The Cost of Education

In today’s Taipei Times, Dr. Prudence Chou of National Chengchi University discusses the individual cost of attending university in Taiwan.  She states,

My own research indicates that the total costs of school fees and living expenses over four years of study come to about NT$1 million (US$31,800) for students at state-run universities and more than NT$1.3 million for those at private colleges.

Given this huge cost and growing employment problems, she goes on to ask what I think many observers see as the real question,

“…shouldn’t we be looking at alternatives to university?”

The implication seems to be that many students will not have the opportunity to pay for the poor quality education they are receiving at some of many newly opened private universities. Certainly this is consistent with widely published expert opinion that there are too many universities.

But I believe this misses the point. Why are students and their families willing to pay this premium when alternatives exist in construction trades, the military, and entrepreneurship?

The answer to this is very direct. The importance of university graduation on earning power has been effectively demonstrated for Taiwan. In one study conducted in 1999, the average monthly income of  university graduates was almost 30% higher than that of a junior college grad. The difference for those with graduate school education over a 4-year degree was in excess of 20%.

Differences such as these are planned. Large companies, both local and foreign, pay higher wages to new employees if they are university graduates. In many companies, this is policy. The position, career-track, and performance are not what decides income. At least initially, a major determinant is the type of degree one holds. Some large companies have educational requirements for managerial positions.

In addition to these direct effects on earning, there are indirect effects through closed career-tracks that need to be considered. Students who do not have a degree can not continue with graduate school. As I pointed out back in June, Taiwan is full of students beginning from humble origins who with the benefit of a liberal admissions and transfer system have been able to obtain an incredible level of merit.

There are significant problems with the university system of job preparation currently being cultivated in Taiwan, but fairness is not an issue. Students and their parents are well aware of the options available to them and select university education when ever its available. They do so because there are huge structural  advantages available for the university-educated in Taiwan.

Comments

I’m amazed that the private collages are only marginally more expensive. In the US they are often as much as two to three times the price of public ones, some many times that. On the other hand, they often have the resources to help poorer students so that it can be cheaper for those in need (even free) to attend some of the most expensive private schools. What I don’t understand, and would like to know more about is the exact situation of private universities in Taiwan. My impression is that they still receive a tremendous amount of public money and are highly regulated (including caps on what they can charge). I’d love it if you could write a post explaining more the nature of private higher education in Taiwan and how it compares to other countries, such as the US and Canada.

That’s a good suggestion. I’ll write more about it later. The first private universities in Taiwan were church-operated. It is often said these schools are transplanted from Republican China. Some time later, individuals with close connections to the KMT were allowed to operate school. These are another class of private university that I refer to my friends as family-owned universities. This is where my university comes from.

It is not clear to me if churches can actually contribute money to their universities. Church-affiliated schools are among the leading schools of Taiwan. Fu Ren and Tunghai look like real schools and have libraries that are as well stocked as many public schools. I am not certain how this funding situation developed.

Private schools do receive cash transfers from the MOE but not enough to cover their entire operating cost. As such, we have to charge higher tuition than public schools. The situation that results is that public schools always have more money than family-operated private universities.

The funding inequality is quite noticeable if you spend time walking around a well-funded family-owned university. Tamkang and Wunhwa would be at the top of this. Ming Chuan would probably be nearby. The many or even most of the newly opened private universities would not resemble anything you would think of as a university. Many would be functionally equivalent to rural high schools.

I think the calculations are based on the concept of a student living at home. The 0.3 million difference is the difference in tuition over 4 years.

The importance of university graduation on earning power has been effectively demonstrated for Taiwan. In one study conducted in 1999, the average monthly income of university graduates was almost 30% higher than that of a junior college grad. The difference for those with graduate school education over a 4-year degree was in excess of 20%.

I agree that degrees are more valued here than in the US. However, there is a flaw in this study. There are factors, such as intelligence and work ethic, that correlate strongly with both college admission and lifetime earnings. A more meaningful statistical comparison would be between those who complete a given degree and those who were able to gain admission but chose not to.

Very similar issues confounded earlier studies on the value of “name brand” degrees in the US.

You are correct in that there are more factors effecting earning power than just level of education. Many of these have been explored in the USA. Such data is not available for Taiwan.

While I agree with you, it is not directly related to this problem. My point here is that parents and students are making a rational choice when they select to attend a junky promoted junior college rather than to receive trades training. This out-explains every other possibility that we have detailed information about, including the idea that parents and students attend university because of some deeply rooted Chinese desire for education.

