WHAT THE HECS

27 YEARS OLD. 71 EM­PLOY­EES. $13 MIL­LION TURNOVER. NO UNI DE­GREE.

The Courier-Mail - QWeekend - - FRONT PAGE - SU­SAN JOHN­SON

EARN OR LEARN

High fees, mas­sive debts and no job guar­an­tee de­spite your de­gree. Is univer­sity re­ally worth it?

In the 1950s, only 8 per cent of Aus­tralians at­tended univer­sity. To­day, a quar­ter of the adult pop­u­la­tion – or about 1.3 mil­lion peo­ple, in­clud­ing in­ter­na­tional stu­dents – are cur­rently study­ing for a bach­e­lor’s de­gree or higher.

And it’s not cheap: ac­cord­ing to pub­lic-pol­icy think tank the Grat­tan In­sti­tute, stu­dents owe a record $26 bil­lion in debt, the high­est it’s ever been. Loans to cur­rent and former stu­dents for the Higher Ed­u­ca­tion Loan Pro­gram (the Higher Ed­u­ca­tion Con­tri­bu­tion Scheme, known as HECS, be­came HECS-HELP in 2005) rose by a stag­ger­ing $10 bil­lion over the past nine years be­cause, year on year, univer­sity en­rol­ment num­bers are grow­ing. More peo­ple are go­ing to uni than ever be­fore.

The Grat­tan In­sti­tute es­ti­mates that $6.2 bil­lion in loans will never be paid back ei­ther be­cause former stu­dents move over­seas for work (and thus es­cape the re­coup­ing sys­tem through the Aus­tralian Tax Of­fice), or they fail to find high-pay­ing jobs in their de­gree area and never earn the $54,126 a year re­quired be­fore HELP loans start be­ing re­paid.

With record high youth un­em­ploy­ment – al­most dou­ble since 2008 and now stand­ing, on av­er­age, at about 14 per cent – out­comes for grad­u­ates have never been worse. The full-time em­ploy­ment rate for grad­u­ates has been in de­cline for the past six years and is now at the low­est level ever recorded by Grad­u­ate Ca­reers Aus­tralia, which has con­ducted an­nual sur­veys track­ing em­ploy­ment out­comes for new grad­u­ates for the past 30 years.

To­day, univer­si­ties are also big busi­nesses, com­pet­ing for stu­dents, who are seen as “clients”. In a 2014 ad­dress to the Na­tional Press Club, Pro­fes­sor Ian Young, previous chair of the Group of Eight (com­pris­ing Aus­tralia’s eight lead­ing re­search univer­si­ties), ad­mit­ted Aus­tralia had cre­ated “a per­verse in­cen­tive that re­wards univer­si­ties for en­rolling as many stu­dents as pos­si­ble and teach­ing them as cheaply as pos­si­ble”.

The Grat­tan In­sti­tute’s Higher Ed­u­ca­tion Pro­gram di­rec­tor, An­drew Nor­ton , says that un­der the his­tor­i­cal higher ed­u­ca­tion fund­ing ar­range­ments the num­ber of univer­sity stu­dent places was lim­ited, so only small num­bers of peo­ple with weaker

12 re­sults re­ceived of­fers. “Now that bach­e­lor de­gree places are in [al­most] un­lim­ited sup­ply for pub­lic univer­si­ties, they are much more will­ing to of­fer places to peo­ple with weaker school re­sults. As a con­se­quence, young peo­ple are hav­ing to make choices that, in the past, were largely made for them.”

In other words, in try­ing to ex­pand ac­cess to higher ed­u­ca­tion, univer­si­ties and gov­ern­ments have ef­fec­tively com­bined to flood the job mar­ket with new grad­u­ates. That’s bad news for Aus­tralia’s stu­dents, some of whom will leave univer­sity with a mas­sive debt and no guar­an­tee of a job.

In Bri­tain, it’s even worse. The most re­cent fig­ures from the Higher Ed­u­ca­tion Sta­tis­tics Agency found a third of grad­u­ates took jobs as clean­ers, of­fice ju­niors and road sweep­ers six months af­ter leav­ing univer­sity, and more than 60,000 worked in other “non-pro­fes­sional” roles, such as ad­min­is­tra­tion and sec­re­tar­ial, ser­vice and car­ing in­dus­tries, and cus­tomer ser­vice. So, is univer­sity worth it?

