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Free Education – how to pay for it

Written By: - Date published: 10:24 am, October 28th, 2017 - 85 comments
Categories: education, tertiary education - Tags: , ,

I am a New Zealander living in Norway lecturing at NTNU, Norway’s largest University. For the last few months I have been thinking about the challenges of providing free post-secondary education. Norway offers free education for all students including international students.

Norway’s pays for this through general taxation. For New Zealand I would propose something called an Income Share Agreement (ISA) for providing free access to post secondary education. Income Share Agreements are starting to be experimented with in the US, Purdue University and MissionU for example. The basic principle is that instead of paying a fee upfront, the University will earn money by the graduate paying a share of future income for a set length of time, rather than a set amount of money. Thus if the University fails to provide a good education and help the students career then the student pays almost nothing back, while if they get an amazing career using their qualifications they pay a proportion of that back to the University/Government.

In the NZ context the numbers might be:
• Each year at a Post Secondary education would be 2% investment
• The investment is active from year 3 to year 15 after graduation ( a 12 year period)
• The payment is on all income over the current level of $19,000.

Given the estimated of value of a 3 year degree on average then the students would be paying back about $18k for a three year degree. However students who earn a lot using their degree pay more, and students who were unable to find work using their qualifications will end up paying very little. This focuses on the value of the degree rather than the cost of the degree.

This approach works well for high paying career focused degrees. To balance the focus on developing a career the Government would need to create different funding categories, with both public good funding and private good funding. Degrees that have a high private good component receive less funding from the government and are expected to be able to help people who are focused on career advancement. This would include Computer Science, Law, Dentistry, Medical, Accounting, Engineering, Business, etc. There would also be public good funding for studies such as Nursing, Arts, History, Teaching, Caregiving, etc. This would require an analysis of the value and benefit of degree programmes.

Perhaps the largest and most disruptive change would be using this as part of the funding for Universities. Having income linked to graduate performance would put significant strategic pressure on the administration of Universities to increase the relevance and quality of their educational offerings. Rather than getting paid to graduate students, the organisations are investing in the future of their students. This also creates a natural incentive to offer continued education opportunities for alumni as the University is invested in the career of their graduates. This would create alignment between the goals of the students, and the income for the University. Universities would not want to risk flooding the market with graduates in an area where there were not jobs, as they would not get the money back from their investment.

The Universities have said the education is a “wise investment”. This model requires the Universities to back that assessment up by actually having a stake in the future of their graduates. Unlike individual students who are risking a large amount of money on a single item, their education, the University is able to diversify their investment across all their graduates. Thus the University and the Government take the risk not the individual student. The focus on alignment with what is needed in the market would also help to addresses the mismatched qualification issues related to New Zealanders identified by the recent OECD report.

With Labour offering free education by raising general taxation, this model proved a solution for who pays, and at the same time changes the game for post secondary education providers, no longer “bums on seats”, but “careers for grads”.

Links
Purdue offers an ISA system https://www.purdue.edu/dfa/types-of-aid/income-share-agreement/index.html
MissionU is no fees but heavy ISA https://www.missionu.com/about
OECD NZ report http://www.oecd.org/eco/surveys/economic-survey-new-zealand.htm

Dr Simon McCallum has been lecturing in Computer Science and Game Development for 20 years, in New Zealand and Norway. He is currently lecturing at the Norwegian University of Science and Technology (NTNU), Norway’s largest University.

85 comments on “Free Education – how to pay for it”

  1. Ad 1

    Great to see another fresh author.

    – How is the amount tracked?

    – What are the mechanisms through the central government tax system for collection?

    – What is the % of arrears compared to the current NZ student loans system?

    – Has it been found to reward more commercialized degrees at the expense of the less rewarded ones, and hence turn universities into essentially technical colleges responding to markets?

    – Has it increased loyalty through retention of graduates to stay in Norway, or decreased it?

    • Cinny 1.1

      Good questions Ad. Great post Simon, thanks for the insight, seems like a very sensible system that Norway has.

    • aster 1.2

      Reread piece. Norway doesn’t use ISA his references are to two universities in USA. Maybe not long enough in practice to see results. Norway pays through general tax. They have higher tax rates but are also backed up by sovereign wealth fund generated from oil resources. We have potential to uncover/unleash more oil/gas in NZ but with transition away from fossil fuels to renewables necessary in light of climate change means we’ve missed the boat on that one. But if we re-invest in Forestry as a nationally-controlled asset and become one of the major suppliers of wood/timber to world then maybe we can start building a sovereign wealth fund of our own. If we transition from hunter-gatherer fishing to sustainable aquaculture as the majority of our fishery then that too could contribute.

