Why a minimum ATAR would improve efficiency and equity

18 October 2013

Michael GallagherIn this excerpt from a presentation just before the election,  Mike Gallagher (executive director , Group of Eight universities), makes the case for a “re-calibration” of the demand driven system, by the imposition of a minimum ATAR for university entry.   He argues that the G08’s proposal for a minimum ATAR of 60 (now apparently in public abeyance) was never an argument for  reintroducing caps but would actually improve both equity and efficiency in the higher education system by directing  academically underprepared students into pathways programs which would ultimately increase the chances of such students successfully completing bachelor degree programs.  Such students admitted directly into degree programs are in many cases being set up for failure.  He also notes that ATAR is of decreasing relevance anyway, applying only to applicants within 2 years of completing Year 12 (in 2012, only 34% of university places were offered solely on the basis of ATAR).  The full presentation is wide ranging, going as it does to the whole structure of higher education in Australia, which Gallagher describes as “unbalanced”.   He argues, for example,  that the dynamic of changes in higher education, such as the impact of technologies,  international competition and the emergence of multiple forms of higher education, involving non-university and non-public providers, renders many of the underpinning assumptions of higher education obsolete.  Policy needs to adapt to provide greater real choice and diversity in higher education offerings and facilitate the emergence of new institutional types and modes of delivery.

Application of the ability-to-benefit principle in higher education

“Higher education institutions should be primarily concerned to establish systems of access for the benefit of all persons who have the necessary abilities and motivations” (World Declaration on Higher Education for the Twenty-First Century: Vision and Action, UNESCO, 1998)

In the dying days of the Gillard Government we saw desperate efforts to find extra funding for schools while protecting the uncapped competitionsystem of taxpayer-funded university admissions, whose costs were continuing to blow out alarmingly, by cutting back assistance to students and research programs, and imposing an efficiency dividend on universities, including funds for teaching and research block funding. Those lazy ‘saves’ seemed to be driven more by a political narrative and quest for a legacy than by policy worth; they certainly were not subject to any assessment of cost-effectiveness or policy coherence – neither for schools nor higher education. The containment of costs in the May 2013 Budget followed two earlier containment exercises, one in the MYEFO 2012-13 with the cut to forward funding for the ironically titled ‘Sustainable Research Excellence’ program, which was designed to raise funding for the indirect costs of research, and the other in the previous year when sub-Bachelor degree programs were removed from the so-called ‘demand-driven system’. More recently, under the Rudd return, we saw efforts to unscramble the mess over capping tax deductibility of self-education expenses, and mollify disgruntled university students and staff, with a search for alternative savings. The re-appointed Innovation Minister, Senator Kim Carr, this time with responsibility for higher education as well as research, called for ideas that could generate the necessary savings and address concerns about quality, without the adverse impacts of the Gillard measures.

In that context, the Go8, whose member universities are disproportionately and seriously affected adversely by the various ‘saves’, suggested that around $750 million could be saved over the budget forward estimates period by applying the merit principle through an ability-to-benefit test of an ATAR of 60 or better to school leavers seeking direct entry to a Bachelor degree course (and 70 for BEd students), with some of that saved amount reallocated to sub-Bachelor pathways. This suggestion was not universally welcomed. It was contentious even within the Go8, not least because it could be construed as limiting the autonomy of other universities. It was seen as an overly crude approach that applied variously to one part of the entering cohort of students such that it could operate unfairly for some individuals, and could be manipulated by some institutions, such as through bonus points.

The ATAR cut-off was suggested, partly on technical grounds, because it provided a data basis for calculating the potential scope for savings. As it has turned out, Minister Kim Carr, with an inclination to contain growth in intakes, indicated a preference for a negotiated approach with each university through mission-based funding compacts, which would have the advantage of allowing universities to use contextual data in their admissions. Presumably, that would involve the Government setting an upper limit on annual outlays, and each university proposing an enrolment mix within its given funding envelope. However the method of implementation has not been revealed, nor the extent of savings that might be sought from this approach, or whether all universities would retain the funding for their current enrolment pipeline plus or minus forward adjustments for growth or decline in intakes. One consequence of permitting variations in the number of places within a set funding envelope could be variable rather than standard public funding rates per place, with interesting implications for the nexus with student contribution amounts. Of course, a change of Government could alter the whole ballgame.

It is not my purpose here to delve into the ATAR debate but rather to use it to illustrate some problems we have in the design of what we might call temporarily ‘Australia’s higher education system’. I say, temporarily, because it is not necessarily a ‘system’, it is not exclusively Australia’s, and it is not all about what we used to understand to be ‘higher education’. Briefly a few points should be noted about the ATAR controversy.

First, there has been some conflation in the policy debate of three quite different approaches: re-capping enrolments; ending the ‘demand-driven system’; and requiring an ability-to-benefit threshold for admission to Bachelor degree studies.