Aged 26, Jor­dan Grives was a fi­nal­ist in the Young Busi­ness Per­son of the Year cat­e­gory in last year’s Bris­bane Lord Mayor’s Busi­ness Awards. Grives, now 27, is founder and chief ex­ec­u­tive of Fonebox, a cor­po­rate call so­lu­tion provider, which em­ploys 71 peo­ple and has an an­nual turnover of more than $13 mil­lion. His com­pany pro­vides 1300 and 1800 num­bers and also runs a call cen­tre from its Bris­bane of­fice. Clients in­clude car man­u­fac­tur­ers, a gym group and re­tail­ers. Not bad for some­one whose only qual­i­fi­ca­tion is a higher school cer­tifi­cate. Grives left St Peters Lutheran Col­lege, a mixed, in­de­pen­dent pri­vate school at In­dooroop­illy in Bris­bane’s west, in 2006 with a high enough Over­all Po­si­tion (OP) to get him into a busi­ness/economics de­gree at univer­sity. “I al­ways passed. I didn’t al­ways en­joy school but I ex­celled in busi­ness,” Grives says. “I took a busi­ness class [at school], and that’s what I did. I def­i­nitely thought of go­ing to uni, do­ing a busi­ness de­gree, but I didn’t end up ap­ply­ing. Part of me still thinks that one day it might be great to go and do an MBA.

“Look, don’t get me wrong, univer­sity is needed. Uni is needed to get into a big law firm or a big ac­coun­tancy firm or what­ever. But if you’re some­one who has that Type A per­son­al­ity, who’s driven to do some­thing for them­selves, then, as cliched as it is, try and get out there and have a go.”

The high achiever went to school with friends who are only now on the bot­tom rung in var­i­ous pro­fes­sions. “They’re just start­ing to make their way,” Grives says. But, when pressed, he ad­mits he’s earn­ing much more than them, with own­er­ship of two ex­pen­sive cars, a cool ware­house in the in­ner- north­ern sub­urb of Tener­iffe where he lives, plus two in­vest­ment prop­er­ties. He ar­gues that too many kids are pushed to­wards univer­sity, as if a de­gree will au­to­mat­i­cally re­sult in a bet­ter life – and not just eco­nom­i­cally. “I think schools – and par­ents – put a lot of pres­sure on study and OP re­sults. There’s too much pres­sure.”

Other av­enues might be prefer­able – vo­ca­tional cour­ses, or ex­ploit­ing one’s en­tre­pre­neur­ial flair. “[Some­times] peo­ple have these ideas, but they don’t do any­thing with them, or there’s no sup­port from in­sti­tu­tions or any­one will­ing to help you,” Grives says. “That’s why these new lit­tle hubs are so good, River City Labs and those in­cu­ba­tors [co-work­ing spa­ces for new start-ups], they’re great. Aus­tralia needs more of those and more peo­ple will­ing to help fos­ter some of that younger ta­lent. From an in­vest­ment point of view, if you’ve got all these smart young kids in a room, you’re go­ing to make some­thing work.”

Grives says he didn’t have ex­cep­tion­ally wealthy par­ents or any­one to give him a leg up. His par­ents – Steven, an ac­tor who did voiceover work and later set up an early cor­po­rate on-hold mes­sag­ing busi­ness with Leanne, his wife and Jor­dan’s mother – wanted him to go to univer­sity, but Grives talked them into let­ting him work in their busi­ness in­stead. “I started work­ing for them straight out of school, and that’s where I learnt to sell. I just started to adapt – learn­ing from Dad, pri­mar­ily – how to talk to peo­ple. I re­ally got thrown in the deep end – we had 300sqm of of­fice space and I was in one cor­ner and he was in the other. Ba­si­cally, he put a Yel­low Pages on my desk and said, ‘start ring­ing peo­ple’.

“I did that for about a year, and that busi­ness started to grow, and it got to a point where I was look­ing for some­thing a lit­tle bit dif­fer­ent, that I could cut my own teeth on. I al­ways wanted to be in busi­ness, to do some­thing for my­self.” First he worked for another telecom­mu­ni­ca­tions com­pany, then saw there was a gap in the mar­ket around In­ter­ac­tive Voice Re­sponse – you know, press one for sales, two for what­ever – and be­gan work­ing on a con­cept for busi­nesses so they could re-route in­com­ing calls to the near­est store. Bingo.

Grives says he doesn’t par­tic­u­larly have any IT nous; he pays peo­ple for that. “You don’t need to know all the ins and outs – which is why you’ve got smart peo­ple here – you just need to know the vi­sion for what you’re try­ing to cre­ate and ex­e­cute it.”