    • Hi Ad,
      I see the system as best run by government and universities in collaboration, so that the amount is tracked centrally. Thus we would need to augment the taxation system to collect this section of taxation. However for student loans we already have a mechanism for doing this.
      The numbers I was using tried to match the current level of average payment by students for loans and degrees. The specific values would need to be adjusted, but the idea is that this is a different way to view education, as an investment rather than a product, or a cost.

      As pointed out below the Norwegian system is free and is based on general taxation. It is surprising that it is still free even for international students. Norway is able to fund the tertiary sector partly based on high taxation, and also participation of women in the workforce, and low unemployment. I also see that there are courses in Norway which are just focused on graduating students rather than giving them a valuable education.

      As for retaining students in Norway, from what I have seen the heart is stronger than the wallet. When young people spend time with each other, they often form relationships and that seem to be a much stronger connection than particular financial incentives to stay in Norway.

      • Sam aka clump 1.3.1

        It’s actuall the students themselves who have been cooped by the school. To be loyal to the school. Because they know that there time in that school, the quality of the teachers, and how dedicated the school is to excellence. Will assure the student a top position in life. And it’s upto the student to fund the school, and make it better so that those that come after can also gain top positions in life.

  2. Antoine 2

    What would happen when a graduate left the country?

    A.

    • We already have that problem with the current system. There are various potential solutions, pausing the investment repayment period, contracts related to overseas income, and providing careers advice to keep the connection active and relevant. But this is a problem for any deferred payment system, be it loans or investments.

      • Antoine 2.1.1

        RIght, but surely the problem shifts from the Govt to the tertiary provider, who is less equipped to chase the money overseas.

        A.

  3. Antoine 3

    How do universities get cashflow initially, given that they don’t receive any fees from the student until 3 years after graduation?

    A.

    • This is why it has to be coordinated with government. The initial funding would still come from the government as it does now, and the income from students would be phased in over time. I would also like to give graduates even more power by allowing graduates to direct the taxation either back to the University that helped them or to general education. Thus if you as a graduate felt your tertiary provided did not help you then you would direct the 9% to general education. This may be too far, but at least it is worth discussing.

  4. Antoine 4

    Does a student pay the university anything if they do not complete a qualification?

    A.

    • That is why I suggested 2% per year regardless of qualification. Qualification is not education. The value of an education should be in the activity of learning, not in the piece of paper that you get at the end. Thus there is no incentive to the University to focus on “qualifying” as many students as possible, but on giving value at all stages of the learning.

      • Antoine 4.1.1

        OK. So if you come away without a qualification, you still have to pay X% of your income? Seems a bit harsh

        A.

        • Simon McCallum 4.1.1.1

          No harsher than the current system of having to pay fees back. Dropping out is actually one of the largest problems in sector where students who drop out after 1 or 2 years end up with without qualifications and large loans. Under this system they would not be lumbered with a loan to pay off for the rest of their lives.

  5. BM 5

    Norway gets free education because of Statoil

    https://en.wikipedia.org/wiki/Statoil

    • joe90 5.1

      nah

      There are no tuition fees for attending public higher education in Norway, as all the costs are covered by the Ministry of Education and Research.

      Students are also given the opportunity to apply for financial support (a part loan/part grant) from the Norwegian State Educational Loan Fund. The main requirement for support from Fund is that you are a Norwegian citizen. However, foreign citizens may also be entitled to financial support.[4]

      Eligible applicants may be granted financial support (a part loan/part grant) of about NOK 90,000. It is initially given as a full loan, but upon completion of modules in the education around 40 percent of the amount is transferred to a scholarship/grant if the modules are passed. There is no interest paid while taking the education.

      While studying, all students belong to a student welfare organisation that takes care of such services as housing, on-campus dining, book stores, kindergartens, advisory services and some health care. Part of this is finances through a student fee, typically at NOK 300–500 per semester. There are a total of 25 such organisations, each covering a geographic area and often consisting of more than one institution. The sole exception is Oslo where there are two.

      https://en.wikipedia.org/wiki/Higher_education_in_Norway#Student_welfare_and_economics

      • KJT 5.1.1

        Norway makes individual tax paid public.
        And tax dodgers are seen in the same light, most New Zealanders reserve for young Polynesian unmarried mothers.