Re-capping means either placing upper limits on the number of students that the Government would fund in any particular university, or putting upper limits on the funding envelope that the Government would resource for particular institutions. There has never been any suggestion by the Go8 for the Government to adopt either of those options. If re-capping also means going back to a centrally-driven allocation of student places by field of study, that option also has never been suggested by the Go8.

Ending the demand-driven system, presumably, means restricting students’ choices about what and where and how they study, in particular by limiting their choices to specific institutions or fields of study. Again this has never been advocated by the Go8. To the contrary, in our public and behind-the-scenes advocacy with all political parties, the Go8 has argued consistently for relaxation of central controls on enrolment volumes and prices. Nor have we advocated for total deregulation. Our argument has been for universities to have operational flexibility with accountability for results, within a policy and financing framework that delivers cost-effective outcomes for the community, including through open competition among all rival providers, public and private alike. This is to suggest: (a) that what we have now is not actually a demand-driven system; (b) that its further evolution and fuller expression is necessary; and (c) that in its present and future forms it will not be a sufficient basis for underpinning a balanced higher education system.

Second, the proposed ATAR cutoff was intended (and costed) only for domestic school leavers aged 17-19 years seeking admission to a funded Bachelor degree program in a public university within 2 years of completing Year 12. It was never a proposal to determine, as in some countries, such as via China’s gao kao or Egypt’s Thanawiya Amma, the life chances of individuals on the basis of their once-in-a-lifetime attainment score in final school exams. It was envisaged that more mature applicants would continue to be admitted on broader criteria, regardless of their school attainment, in recognition of their opportunity to learn from their wider experience. Go8 universities admit more than 50% of their commencing undergraduate cohorts from direct school leavers, whereas other universities generally cater more to the mature-age student market at the undergraduate as well as graduate levels.

Third, the ATAR threshold proposal was complemented by an explicit transfer of savings to provide additional funding for sub-Bachelor degree pathways for immediate school leavers. The reasoning behind that proposal was that many students with ATARs below 70 have been found to struggle with university studies without support. Presumably, less well-prepared students need even greater support to succeed. It is not that they lack aptitude but that they lack adequate preparation. Yet the Government has not accepted the arguments of several reviews that funding rates per student – including for the less well-prepared students – should be increased by the order of 10%, so that any additional student support has to be provided from current funding per student. Generally, students with low levels of school attainment are more likely to benefit from preparatory programmes to improve their readiness for advanced learning, even in fields that require little if any mathematical competence.

Sue Willis, one of Australia’s best informed analysts of student progression, argues that “some of the money being spent on enrolling more low-ATAR students into degrees could be better spent on pathway programs and vocational education and training.”  The Monash University data that Sue draws upon show that low-ATAR students, who are selected on the basis of their performance in pathway programs, perform strongly and in a wider range of fields than they would otherwise be able to access:

quote marksAdmitting under-prepared students with low ATARs not only increases their risk of non-completion, it restricts their choices. Lower ATAR students admitted directly to bachelor degrees are being selected on the basis of their current preparation, rather than their potential for university study, while graduates of pathway programs have a chance to prepare for a wider range of disciplines, and demonstrate their aptitude for tertiary study.

Without access to pathways, students may be subject to failure, or have limited study options, or find themselves with qualifications that have little use value for employment and further learning. Lowering the entry bar to a Bachelor’s degree yields no benefits for anyone. It is particularly not fair to induce equity groups into pursuing studies that will not lift them up and may well let them down.

he admissions debate also seemed to equate low ATAR with low SES. However, in aggregate 4 out of 5 of the  students admitted on the basis of an ATAR over the last four year were middle and high SES, and they comprised the bulk of offers at every ATAR decile. Arguably, laissez-faire admissions, post Bradley, have been of greater benefit to students of lower-attainment from middle and high SES backgrounds than to more able students from low SES backgrounds.

One apparent structural flaw in the Australian higher education design is that the base of the system is too narrow to accommodate growth and diversification of the student body cost-effectively. That is, the Australian structure is unbalanced in terms of program levels and pathways relative to the trend of domestic student demand, ironically in a system that has a very wide and diverse range of preparatory and pathway education services for international students.

What has been a major pathway to university study, TAFE, has been enhanced over the last decade through Associate Degree and Diploma courses tailored for particular occupational progressions but its scale has been contracting through cuts in funding and by the increased admissions capacity of universities. Sub-Bachelor courses were excluded from the ‘demand-driven system’ from 2012, partly to stop a cannibalisation of TAFE and partly to save costs, including Commonwealth substitution for state government expenditure on TAFE. Costs have continued to rise, however; indeed, the cost of a university place is higher for the Commonwealth than that for the sub-Bachelor program in TAFE for which it substitutes. Pathways for students have been narrowed, and a number of students who could have benefitted from preparatory programs have gone directly into Bachelor degree studies. Unfortunately, there is no adequate data publicly available to inform us how well those students are doing.

MG slide1For the full presentation, go to
The debate we have yet to have
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