This piece was published by The Conversation, 29 May 2015
The economic and individual value of higher education
We have become accustomed to hearing the benefits of higher education measured in economic terms.
Universities Australia (the peak body for the sector) points to the value of universities as producers of both the knowledgeable workers and the research that will lead to economic growth. Publicly-funded university research, they argue, offers an excellent rate-of-return on investment.
Higher education is one of the nation’s top exports. As the “Keep It Clever” campaign outlines:
Our universities attract over one million students, employ over 120,000 staff and directly contribute $24 billion to GDP. At around $16 billion each year, international education is Australia’s largest export earner after resources, and it builds vital links with the world.
Graduates are worth A$198 billion a year to the economy, and pay over A$32 billion annually in tax.
While the sector speaks of itself in dollar terms, universities are keen to emphasise the economic benefits of study to individual students. Graduates, according to Adelaide University, are more likely to get a job, and those with a degree receive a “substantial wage premium over non-graduates”.
Advertisements like the “Self Made” campaign from RMITplace the individual student at the centre of the story. They portray study as a personal investment of time and money, the benefits of which accrue to the individual. The consequence of this is that – factoring in all costs, loan repayments and interest rate rises – it is possible to calculate the net monetary benefit of higher education to an individual over a lifetime. The Grattan Institute puts it at about A$100,000.
These measures of the value of universities are economic and individual. They envision higher education as a marketplace. Paying students choose between the offerings of competing universities who attempt to highlight their individual selling points, be they old buildings, accessible campuses, or “employability”.
In all this talk, it is usually presumed that the benefits from a degree come from learning the course content. The notion that a large part of the value of education lies in the experience of meeting and sharing ideas with people who are different to you, playing with them on the sports fields, drinking with them in the bar, and engaging in a host of “extra-curricular” activities, is rarely heard.
Universities as public institutions
This is not the only way of valuing higher education. For most of the 20th century universities were seen in terms of their public role. They were understood as valuable because they strengthened democracy. By offering students the opportunity to engage in robust, thoughtful and informed discussion, universities produced responsible and engaged citizens.
They also trained students to fill roles that were key to the community. As doctors, lawyers, priests, architects, teachers, nurses, and in many other capacities, university graduates provided the professional services that served members of the public.
And when governments began to support university research, they did so because of its potential social benefit. Universities were seen to be valuable public institutions despite the fact that, for much of the twentieth century, they were far from accessible to most of the population. Undoubtedly graduates individually profited from their university education, but the private benefit they derived was generally framed within this broader notion of their public role.
The money that governments gave to universities was thought to pay off in ways that weren’t just economic. It was an investment in democracy, public services, and knowledge industries that would grow with graduates throughout their careers. It had a public benefit that was measured over the long term.
The shift in the way higher education is valued reflects the much bigger processes that have been reshaping global economies since the 1980s. Universities have needed to adapt to new funding arrangements and regulations, to new global markets, and to radical changes in technology and the way we receive and impart information. The new ways they present themselves are part of their attempt to adjust to these economic and political changes.
But we should reflect a little more deeply on the extent to which these new ways of valuing the university reflect our actual knowledge and experiences of them.
When do we reap the benefits of higher education?
So many of the economic promises universities make depend on time and on the assumption that present investment will bring future reward. But when should such benefits be measured?
The way graduates feel about their time at university will be different two, ten or 30 years after graduation. If on graduation it is getting a job that most concerns students, looking back a decade later it may be the opportunity to read and think, the friends made, or the extra-curricular activities undertaken that made the difference.
It’s not even clear that what is valuable about university is what gets taught in class. The Week Five unit in Third Year Statistics is rarely something that students remember, even in Week Six. There is, of course, real significance to the content of education, but for employers as for individuals the value of university is clearly about far more than what’s in the exam.
Silicon Valley certainly thinks the experience of living, studying and playing together plays a much greater role in business success than the curriculum does.
Universities claim to improve students’ work prospects and earning capacity, but where will future jobs be? Taking out a substantial loan to fund a degree is only a good personal investment if future earning and employment is predictable.
But all predictions say the employment market is rapidly changing. What courses should students study now in order to fill jobs we can’t yet imagine? And how much debt should they risk to do so? In the United States the huge cost of taking out student loans for university means that large numbers of graduates in America are actually left in a worse position after their studies.
University research certainly leads to innovation, but when is the impact of the work realised? It can be hard to predict the outcome of research or when it will prove useful. Sometimes, the most important breakthroughs are made trying to prove something else. Who knew it would be research into black holes that would give us wifi?
Our language of valuation is out of step with our experience
Even though students bear most of the cost of higher education, according to OECD indicators, in Australia it is the public that still profits most from it.
Higher education is clearly valued by individuals, by employers, and by the public in ways that extend far beyond economic and measures. But our language of valuation is out of step with our experience.
Learning is never the work of individuals alone. Ideas are always produced collectively: in institutions that pool resources, in research teams that bring together different forms of expertise, and in conversations that engage past and present thinkers.
Universities do need to make their sums add up, but they also need to do much more than this. As key institutions of our civil society, their role is to hold the market and the state to account, even as they serve them. As institutions dedicated to learning, they are working with a time scale that is much longer than that of quarterly reports and three-yearly election cycles.
And because so much about the future, our world, and what it is to be human is messy and unknown, the role of universities is to deal with uncertainty as much as it is to build knowledge and train experts.
These are qualities that fit awkwardly in a world where value is marketised and individualised, priced and preferably tradeable. It is precisely because of this that universities are so important.
When we speak of universities primarily in monetary terms, we fail to recognise that we actually value them in these other ways too.
Higher education is an investment, but it is an investment in a future that we all share. We need to speak about universities in terms that better reflect the roles we need and want them to play.