    • UncookedSelachimorpha 5.2

      Nearby Germany, Denmark and Sweden get free education without Statoil.

    • Brigid 5.3

      New Zealand doesn’t get free education, in spite of Big Dairy and Tourism.

    • One Anonymous Bloke 5.4

      You’re quite right: nationalisation is a great idea. Well done.

  6. Stuart Munro 6

    It sounds like an excellent system – too many local providers have a ticket clipping approach – one gets significantly more care in Asian universities.

    • tracey 6.1

      Pastoral and academic care were HUGE priorities in the Tertiary I worked at. At times to the detriment of academic integrity but that was also due to the competitive funding model. A failing student is unlikely to continue so lost funding. Ergo do not fail.

      • Antoine 6.1.1

        This would also be the case under the “income share agreement” system, I think. Even more so, as the institution would (presumably?) get no money from a student who did not complete a qualification.

        A.

        • tracey 6.1.1.1

          It appears to be linked to a job though? So Universities might tend to take students for whom they believe a job fit can be made and not others? This requires to be crystal ball gazers too. Something govts, with all their resources, have failed to do well. Also we already see agent/employer rorts in attracting Internationals.

          I would love to see PTEs gone and a fresh slate approach taken to them. Make them reappky for a “license” more rigorously enforced. Some will fly through.

          • Antoine 6.1.1.1.1

            > So Universities might tend to take students for whom they believe a job fit can be made and not others?

            Would have an incentive to prefer male students (due to the gender pay gap).

            > I would love to see PTEs gone and a fresh slate approach taken to them. Make them reappky for a “license” more rigorously enforced. Some will fly through.

            Indeed.

            A.

        • Simon McCallum 6.1.1.2

          I personally feel that most of the pastoral care is from having lecturers and tutors who care about students. I would think that changing the way the University is funded would only have small effects on individuals. What I would like to see is a change in university management away from pushing for graduating higher numbers to improving quality of education. Current funding models encourage pastoral care up to the point where you pass the exam, and then the University has no (financial) reason to care about its graduates.

      • Stuart Munro 6.1.2

        Professional networks of fellow students centred on particular professors are the norm in Asia, whereas in NZ the institution’s interest often ceases when the fees do. The pathologies of the NZ model are partly the result of political change – chronic underfunding and the move to a foreign student funded rather than locally focused institution. Rapid change creates a siege mentality among staff that limits outreach. It doesn’t help that with a moribund economy many of us have been obliged to go abroad for work.

  7. tracey 7

    How does this foster learning of non-job linked areas?

    • Antoine 7.1

      See the bit about public good and private good funding

      • tracey 7.1.1

        Yes I read that. My concern is how that would be a sliding scale depending on the ideology of the govt of the time.

        EG during national campaigns to say no to domestic violence, a job in a response team with the police and womens refuge, a candidate required
        A Degree
        At least 5 years experience
        Shift work
        A question during interview ” have you ever been assaulted in a cell

        And a salary of 42k per annum.

        • Antoine 7.1.1.1

          It’s a risk for sure. I could well see a National govt turning the lever way down on the ‘public good’ component. (Can they do the equivalent now – eg causing providers to ditch arts courses? I should know)

          A.

          • tracey 7.1.1.1.1

            Joyce did. But noticeably he never capped Law despite only 25% of graduates getting work in Law Firms. I wonder if the Former Minister of Education ever saw the irony of Joyces move…

            • Antoine 7.1.1.1.1.1

              > Joyce did.

              Can you explain how, in simple terms? Does the Govt currently set a different level of public contribution for each subject or something?

              A.

              • tracey

                You are not asking me for further verification are you 😉

              • tracey

                http://www.nzqa.govt.nz/studying-in-new-zealand/understand-nz-quals/targeted-review-of-qualifications/

                ” In answer to Labour’s written Parliamentary question, Tertiary Education Minister Steven Joyce has revealed a plan to slash the number of Level 1-6 qualifications from 3,593 to 1,204. ”

                2015

                http://www.stuartmiddleton.co.nz/2010/03/rejoyce-the-spend-is-nigh/

                “Minister’s desire to see “more money going into actually training EFTS” (NZ Herald, Saturday, 27/02/2010) has therefore to focus on taking out of the system students who are likely to fail or not complete their qualifications or on reducing access to student loans or a combination of both. ”

                Can I just say that failing, making mistakes is a crucial part of learning. Even in deciding to discontinue study.

