Challenges in Education

New Zealand Centre for Political Research

The New Zealand Centre for Political Research is a web-based think tank that takes a research-based approach to public policy matters and encourages the free and open debate of political issues.

Parents have always gone to great lengths to impress on their children that education is the key to the future. According to this age old wisdom, those who are well educated can look forward to good jobs and higher wages. In addition, there are spin-offs for the nation as better-educated countries grow faster, embrace innovation more readily, and have higher living standards.

Or do they?

While this was certainly the case in the past, things are not so straight forward these days.

This week’s NZCPR Guest Commentator, Dr Roger Bowden, formerly of Victoria University’s School of Economics and Finance, has been looking into what’s been described as a growing ‘over qualification phenomenon’ and explains:

“By some estimates, up to 60% of graduates in the US, Canada, and the UK are working in jobs for which their qualifications are not needed. It’s hardly a surprise.  I had observed the same thing right here in NZ, with Masters level graduates working in clerical jobs, or with marketing and management graduates pumping petrol.

“Though even here, a recent OECD study found 7% of graduates could not read a fuel gauge properly. The OECD report goes on to say that a three year undergraduate degree was too expensive and unsuitable for people with poor literacy and numeracy. It warns the removal of a cap on student numbers could make the problem worse. And there’s another can of worms, as to whether more vocationally directed degrees in things like Events Management or Interior Design don’t exacerbate the over-qualification problem.”

That OECD study referred to by Dr Bowden found that while young people aged 16-24 have more and better qualifications than those aged 55-65, in some countries their basic skills are no better. It points out that In England one in ten university students have such low skills that they would find it difficult to understand the instructions on an aspirin packet. They attribute the problem to the fact that the threshold for entrance to university has been set too low.

In his article Dr Bowden also makes reference to the Labour Party’s new “free” tertiary education policy, which will undoubtedly result in a substantial increase in the number of students wanting to attend university – exacerbating the problem:

“Just in case you missed it, the NZ Labour Party under their ‘Working Futures Plan’ is proposing to offer free post school education, with a projected cost of $1.2 billion per annum. This, they say, will help rectify declining student enrolments, which in turn are because of escalating tertiary fees. They don’t pause to ask just why the escalating fees, but that’s another story.”

Labour’s plan is to provide three years of free tertiary tuition over a person’s lifetime – for anyone who has received no previous tertiary education. It could be used for any type of training, apprenticeship or higher education approved by the New Zealand Qualifications Authority, and for fulltime or part-time study. The three years wouldn’t have to be consecutive and there would be no age limit. To be eligible for the second and third year, graduates would need to pass more than half of their courses in the first year.

If Labour is elected to Government next year, their policy would be introduced in phases – the first year’s free education would be available from 2019, two years from 2022 and three years from 2025. Labour says that when fully enacted in 2025, the cost will be $1.2 billion. The first year would be funded from money earmarked by National for tax cuts.

However, before considering a major expansion of the tertiary sector through the offer of free tuition, surely the issue raised by Dr Bowden, over whether tertiary education is providing value for money, needs some answers.

This is a question that is also exercising the Government. They are concerned that while New Zealand has a comparatively high level of tertiary attainment among the working age population, this has not translated into higher levels of overall productivity – nor higher incomes.

In fact, the OECD has found that the value for money spent on a tertiary education in New Zealand is smaller than in most other developed countries. While the sector receives around $3 billion in annual funding – not to mention substantial taxpayer subsidies through the student loan scheme – the difference in incomes between graduates with a tertiary education, and school leavers, is the smallest amongst the 34 member countries.

While the return on the state’s investment in tertiary education – measured in terms of a higher tax take and lower welfare payments – is positive overall, it is only a fraction of the norm in other OECD countries.

The fact that the record numbers of graduates entering the workforce is not lifting the country’s productivity is a major concern for the government, especially as the effects of the country’s long term decline in birth rates look set to increase the future cost of tertiary education.

The tertiary sector consists of some 418,000 students studying in 8 universities, 18 institutes of technology and polytechnics, 3 wananga, and more than 270 government-funded private training institutes. While only half of students are enrolled in universities, they receive the lion’s share of the tertiary education funding due to their high fixed costs – especially bricks and mortar.

In the past, the impact of demography and falling student numbers, have been offset to a large extent by the growth in fee-paying international students. But with the global competition for these students heating up, it is becoming clear that a new approach is needed.

What especially concerns the government, however, is the inertia and risk aversion of established institutions. They are reluctant to change, even though their traditional business models are now under extreme pressure.

Not only that, but the government is concerned that the tertiary sector is not keeping up with the changing needs of the workplace – nor of students, who increasingly want to do more of their study through distance-learning, on-line and part-time.

