Uni Is About to Become a Lot More Expensive, But How Much Is a Degree Actually Worth?

The Federal Budget has just been announced and university funding is on the chopping block.

With the 2017 Federal Budget introducing an increase to university course fees as well as a decrease in the repayment threshold, it’s probably the right time to start questioning how much a university degree is really worth.

Of course, the value of degrees can literally be measured, but there’s a case that they have worth outside of their monetary cost—something a lot harder to measure.

Speaking with Dr. Tim Pitman, a senior researcher of Higher Education Policy at Curtin University, we found out that having a highly-educated society is good for everyone, not just the person holding the piece of paper.

Isn’t university just about getting a good job?

Last week, Senator Simon Birmingham announced that the federal government would be cutting increases to university education while, simultaneously, increasing course fees and lowering the repayment threshold from $54,869 to $42,000.

"The most important thing to university graduates is finding a job, is ensuring we have a strong economy with levels of investment that will ensure there are good, high-paying, high-quality jobs,” he said.

Tim explained, however, that this was becoming harder and harder to achieve. 

“The more successful [the government] is in getting people to become educated, the less the relative value of that education is to each person because the market becomes more competitive,” Tim told Student Edge.

This means it’s harder for graduates to fulfill the prophecy of nabbing a nice, well-paying job with their degree. But that’s not to say degrees are worth nothing in 2017. Consider the original reason universities were founded.

In Shakespearean times (apologies for even bringing the name up), the idea of the university was to enlighten the soul and the mind. That’s why Hamlet went to Wittenburg. (We’ll just leave out the part where he went mad.) Though, you have to remember, this was also at a time where most of the world thought the Earth was flat and that soap wasn't a necessary part of life. (FACT: It is.)

Fast forward to the university of modern times, and the purpose of the university has shifted from one of enlightenment to one of getting a damn good job.

“The thing that’s really important to remember there is that no one, not politicians, not the students themselves, should be judging the value of their degree by the job they get immediately post-graduation,” he argued.

So, what am I actually paying for?

The bill you receive for your degree is supposed to cover the teaching costs and provide the equipment. Yet, in reality, it doesn't quite work that way.

While Tim explained that the majority of your fees goes towards the cost of teaching, there is a portion that goes to other aspects of the university.

“Universities, in general terms, do take some of the teaching revenue and direct it towards research, and the government has indicated in these latest proposals that they want to become a lot stricter on that,” Tim explained.

It is for this reason that the government will be curbing the increases in funding over the next few years to the university sector. As the Deloitte Access Economics report did point out, the cost of delivering a degree has increased by 9.5 per cent since 2010; however, funding has increased by 15 per cent.

Tim agrees with this aspect of the budget: “Research is really important in universities and it's fundamental, but research needs to be funded for its own work.”

The government's funding actually subsidises your place at uni by giving the university a pre-arranged amount per student. The way they determine how much they should fund your uni degrees is broken down into pricing clusters that are updated each year.

There are eight clusters, defined by the Department of Education, which determine whether certain courses are priorities within the government’s vision. This means that jobs that are in higher demand, but reap a lower average salary such as nursing or teaching, have courses that are subsidised more than those for jobs with less demand, such as accounting or law degrees.

Great, so I pay more and will enter the job market with less chance of being employed. Is there any good news?

Well, Tim mentioned that having a large workforce of university-educated employees doesn’t just solely benefit the individual like some politicians have argued.

In fact, the statistics say that the rest of Australia is benefiting as well.

“In general terms, the more educated your population is, the better social and economic outcomes are,” he explained.

He also cautioned that it wasn’t so easy to show this outcome in ways we are familiar with.

“Even though they’re very hard to quantify in numbers, or dollars, or percentages, hundreds of surveys from Australia and around the world show that there’s a direct correlation between increased education levels and better social outcomes in terms of health, crime and social cohesion.”

So, should I go to uni?

This is ultimately down to personal choice and Tim doesn't think anybody should be forced to go to university. It is up to you to weigh up whether the monetary cost and the possibility that you might not become automatically employable are worth the social and experiential good that you might gain from attending uni for a few years.

To that point, Tim shared with us his favourite adage: “Instead of measuring what we value, we tend to value what we can measure.” He means that it's easy to look at the cost of a degree and weigh up how much you're earning because of it—after all, that's how the government and most of Australian society sees it at the moment.

What's important to take into account (which is often overlooked) is the larger social and economic impact your university education has on Australian society. If the surveys and studies are anything to go by, it's looking pretty beneficial for everyone.

Photo: Fox