                • Antoine

                  Are we talking this sort of thing, also? http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10848413

                  (Edit: For me this comes back to depoliticisation again. A Minister shouldn’t be able to personally determine what courses a specific institution should provide.)

                  • tracey

                    Partly but Joyce speaks with forked tongue. Claimed in 2010 or 2012 that he didnt want students coming here for PR but that is precisely what has happened and he didnt move a muscle to tweak it until election year 17.

                    Universities focus on Internationals cos they get more money. To survive Tertiaries need money so more and more they cater to Internationals. Joyce likes this cos it gives Bill money for his surpluses… BUT International students behave lije customers. They are higher maintenance than domestic and make money back demands more often. Very few have plagarism rulings held up after they appeal…

  8. Sparky 8

    There is no real reason to make students pay here. If big business were to pay its share of taxes, for example, they would be more than enough money for every student to study for free.

    • You could fund it all from general taxation, as happens in Norway. But then you do have the arguments about solo-mums paying taxes to support lawyers through University. Also there are risks in having businesses direct the flow of graduates. Businesses tend to have a short term focus on immediate needs. The 12 year focus is to try to counter some of the aspects of job training, and incentivise career skills.

  9. tracey 9

    I would also like to see more employers step up and take responsibility for training their new entrants. More than an Induction Day or week.

    Tertiaries can only do so much and “job ready” and “academic integrity” and “customer satisfaction” do not always marry up on the funding and demands.

    Under the last Labour Govt and on steroids under Joyce Tertiaries became factories for producing treadmill employees. I attended an introduction to my tertiary’s new General Managers. They all sat in a circle with our Dean and Head. We gathered on chairs outside the circle. These 6 GMs stood, spoke to the circle not us, and extolled their own virtues from their prior jobs in industry. They called employers our clients and not 1 of tgem over the hour mentioned teachers or teaching.

  10. UncookedSelachimorpha 10

    “Norway pays for this through general taxation.”

    We used to do exactly the same. We should simply go back to that. We are not a poor country – and certainly no poorer than when we had completely free education, just 30 or so short years ago.

    The only reason we have all this nonsense and angst is because we have decided that here in NZ, the very wealthy should not have to pay proper amounts of tax. It is a greater priority here for a handful of super-rich to have incredible wealth, than free education for everyone.

    • AB 10.1

      Yes. Our system used to do what was in effect much the same thing – through a more progressive income tax than we have now.
      It was less direct and transparent than the Norwegian system described here, but also administratively far simpler.
      Oops – snap – Bill below at 15. Didn’t see your comment.

    • KJT 10.2

      When we had “Free” tertiary education” less than 10% went to University, and the top tax rate was 66%.
      People on here tend to be university educated so they think it is important. learning to learn and think is often cited.
      In my experience of graduates, if they hadn’t learn’t to think critically by the time they left high school, then University just produced a closed mind, with 15000 new words to justify their bias.

      I am not much concerned about the “snowflakes” that go to Uni. Most end up well able to pay their student loans. Which is much less than they/we paid in tax when I started work. We have way more graduates than positions for them, anyway.

      The lack of apprenticeships and training for the skills we actually need, as shown by the immigration skills list,’ is much more concerning. As is moderately paid positions in the trades ending up with student loans. Often after lengthy courses which still do not get them into on the job training.
      When you have only 6 apprenticeships available in a whole year in Whangarei, despite employers claims, they cannot get anyone without importing already trained South Africans, the system is broken.

      Employers who want these “job ready” people should also be doing their part. Often wondered why the tax payer/employee should pay for training which only benefits the employers. As they still pay little over minimum wage.

  11. Incognito 11

    From a cursory look & think I can see the attraction but it comes across as a business deal with a limited (?) focus on career prospects and economic outcomes. My personal impression is that Norway is more ‘parochial’ than other Nordic countries and there’s relatively little exchange of international students but I have no hard data to support this view – it could well be very dependent on degree area.

  12. greywarshark 12

    This comment below contains information about a private education facility which I put up on an education piece that I got together last night. Education as a business is just another profitable new area for rich investors being handed opportunities by NZ government and RWs, on a velvet cushion. And the subjects are skewed in the way they are taught and the subjects are limited. And I fear a machine-IT-education emphasis trumping the understanding of ourselves as humans and our style of thinking and knowing.

    While looking at Tauranga… I notice a new private one, with a purpose built campus, and promoting itself as being the bees knees. The advert is dated 2017, and it is part of a group with others.* I can’t really identify it as it has adopted that crap practice used too often these days, just giving itself letters for a legal definition followed by Ltd. There is no meaning to letters, not unless they are used as a logo for a full name that is provided!

