La Trobe Business School academic Buly Cardak recently came under the spotlight with his research on dropout rates among university students, with his research receiving significant media coverage. Specialising in the economics of education, he has been researching factors influencing students’ studies since early 2006. In his recent study, Associate Professor Cardak and his collaborator Joe Vecci studied the connection between the financial hardship of university students and the likelihood that these students would graduate or dropout at some later stage in their studies.
The data show that one in three students from financially disadvantaged backgrounds drop out from university studies. Further to this, students from financially disadvantaged backgrounds are up to 15% more likely to dropout than students from financially secure backgrounds. It is believed these effects operate through costs of living, e.g. paying for food, books, or transport, rather the tuition fees which can be deferred through HECS.
Associate Professor Cardak notes that these results are important because not only do they show that students experiencing financial hardship are more likely to drop out, but it was found that after three years of study, the likelihood of dropping out among financially disadvantaged students increases rather than falls as it does for other students. Disadvantaged students that don’t finish their degree in the standard allotted time are likely to be cut off from government income support. Facing this financial challenge, many students have no choice but to drop out. Not only is this detrimental to disadvantaged students, but it is also costly to society. After financially supporting students for several years, to have them drop out of university altogether, presents the economy with a costly loss of potentially skilled graduates.
Another important finding was how the Youth Allowance benefited students. It was found that students who are independent Youth Allowance recipients were less likely to drop out. However, results pointed to these students taking a longer time to graduate. It is suspected that this is related to students who have taken time off from study in order to work full time and earn sufficient income to demonstrate their financial independence and qualify for independent Youth Allowance. It seems that taking this time off from study has a longer term detrimental effect with students in this situation actually taking longer to graduate.
Associate Professor Buly Cardak and Joe Vecci, who have been conducting this study together, are hoping to conduct further analysis over the coming years on this issue, and to consider ways to improve the circumstances for financially disadvantaged students.
To read the full article in which this research has been published, see: Cardak, B.A. and J. Vecci, “Graduates, Dropouts and Slow Finishers: The Effects of Socioeconomic Status on University Educational Outcomes”, Oxford Bulletin Of Economics and Statistics.