20 years in the life of asmall tertiary educationsystemAttaining and sustaining mass tertiary education -Lessons from the ...
This talk New Zealand spent a decade focused on attaining mass higher education And then took stock So spent the following...
This talk In this presentation, I describe the policy context – the issues facing the NZ tertiary system at the end of the...
Part 1Attaining mass higher      education
The context – the 1980s The reform of the NZ economy – changed skill needs And an economic downturn led to greater school ...
The first phase of reforms A uniform, volume-driven funding system, across all sub-sectors Removal of restraints on instit...
Fees went up Average fees for a BA at a university      $4,000      $3,000                                              St...
Financed by loans The expansion of the loan scheme        1.8                                                             ...
So did participation Participation doubled 1985-1993 Average annual growth > 10%
And the cost to government     250                                                           $2.0                         ...
What happened Growth among groups who have traditionally had low participation     Including Māori and older age groups Th...
Over-enrolmentOver-enrolment ….Most demand in the core age group was being metThe wānanga were helping address low partici...
A new packageThe changes had dealt with the issue of participation, but ...   Concerns about accountability, governance, q...
A new package An election was coming up Most green paper/white paper proposals were shelved     Including changes to gover...
Demand driven funding…Further unforecast cost increasesPrivate providers refocused on level 3+ and new providersentered th...
What happened … More supply-induced demand 45% of the growth was among older students     NZ had the second oldest student...
Part 2Sustaining mass higher      education
A new reform agenda A new government meant a new agenda Managing affordability for students – a new consensus on sharing c...
Research performanceShare of world indexed publications and citations by    PBRF and CoREs                                ...
The new reform agenda BUT … the quality assurance system remained And representative governance was retained Moves to chip...
Fine tuning forsustainability … And in 2006, the government announced the abandonment of demand-driven funding As part of ...
Now …The government didn’t want to stifle demandRather, the intention is to move funded levels in line withshifts in deman...
We have seen … The new caps came into effect in in 2008 And in 2009, youth unemployment went up, leading to greater demand...
We have seen … The new system has changed institutional decision-making Prioritisation of students who are younger, more l...
We have seen …                Participation rates by age group                Attaining and sustaining?    15%            ...
The new priorities… Fine-tuning within these settings …. Youth transitions Vocational/on job training Reviewing research f...
Questions For more information, research and statistics Visit www.educationcounts.govt.nz
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20 years in the life of a small tertiary education system: Attaining and sustaining mass tertiary education - Lessons from the New Zealand experience - Roger Smyth

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20 years in the life of a small tertiary education system: Attaining and sustaining mass tertiary education - Lessons from the New Zealand experience - Roger Smyth