    The facilities sound superior to state schools:

    Purpose-built campus
    Our campus features a brand new sports complex equipped for multiple sports including badminton, basketball, netball and futsal. Alongside this we have traditional outdoor rugby and soccer fields. The campus also boasts state-of-the-art learning facilities including science labs, multi-purpose areas, music and art rooms.

    *Schools listed are: ACG Tauranga, ACG Parnell College, ACG Senior College,
    ACG Strathallan, ACG Schools Jakarta, ACG Sunderland, AIS Vietnam.

    ‘World-Class Education in NZ’

  13. Fran 13

    Perhaps it would be useful to ask what education is really all about and why it is important. I hope that it is not about work which would seem to be the basis of this proposal. Hopefully real education is about critical thinking, innovative thinking and knowledge of what has gone before so we are not doomed to repeat it. Educated people are, hopefully, thinking, tolerent, inquisitive and open to difference.

    There is a big difference between education and job training and I hope that after nine years of emphasis on job training we can start educating people again. Again the proposal of this post seems to emphasise job training so while food for thought it seems to me to have some potentially dangerous fishhooks.

    • tracey 13.1

      Whrn Joyce effectively gagged scientists he showed the Nats consider the Education Act just smoke to their mirrors.

      So many parents dont want critical thinking, problem solving children if it doesnt comr with an A

      • Incognito 13.1.1

        Critical independent thinking and problem solving are life-long skills as is learning to learn well. Much current information & knowledge needs continuous updating and/or replacing.

        Another problem is that nowadays students & teachers alike seem to avoid failure at all cost as if it the worst and most embarrassing experience one can ever have. It’s all about achieving success and a focus on short-term gains (i.e. the certificate with an A); failure is not an option in the current competitive environment.

        This encourages short-cuts and risk-avoidance and one the inevitable failure does happen there is no resilience. In a safe learning environment people need to dare to take risks, step outside their comfort zones, tackle new things, and explore their personal boundaries as well as those of others and respect these instead of taking advantage. It is also a good time to develop one’s values and hold these against the values held by others.

        None of this was ever part of National Standards AFAIK and Ethics101 is not compulsory either I believe. Instead, get your certificate and move on so that you fulfil your (materialistic) dreams.

      • Fran 13.1.2

        Too true Tracey.

      • greywarshark 13.1.3

        Tracey
        You might laugh at this. Here is Little Red Riding Hood for children who provide critical thinking to hardy parents, keeping them on their toes slightly ahead of their offspring. From Radionz Storytime.

        http://www.radionz.co.nz/collections/storytime-treasure-chest/audio/201831634/little-red-riding-hood-not-quite
        About 6 mins
        Little Red Riding Hood (Not Quite)
        From the collecton Children’s Treasure Chest

        Cover of Little Red Riding Hood (Not Quite)
        A modern re-telling of the classic fairy tale – for young skeptical ears…

        By Yvonne Morrison
        Read by Geneveive McClean and Finn Hagen

    • KJT 13.2

      “Educated people are, hopefully, thinking, tolerent, inquisitive and open to difference”.

      What the, evidence based, “New NZ Curriculum” was aimed at, before National destroyed it with NACT standards and “performance assessment”.

  14. red-blooded 14

    Personally, I worry about funding and provision of arts focused courses under the sort of proposal that’s being made here. There’s already a big push in our institutions to focus on career-related courses and to an extent that’s understandable, but a healthy society also needs people who are well-read, who have a developed sense of history, have thought about philosophical and political issues, appreciate the visual arts and music, along with dancers and actors and musicians and artists…

    It’s fine to say that if you didn’t end up making much money you wouldn’t pay much back, and that might work on a personal level, but it would also tend to be another driver for universities to under-value and make cut backs in languages and culturally focused courses. They wouldn’t get much reward from many of them, and would naturally concentrate their resources on the higher yield subjects.

    Plus, the practicalities when someone leaves the country seem pretty challenging. I wonder if the EU countries have some kind of agreement about collection of the owed amount?

    I believe that education is a social good as well as a personal one, and that it should be paid for by the state. The current policy of moving to 3 years free tertiary seems like a pretty good start to me.

