In my last column, I touched on the historical trends around tuition in Canada and argued that despite the relative quiet on the issue, it was time to address the costs of education, student support and the relative role tuition should play. In this follow-up column, let me begin by challenging some of the positions on both sides of the debate.
First, opponents of deregulated tuition who are concerned about accessibility often centre their efforts on tuition fees. Yet tuition is only one part of the cost of education and often a minor part. The average base tuition in Canada is just over $5,000. Residence plans, on the other hand, cost from $8,000 to $11,000 a year. On top of that is the cost of books, supplies and, most of all, foregone income during the years of university.
Second, contrary to the data thrown around, many students are not dependent on their own resources for postsecondary education. More than half of them leave university with a good education and no debt.
Third, the argument that tuition is socially regressive is not a strong argument. Several studies have demonstrated a weak relationship, at best, between tuition levels and participation rates. Nor is there a strong correlation between tuition and participation from lower socio-economic groups. Tuition is far less important than parental education in determining who goes to university.
Those who favour deregulating tuition point to these facts. They also mention the support systems that have grown to assist families that cannot support their child’s postsecondary education. Government or government-backed loan schemes and universities’ own investment in student support systems have accompanied the increases in tuition over the past 20 years. Some universities have policies similar to the University of Toronto’s that “no student … should be unable to enter or complete the program due to lack of financial means.”
Does this then mean that there is no real issue? After all, the amount of money available to students, though not luxurious, does enable many to attend who would not otherwise get an education. Further, years of fine-tuning student-loan systems have honed the ability of institutions to discern need, though there will always be disputes on the margin. So, in other words, both the amounts of support and who gets support, though not perfect, function fairly well.
Still, there are problems. One is the patchwork system that our federal structure has thrown up. Some funding is based on the national Canada Student Loans program and part is based on whatever system each province has devised. How well you are treated depends on where you live – it is much better to be a student looking for support in Alberta than in British Columbia, for example. This can be exacerbated by differences in the cost of living: Vancouver is more expensive than Prince George.
Most importantly, though, universities and governments have focused on the input side – accessibility. We also need to look at the output and the social consequences of debt.
First, research shows an inverse correlation between debt accumulation and graduation rates, so even if debt improves access, it negatively affects completion. Second, the moment a student graduates, interest starts accumulating on outstanding loans, and repayment must begin within six months. The repayment often coincides with marriage, a first home and beginning a career, making it a significant burden.
On a collective basis at least, the burden is getting worse. The total amount of debt has in–creased steadily over the last decade, and university and college graduates now owe $18 billion. Nor are the interest rates attractive: the federal loan scheme charges prime plus five percent. It’s chea-per to get a mortgage than repay a student loan.
Overall, the controversy around tuition may be a red herring. The real issue is debt.
Universities and governments need to examine whether some shift away from debt financing is a reasonable investment in social equity and Canada’s future. What would it cost provinces or the federal government to delay interest charges on successful graduates? Should universities shift more of their own student support from merit-based scholarships to needs-based bursaries? Should provinces consider partial debt-forgiveness for successful graduates? (That would be a real incentive to staying in school.) And finally, what would a comprehensive package involving all of these areas do for the Canadian economy and for provincial budgets?