University is actually quite cheap – it just doesn’t look that way
TheGlobeandMail.com – Globe Debate
Aug. 26 2014. Alex Usher
Alex Usher is president of Higher Education Strategy Associates.
Every September, Statistics Canada publishes its annual Tuition and Living Accommodation Cost survey. Inevitably, the press coverage focuses on the sticker price, and the narrative is driven by people claiming that education is increasingly unaffordable.
But the sticker price is only part of the equation: while governments and institutions ask students to pay for part of the educational costs, they also find ways to lessen the burden. Every year, Canadian governments provide over $2-billion in tax credits, over $1-billion in grants and nearly $1-billion in loan remission to reduce the costs of education to students and their parents. All that money reduces the actual costs significantly.
How much? Well, consider the following findings from a new study from Higher Education Strategy Associates entitled The Many Prices of Knowledge, which looks at exactly this question.
– For some low-income students, Ontario is cheaper than Quebec. Ontario is famous for having the country’s highest tuition. But it also has one of the most generous student-aid regimes, particularly for first- and second-year students. So, a student from a family with total income of $40,000, paying $7,200 in tuition, would actually receive about $7,400 in grants. Add in another $1000 or so for a merit-based grant (which Ontario universities give to virtually every entering student with an 80 per cent average) and this student is actually paying net tuition of -$1,400 or so – which is substantially better than the -$400 net cost the same student would have in Quebec.
– Students with Dependents on Average Receive over $11,000 in non-repayable aid. Though nobody says this explicitly, general student-aid policy seems to be to make tuition free and then cover the cost of children with grants – leaving the student to take out loans only for his or her own cost of living.
– Manitoba and Saskatchewan essentially have free tuition. In Manitoba and Saskatchewan, students who finish a first undergraduate degree or college program qualify for one of those province’s graduate rebates. For those graduates who remain in the province, these programs are so generous that literally everyone ends up receiving more in subsidy than they pay in tuition. In Saskatchewan, students from families earning over $120,000 can end up receiving $34,000 in various forms of grants tax credits while paying only $26,000 in tuition if they graduate in four years and stay in the province for seven years after graduation.
Some of these findings are of course extremely good news: the fact that governments are making substantial efforts to make education affordable to young low-income students and single parents should be applauded by all. But others are more puzzling. What’s the point of paying graduates $20,000 each to stay in Saskatchewan, regardless of pre- or post-study income? Even if that argument had a smidgen of validity fifteen years ago when it was introduced, now that Saskatchewan is a “have” province it looks faintly ridiculous. With so many pressing problems, why pay people to do what they were going to do anyway?
Now, of course, many will retort that all these low or negative net prices all well and good, but most of that money comes at the back end, months after students really need it in order to pay for tuition. That’s a fair point: roughly 70 per cent of all non-repayable aid does come through remission or tax credits, which don’t immediately show up in students’ pockets (though if they work enough, tax credits can increase weekly take-home pay). Canadian student aid is, if nothing else, clumsily organized.
The main reason it is so clumsily organized is that there are too many players in the game, using too many different funding vehicles. We’ve got several varieties of need- and income-based grants in this country, plus loan remission, plus both provinces and the feds using the tax system to funnel money to students and parents. We’ve got institutions both providing grants to the needy and also using merit-based aid as a lure for enrollment-management purposes. And everybody wants to claim political credit for their contribution and deny others the opportunity to do the same. As a result, it is difficult to put all this money in a single, comprehensible package for students.
But to say that the system is clunky is not to say that is ungenerous. In our research, we could not find a situation anywhere in the country where a college or first-degree undergraduate student paid more than 62 per cent of actual sticker price, after all aid was accounted for. And that’s without counting all the other forms of aid this study did not include: tri-council graduate scholarships, $750-million per year in savings incentives, $330-million per year for Aboriginal post-secondary education and of course the $1.7-billion or so that institutions themselves hand out in scholarships and fellowships.
In short: higher education in Canada is actually quite cheap; we just choose to make it appear expensive. Both levels of government need to start thinking about how to make the system’s generosity more apparent.
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Tags: ideology, participation, standard of living, youth
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2 Responses to “University is actually quite cheap – it just doesn’t look that way”
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In response to the article, “University is actually quite cheap – it just doesn’t look that way” by Alex Usher,as a fortunate student whose parents pay for my education, I am still aware of the definite struggles students go through to pay for their own tuition. It is safe to say Canada’s education system does have it’s benefits, but not all people are fortunate enough to receive them,which is the complication. The article states they’re very generous and that every year Canadian governments “provide over $2-billion in tax credits, over $1-billion in grants and nearly $1-billion in loan remission”. But not all students are getting the help they need. There are certain requirements to be met in order to receive certain bursaries and grants, and the article never went into that and recognized it is a fact and students are struggling. Being a close friend to a lot of those who use OSAP to pay for school, they still have difficulty working back to back jobs just to pay for OSAP. A lot of people attending or planning to attend school don’t recollect this sort of assistance is provided,making it impossible to get help they could qualify for and deserve. I feel this article shows mostly a utopia version of tuition and wasn’t very realistic. The comment, “But to say that the system is clunky is not to say that is ungenerous” I have to agree with. Compared to other countries, in Canada we are lucky for the benefits we have in the schooling regime, but that doesn’t mean it’s perfect and it is flawed. This article should of touched on other statistics of students having a hard time verses their ideology of “most generous student-aid regimes”.
In regards to the article, University is Actually Quite Cheap – it just Doesn’t Look that Way by Alex Usher, I believe that even though there are financial opportunities in Canada, they are not for everyone and can be difficult to find. Unless you are aware of these scholarships and grants the writer is talking about, it can be difficult to find any that work for specific individuals. I as a single middle class female, who does not rely on my parents, find it difficult to qualify for many of the opportunities mentioned in this article. In general, if someone does not qualify for OSAP, many of these grants and bursaries will not be an option as they are based on financial need.
I feel that this article has not looked in to all the statistics that relate to tuition fees and what other factors are at play. With most bursaries and grants, there are criteria that many individuals currently do not fit it. The author made a valid point at the end sating that Canadian student aid is “clumsily organized”, and how it makes it difficult to put all this money in a single, compressible package for students. There may be a lot of opportunities out there, but it is becoming more difficult for students to find and access. I feel that a major restructuring of student aid is in order to make more options available for all those that are in need.