    • tracey 14.1

      And yet if it wete about labour shortages where are the horticulture degress and diplomas to get more NZ pickers for the growers? But that is the smoke for the mirror… what is wanted is uneducated (cheap) labour to help profits…

    • I completely agree with the risk of moving to a career focused system, which is why I felt there has to be a distinction between public and private good. Considering all the activities at a tertiary provider as public good activities does not reflect the current state of tertiary education. Many courses are job focused and I think it is reasonable to discuss differentiating funding based on the social value of the education. Philosophy courses should be 100% funded from public good funding, while accountancy might only get 30% from the public fund.

  15. Bill 15

    Christ on a bike!

    Does no-one remember progressive taxation and ‘free’ education? If graduates get a well paying job/career, they pay higher taxes off their higher income.

    If they don’t, then society benefits from a more educated populace anyway.

    The whole “user pays” was just a slight of hand to shift government debt onto citizens.

    And the only reason for that was the whole bullshit liberal fixation with fiscal responsibility and running surpluses – in other words, utter economic incompetence and stupidity.

    • Brigid 15.1

      Exactly. If “Norway pays for education out of taxes” so can New Zealand.
      After all we all use the same numbering system.

      It really is so damned simple.

    • UncookedSelachimorpha 15.2

      Agree. I would say that “User Pays” is a method to transfer wealth from poor to rich and to wind back redistribution via the state.

      Those with wealth can use, and those without, cannot.

      • Incognito 15.2.1

        No, it’s much more perverse: those without [wealth] are most encouraged to use it as a way to ‘move upwards’. They can only achieve this by making sacrifices, especially financial ones, and getting themselves into debt. This is one of the ways they end up in the debt-death spiral from which there’s no escape. This, in turn, ensures complacency and obedience and conditions the debt slaves to fully embrace status quo and the ‘system’.

        • Simon McCallum 15.2.1.1

          That is partly what I wanted to avoid. This is not debt, but an investment share. Rich families do not pay for their kids fees as there are no fees. If a graduate is given a high paying job through their parents connections or current wealth, they still pay the percent back to the University.

          But the way we pay is only half of the proposal. I agree we could have the whole amount come from general taxation, but then we still have the problem of Universities acting like businesses and focusing on graduating large numbers through low quality degrees. This model is partly about retaining a connection with the students after they graduate so that the University has an incentive to help develop students for 18 years rather than 3.

  16. Gristle 16

    Good start but there are problems.

    Tax efficiency. PAYE has a cost of about 10 cents to the $100, that is 0.1%. Specific taxes are usually very expensive to administer,for example the old television (receiving station) licence was about $10 to the $100, that is 10%. In this case sorting out tertiary students from the rest is not that difficult but will cost.

    Intergenerational equality. Me, I was lucky enough to complete university before loans came into operation. Compared to loan payers, and tertiary students getting levied the extra 2%, I am getting a free ride.

    Expats. For people who go overseas after graduating, what is their payment method.

    Bow wave. There are more people out in the workforce who have completed tertiary training than are going through training. Some have had free courses, some have student loans and now some will have the plus 2%.

    Taxing every high earner 1% more appears a better way to go.

    If the logic is that getting tertiary increases the earning opportunities for these people beyond the earning opportunities of people who don’t get tertiary qualifications, then a progressive tax rate will address this issue. It’s a matter of striking the correct tax rate.

    Anyway, from a NZ productivity basis, high paying jobs comes with the inference of being high productivity jobs. Requiring marketing and sales qualifications to work on a shop floor seems to go against this sort logic. We are buying into an employment view that seems to hold that high level qualifications are needed for a position when in reality it becomes an easy route for employers to cull through applicants.

    (My best employee ever was a joker who had run away to sea at the age of 14. My worst employee (apart from me) is a know-it-all mathematician with a Ph D.)

  17. One Anonymous Bloke 17

    What Bill said at 15.

    User pays is a disease.

    • Incognito 17.1

      Because you only get what you pay for. No pay, no cure. Capitalist claptrap that inevitably leads to competition and an uncaring society.

    • But this is explicitly not “user pays”. This is wealth sharing. If you imagine the student as a “user” of education, then they do not pay unless it creates value for them. This is not even a money back guarantee based on success. This is sharing the value created by the investment of time and resources into the student. And the reason to tie it to the actual provider of education is that the main value is not in covering the cost, but in thinking of education as part of a life long development rather than merely a qualification that is brought. Education is not a product but an investment.

      • One Anonymous Bloke 17.2.1

        I prefer that we fully fund free education through taxes the way successful countries do, rather than invent artificial markets for no reason at all.