Now, both of his younger broth­ers, Nick, 23, and Harry, 24, are work­ing on the op­er­a­tional side of the busi­ness; nei­ther of them has been to univer­sity ei­ther. “I’ve got a lot of friends who’ve gone to uni, a lot of peo­ple who were a lot smarter than me at school, and they’ve said, ‘You’ve ba­si­cally passed it nice and quickly’, be­cause the things they’ve learned

at uni I’ve learned on the job. So you ei­ther get that book ex­pe­ri­ence or real-world ex­pe­ri­ence. Some peo­ple are book smart, some are street smart.”

Grives says that when he’s look­ing to em­ploy peo­ple, he doesn’t look at uni de­grees. “I wouldn’t know in my of­fice who has one and who doesn’t,” he says. He’s about to move to larger of­fices, is em­ploy­ing about five new em­ploy­ees a month, and the busi­ness is grow­ing 30 to 40 per cent, year on year.

One

of Aus­tralia’s most out­spo­ken crit­ics of the push to­wards higher lev­els of univer­sity ed­u­ca­tion is Busi­ness Coun­cil of Aus­tralia pres­i­dent Catherine Liv­ing­stone, who, in speech af­ter speech since she as­sumed the in­flu­en­tial role last year, has ar­gued that many school-leavers would be bet­ter off train­ing in job-re­lated and tech­ni­cal ar­eas. She told an Aus­tralia-Is­rael Cham­ber of Com­merce lunch last year that “too many peo­ple [are] go­ing to univer­sity, and not enough [are] go­ing through the VET [vo­ca­tional ed­u­ca­tion and train­ing] sys­tem … some stu­dents would be bet­ter off with vo­ca­tion and skill train­ing and hav­ing work ex­pe­ri­ence”.

At a 2015 con­fer­ence in Can­berra, Liv­ing­stone also asked hard ques­tions about whether Aus­tralia could still af­ford the lux­ury of de­grees be­ing all about ed­u­ca­tion and not train­ing, ask­ing if the “prod­uct” fit the pur­pose “given the level of un­em­ploy­ment and un­der­em­ploy­ment among grad­u­ates”. She ar­gues that many en­try-level roles for grad­u­ates are al­ready sig­nif­i­cantly di­min­ished in num­ber “if not gone” and that, more­over, we have “cre­ated a se­ri­ous dis­con­ti­nu­ity be­tween ed­u­ca­tion and work”.

Liv­ing­stone is not alone in sug­gest­ing univer­si­ties should take more re­spon­si­bil­ity in en­sur­ing po­ten­tial stu­dents are fully in­formed and equipped to make de­ci­sions that will pro­foundly af­fect their lives, and that there also should be much greater fo­cus on ed­u­ca­tion meet­ing the world of work. “Is there a bet­ter model more suited to the new era where, from age 16, all young peo­ple pur­sue a dual track that com­bines ed­u­ca­tion and work?” Liv­ing­stone asks.

As the work land­scape changes, and bound­aries be­tween dis­ci­plines be­come in­creas­ingly blurred, some com­pa­nies are al­ready adapt­ing their em­ploy­ment pro­ce­dures. Global ac­count­ing con­glom­er­ate KPMG, for ex­am­ple, has an­nounced that its Aus­tralian au­dit di­vi­sion has bro­ken a 100- year tra­di­tion by hir­ing grad­u­ates with­out busi­ness or ac­count­ing de­grees in an at­tempt to “en­hance soft skills and diver­sity in the di­vi­sion”.

Paul Fi­u­mara, a part­ner in Bris­bane ac­coun­tancy busi­ness DFK Hirn Newey, talks up the value of ap­pren­tice­ships. His prac­tice has run a suc­cess­ful school-leavers’ cadet pro­gram for eight years, sup­port­ing 18 cadets through a part-time four-year ac­coun­tancy de­gree by pay­ing them and pro­vid­ing prac­ti­cal work ex­pe­ri­ence. “We found em­ploy­ing

was a bit of a lot­tery,” he says. “They think a de­gree is an open door, but most em­ploy­ers want prac­ti­cal ex­pe­ri­ence.” Fi­u­mara be­lieves there needs to be a tri­par­tite agree­ment be­tween govern­ment, in­dus­try and univer­si­ties to en­sure bet­ter em­ploy­ment out­comes. “Gov­ern­ments want kids to be em­ployed, in­dus­try is look­ing for grad­u­ates with prac­ti­cal ex­pe­ri­ence, and univer­si­ties want to send out ed­u­cated peo­ple – ev­ery­one’s got a stake in this, it’s not the re­spon­si­bil­ity of just one group,” he says.

