Learning From the Southern Hemisphere

I recently visited Australia and Indonesia, both countries which—in their different ways—are pivotal for global higher education.

Australia is a complex system in which higher education has become a big business. It attracts a significant number of international students, especially from Asia, which generates some $6.8-billion dollars (Australian) a year, according to the Grattan Institute. That makes higher education the country’s fourth largest export earner.

Australia has pioneered new systems of student financing. In particular, it developed a system of income-contingent loans, which is becoming the preferred model for many countries. In 2012 the government lifted a cap on student numbers, allowing public universities to enroll as many students as they wanted—and promising loans to them—to develop a “demand-driven” market. Interestingly, England is now doing much the same, prompted in part by the Australian experiment. So, an idea that was born in the United States (but never fully adopted there) has made its way around the world: Even some American education experts want to adopt the scheme.

There is some controversy in Australia about lifting the cap on student numbers. Has it depressed academic standards? Has it pushed up government costs to unsustainable levels? Will it produce unmanageable levels of student debt? What are the effects on dropout rates? These are questions that have to be asked of all demand-driven systems. The jury is still out, though a recent paper by Grattan begins to examine these issues.

More generally, there is the question of how much more productivity can be squeezed out of the Australian higher-education system before quality begins to suffer. A recent book, Raising the Stakes: Gambling With the Future of Universities, offers a good discussion of the problems.

While Australia is a mature system—albeit one that is probably too dependent on student fees—Indonesia illustrates the extraordinary educational potential of the fourth most populous country in the world and one which is just finding its economic feet. The scale and diversity of Indonesia are both staggering. By one set of figures, there are currently 3.6 million university students and 5.6 million students in higher education more generally, housed in 478 universities and 3,170 higher-education institutions (other figures exist based on different definitions). But these numbers will have to grow very fast. The Indonesian government has set a goal of providing access to higher education for a quarter of its university-age population by 2020: an increase each year of about 260,000 students over the next decade.

There is, in other words, a major push to expand higher education—and one that other developing countries could learn from. Indonesia is building 495 community colleges, 64 of which have already been constructed. At the same time, it is upgrading the quality of its academic work force. Only 5 percent of Indonesian researchers now have doctorates, with another 15 percent holding master’s degrees. Part of the solution will have to consist of more students (and faculty) going overseas for their education. Now most of them go to Singapore, Australia, Malaysia, and China, with the United States coming in fifth but with its share of students growing rapidly.

As I returned to Britain, I was left with one question which applies to both systems in different ways. How will we handle regulation of educational-quality standards in a world in which higher education is increasingly multinational?

In Australia, this is a pressing issue as Australian universities expand overseas. In Indonesia, it will become an issue as foreign universities begin to establish programs there to meet the demand. Should regulation continue to be handled at the national level? Or should it move to the regional level as in some parts of the world? Or to the global level, differentiated by type of institution or discipline? Jurisdiction: That is the question.