        Been there, done that. Does the name Max Bradford mean anything to you?

        • Simon McCallum 17.2.1.1

          The problem is that we have turned the universities into businesses. The way you fund a university matters. Funding for getting students to pass exams results in lower quality courses where there is pressure to pass students regardless of output. Even if it is fully funded from general taxation system, there is still a significant problem with the behaviour of the universities. The free system here in Norway does not stop tertiary providers creating courses just to get students in the door. The pressure from funding is to get students to pass, not to educate them.

          • One Anonymous Bloke 17.2.1.1.1

            So the universities have to be salvaged from the wreckage of the broken failed model right wing ideological brainfart too.

            • Incognito 17.2.1.1.1.1

              You know the answer!

              Death of the Public University? /open-mike-18102017/#comment-1401499

              Joyce did everything in his power to further undermine the role (and status) of universities as critic and conscience of society and put a few more nails in the coffin. The same has been happening all over the world, sadly.

        • RedBaronCV 17.2.1.2

          Yep & the “solo mums tax” paying for lawyers argument needs to be firmly countered with “high earners such as lawyers ” will be paying back through a progressive tax system.

          But back when university was free and most people bolted from school at 15 there was further “tertiary” training in apprenticeships, teachers colleges etc combinations of on the job & block courses. and those young people earned an ordinary wage while training.
          University students, while supported expense wise didn’t receive other income so they paid an early life penalty of around 5 years lost earnings between 16-21 .

          And while I’m here why are we going to be looking at capital gains taxes when we don’t have a progressive income tax system on higher earnings? Get the money at source.

          • Antoine 17.2.1.2.1

            > why are we going to be looking at capital gains taxes when we don’t have a progressive income tax system on higher earnings? Get the money at source.

            The capital gain can _be_ the source, yeah?

            A.

            • RedBaronCV 17.2.1.2.1.1

              Yes capital gains can be a “source” and I’m not saying we should not use it but why not get at least some of the money earlier in the cycle with progressive income taxes.
              Should only high earners be ‘entitled” to save & invest and does this imply that they are the people who will make the best investment choices (unlikely) or is it possible that we will get a better result from a wider ange of people making more modest investments??

          • KJT 17.2.1.2.2

            And that is why most university students, back in the day, were the children of the well off. Paid for by tax paying tradesmen/labourers. They used to infest the ski fields every varsity holiday. The poor things.

            Student loans allow many more to go to University. Including many who wouldn’t have in the past.

            Unfortunately the “bums on seats” business model results in qualification creep, a plethora of substandard courses, capture and dumbing down of practical occupational training, and many going to Uni who would be better off doing something else..

            • RedBaronCV 17.2.1.2.2.1

              Not all were from a well off background – I was part of a significant cohort who were not – and yes we could manage on the free system “just” but remember only around 10% went and that was after a 6th & 7th form year.
              but my going made it seem more “normal” in my family and a number of my many cousins followed.

              The bigger barrier was really the lack of “push” & identification at school level as university was not considered as a choice really by families who hadn’t been involved at parent level plus many wanted to just leave school and earn money.
              Of course this works the other way too, I have friends with degrees (including a lawyer) who either directed their kids to university when they would have preferred to do some thing else or who were surprised that I would be just as happy to have a plumber in the family & would support that.

              As to the loans enabled a wider range of people (it’s been repeated lots) but maybe yes maybe no – poorer families usually aren’t as happy to take on debt – and many of the jobs & incomes that result make the repayment a real hurdle.

              As to the dumbing down – yes I agree . And some of these minimal or next to useless qualifications are being used as a financil barrier to entering certain jobs.

  18. Jerko 18

    I haven’t read all the comments here so I hope I’m not repeating. Southern Institue of Technology has had zero fees since the late 1990s. They provide a lot of vocational courses and Degree courses, and have branches in Queenstown, Hornby, Gore and Auckland as well as Invercargil. They were pretty upset when Labour announced their policy. They were reassured by someone whose name escapes me. They introduced zero fees because the region was losing people and it has been successful so far. I actually applied for a job there a few years back in the Nursing Dept. I was quite disappointed that I didn’t get selected at the time. Such was my Karma. I agree in some ways that the rich should pay more. Having said that, a surgeon I know was paying $250000 in Tax a few years ago. He worked his arse off to make the sort of money he must have earned for that year. I don’t begrudge him a cent of that. The thing was that his tax bill was the same as the value of my house at the time. I

    I would have my doubts about any educational fee scheme coming out of the USA. Their track record for pretty much anything is dismal.

