The scholarship fig leaf: they won’t improve access for all

Are new equity scholarships expected to increase access, or are they just a fig leaf to garner support for a harsh education budget? Flickr/Thomas Hawk, CC BY-SA

Alongside higher fees and real interest rates on student debts, this year’s federal budget announced 20% of universities’ additional revenue will go towards equity scholarships. But will this measure increase the proportion of underrepresented students in Australian universities, or is it a fig leaf to sell a budget package that would otherwise be seen as an attack on equity and access?

As many commentators have noted, budget reforms will very likely increase stratification between universities and reduce access for students from underrepresented groups. These groups include Aboriginal students, students from low socio-economic backgrounds and students from remote communities.

Education Minister Christopher Pyne said the purpose of these scholarships was to “expand opportunities” for these very students. Whether they will work to that effect seems unlikely for a number of reasons.

The devil is in the detail

First, how much money will each scholarship offer? If it is just a few thousand per year, as is typical in many Australian universities, it probably won’t be very effective for increasing the numbers of underrepresented students.

Especially for students from rural/remote areas, the housing costs associated with attending university are very high. The University of Western Australia, for example, estimates that students need a minimum of $23,500 per year for living costs. To truly expand opportunities for low-income students from rural communities, scholarships would need to be substantial and not just pocket change for books and supplies.

Second, on which basis will the scholarships be allocated? If they are based on merit (eg, on ATAR scores), they will most likely go to middle- and high-income students who would go to university anyway, as plenty of research from the US has shown.

Academic achievement is strongly related to socioeconomic status and family background. On average, students from lower-income and lower socioeconomic backgrounds have lower test scores and other educational outcomes than their more privileged peers.

This is because access to educational resources and opportunities, both at home and at school, is not distributed equally throughout society. Merit-based scholarships therefore reward bright students but rarely expand opportunities for low-income students.

This leads to the third issue. If we want to expand opportunities for low-income students, we need a mechanism for identifying them. How do you know if someone is from a low socioeconomic background? Most universities use a student’s residential postcode to determine this.

The problem, however, is that postcode is an accurate way to assess socioeconomic status only about 60% of the time. In other words, it’s not much better than a coin toss. For scholarships to expand opportunity, we would need a better way to assess financial need.

Using a postcode isn’t good enough – there are plenty of highly educated, moderately well-paid professionals who live in modest neighbourhoods (myself included). Should their children receive scholarships simply because of the location of their home? Similar examples can be found among prosperous farming families.

Delivery could cost more than scholarships are worth

To accurately assess financial need, we would need a mechanism similar to the Free Application for Federal Student Aid, administered by the US federal government. It provides a very detailed and complex portrait of a family’s financial need. Just completing the form takes one hour.

While accurate and transparent, this process is also expensive to run. The managing office has over 1,000 employees. Given the Australian government’s attempts to reduce funding to higher education, it is unlikely to invest in such a mechanism.

Universities could create their own mechanisms for assessing financial need and managing financial aid packages, as is done in the US. Again, however, this is an expensive undertaking. Even moderately sized universities in the US would typically employ 30 or more employees to run such an endeavour. For Australian universities, the cost of this approach would likely exceed the money allocated for scholarships.

Given these scholarships are unlikely to have the desired effect, the proposal is either naive and ill-considered, or a fig leaf to sell an unfair and inequitable budget. Neither conclusion paints a very favourable picture.

Deregulating university fees will create a Pandora’s box of equity problems. Pyne, like many non-education specialists, wants to emulate the market-based approach of the US system.

While choice, diversity and healthy competition can be good features to promote, policies need to be created to ameliorate negative impacts on access for underrepresented students. The US system does this through its financial aid programs. While these programs are probably not suitable for the Australian system, another solution would need to be developed.

The current solution – Pyne’s scholarship programs – needs a lot more thought to be effective.