Andrew Leigh reports on work by Andrew Norton suggesting that university funding regimes will have some universities in Australia aiming for fewer domestic students despite the current downturn meaning that the opportunity costs of attending university, for students, are at a low.
Why would universities want fewer students? Well, if the government funding regime sets a quota on student numbers beyond which additional students generate only tuition income for the University, and if tuition income does not cover the marginal costs of educating a student, and if tuition levels are capped so that they cannot be increased to cover the student's marginal costs, that's about what you expect to have happen.
The NZ system is pretty similar.
I've heard numbers thrown around here than an additional domestic student in the College of Business and Economics next year costs the College more money than the student brings in. The tuition income we get from a domestic student is less than the per student overhead tax that we have to pay to the central university administration and we're at our maximum quota overall for the government's subsidy for students. So every additional domestic student costs the College about $300.
