Fees or deposits for undergraduate university degree courses?

By Grant Jacobs 06/11/2009

When the government moved to “full-cost” course fees for undergraduate university courses, I felt it was an heavy-handed solution and wondered if a deposit scheme might have been a wiser starting point.

(For any readers wandering in from overseas, I’m speaking of New Zealand (NZ) universities, but my general thoughts may still be worth considering?)

At that time, the universities in NZ had very large numbers of first year students, a sizable minority (majority?!) of who were basically there to have a party year. If you passed your high school University Entrance or Bursary exams (as they were then), you had a cheap ticket to a year’s education at the tax payer’s expense. You still had to met living costs, but we were all good at living on the cheap at that age, right?

I’ve nothing against parties, but many of these people had no intention of going on in university, some didn’t even sit the exams.

It was decided to make students pay what was termed a full-cost fee. They aren’t really full costs, much of the cost is covered indirectly, but they are substantial fees and causes students to carry a fair debt on completing their course which has been a political issue in New Zealand.

This shifts a large part of the cost of training people to the individuals who benefit, which makes sense, but only if it doesn’t come back to bite in other ways.

More on this later, let me suggest what I thought might have been a more measured initial change, that might have lead to a more sound move towards full/partial fees: charge students a sizeable deposit, with the deposit carried over to the next year if they passed.

Make the deposit large enough that students have a serious commitment to being at university. Make it a one-off, a deposit not on-going fees, so that they’re not forced to carry too large a burden if they leave early. The deposit could (optionally) be forgiven or reduced for working in NZ for a time after qualifying.

I feel for those that fail or having started university decide to take some other path. Those who fail have to pay their course fees with no qualification in return, which must create a burden for some people.

There are those who–correctly–judge that they should be doing something else part-way through their degree are doing the tax payer a favour, they’re moving on, not continuing to use the tax payers’ money. The dux of my high school did that, this isn’t limited to those doing badly or don’t have the skills to continue! (To be fair, pay-as-you-go mitigates this, but it also puts increasing financial pressure as the course progresses to continue despite sound reasons for moving on.)

The fees may be contributing to New Zealanders leaving the country. Qualified young people know that they can earn more overseas and we’ve all heard people say that the student debt gave them one more reason to shove off. Is NZ getting the return intended on the investment of training these people?

Others might argue there is an exchange with those coming in from other countries and you could also argue that salaries should be higher to match the cost of the training (but as a small country, is that ever really going to happen?).

There was talk that these new fees might be covered by scholarships, but NZ has never had the tradition that Europe has long had of scholarships for undergraduates, not to the extent over there (or in the USA).

Some of the best degrees–to my mind–are cross-disciplinary degrees, spanning two disparate subjects. I’m biased as I have a cross-disciplinary undergraduate myself, a mix of genetics/molecular biology and computer science. There were no computational biology (or bioinformatics) taught courses then. I took both degree courses separately and after my undergraduate degree taught myself the specialist area by reading the research literature. It’s now been integrated into biology and computer science courses.

Many advocate cross-disciplinary work, as Peter Gluckman did in a recent speech (PDF file). I believe the many interesting and useful new areas and people come from joining previously unconnected combinations. They’re risky courses in that they are forward-looking choices that may not prove to be the future.

By way of example, bioinformatics (or computational biology) is now very well established but it was a niche area when I started reading it. It only became more widely known well after my undergraduate degree through advances in DNA sequencing and other experimental techniques. (I’ve a number of articles in the pipeline fleshing this out.)

Another mix I’ve seen is law and biology, great for serving those biotech companies! There will be plenty of others (readers are invited to suggest their favourites).

Undergraduate degrees should be a chance to explore avenues. If too much hangs on paying back course fees, people will naturally opt for lower-risk courses. The move of the fees to the individuals shifts the risk mitigation to them too.

So perhaps a side effect of “full fees” might be that a clarion call for interdisciplinary work will falter?

Besides, you can’t really predict the next wave. I recall people trying computer graphics when “graphics” screens were 128 x 32 rectangular blobs! I thought they were a little mad. Even more than a little mad. (Yet I was a doing what was then an odd mix myself.) Those people are probably now working for Peter Jackson and company…

I’m not suggesting deposits are a complete solution, just throwing it out there for thought and entertainment as I still wonder why it was never taken as an interim solution and a part of me wonders if it might still be a better solution for our country, whatever works elsewhere.

Politicians like to be seen to be different to the opposition. A side-effect of this, to my mind, is that sometimes policy is made show a big change to avoid being perceived as making “tweaks”, as if these were weak. Tweaks or small steps are often what’s really needed and there is a place for trialling a particular direction in a limited way without going the full hog straight away. Looking back, I still wonder if it might have been wiser to have taken a smaller step first, even if the longer term goal was to migrate to full-cost fees.

(An angle I haven’t time for is what effect would this approach have on the (supposed) competition for “seats on bums”?)