Tuition Fees and Student Participation Lessons from Austria

1. Tuition Fees and Student ParticipationLessons from Austria Hans Pechar University of Klagenfurt, Austria

2. Why is Austria an interesting case? • The re-introduction of tuition fees in 2001 resulted in a decline of enrolments (20%) and first entrants (14%) • Conflicting interpretations: • Opponents of fees: one fifth of the student population can no longer afford higher education. Even small fees result in decline of student participation. • Austria had a large number of “paper students” (without detectable study activity). The decrease of enrolments is caused by “drop-out” of paper students. Decline of new students is due to postponed enrolment. • empirical evidence for the 2nd interpretation.

3. Overview: • The laissez faire characteristics of Austrian higher education • Stages of tuition fee policies in Austria • The impact of fees on participation at the tertiary level

4. Why do we have paper students? • For decades, Austria has a „laissez faire system“: this is a heritage of the Humboldtian tradition which does no longer fit into the realities of mass higher education • 3 pillars of laissez faire: • High degree of freedom in teaching and learning (little formal obligation for students and teachers) • Open access (graduates from Gymnasia are entitled to enrol at any university for an unlimited period) • No fees • As a whole, these conditions resulted in high drop out, long duration of studies and a high number of paper students. Indicators for 2000 (prior to the introduction of fees and the implementation of Bologna): • Almost 50% drop-out • On average 7 ½ years for the 1st degree (= Master) • Estimates about paper students vary between 5% and 50%

5. Are paper students a problem? • A fictional problem (but very prominent in the public debate): they are a financial burden on universities. This is based on the assumption that paper students use the resources of a university in the same way as active students. • The real problem: enrolment data and other statistics are not reliable. This causes problems at the policy level and at the institutional level. The debate about fees illustrates this problem.

6. Stages of tuition fee policies 1: abolition in 1972 • policy objectives: • encourage increase of participation in higher education • remove mental barriers against participation at lower income families • reduce social, regional, and gender disparities in participation at tertiary level. • public debt was not yet a major policy issue • increase of student numbers was matched by growing public expenditures

7. Stages of tuition fee policies 2: A new debate in the mid-1980s • In the mid-1980s the situation had changed: • no longer strong commitment to expansion of higher education • Fiscal consolidation: a policy priority • decrease in per capita expenditures for universities • Advocates of fees: • The “no-fees-policy” has not effectively removed social disparities in participation • The middle classes get most benefits from public expenditures for higher education. There are more effective ways to support low income students. • It is feasible to design a fee policy which does not create financial barriers for low income students. • Oponents of fees: • Higher education is a public good • Low income students are excluded; female students will be mainly affected • Financial pressures undermine the quality of education

8. Stages of tuition fee policies 3: re-introduction of fees in 2001 • fees amounting 363 Euro per semester are charged since 2001/02; some justified criticism: • fees were no additional income of universities but collected by the treasury; it was a “student tax” to facilitate fiscal consolidation. • “flat fees” which do not allow for a differentiation of full-time and part-time students; students who combine study with work pay more • Do fees function as a social barrier for students from low income families? • With 363 Euro per semester, the amount of fees is relatively low. • In addition, students who are eligible for student aid are exempted from fees • Empirical evidence: no decline of active students

9. A forecast for 2001 • New statistical data enabled a serious estimate of paper students: in 1999 data about examinations were collected at the system level. 40% of all enrolled students did not even make one exam. • Assumptions of the forecast: • Only a minority (20%) of students without exam are active • Paper students would not enroll as soon as fees are charged • Fees have no impact on active students (who have already made an investment) • Initially, new entrants would decline for 5-10%; in the following years, first enrolments would again rise to the prior level. • Forecast for 2001: • total enrolments: - 30%; this is mainly advanced drop-out of paper students • First entrants: - 5-10%; this is due to postponed enrolment

10. actual enrolments in 2001 • significant differences to the forecast: • Decline of new entrants higher than estimated (14%) • Decline of total enrolments smaller than estimated (20%) • Why did we overestimate the number of paper students? • Insufficient quality of exam-statistics; in 2001 a second data set was available (for 2000); better data quality; when we combined the data of 1999 and 2000, the number of inactive students decreased to 25%. It is plausible that 5% inactive students enrol even if they have to pay fees. • Why did we underestimate the decline of new entrants? • Different enrolment patterns of „traditional“ and „non-traditional“ students: small decrease for young, large decrease for older age cohorts (-40% for new entrants older than 25). • We did not consider the strong shift to the Fachhochschulen

11. First entrants at universities and Fachhochschulen

12. A second look to the data – new developments • Total enrolments: • Active students at universities + FHs increased over the whole period • First entrants: • In 2003, first entrants at universities have already surpassed the figures for 2000 • Gender bias? • In 2001, decline was stronger for men than for women

13. retrospective estimate of active students

14. total enrolments: official statistics vs active students at universities and Fachhochschulen, 1996-2001

15. First entrants at universities 2000-2003

16. Conclusions • While the figures of the forecast were not very accurate, the substance of our interpretation has proved true. • The introduction of (very modest) fees has not negatively affected active student participation. • After an initial decline of new students, the number of first entrants continues to grow in the following years.