To get to the bottom of the discrepancy between the high expenditure in the tertiary sector and the relatively low economic returns, the government has asked the Productivity Commission to undertake a wide-ranging inquiry. The terms of reference set for the inquiry are very broad, giving the Commission the opportunity to explore the issue as widely as possible in order to come up with some new models of tertiary education.

In particular, this review provides an opportunity to review some of the ideological changes forced onto the sector by the Labour Government, including the Performance-based Research Fund, which some critics believe has severely compromised the quality of tertiary teaching – a view expressed by Dr Ron Smith, the former Director of International Relations and Security Studies at the University of Waikato, in his 2011 NZCPR research report Performance-Based Research Funding: why it should end now.

Without a doubt, the government wants the tertiary sector to become more responsive to the needs of students and employers, and to take greater advantage of a rapid change in technology that could see lectures from world famous scholars streamed directly to Kiwi students.

Technological change could transform tertiary education business models as well – instead of providers being paid to train students, access to learning might be free, with students paying for their certification instead.

But tertiary education does not stand alone, and the decline in basic skills amongst students mentioned by Dr Bowden, does complicate matters. The Tertiary Education Commission found that tertiary students studying at foundation level are performing poorly in tests of functional, everyday literacy and numeracy. This not only backs up what employers are saying, but what international studies are showing as well.

Their research compared the literacy and numeracy requirements of Level 1 of the National Certificate of Educational Achievement (NCEA) – the secondary school qualification phased in by the Labour Government between 2002 and 2004 to replace School Certificate, University Entrance, and Bursary – with measures of adult literacy. Using the test results of thousands of school children and young people in low-level tertiary courses in 2012, the study found 40 percent of Year 12 students and 50 percent of tertiary students who met the benchmark NCEA requirements did not meet the level of reading and numeracy regarded in adult testing as the minimum for life in a knowledge economy.

This casts doubt on the value of the NCEA as a reliable indicator of student capability and as a benchmark for the literacy and numeracy competencies of school leavers.

The point is that schools are tasked with the responsibility of ensuring their students’ understanding of literacy and numeracy equips them for further learning and for work. If employers hiring school leavers are finding that their literacy and numeracy levels do not enable them to carry out basic competencies such as comprehending written instructions, keeping themselves safe, carrying out simple size and volume measurements and conversions, then it suggests that NCEA standards are set too low and need to be raised.

At present, to meet the requirement of NCEA Level 1 literacy and numeracy, 10 credits from literacy-rich subjects and 10 from those rich in maths, must be obtained. But under the current system, these credits can come from more than 700 standards, including subject areas where teachers have had little experience in assessing literacy and numeracy, such as physical education.

Tightening up NCEA requirements would impact on enrolments in tertiary education and on the government’s goal of 85 percent of 18-year-olds achieving NCEA Level 2, but if basic standards are found to be too low, then they must be raised.

To further complicate things, it now seems that the exuberance, with which schools have embraced technology, to help improve standards, might be hurting rather than helping their students.

Based on the results of the Programme for International Student Assessment (PISA) tests, the OECD has found that, “Countries that have invested heavily in information and communication technologies for education have seen no noticeable improvement in their performance in PISA results for reading, mathematics or science.”

Their research found that two of the highest performers in the international tests, Korea and Shanghai-China, used computers much less than countries such as Australia – and New Zealand – where computer use at school is almost universal.

The report also notes that between 2000 and 2012, countries that encouraged students to use the internet for schoolwork saw a decline in their students’ performances in reading. Worse, the report says an overemphasis on computers in the classroom disadvantages at-risk students, who would benefit more from achieving a basic proficiency in reading and mathematics, rather than learning how to use hi-tech devices.

The OECD also found that children who spent too much time on computers could experience negative consequences, such as information overload, an inability to concentrate, and exposure to online bullying.

The reality is that to help young minds develop, students must be taught to memorise spelling, their times tables, poems, and a host of other information that is needed for automatic recall and to expand their abilities. Relying on computers and calculators too early interferes with this basic skills learning, making it difficult for students to move onto more complex tasks.

As the OECD’s director for Education and Skills, Andreas Schleicher said: “Technology can amplify great teaching but great technology cannot replace poor teaching.”

Education is a lifelong process. While the government’s focus in this review is on the future direction of tertiary education, it is important that contributing factors – such as a student’s ability to move into higher education and training – are also factored into the Productivity Commission’s inquiry. If on-going concerns continue to be raised about the veracity of the NCEA, as the gateway to tertiary studies, then perhaps it is time it was replaced – or maybe that’s the subject for another inquiry!

The Commission’s final report on New Models for Tertiary Education is not due until February 2017. They are very keen to hear from anyone who has suggestions on how to improve the operation of the tertiary education sector – submissions are open until the 4th of May and full details can be found HERE.


Would you like to see the money earmarked by National for tax cuts, used for tax cuts or to fund free tertiary education?


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