There is a final point that I can’t elaborate on. The symbolic importance of a diploma is quite different here than in the USA. Diploma is the USA are implied to indicate among other things that the holder is intelligent. In interviews I have done with Taiwanese teachers and employers, this is not the implied meaning they express. The terms that come up most frequently are those related to diligence and hard-work, rather than brain power. What I have been told in so many words is that you hire a name-brand diploma because having that means the holder has and can work a lot harder than other diploma-holders.

As a small company owner and graduate of a top national school once said to me, “Many students in a top school think they are smart. Maybe they are, but in the education system of Taiwan, to enter a top school you need to be more than smart. You must be well-prepared. A lot of things can effect your performance, like knowing how to take the test and other things to get a high sore.”

Every year about this time, we hear a lot of somewhat sanctimonious tut-tut-tutting from the media about students with low scores being accepted into more newly-established private colleges and universities. Such reports form part of a larger discourse in relation to such colleges and universities – that they are evil predators exchanging diplomas for cash, with no regard for academic standards. It is a discourse which Scott seems to subscribe to, at least to some extent, in his latest blog. However, as a member of the academic staff of one such institution, it is a discourse which does not accord with my perception of the reality. I would like to raise two points briefly here. First, what is the reality of the educational services provided by these new, smaller, private institutions? And second, what is the ideology underlying the discourse that attacks them?

With regard to the first point, I will comment only in relation to the department of which I have been a member for the past seven years. All of the academic staff within this department gained their academic qualifications from overseas or high-ranked local universities. All are rigorous in the standards that they demand of their students. All spend considerable amounts of time consulting individually with students outside of class time, and many have eschewed mass-produced text books in favor of teaching materials that they have developed themselves to address the specific needs of the students at this institution. Experienced teachers know that it is always the less academically gifted students who are most demanding of their pedagogical energy; I would go further to say that the response of an institution to these students is the best yardstick of teaching quality. The results speak for themselves. Last year, between 10 and 367 of our graduating students passed the entrance requirements for graduate school, 115 of them to national universities, and 11 more were accepted into PhD programs. In other private colleges, the figures are similar. To put these results in perspective, on entrance to university, all of these students were ranked in the bottom 10 percent of all students in Taiwan. After four years of education within these maligned institutions, they had climbed into the top 20 percent. It is this kind of transformation which I believe may help point to some of the ideology underlying the public invective directed at smaller, private universities.

When students with high-school scores as low as 7.69 are accepted into college, why is there not the slightest concern about how an education system can produce such large numbers of students with such poor grades after 12 years of education? Our preliminary testing reveals that two-thirds of Freshmen entering our college have not reached junior high-school levels of English. Clearly, they have long been abandoned by the system. Yet the only concern that is publicly expressed is that such students can continue to receive education. It would appear that many sectors of society would prefer these students to be cast on the slag heap, to fulfill their predestined roles as drivers of blue trucks and purveyors of betelnut. As Scott so correctly stated, academic qualifications in Taiwan are a form of institutionalized capital that have long been readily convertible to economic capital. In all countries, the ability to attain academic qualifications is highly correlated with socio-economic status, but this is particularly true in Taiwan, given the important role of the auxiliary education system (i.e. cram schools) in supplementing conventional schooling. This has enabled the education system here to successfully fulfill its role as organ of social reproduction, ensuring that “to he that hath, much shall be given; and to he that hath not, all shall be taken away.” In short, the primary value of academic qualifications has often not been as a symbol of knowledge or ability, but as a symbol of one’s right to claim social goods, such as highly-paid employment and high social status.

Pardon me if this all seems rather obvious, but here comes the point. The transformation of university education into a phenomenon that is available to all, seriously threatens the stability of this system. If university degrees can no longer be used to sort the wheat from the chaff, how can those who benefit from the current arrangements ensure that they continue to do so? The system that was originally designed to disguise privilege as merit is now in danger of granting privilege to the merited! This is a risk that the privileged cannot afford to take. The discourse of invective against lower-ranked colleges does not reflect exploitation or opportunism by these colleges. It reflects a widespread fear that in the future, one will have to earn one’s place in society.

