Carrie Lam

Will Carrie Lam’s education subsidies improve the careers of Hong Kong students?

Regina Ip questions the government aid for self-funded courses, given that even university places are not being filled, graduate wage levels are falling and Hong Kong’s economy seems unable to create enough jobs requiring higher skill levels

PUBLISHED : Saturday, 05 August, 2017, 12:31pm
UPDATED : Saturday, 05 August, 2017, 7:15pm

On July 14, the Court of First Instance handed down a shock judgment disqualifying four lawmakers for failing to take their legislative oath properly last October. The surprisingly pro-government ruling sent shock waves through the pan-democratic camp. Filibuster by pan-democratic legislators returned with a vengeance at the Finance Committee meetings on July 15 and 19.

Yet, despite the febrile mood in the Legislative Council, and the determined effort by supporters of the disqualified legislators to block a vote on an education initiative prioritised by Chief Executive Carrie Lam Cheng Yuet-ngor, the additional funding of HK$3.6 billion was approved by an overwhelming majority. Few could argue against providing more resources for education. The additional funding would give succour to several sectors crying out for help – teachers at kindergartens and schools, students with special education needs, and privately funded tertiary institutions. Lam has clearly taken on board the requests for help conveyed to her during her chief executive campaign.

Hong Kong lawmakers approve extra cash for education after angry final session

With nearly 90,000 voters in the education sector in the Legislative Council, hundreds of thousands of parents and students who want better education, and two from self-funded colleges elected to the Election Committee that selects the chief executive, support for education is one issue that no politician can afford to ignore.

Hong Kong parents’ strong desire for their children to be degree holders is well-known. Yet, whether the additional funding of roughly HK$1 billion for students enrolled in self-funded tertiary institutions would actually bring about quality higher education in the long run remains to be seen.

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.

The subsidy scheme cannot guarantee the long-term viability of self-funded institutions

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.

The wage decline of degree holders is attributable to the increase in university graduates

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.

With almost a trillion dollars in fiscal reserves currently, it is easy enough for the government to throw a few billion dollars at education to provide an immediate lifeline and win some kudos.

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.

Four years from now, let’s hope the government would not face even greater student anger than that from those who enrolled in the sub-degree programmes introduced 17 years ago, which now look set to become relics of history.

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