When the Ontario government extended its current tuition framework last year to the end of the 2011-12 academic year, it was understood that a new framework would be considered for implementation in 2012-13. The current framework allows for each institution to increase their overall tuition fees for domestic students by 5% annually with differentiated increases by program and year of study. With the expectation of consultations on the new framework coming after the October election, OUSA’s General Assembly tasked the organization this past Sunday with reviewing its tuition policy and submitting proposed recommendations to the next meeting of the Assembly in October. As a result, part of our weekend in Kingston was spent in breakout groups talking about what students want to see in the next tuition framework.
So it was a timely surprise to see the Higher Education Quality Council of Ontario put out its most recent @ Issue Paper on Monday outlining tuition fee policy options for Ontario. The paper discusses the current tuition framework, financial assistance programs and some of the recent research related to accessibility and private rates of return for students. The paper does not make any explicit recommendations but does evaluate four types of tuition frameworks, namely capped fees, capping the share of costs borne by students, constrained deregulation, and full deregulation.
We were encouraged to see HEQCO starting a necessary discussion around tuition fees, given this debate is too often dominated by stakeholders who understandably each have their own special interests in the outcome. As a neutral party able to conduct independent research, more of this type of activity would be welcome. Upon review of the report, we think it did a nice job of framing the tuition framework’s complex relationship between the accessibility of higher education, the revenue needs of colleges and universities, and the public funds available to support both operating grants and student financial assistance. Its revenue projections for the various tuition policy options were also helpful. However, we were left disappointed with several aspects of the paper.
We agree, as the report points out, that discussions around tuition fees should not intentionally exclude research that “runs counter to long-held positions.” So, we were surprised to see what we believe is an overly narrow review of research on the relationship between tuition and accessibility. While it is certainly true and well documented in the report that overall participation and persistence is not greatly affected by increases in tuition, the effect of fees on participation of certain underrepresented groups was not given the attention it deserves. The paper states that “…there are still groups that are underrepresented in [post-secondary education] in Ontario and it is apparent that financial barriers remain part of the explanation.” It also points out that the gap between high- and low-income participation continues to increase. However, the paper makes almost no attempt to evaluate if tuition fees are a factor in this underrepresentation, even though there is considerable Canadian research that supports this contention.
The three principal financial barriers to higher education in the literature are a lack of sufficient funds, debt aversion, and price sensitivity – all of which are intimately related to the price of tuition. According to a 2009 literature review by Social Research and Demonstration Corporation, students most frequently cite financial barriers as a reason for not pursuing post-secondary education, and among the top three reasons for leaving their studies prematurely. A 2007 article by Berger and Motte reports that almost 40% of individuals who never attended a post-secondary program reported finances as a barrier to attending. Unsurprisingly, a Statistics Canada study found youth from lower-income families are three times more likely to report being financially constrained, and after controlling for other factors, youth that report being financially constrained are 30% less likely to participate in university. Furthermore, a 2007 review by de Broucker and Mortimer found tuition increases have a moderate impact on post-secondary education participation in low-income students. Finally, the relatively low take-up rate of OSAP among low-income students cited in the report is not surprising considering that recent research has found between 10% and 30% of students are unwilling to go into debt to pay for post-secondary education and that debt aversion is highest in low-income and Aboriginal students.
This is not to say that overcoming the three primary financial barriers necessitates the elimination of tuition. If there was a well-functioning financial aid system that provided sufficient non-repayable aid to overcome shortfalls in up-front resources and debt aversion, coupled with ample information provided to students about the costs and benefits of higher education, we may be able to overcome many of these financial barriers. However, our primarily loan-based aid system remains a far ways off from that goal. The report seems to accept at face value that the financial assistance provided in Ontario is sufficient and accurately reflects students’ costs and resources, which is largely acknowledged among financial aid experts to be untrue. The paper excludes any mention of insufficient resources for students in Ontario, despite the fact that 42% of Ontario students have financial need unmet by student assistance programs, with an average unmet need of $1,191 – and that true unmet need is likely much higher due to living costs and parental contributions which vastly underestimate the real needs of students. The report also seems to suggest at times that increasing the amount of information available to students will alone solve these challenges – we would suggest that the ability to take out grants without taking out loans, a lifting of assistance maximums, and increasing the amount of non-repayable aid for these students are necessary and complementary steps.
It is also worth mentioning, given the number of times it comes up in the report, that students have fundamental concerns with the presence of a tuition set-aside program, where students self-fund financial aid through part of their tuition fees. The tuition set-aside program in Ontario has significantly increased the amount of financial aid money available for students, and its overnight elimination would obviously not be a valid course of action. However, we do not think a set-aside is a sustainable solution for increasing access. It is our belief that ensuring access to higher education is a public goal and therefore financial assistance programs should rightly be funded by the public and not by students themselves through inflated fees.
