Identity: Influence of social interactions on education outcomes

Choices in education by their very nature are dependent upon social interactions. These social interactions are complex and cognitively demanding due the number of variables involved, and problems of incomplete and asymmetric information. Consequently, ‘‘the ability to sort people (or objects) spontaneously and with minimum effort and awareness into meaningful categories is a universal facet of human perception essential for efficient functioning’’ (Bodenhausen, Todd and Becker 2006). A person’s identity defines who they are with regards to their social category, the ‘in-group’ (Akerlof and Kranton 2010). Having a common ‘identity’ in social interactions significantly reduces the amount of information asymmetry present with regards to individuals within the group, thereby decreasing the complexity of decision making.

The same heuristics that are valuable in reducing complexity and cognitive load can also lead to bias-confirming assessments of inter-group relations giving rise to stereotyping. The perception of an individual’s identity status via social cues can reinforce confirmation biases associated with maintaining a state of identity threat (Darley & Gross, 1983). Identity threat is one of the mechanisms that lie behind persistent achievement gaps in education outcomes (females: Spencer et al., (1999); African-Americans: Steele and Aronson (1995); students from low socio-economic backgrounds: Croizet and Claire (1998)). However, being a socially context dependent behaviour, identity is localised and does not persist beyond its context frame. For example, low achieving boys when changing grades experience large gains when leaving behind old identity norms and expectations (Dweck et al., 1978). For an explanation of the decision processes that underlie poor academic achievement due to identity threat (see Cohen & Garcia, 2008). Continue reading

15% universal loan fee for HECS/HELP

The Grattan Institute released a report calling for a universal 15% loan fee to be added when student incur a higher education HECS/HELP liability.  Reasoning behind a 15% loan fee is that it would go towards offsetting the interest-rate subsidy students receive as a result of their HECS/HELP liability being indexed at the rate of CPI (currently 1.3%).  That is, a real rate of interest that is zero. As opposed to the Commonwealth Government actual cost of funding which is closer to 2.75% (current 10 year bond yield).  In 2015/2016 this interest rate subsidy was around $550million for the year on total outstanding HECS/HELP liabilities of around $40billion. Bruce Chapman also wrote an article for The Conversation supporting the idea of a 15% loan fee.

Below are my reasons why a 15% universal loan fee is a far better idea than alternative proposals for reducing the funding burden of HECS/HELP. Not just the interest-rate subsidy that makes HECS fair for all types of students with many different backgrounds but also the implicit understanding that some students will fail to repay their HECS liability due to simple bad luck and the uncertainty of life. Continue reading

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