  1. 1. 20 years in the life of asmall tertiary educationsystemAttaining and sustaining mass tertiary education -Lessons from the New Zealand experienceRoger Smyth17 September 2012
  2. 2. This talk New Zealand spent a decade focused on attaining mass higher education And then took stock So spent the following decade working on the sustainability of the system Making sure that the system delivers good value for New Zealand and for those who participate New Zealand may be small … But our journey may have lessons for others
  3. 3. This talk In this presentation, I describe the policy context – the issues facing the NZ tertiary system at the end of the 1980s And how the system was reformed to lift participation How that worked in practice And why – after a decade of a system focused on participation – we moved to shore up the gains and ensure sustainability My roles … 1987-2002, a university manager, responsible for academic management 2002-now, a Ministry of Education manager, with responsibility for research on and analysis of tertiary education
  4. 4. Part 1Attaining mass higher education
  5. 5. The context – the 1980s The reform of the NZ economy – changed skill needs And an economic downturn led to greater school retention and greater demand for tertiary education While the tertiary education system was characterised by low participation High levels of regulation and rigidity, especially in the polytechnics and colleges We saw rationing of places – especially in universities – as demand grew A true supplier’s market A need for reform
  6. 6. The first phase of reforms A uniform, volume-driven funding system, across all sub-sectors Removal of restraints on institutional competition A moving cap on funded places An expansion of places Funded by progressive funding rate reductions Removal of fee controls Major reductions in student allowances/grants via targeting An income-contingent loan scheme Mitigates risks to participation by removing the liquidity constraint In effect, loans channeled government funding of institutions via students, to mitigate the imbalance in market power Increased incentives for responsiveness
  7. 7. Fees went up Average fees for a BA at a university $4,000 $3,000 Student Loan Scheme introduced $2,000 N T Z $ e n o u f t i $1,000 $0 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000
  8. 8. Financed by loans The expansion of the loan scheme 1.8 250 Fee Interest f ree Recession stabilisation loans 1.6 1.4 200 Reduced 1.2 course costs entitlement Phasing in 150 1.0 of the loan scheme 0.8 100 N Z n o b $ s l i w B 0 e o 0.6 s ) ( r 0.4 50 0.2 0.0 0 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Loan borrowings Borrowers
  9. 9. So did participation Participation doubled 1985-1993 Average annual growth > 10%
  10. 10. And the cost to government 250 $2.0 $1.8 200 $1.6 $1.4 150 $1.2 $1.0 -N Z n o b $ s l i 100 $0.8 S E T F 0 ) ( $0.6 F g d n u i 50 $0.4 $0.2 0 $0.0 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 Funded EFTS Unfunded EFTS Government funding
  11. 11. What happened Growth among groups who have traditionally had low participation Including Māori and older age groups The planning system was light-handed Performance measures largely focused on volume No sense of a ‘network’ view Supported the competitive settings Preference in the allocation of new places to ‘pipeline’ growth A powerful incentive on providers to enrol over their funded levels
  12. 12. Over-enrolmentOver-enrolment ….Most demand in the core age group was being metThe wānanga were helping address low participation amongMāori
  13. 13. A new packageThe changes had dealt with the issue of participation, but ... Concerns about accountability, governance, quality Intense public anxiety about fees and loans A new green paper package in 1998 including …. Governance changes Capital charge Quality assurance Restructuring of the tuition subsidy structure Separation of research and teaching funding Removal of differentials between fields A greater role for the private sector Demand-driven funding
  14. 14. A new package An election was coming up Most green paper/white paper proposals were shelved Including changes to governance, accountability, and quality assurance, capital charging, most of the tuition subsidy changes … (But this set a policy menu for more than 10 years) What remained … Funding was opened up to private providers on the same basis as public, at levels 3+ Demand-driven funding …. But …. Quality, governance and other interventions were put aside Demand-driven applied across the system
  15. 15. Demand driven funding…Further unforecast cost increasesPrivate providers refocused on level 3+ and new providersentered the market in large numbersThe wānanga were new and in a growth phase – they grewfast One wānanga grew from 1,000 to 36,000 EFTS in 4 years Funding up from $5m to $177mPolytechnics sought to grow via community/continuingeducation Where there was a ready market, able to be driven by advertisingUniversities ... Less change, but … High dead-weight expense Volume prioritised over quality
  16. 16. What happened … More supply-induced demand 45% of the growth was among older students NZ had the second oldest student profile in the OECD Meaning lower human capital gain So a lower value spend Much growth in lower level qualifications Low labour market returns Quality concerns Changed the dynamics of decision-making in all parts of the system Destabilised government’s fiscal planning And IFRS costing for loans was looming with large, hard to control costs
  17. 17. Part 2Sustaining mass higher education
  18. 18. A new reform agenda A new government meant a new agenda Managing affordability for students – a new consensus on sharing costs Loan interest concessions Fee setting controls A strategic approach to setting goals for the system The tertiary education strategy (TES) – articulating national goals for the system New planning mechanisms for institutions Steering the system to align with national priories While retaining institutional autonomy Separation of research funding from teaching funding
  19. 19. Research performanceShare of world indexed publications and citations by PBRF and CoREs decided on….New Zealand tertiary education institutions And implemented 0.5% 0.4% 0.3% 0.2% 0.1% 0.0% -2 1 0 -1 5 8 9 -1 6 8 9 -1 7 8 9 -1 8 9 -1 8 9 -1 0 9 -1 1 9 -1 2 9 -1 3 9 -1 4 9 -1 5 9 -1 6 9 -1 7 9 -1 8 9 -1 9 -2 0 -2 1 0 -2 2 0 -2 3 0 -2 4 0 -2 5 0 -2 6 0 -2 7 0 -2 8 0 -2 9 0 -2 1 0 7 0 2 8 9 1 2 8 9 1 3 8 9 1 4 8 9 1 5 8 9 1 6 8 9 1 7 8 9 1 8 9 1 8 9 1 0 9 1 9 1 2 9 1 3 9 1 4 9 1 5 9 1 6 9 1 7 9 1 8 9 1 9 1 0 2 1 0 2 0 2 3 0 2 4 0 2 5 0 2 6 0 2 Publications Citations Source: Thomson Reuters
  20. 20. The new reform agenda BUT … the quality assurance system remained And representative governance was retained Moves to chip away at demand driven funding Mainly focused on the private sector BUT … costs were still high and unpredictable The TES was too loose And the planning and funding systems were too complex Accountability was loose
  21. 21. Fine tuning forsustainability … And in 2006, the government announced the abandonment of demand-driven funding As part of a wider package Simplification of the planning and accountability arrangements An overhaul of quality assurance Rationalisation of the qualifications system Leading to performance-linked funding A new TES, prioritising human capital growth And interest-free loans This and the new accounting standard saw the cost of lending move from 13 c/$ to 41 c/$ Meaning the cost of over-enrolment was very high
  22. 22. Now …The government didn’t want to stifle demandRather, the intention is to move funded levels in line withshifts in demandBut to manage the fiscal implications for governmentcarefullyInstitutions have to manage to between 97% and 103% oftheir funded levels Avoiding high flow-ons to loans costs And quality risks And managing according to the priorities of the government tertiary education strategy Reverses the dynamics of institutional decision-making
  23. 23. We have seen … The new caps came into effect in in 2008 And in 2009, youth unemployment went up, leading to greater demand for tertiary education Just as the birth bubble was hitting the tertiary age group And improved school achievement put pressure on higher level enrolments So what happened? By and large, institutions managed to the tolerance bands And have become better at it Except the private sector where caps were applied earlier And where over-enrolment is being managed down slowly
  24. 24. We have seen … The new system has changed institutional decision-making Prioritisation of students who are younger, more likely to be full-time and in higher level qualifications Greater human capital development Greater value for money
  25. 25. We have seen … Participation rates by age group Attaining and sustaining? 15% 6% Under 25 25 and over 5% 12% 4% 9%P Pne n ec c 3%r rt t 6% 2% 3% 1% 0% 0% 2005 2006 2007 2008 2009 2010 2011 2005 2006 2007 2008 2009 2010 2011 Certificates 1-3 Level 4-7 non degree Certificates 1-3 Level 4-7 non degree Bachelors degrees Graduate/Postgraduate Bachelors degrees Graduate/Postgraduate
  26. 26. The new priorities… Fine-tuning within these settings …. Youth transitions Vocational/on job training Reviewing research funding mechanisms
  27. 27. Questions For more information, research and statistics Visit www.educationcounts.govt.nz

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