The subsidy scheme to provide students of self-funded institutions with HK$30,000 per year is not a a voucher scheme, as originally conceived by Milton Friedman. A voucher scheme, which would give the money directly to students, would also give them the freedom to choose, and use market discipline to flush out institutions that are not up to scratch.

Under the government’s subsidy scheme, the money will go to the self-funded institutions, which will be paid HK$30,000 for each student enrolled. Students will have to pay the full tuition fee upfront, and inquiries are already pouring in regarding when and how they will be reimbursed.

The subsidy scheme cannot, however, guarantee the long-term viability of self-funded institutions. As Professor Ho Lok Sang of Lingnan University has pointed out, first-year places have already exceeded the number of qualified students available.

As Ho estimated, there are a total of 24,198 first-year places in local universities, including those for students who qualified from overseas, outside the Joint University Programmes Admission System. But, in 2017, only 20,801 candidates met the minimum university admission requirements.

With more privately funded institutions receiving financial assistance and a shrinking student population, all tertiary institutions will face increasing pressure to recruit enough students.

After then chief executive Donald Tsang Yam-kuen put forward education as a “new, emerging industry” in 2009, the higher education sector has expanded so rapidly that there is now cannibalism on university campus. Competition also comes from the self-funded schools or colleges of professional and continuing education operated by publicly funded universities, which also offer degree programmes for students who have satisfied the minimum requirement for college admission.

Fewer Hong Kong youngsters with degrees land middle-class jobs, while more work as clerks

While the large number of tertiary institutions that have mushroomed would suggest rising demand for college education, recent data from the University Grants Committee indicate that between 2012 and 2015, about 7 per cent of undergraduates dropped out of publicly funded universities every year. Some students might find college education is not right for them after all.

Even more worrying is the fact that our economy does not seem to have been able to create jobs requiring college-level skills as fast as our college aspirants would wish. A recent survey, bypublic policy trackers New Forum and New Youth Forum, of wage increases over a 20-year period shows the inflation-adjusted median wage level of the general working population increased by 13.6 per cent while that for degree-holders dropped by 5.5 per cent.

Academics are unanimous in pointing out that the wage decline of degree holders is attributable to the vast increase in the number of graduates in the past 20 years, coupled with our economy’s inability to create enough jobs that require higher skill levels. The funding for private universities could aggravate the job shortage and mismatch of talents.

But students would still need to take out loans to pay for their college education, and spend four years on programmes that could end up producing an over-supply of graduates in areas facing global competition.

Regina Ip Lau Suk-yee is a lawmaker and chairwoman of the New People’s Party