Much of the argument in the paper for why enrolment continues to increase despite tuition increases is the concept of ‘net tuition’ or that the cost of post-secondary education minus various government subsidies is significantly less than the sticker price. ‘Net tuition’ is an academically useful concept in a debate about the private versus public expenditure on post-secondary education; however, it is substantially less useful in a discussion of accessibility. The Canada Millennium Scholarship Foundation put it best: “Unfortunately, for students and families thinking about whether they can afford higher education (especially low-income families), it is not clear that the [net tuition] concept is all that useful. Discussions of net tuition do not focus on when and how tuition is paid… Policy efforts that, by intention or effect, reduce net price are undermined if they do not also affect the perception of post-secondary costs.” It is not clear to students prior to attending post-secondary education how financial aid and post-secondary tax credits will reduce the financial costs, and many low-income students and families do not have sufficient taxable income to make use of tax credits until well after graduation. Even the government has recognized through its 2007 platform that funds for post-secondary tax credits could be better spent, and students will continue to advocate for the elimination of these credits to reduce students’ actual up-front costs. Furthermore, a full report on tuition options should at the very least consider the role that the sticker price of tuition has on access and students’ decisions, regardless of the financial aid systems in place.
Turning to the report’s proposed options for the future, the report largely dismisses rolling back or freezing fees due to the revenue that would be required. Tying increases to the status quo of 5% or to the Consumer Price Index is then discussed, as is the idea of establishing a ‘share’ or proportion of the cost that should be borne by students through fees (a model that OUSA has supported in recent years). The paper also proposes an option of ‘constrained deregulation’ in which fee increases by program are no longer regulated, but the overall increase remains capped. We would like to reiterate students’ disapproval of such a scheme. This would no doubt drive large-scale increases in professional and second-entry programs and result in the same sort of accessibility outcomes noted in the report (namely that financial aid programs and assistance maximums would fail to make up the difference for these students and that tuition fees would negatively affect program choice among students from low-income families). The final option discussed is full deregulation, which for obvious reasons is not an option that students would ever consider viable for an accessible public education system.
We were also concerned with the overall tone of the report, which suggests at times that the province’s current deficit will likely preclude increased government funding beyond increases for growth at current per-student levels. It unreasonably assumes that the ability of students to increase their financial contribution to post-secondary education is essentially limitless, while taxpayers’ contribution is completely constrained. The report also gave absolutely no consideration to the idea of free tuition, despite the number of students, faculty members, public at large and Ontario MPPs of all stripes that consider free or significantly reduced tuition fees a worthy long-term goal. Tuition fees could be nearly eliminated for first-entry students with a single point increase in the provincial rate of the HST or a reversal of the recent provincial corporate tax cuts. Those sorts of choices obviously have broader economic and political ramifications; however, considering the importance this government has placed on access to higher education, we think it remains worthwhile for the sector to engage in such a dialogue when considering tuition models.
There is also the built-in assumption in the report’s analysis that revenue for institutions must continue to increase at or close to the current rate. As the report points out though, inflation in the sector and particularly average annual salary increments over many years have “outpaced inflation by a considerable margin.” We suggest that a continuation of this trend on the backs of students alone is neither fair nor necessary. Students understand that they will have to sacrifice financially to secure a high quality higher education, but the public purse and those that work within the sector should not be automatically sheltered from that burden.
To put it more simply, our fundamental question is are we content with the proportion of post-secondary costs borne by students continuing to increase over the next five years? Over the last three decades, that proportion has increased from 19% to around 45%, a shift in costs unique among provincially-funded services. Should consideration not be paid to the fact that Ontario remains near the bottom of Canadian provinces in per-student funding for our institutions? Is this continued downloading a practice that Ontarians are happy with?
OUSA has long advocated for a 2-to-1 cost sharing model based on the belief that there is both a public and private benefit to higher education that should be recognized in the revenue contributions. Students plan to evaluate this position over the coming months in preparations for the expiring tuition framework. We want to thank HEQCO again for its important contribution to this dialogue, and we hope that it can spark the government and the sector as a whole to continue to debate, reconsider long-held positions, and ultimately decide to do what is best to build an accessible, affordable and high-quality post-secondary system in Ontario.
-Alexi White, OUSA Executive Director
-Sam Andrey, OUSA Director of Research & Policy Analysis













