Should Australia pay its university students?
The “SU” is the name given to the State Educational Grant in Denmark — a no-strings-attached monthly allowance that all Danes above the age of 18 are entitled to receive for their university studies. The amount can vary, but tends to be the equivalent of A$700 per month, providing significant help to students amidst the steep cost of living in Denmark.
It takes more than a few Duolingo lessons to prepare a novice for the tongue-twisting phrases of the Danish language. The “Statens Uddannelsesstøtte” is no exception to this rule. The “SU” is the name given to the State Educational Grant in Denmark — a no-strings-attached monthly allowance that all Danes above the age of 18 are entitled to receive for their university studies. The amount can vary, but can be up to the equivalent of A$700 per month, providing significant help to students with the steep cost of living in Denmark. With this stipend, in addition to the fact that university education is already free, students experience a virtually incomparable level of support.
“I feel like I can basically do whatever and buy whatever because it’s my own money,” says Louise, a student at the Copenhagen Business School. Not only do students have less pressure to work copious hours alongside full-time studies to meet living costs, they are then less dependent on family support. “If I got paid every month from my parents I would feel less free and feel bad about spending money.”
Benefits of such a policy extend well beyond student freedoms. Danish universities have some of the highest graduation rates amongst OECD nations, and its graduates are almost totally free of any burdening student debt. As the decision to gain a tertiary education is no longer a financial one, students can be driven by passion and curiosity, prompting a greater personal motivation for success and enjoyment in studies. By establishing ability as the only determinant of university entry, individuals are able to study and specialise in careers that they are best suited for.
There is no denying that Australia has a long way to go before we could even imagine implementing a policy like this. More than just physical distance, or the fact we have more beaches and less bicycles than Denmark, cultural and political discrepancies make it seemingly implausible.
Denmark and its citizens, like its Nordic counterparts, are deeply concerned with social welfare. Access to social services is largely universal and most needs are covered all the way from pre-school to retirement. Danish citizens are content with one of the highest taxation rates in the world, since they strongly trust in effective government provision.
By way of comparison, tax as a proportion of the economy is over fifteen percentage points lower in Australia than Denmark. Moreover, less than half of Australians have confidence in the national government, compared to 64% in Denmark. Not only does Australia lack the current tax system to support a policy of free universities and paid students, tax payers lack the trust in government to allow for such a change in the near future. However, with a recent budget surplus which gave away billions to nuclear submarines, this cannot be a surprise.
Furthermore, trends in Australia’s tertiary education sector and politics give no indication of nearing the Danish state of affairs. University fees are increasing and currently the second largest contributor to inflation. Making matters worse for the 3 million Australians already encumbered by student debt, HECS-HELP loans are set to increase in June, directly contradicting the Productivity Commission’s recent recommendations to increase accessibility and make “all lectures online and for free”.
While it is easy to see what Australia’s students are missing out on, the Danish system is not without its critics, however easily disproved they may be. Some argue that without having to consider paying future student debt, the Danes are more prone to choosing degrees that may not meet the demands of the labour market. There are also claims that students are incentivised to drag out their studies and delay starting full-time work, since they have no financial reasons to do otherwise. Notably, neither of these arguments have great statistical support. Far from suggesting any skills gap in new graduates or that students are wasting their time, Denmark’s youth unemployment rate is one of the lowest in Europe. Furthermore, how can students spending more time studying ever be considered a waste? If universities exist to encourage the acquisition of knowledge, and not merely preparation for the labour market, the benefits of this policy appear to firmly outweigh any negatives, at least under the current Danish system.
Ultimately, Denmark is reaping the economic and social benefits of a system which fosters curiosity and motivation. In Denmark, the saying goes that “one who is afraid of asking is ashamed of learning.” The Danes have no shame in encouraging learning, much less in asking for help to learn — in my view, this is a concept that Australia cannot afford to miss out on.