By Marcia Devlin

A national election looms in Australia and while no-one is under any illusion about the likelihood of higher education being a key issue for the Australian public when they are considering for whom to vote, those in the sector are hopeful that, at the very least, higher education policy common sense will prevail. Depending on your particular higher education interests, the focus of such policy common sense will differ. For me, at least partly, the focus will be on equity policy.

I recently led to completion a national study that looked in part at the costs of supporting students from low socioeconomic status (SES) backgrounds in Australian universities. We used a mixed methods approach, incorporating quantitative analysis of national higher education data and qualitative exploration and validation.

The complexity of university finances, the opaque nature of equity funding and the generally low level of understanding of the precise costs of supporting low SES students in the sector provided challenges to meeting the project brief. That said, we used data from 37 universities over ten years and a sophisticated quantitative methodology and detailed consultation with senior executives at four universities on the quantitative findings to test their validity. The results were, as one Vice-Chancellor described them, “stunning”.

We found that the average costs of supporting low SES undergraduate students are around six times higher than the costs of supporting medium and high SES students. This was for a university with an average number of undergraduate low SES enrolments. At the postgraduate level, the average support costs for low SES students are around four times higher than those for medium and high SES students for a university with an average number of postgraduate low SES students.

These are, indeed, stunning findings.

We found that the kind of additional support needed by students from low SES backgrounds includes: outreach support to raise aspiration and relevant individual capital prior to enrolment; academic, personal and financial support while at university; and in some cases, support to care for students with highly complex needs.

We found that the additional cost incurred in supporting a low SES student compared to other students include those inherent on the support listed above and additionally, the costs inherent in the interventions required to address disadvantage throughout school and university.  We found that the costs of establishing, maintaining and appropriately staffing multiple and/or regional campuses, particularly but not only those located in highly disadvantaged communities, also contributed to the cost differentials.

In simple terms, we found that universities that are strongly prioritising or enacting missions to address disadvantage have higher costs than universities with other missions.

Because low SES students are not a homogeneous group, we found that additional support costs are not the same for all low SES students. As will be unsurprising to those working with equity group students, depending on their particular background and circumstances, low SES students may experience different levels of disadvantage and/or multiple disadvantage. In the four universities consulted, there were different costs in, and different approaches to, supporting low SES students. This was partly because of the differences in the universities’ missions, the number and geographic locations of campuses, whether the student was undergraduate or postgraduate and the characteristics of the particular low SES students for whom support was being provided.

There are a number of policy implications that an incoming Australian government might like to consider:

• Given universities that are enacting missions to address disadvantage have higher costs than universities with other missions, moving from activity-based to mission-directed costing may be a fruitful area for further exploration.
• Given that the costs of supporting low SES students are four to six times higher than those of supporting medium and high SES students, consideration could be given to applying the principles of ‘cost compensation’ in university funding for low SES numbers. In rudimentary terms, this would mean that each low SES student would attract four times (postgraduate level) to six times (undergraduate level) more funding than otherwise like students.
• Given the lack of homogeneity of low SES students and the differential costs for different universities in supporting low SES students, consideration could be given to the distribution of funding to support low SES students according to the investment/cost need of a university/campus/area in which a campus is located, rather than according to the number of students at each university who meet the technical definition of ‘low SES’. This would also help reduce perverse incentives to seek only the least costly low SES candidates.

I’m not overly optimistic about these findings being immediately embraced and celebrated by either side of politics. I am hopeful, however, that a government genuinely interested in equity might recognise that properly funding universities to enact their missions might be purposefully conceived as an investment that lowers social disadvantage and ultimately improve economic outcomes for both graduates and communities. In other words, I’m hoping policy common sense will prevail.

SRHE Fellow Professor Marcia Devlin is Deputy Vice-Chancellor and Senior Vice-President at Victoria University in Melbourne, Australia. The study referred to above was funded by the Australian government through the National Priorities Pool