And, imo, it's failing in the economic sense for reasons of "incomplete information" or "information asymmetry" (depending on your preferred economics textbook).
The universities know (or ought to know) that some degrees are in oversupply. Still, they pumps out grads like their lives depend on it - mostly because their lives do depend on it. No students or less students = less money or no money = all over red rover.
mostly just dumb, ill informed, niave teenagers.... Which is to say that don't really stand a chance next to the tertiary education machine.
Behind the scenes of all of this is the government.... because until such time as all students are paying 100% of the full cost of their education up front (and HECS or FEE-Help is abolished) then the government is still (largely) signing the cheques.
For the most part centralised (control) economies have failed dismally, but I am wondering if this is one "market" in Australia that could use a bit more government intervention.
There's been a lot of talk on this thread and on this forum in recent weeks about debt.
Well, as much as I think education is a great thing (again, I've the benefit of a uni education), realistically I do wonder if for a lot of people it is an unwise financial investment or - and this is my main point - whether they make that investment based on incomplete or spurious information.
Surely the government (the underwriter of all of this) owes it to all of us to mitigate this where feasible?
After all until such time as the loans students have are are paid back, if ever, these are tax dollars.
Yes, I agree the Universities have been less than truthful about the realistic employment prospects for their graduates hence the oversubscription in courses like law, accounting, finance, business, economics, teaching etc. For courses like law and accounting, there is still the prestige associated by the families for their progeny to have these degrees hence the insatiable demand for enrolment in these courses. Many do not realise, that in this globalised world, even 'prestige' jobs - law and accounting, like IT, are heading for cheaper Indian shores where it is considered backroom work with the help of advanced computerisation.
But I don't think you have to fret much longer about how universities are making the best use of our tax dollars and us having to hold them to account about how our tax dollars are being made the best use of, MarkB.
I've been reading a lot about the University sector shake-up.
The Group of 8 are now participating in the most Divine Comedy of errors reminiscent of Shakespearean proportions.
In April, the Group of 8 went to the Education Minister to pressure hard for deregulation of university fees.
The Go8 chair, Professor Young, who is also the Vice Chancellor of ANU said, "Removing arbitrary limits on fees would lead to a more vibrant and diverse university system and allow Australian universities to become truly world class."
Kim Carr said that they have been doing that for years previously and he and other Education Ministers have knocked them on the head about derergulation.
The Group of 8 had their wildest dreams come true and then some...
The Budget 2014 basically cut universities loose to fend for themselves
"Deregulation of undergraduate fees meant government funding for each Commonwealth-supported student would be cut by an average 20 per cent, and universities would be free to decide their own fees for undergraduate courses". Student HECs/HELP debts would be subject to interest rates of up to 6%.
The Group of 8 wanted deregulation - to be free to charge whatever they want - but they did not forsee the double whammy of withdrawal of Commonwealth funding of 20% for each student and the impost of market rate interest on unpaid HECs/HELP debts at the same time.
Now, the universities are balking and backtracking at the speed at which they have to implement these complex changes as they will have to manage different cohort of students under different fee charging systems at the same time.
Furthermore, the Universities are now begging the Education Minister to give them more time to deregulate as they cannot give accurate tables of fees to current and incoming students. Students will be enrolling in 2014 and 2015 without knowing what the complete fees and charges are from 2016. 'Not enough time, not enough time', Unis are screaming! How ironic when they've brought this upon themselves.
Michael Spence, University of Sydney's vice chancellor is now saying:
''I want the best students, not only those who can afford to pay,'' Dr Spence said.
My take is that what the Unis are really panicking about are potential class actions taken by disgruntled students who enrol without realizing the extent of the cost they would have to pay. Students will claim they were given spurious, inaccurate or incomplete information about their course structure fees. Think 'lawsuits'
Govts will shrug their shoulders and say, 'we cut you loose, you wanted to be cut loose, you deal with it, it's your problem now'
If the Unis lose these lawsuits and students go scot-free without paying a cent of their courses as they will claim to be 'duped', then Unis will have to sell of their assets like share portfolio or realestate portfolio of buildings to realise their losses from uncollected student fees. Just my 2 cts.