VC's perspective: University study—who really needs it?

About this time every year, large numbers of students in their final year of school take their last round of NCEA exams and talk with friends and families as they finalise decisions about what to do next.

Do they take a gap year and travel? Do they get a job? Do they take up an apprenticeship or some form of trades training? Do they go to university?

Any of these decisions can be an excellent choice—depending on individual students and their goals and circumstances. Sadly, however, these decisions can be based on opinions, analysis and anecdotes that are frequently out of date, and often plain wrong.

When it comes to university study in particular, students are often inundated with bad advice and bad information. Some information and advice I have encountered in the past couple of weeks includes: (1) traditional university education is a waste of time because it keeps you out of work for three or four years and leaves you with a large debt and not much else; and (2) universities will be gone in ten years, as people move away from traditional degrees to micro-credentials or studying on-line, so why bother?

The problem with these views is that not a single bit of evidence supports them.

Nowhere in the world is demand for degree-level education declining—it’s increasing everywhere.

Nowhere is traditional degree-level education being replaced by some alternative model—actually, though there are lots of attempts at new models, none is getting serious traction.

And nowhere is a degree a bad investment in time or money for students—even in the United States where the costs of university are many times that of those in New Zealand.

Evolving workforce

New Zealand is experiencing the same general trends as the rest of the developed world. Our workforce is evolving. Of the jobs listed in New Zealand’s 1996 census, if advertised today, about 33% would probably have required someone with a degree. By the 2013 census, 51% of jobs required a degree. The results of the most recent 2018 census haven’t yet been published, but I expect the trend to continue.

Most jobs created in New Zealand between 1996 and 2013 required significant post-school training or education—such as doctors, plumbers and electricians. Most jobs that disappeared over that period were for unskilled or semi-skilled jobs that could be done more efficiently by developing technology—such as labourers, clerks and receptionists.

The people who undergo the most training or education after finishing school are usually those with the lowest unemployment rates and highest incomes. A typical two-year diploma-type qualification will give a graduate an average earning premium of 17% over someone with just a school qualification. A three-year bachelor’s degree gives a premium of 41%. An additional postgraduate qualification brings that up to 53%. Of course, this value varies according to the subjects studied, but every single degree-level subject provides higher average earnings and employment rates than any sub-degree qualification.

The fear of losing income and taking on debt while studying is also not justified by the evidence. A typical degree-qualified graduate who goes straight to university from school makes up all lost income and debt by the age of 33 and still has another 30 plus years of higher income and employment rates.

In New Zealand, a degree is an investment with an average 12% annual return over a graduate’s working life. How many other investments provide that sort of rate of return?

The idea that traditional university-type education will disappear at some point in future is also very unlikely.

If education involved simply providing knowledge and information then, yes, this task could be achieved more effectively and more efficiently online. However, a degree-level education is about developing skills and competencies in a structured and supported environment. It’s about producing engineers, doctors and science graduates who can work safely and effectively with a range of tools in laboratory and workshop conditions.

It’s about graduates who can communicate, collaborate and work well with others. It’s also about our brightest and most talented young people going through a vital journey of discovery in which they mature both personally, and in terms of deciding which direction from a wide of possible options they wish to take in the first stage of their working lives.

Make decision on facts, not rhetoric

Distance education is a valuable way for people who can’t attend campus-based learning to still gain a university qualification. But this mode of learning is not as easy for students and has higher levels of non-completion, in part because most distance students are studying part-time, balancing study with other priorities in life—but also because it is lonely. The proportion of students who have been studying extramurally (distance) since 2004 has remained completely unchanged at between 7-8% of all students. I don’t expect this figure to change any time soon, particularly for students who are pursuing their first qualification.

I also hear that micro-credentials may replace degrees at some point soon. Micro-credentials involve people doing short blocks of training or education for credit. The theory is that micro-credentials can be gained when a person needs them—a kind of study-as-you-go model.

All the evidence suggests that micro-credentials can and will be valuable—but they are just another form of training that can provide very specific knowledge or skills. They are great for certain types of on-the-job training or for filling in gaps in knowledge before or when starting certain jobs.

But micro-credentials won’t replace degrees. A degree from a New Zealand university produces a graduate with a coherent and deeply developed mix of fundamental knowledge and capabilities over a three- or four-year period. These broad capabilities are what most young people need to get into jobs and professions today, and also what all the evidence suggests will be most relevant to the portfolio careers of the future.

In short, don’t believe all the rhetoric and opinion. The facts don’t support them. University is not the right choice for everyone, but everyone should make their choice based on the facts, not on rumour and speculation.

Professor Harlene Hayne
Vice-Chancellor, University of Otago