Fi­u­mara’s firm no longer em­ploys grad­u­ates and says that while it is ob­vi­ously cheaper for DFK to em­ploy cadets rather than grad­u­ates, it’s also a win-win for cadets: they are paid through­out their cour­ses and by the time they grad­u­ate, they earn about $10,000 more than a newly em­ployed grad­u­ate with no real-world ex­pe­ri­ence. Some larger firms, such as Ernst & Young, also have cadet pro­grams, but oth­ers, like Deloitte, only em­ploy grad­u­ates (but do have un­der­grad­u­ate in­tern­ship pro­grams).

How­ever, while an ac­count­ing de­gree gen­er­ally fol­lows a di­rect path to a job in ac­count­ing, other de­gree out­comes are less clear – for those still will­ing to take on debt to pay for a full-time univer­sity course, choos­ing the right de­gree is more crit­i­cal than ever. The lat­est Grad­u­ate Ca­reers Aus­tralia data shows den­tistry and op­tom­e­try re­sult in the high­est-in­come jobs (pay­ing about $75,000 for new grad­u­ates), while “soft” de­grees, such as those re­lated to the hu­man­i­ties, are the low­est paid (although the worst-per­form­ing de­gree is phar­macy, grad­u­ates of which earn about $40,000). Ac­count­ing hardly fares much bet­ter, with the me­dian start­ing salary for a new grad­u­ate un­der 25 at $50,000.

Busi­ness­woman

and en­tre­pre­neur Adri­enne Jory, 24, who lives with her part­ner, Rick Gib­son, at Scar­bor­ough, 30km north-east of Bris­bane, lasted ex­actly one day of a bach­e­lor de­gree course in busi­ness at the Univer­sity of Queens­land. Jory and Gib­son now run a be­spoke on­line T-shirt busi­ness out of Bris­bane and Bangkok, em­ploy­ing 17 staff. They re­cently took on in­vest­ment to grow the busi­ness from Bris­bane ven­ture cap­i­tal­ist firm Black Sheep Cap­i­tal, which has a solid record in pick­ing suc­cess­ful start-ups. Jory is one of River City Labs’ suc­cess sto­ries, us­ing desk space once or twice a week, partly as a means of con­nect­ing with other start-ups.

The pres­sure on her to at­tend univer­sity was im­mense. “In Year 11 and 12 [at Mount Alver­nia Col­lege, Ke­dron, an in­de­pen­dent Catholic girls’ school in Bris­bane’s north] we were ex­pected to pick the cour­ses at uni we wanted to do,” she says. “There’s so much build­ing pres­sure then to get the right OP, to get you into your first choice. There just isn’t the same push to be your own boss, or to be an en­tre­pre­neur, you know? If you don’t fit into this uni mould, or you don’t fit into this trade mould, what are you?”

Hav­ing achieved a re­spectable OP10 in 2008, which got her into many cour­ses, Jory still had no real idea of what she wanted to do at uni or what she wanted out of it, so she took a job at the women’s cloth­ing store Witchery. “Then I thought, I’m just a re­tail chick, I need to go and do some­thing with my life.” So Jory en­rolled, “just to do it, and see what it was like”. She re­mem­bers her first day in an economics tu­to­rial (she had ran­domly cho­sen economics and pub­lic re­la­tions as her ma­jors) and think­ing, “well, I hate maths, num­ber one, so this was a re­ally bad idea, and then, this just isn’t me. I felt like I left school to get out of that kind of scene. I just didn’t work well in that en­vi­ron­ment and I think it was partly be­cause I was do­ing some­thing out of pres­sure and partly be­cause I was do­ing some­thing I just ran­domly picked for the sake of it. I just felt like it wasn’t where I needed to be.

“I be­lieve street smarts out­weigh ed­u­ca­tional smarts. [At Witchery] I had a woman work­ing for me when I was man­ag­ing and she had three de­grees, yet she was a re­tail as­sis­tant be­cause she couldn’t get a job [in her field]. And I thought, this is in­sane, you’ve got this mas­sive push into uni and you’ve got peo­ple who’ve done the hard yards and they’re still not any bet­ter off, and might even be worse off if they’ve also got stu­dent loans.”

Jory was still liv­ing at the fam­ily home at Al­bany Creek in Bris­bane’s north. “I paid two-and-a-half- grand for a se­mes­ter and I walked out. I came home and said to Mum [Jeanette], ‘This isn’t go­ing to work’. I called my boss – I was still work­ing part-time – and I thought, I can’t do both and uni is ab­so­lutely not for me, so I went back to [re­tail] man­ag­ing.”