    • The system does not “come out of the USA”. I have been working on the idea long before I saw that Purdue was also working on a similar system. My inspiration was originally from the Medieval University systems where lecturers were not salaried, but received fees from students who attended lectures. I was also influenced by the business model of the Unreal 4 Game Engine. They recently moved to a free to use model, but 3% of gross revenue once your game was successful. Combining these two areas and thinking about my own profession as a lecturer, I started designing a system that would align the motivations of most students with the motivations of the University. The USA is also a very big place and so often there are pockets of very good ideas, and some very bad ideas, but that is another discussion.

  19. Nic the NZer 19

    While this ‘funding’ scheme is interesting the post needs to acknowledge that the NZ government can at all times afford to buy everything for sale in NZ dollars (including a secondary education). If the argument is made without acknowledging this its simply not dealing with the world as it is.

    Discussing replacing (or altering) tax collection via general taxation with tax collection (and its related distribution) from those attending a particular secondary institution, may effect the incentives of secondary providers. It doesn’t however effect the affordability at all.

    • Nic the NZer 19.1

      My comment said ‘Secondary’ where it should have said ‘Tertiary’.

    • By affordability I will assume you mean that the government can afford to pay for tertiary education for all those who want to study. At the moment the government limits enrollment partly by making it only available to people willing to pay a fee or take a loan. Under the investment model you can also limit the number of students you are willing to invest in. As this is the government investing in the population, it can choose to invest with different risk profiles than a commercial entity, such as investing in minorities, or different career paths.

      By focusing on the value of education rather than cost, there may also be improvements in reduction of courses which do not serve anyone particularly well. The specific courses I would target are courses which are supposed to be for industry training where the industry has no need for the skills being taught. This is currently managed by the TEC reviewing courses. The investment model makes the tertiary organisation directly responsible for failure to understand the market.

      • Nic the NZer 19.2.1

        Yes, when dealing with such macro-economic policy the issues are quite different. Essentially for a government like NZ there is no such constraint as affordability for its spending. If the government wants to have free education it can always choose to employ the providers in such a sector directly. What is the issue in this context is not how much it spends to employ them but what effects that choice will have on the national economy over all.

        Obviously, when this is understood, it comes down simply to a political choice of if students should pay for their education in some way (or not).

        “The specific courses I would target are courses which are supposed to be for industry training where the industry has no need for the skills being taught.”

        Addressing this directly I would have to doubt that funding university via income sharing for skills that the industry has no need for, will lead to more funding of such courses at all. Quite the opposite. One of the main arguments for introducing student loans was that students would choose courses which were actually of use to an eventual employer. This seems to have introduced some problems where some of the courses appear more useful than they are in practice but there has been a definite shift to more career focused course selection by students and offerings by institutions. This is unlikely i think to shift to non career focused under any paid system (because of the selected and available courses needing to suite the educators and students).

        This will be useful reading,
        http://bilbo.economicoutlook.net/blog/?p=37157

  20. Philg 20

    If 6 or 8 families own 40 or 50% of the world’s capital… I would’ve thought the solution was obvious.

    • KJT 20.1

      Personally I am opposed to the death penalty. Tempting as it may be.

      Especially for the crime of serial child abuse.
      300 thousand children, and their, mostly, working parents deliberately forced into poverty, because the Wayne Mapp’s of this world thought we had, “too much equality”….

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    3 days ago
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  • Week That Was: Supporting our schools
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    2 weeks ago
  • Tax-free deployments for Kiwi troops
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  • A balanced Zero Carbon Bill passed
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    2 weeks ago
  • Paramedics’ status to be recognised
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    3 weeks ago

  • PGF approves wind turbines funding for Stewart Island
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  • Milestone of 1800 new Police officers
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  • LGNZ Rural and Provincial Sector Speech
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  • Ambassador to the European Union announced
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  • APEC 2021 Bill passes first reading
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  • Making progress for our kids
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  • Māori women in business contribute to our economy, whānau and communities
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  • Two schools on the way for Omokoroa
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  • Plan of action to protect seabirds
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  • National interest test added to overseas investment rules
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  • New housing part of support for Kaumātua
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  • Two decades of marine protection celebrated at Te Tapuwae o Rongokako in Tairawhiti
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    7 days ago
  • Modern emergency care for Queenstown area
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  • Disability Action Plan 2019 – 2023
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  • More frontline biosecurity officers protecting NZ
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