degrees of privilege or advantage aside, even if 55 per cent of students come from such backgrounds this still leaves 45 per cent who do not. The result of introducing loans for students, of the quaint idea of vouchers for education, substantially higher fees, imposing deductions from salaries, or bonding, would ensure that the proportion of those from wealthier homes would increase rather than diminish. If Mr Marshall’s concern is that the university system does not have an equalising effect on society — and this is not one of the objects of university education — the user-pays system would make it all much worse.

The principle behind the vouchers is that they would amount to coupons for education, entitlements to a certain measure of education. It has frequently been observed that it is those who understand how to work the system who are able to take advantage of this type of rationing. Student loans from banks already exist, and many a parent has had to fish a daughter or son out of the clutches of a pressing bank. What is being suggested is that loans sufficient to go some distance towards covering a substantial part of the costs of university education could be made available and that these would be paid back when the student entered full-time employment. Thus a student would emerge not only with a university degree but also a substantial debt. The present trading bank loans to students usually have a strict and reasonably low ceiling. A loan which covered fuller costs of education might well be of the order of tens of thousands of dollars.

Under the present wage structure of New Zealand, there are only a limited number of

occupations in which it would be possible for a new graduate to earn and save enough to repay such a substantial debt reasonably quickly. One answer would be, in theory, to pay graduates more than other people. This would be resisted. Deductions from salaries to pay for education are another version of the loan idea. The bonding system under which a graduate works for the Government for a period would seem applicable only to a limited number of courses; and Government departments would have to be swelled to accommodate all those who had been bonded. In any event, a degree is not a guarantee for a meal ticket and the ability to repay a loan.

The practicalities of administering one of these schemes need serious attention. The plain fact of the matter is that many students who want to save for some purpose find that there are greater opportunities to save in Australia than there are in New Zealand. The chances seem high that any measures which would make students pay back large loans would bring about an exodus of graduates to Australia, or beyond. This would raise problems of enforcing loan repayments; it would also deprive the country of the trained people it had produced.

The system of loans has been used in the United States and has created many complications. Federal Government employees come under particular pressure to pay back the loans. The Government has resorted to debt collecting agencies to recover money from some graduates. For a while, graduates were declaring themselves bankrupt to avoid repayments. The Federal Government has tried to overcome this by stipulating that the reason for bankruptcy must not be confined to a student, loan.

The proposals which Mr Marshall is voicing are not new. The Treasury briefing papers of July 14, 1984, contain some of the ideas now being expressed, including a range of ways in which students could be made to pay more or in which a means test could be applied. The Treasury papers also say that private suppliers of education are crowded out. Private universities or colleges are not very likely to assist those who cannot afford university education now.

In* his address to the graduation ceremony in Christchurch this year, the ViceChancellor of the University of Canterbury, Professor A. D. Brownlie, raised several points about the whole question of funding universities. He argued that university education should be seen as an investment for the country. He cited figures from New Zealand universities about the ratios of staff to students; he said that, in Australia, there would be about 15 per cent more staff for the number of students in New Zealand universities, and about 30 per cent more in Britain. The Australian universities would have nearly twice the number of support staff and universities in Britain about four times as many. His general argument was that New Zealand universities give good value for the money.

The university system in New Zealand is not without fault; but it has evolved to suit the country’s needs. The Government should not dismantle it in a hasty and ill-considered drive to apply its ideas and save money. Mr Marshall is under pressure to defend the system. The only argument that he has put forward so far cannot justify such a drastic change to the system as is being proposed.