You see in all the data that on av­er­age univer­sity grad­u­ates out-earn other work­ers in the work­force.

DR JOSH HEALY, SE­NIOR RE­SEARCH FEL­LOW

If peo­ple are go­ing out into life think­ing that a de­gree and a job is a se­cu­rity blan­ket for the rest of their lives, I think they’re kid­ding them­selves. ADRI­ENNE JORY, EN­TRE­PRE­NEUR

She hasn’t looked back – her busi­ness, FanTees, has sold nearly 100,000 units since last March. “There could be so many more amaz­ing busi­nesses, so many more amaz­ing women en­trepreneurs – and men, for that mat­ter – if the idea to start your own busi­ness was pushed more, more sup­ported … You can’t have all these peo­ple grad­u­at­ing school, and all of them go­ing to univer­sity, and ev­ery sin­gle per­son find­ing a job.”

Be­sides, Jory be­lieves the days of some­one be­ing in a job for life are over. “If peo­ple are go­ing out into life think­ing that a de­gree and a job is a se­cu­rity blan­ket for the rest of their lives, I think they’re kid­ding them­selves,” she says. “I was only ever go­ing to make as much as my em­ployer was pre­pared to pay me. You’re never go­ing to be a com­plete suc­cess if your em­ployer is only pre­pared to pay you $50,000 a year.”

She’s happy to take a riskier path: “I’m a firm be­liever [in the idea] that a univer­sity de­gree does not dic­tate the suc­cess of an in­di­vid­ual; it’s com­pletely up to the in­di­vid­ual and their will­ing­ness to make some­thing of them­selves.”

De­spite

the poor job cli­mate for grad­u­ates, all the data sug­gests univer­sity grad­u­ates ul­ti­mately earn more than high-school leavers. A 2012 report by the Na­tional Cen­tre for So­cial and Eco­nomic Mod­el­ling es­ti­mated that some­one with a de­gree is likely to earn in ex­cess of $1 mil­lion more in their work­ing life than a per­son who did not fin­ish Year 12.

Grad­u­ate Ca­reers Aus­tralia’s pol­icy and strat­egy ad­viser, Bruce Guthrie, says its re­search shows un­em­ploy­ment is not a long-term con­cern for grad­u­ates and that when the econ­omy – still reel­ing from the af­ter-ef­fects of the GFC in 2008 – picks up, grad­u­ate jobs will too. “It’s im­por­tant to un­der­stand that get­ting a de­gree is not just about the first job af­ter univer­sity – it’s about a life­time of ad­van­tage in the labour mar­ket as well as the po­ten­tial for huge per­sonal growth.”

Dr Josh Healy, se­nior re­search fel­low at the Univer­sity of Mel­bourne’s Cen­tre for Work­place Lead­er­ship, also be­lieves that, in the end, univer­sity is prob­a­bly still worth it. “If you were to com­pare such things as job sat­is­fac­tion, earn­ings, em­ploy­ment prob­a­bil­ity of the en­tire pop­u­la­tion of univer­sity grad­u­ates com­pared to the pop­u­la­tion of non-uni grad­u­ates, you would find that, on av­er­age, uni grad­u­ates have the best out­comes.

“For in­stance, the av­er­age wage as­so­ci­ated with hav­ing gone to uni is well above the av­er­age wage of some­one who’s only gone to high school or has a VET qual­i­fi­ca­tion,” he says. “But the eco­nomic cy­cle does mat­ter, and so you’ll get pe­ri­ods of tem­po­rary spikes in the wages of, say, non-univer­sity ed­u­cated peo­ple in the min­ing in­dus­try who for a time saw very high wages, and since the min­ing boom has tailed off, those wages have come down again. But, gen­er­ally, over the pe­riod of an eco­nomic cy­cle, you see in all the data that on av­er­age uni grad­u­ates out-earn other work­ers.”

The thing is that the “av­er­age” can never pre­dict in­di­vid­ual out­comes: “Some grad­u­ates will go on to high earn­ings, but oth­ers may not,” Healy says. Equally, for young peo­ple for­go­ing univer­sity to start their own busi­ness, there is no “av­er­age” out­come. For ev­ery Jor­dan Grives or Adri­enne Jory, thou­sands more have ended up broke. Which makes it very dif­fi­cult in­deed for any­one de­cid­ing whether to go into hock – or not – for that hefty stu­dent loan.

SELF-MADE

MAN … JOR­DAN GRIVES, 27, ES­CHEWED UNIVER­SITY TO BE­COME A SUC­CESS­FUL BUSI­NESS OWNER.

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