As it currently stands, all universities in Ontario operate on a system of capped tuition increases. Arts and science programs are set at a cap of 4.5% for first year entrants and 4% for subsequent years of study, while allowable increases in professional and graduate programs are 8% in first year followed by 4% for subsequent years. An institution’s overall increase must not exceed 5%. Any tuition revenue raised beyond this cap is clawed back from the institution’s government funding, generally resulting in universal compliance. This framework has been in place since 2006 and is set to expire at the end of this academic year.
A study on the period of tuition deregulation in Ontario’s professional programs in the mid-1990s serves as evidence that sudden and unpredictable increases in tuition can have a discernable effect on the composition of the student body. Through the deregulated period, both medicine and law saw a decline in participation from middle-income families that accompanied unpredictable year-to-year tuition increases not matched by increases in available resources. In order to plan their finances effectively, it is crucially important for students to understand how much they will pay in tuition over the full course of their program of study, regardless of entrance year or program type.
Thankfully, tuition is regulated for Ontario students in the vast majority of programs (save for a few programs not funded by government). Unfortunately, this regulation has not erased predictability concerns. Since the current framework bases increases off an institutional average with variable program caps, tuition increases can be different from program to program, or between institutions. For instance, the large difference between the arts and science program cap of 4.5 per cent and the professional program cap of 8 per cent has led to widespread confusion amongst students about their tuition increases.
Firstly, the difference between an arts program and a professional program is murky. Data on tuition increases by institution have demonstrated a certain degree of inconsistency in program classification across institutions, creating potential for confusion around expected tuition increase at the student level. For example, while commerce is permitted a professional cap of 8% at the majority of schools, three institutions still classify it as arts and abide by a 4.5% cap. In the same vein, universities treat computer science programs differently across the province.
Secondly, there are a number of instances where tuition increases have fluctuated significantly within their allowable cap. For example, tuition increases in the commerce program at Carleton University fluctuated back and forth between 4.5% and 8% over four years between 2006 and 2010. Similarly, Lakehead University’s engineering program showed increases from 2.5% to 6.3% to 4.5% within a three-year span, demonstrating an inherently unpredictable series of tuition fees for students. In a program such as engineering, which already boasts the highest average tuition level amongst direct-entry programs, a few percentage points up or down can translate to a significant difference in price for students. Lastly, each time the tuition framework is up for review, students are faced with the possibility of significant increases to the tuition cap that they have not initially planned for. In this sense, a potential change in the allowable increase affects predictability for those already partially through the PSE system, potentially affecting a student’s ability to persist to the point of graduation.
Predictability is even more of an issue for international students given that tuition for this group is completely unregulated. The deregulation of international tuition fees has led to a system characterized by both unpredictability and dramatic increases. For example, the University of Toronto saw international tuition grow by 5 percent between 2006-07 and 2007-08, followed by 10 per cent each of the following two academic years. Similarly, York University saw fees increased by 18 percent in 2006-07, followed by an increase of only 1.4 percent. It is clear that under the current regime of deregulation, international students are effectively prevented from planning for future tuition payments. There are few, if any, services that one decides to use in which the final price is unknown – why should post-secondary education be any different?
The tuition framework was introduced to provide predictability for students. The current framework though has not fully addressed the difficulty of predicting tuition levels for students four or five years into the future. Not only does the current framework allow increases to fluctuate unpredictably at times, but also the system as a whole is structured in a confusing way. Students are often not able to predict how much they will be paying for tuition during the course of their time at university. Tuition fees are not formulaic and thus, not predictable when program classifications are blurry and increases fall within a range that is near impossible for students to predict.
Allowing unpredictable fluctuations in tuition increases from year to year is a sure way to affect participation and persistence in post-secondary education. When students and families struggling to save for higher education do not fully understand how tuition fluctuates or are not confident in the consistency of the capped increase system, we risk losing them to non-attendance. This is particularly true for groups that have been shown to be more price-sensitive when it comes to paying for post-secondary – students from lower-income families, those with less educated parents, Aboriginal students, and boys.
The government is going to have a number of decisions to make on the tuition framework this coming year. If it is ultimately decided that tuition increases will continue, we urge the government to institute a more straightforward, long-term and predictable system of increases. Predictability is a key component of the tuition puzzle and something that has been identified as critical to increasing participation in the post-secondary system as a whole.
-Kristen Holman
Research Intern