Hot! Why free tuition helps all the wrong students – FPComment
March 1, 2016.   Matthew Lau

In early February, the Canadian Federation of Students (CFS) released a research document. It determined, to the surprise of no one, that it is in the public’s interest for the federal government to hand students billions of dollars more every year. One demand is a doubling in funding for the Youth Employment Strategy, which would cost $330 million per year. (If the CFS’s provincial campaigns to increase minimum wages to $15 are successful, private employers will surely hire fewer students. But governments as a rule are happy to overpay, hence the request for another $330 million.)

Then comes the much larger demand: The CFS wants an end to undergraduate tuition fees in Canada. The ask comes despite the fact that only about one-quarter of universities’ revenues come from tuition fees, and the federal Liberals already promised upwards of $750 million of additional annual funding during the campaign. But the CFS is unsatisfied with $750 million; it wants more.

Marginal enrollment from eliminating tuition fees will likely come from unmotivated, lower-ability students

Within just a few weeks, the CFS was suddenly a whole lot closer to getting exactly what it wanted, at least in one province — and it didn’t even have to wait for the federal budget. The government of Ontario Premier Kathleen Wynne, Justin Trudeau’s ideological soulmate at Queen’s Park, announced an overhaul of the student grant system. Under the Ontario Student Grant, “average college and university tuition will be free for students with financial need from families with incomes of $50,000 or less, and tuition will be made more affordable for middle-income families,” according to the Ministry of Finance. The “free” tuition will be covered by re-directing funds from current student grant programs and eliminating tuition tax credits.

There will be more grants and more interest-free loans. The Ministry of Finance boasts that more than half of students “from families with incomes of $83,000 or less will receive non-repayable grants that will exceed average college or university tuition” and that “all students will be the same or better off as under the Ontario Tuition Grant.”

What happens when costly services like university education are provided for free or at a steep discount? Invariably, there will be overconsumption. In fact, there already is, as seen in the relative unattractiveness of university graduates for employers, who are evidently more hungry for workers with non-university skills: For every year since 1998, Canadian youth were more likely to be employed if they had obtained a post-secondary diploma or certificate after high school instead of a university degree.

Making university education cheaper will fuel more overconsumption. It gets even worse when you consider where the marginal enrollment will take place, and among what kinds of students. High-ability students who enroll in mathematics, business, or science programs are already in university, because they believe the increased future incomes will provide a sufficient return on their investments in education.

Marginal enrollment from eliminating tuition fees will likely come from unmotivated, lower-ability students, and in less practical programs like theatre history or equity studies. These are students for whom university education is an unprofitable investment unless taxpayers are footing most or all of the tuition bill. Meanwhile, the structure of Ontario’s new funding arrangement actually has the potential to lure would-be students to less expensive programs like arts, where the province covers nearly all of the tuition with its $6,000 a year average grant, rather than a $11,000-a-year architecture degree or a $13,000-a-year engineering degree, where the province will cover only part of the cost.

Eliminating tuition fees will also have the perverse effect of discouraging students from graduating on time. Students are less motivated to avoid failing courses if they don’t have to pay for additional semesters.

So cheapening or eliminating tuition fees likely won’t mean better computer scientists and more engineers; it will mean more party students, more 25-year-old social justice warriors in their seventh year of undergraduate human rights studies, and more campus climate activists. But then, Wynne and Trudeau surely wouldn’t mind having a lot more of those.

Matthew Lau is a finance and economics student at the University of Toronto.

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1 Comment

  1. Matthew Lau, while I do agree with your overall point that free education will not help the economy, I found the way you spoke about low-income individuals to be very judgemental. I read a chapter by Ernie Lightman that stated that burdening the province with the taxes to cover free education for all, would still mostly benefit the middle and upper-class families. Similar to what you wrote, Lightman identifies that low-income students aren’t as highly represented in post-secondary education. What I failed to find in your article was a constructive suggestion as to why low-income individuals aren’t high attenders (other than your comments about “those students” being unmotivated, lower-able, and choosing less economically productive programs such as theatre history). I wonder if you’ve considered that those who have started in such theatre programs, may be the people you idolize on your television. I digress, Lightman states in his article that it is not due to laziness that low-income individuals aren’t as represented in post-secondary schools, rather that they cannot afford to take time off of work to attend university. Free or not, the costs of basic living are not covered unless they work. This creates a regressive model of tax redistribution, burdening low-income families for the benefit of the middle to upper class, as you have mentioned as well. Like I said, I agree with your main point; however, as a social work student, I disagree with your perspective of low-income individuals, and your obvious doubt of their potential.

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