Thanks for the comment. In fact, the MOE is quite concerned about the low scores obtained by some grads. You can find a statement from the Premier’s office about this here
http://www.taipeitimes.com/News/taiwan/archives/2008/08/15/2003420423

I am less concerned with the devaluation of diplomas. Everyone knows the name of leading schools. I don’t at all see a demise of this system. The major concern I have is that Taiwanese do not have the skills to run the present economy and are solving this through the importation of labour
http://www.taipeitimes.com/News/editorials/archives/2007/11/11/2003387247

Hi Scott! At the macro level, you’re right of course. Taiwan needs people with diverse skills, and many of these do not necessarily require a university education. The problem is how to deal with this at the micro level, so that individuals end up doing work that is commensurate with their interests, aptitudes and abilities, in proportions that are conducive to the development of the society. At the moment, the process of sorting is largely completed by the end of high school, at which time students are allocated to the higher or lower ranked universities that will serve as indicators of their value for the rest of their lives, pretty much regardless of what they actually do while they are there.

I see three major problems with this. The first is that to achieve success in high school requires a limited range of very specific abilities, mostly the ability to endure the turgid curriculum and to provide answers on tests that conform exactly with those expected. The chances of someone being successful in this system if they are creative, independent-thinking, passionate or resistant are virtually zero. As a result, our higher universities, and ultimately higher ranks of government and business, are filled with people who may have technical competence, but lack the personal qualities necessary to drive social and economic development. The second, which we have already discussed, is the correlation between success at school and the socio-economic status of the family, and the social reproduction that this entails. I won’t go into this again. The third is the extremely hierarchical division of labor which polarizes white and blue collar occupations in terms of their social and economic rewards. The low value placed on the trades here ensures that many students who may have the interest and competence to take on such occupations are actively or implicitly discouraged from doing so. Closing down universities and opening technical colleges will not solve the current skill imbalance until careers in the trades have achieved greater social and economic value, as they have in other places (try calling a plumber in Melbourne!).

So, to return to the micro level for a moment. What are the options for those students who have failed at high school? Many (not all) of them have failed because they are creative, have their own ideas, have interests in things other than the subjects emphasized in the curriculum, are outgoing and socially active, etc.. There are valuable human resources here which are being wasted. My argument is that these lower-ranked universities that have become the subject of so much scorn not only give these kids a chance to avoid the economic scrap heap, but also carry the potential to enrich the skills base of the national workforce at all levels.

Of course, it will be very difficult to really solve the problem that you have alluded to until there is a flattening of the social and economic hierarchies within the division of labor. I somehow doubt that this is going to happen any time soon. However, the discourse of negativity towards lower-ranked colleges is just one of many forces which serve to sustain and perpetuate these hierarchies.

Excellent precis, Damien. Is it possible, though, that the third problem you cite — careers in the trades lacking social and (adequate) economic value — is as germane to the shortage of economic-growth “drivers” here in Taiwan as the problem of education-system “winners” lacking sufficient analytical, creative, and risk-taking skills is?

Taiwan’s service economy is sadly underproductive, and while much of this problem is rooted in Taiwan’s lagging behind in advanced-type services such as financial and digital services, a large part, too, is attributable to the lack of diversity in lifestyle services and other garden-variety service-sector possibilities. Lots of spas, restaurants, key shops, 7-11s, electronics shops, bed-and breakfast places, and of course cram schools, but the education system largely conditions people to not make time for much else. So, as you say, a lot of creativity and potential ends up with nothing or too little that’s remunerative to devote itself to. In this way, as your mention of a plumber in Melbourne suggests, the education system’s negative effects on today’s economy are strongly manifested in the non-glitzy sectors of the service economy here, too, no less than in the top service sectors. It’s not foremost a matter of whether people have spare cash (enough still do); it’s rather (as you say) that the entire education system (and indeed the whole culture) is geared to the preservation of social hierarchies. More money could be changing hands in the local economy more often and more productively; preservation of social hierarchies is why this isn’t happening nearly as much as it could.

The social-hierarchies orientation is now lowering GDP even as it maintains inequality. If the impetus for this preservation were bred of a more foreign colonialism, there might be more identification of the phenomenon as being a serious problem — and thus there might be more resistance and some initiative for real change. Maybe KMT colonialism was never foreign enough, though, for Taiwanese to take serious issue with its most fundamental premise of the need for social hierarchies; maybe that’s why this stuff all gets maintained at a level that often seems subconscious. Specifically, maybe this stuff gets talked about by some in academia, but only once or twice in nearly two decades here have I heard a Taiwanese mention any of this stuff in regular conversation.

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