Counter-point: Managed tuition growth the way forward

In Canada the provincial government, who has jurisdiction in matters of education policy, can manipulate tuition rates. According to recent Statistics Canada data, Ontario has the highest tuition rates in the country averaging $6,307 while Quebec has the lowest tuition rates averaging $2,415.

On the surface, these numbers seem to indicate that education in Ontario would be the least accessible jurisdiction for post-secondary education in Canada — at least when it comes to the financial burden.

However, not only should it be noted that there is more to accessibility than the cost of tuition, Ontario tends to follow a more prudent path when it comes to the regulation of tuition, at least compared to its provincial counterparts. In fact, while it may seem counter-intuitive, provincial governments should aim for controlled growth of tuition rates rather than aiming to cap, reduce or even eliminate it (through use of tax revenue).

There are two main points that underlie the strength of this position — the fiscal capacity of our governments and more importantly the fundamental flaw of cap to reduce or eliminate policies.

Firstly, to allocate enough resources to markedly reduce tuition costs would mean that governments would have to raise taxes or cut services or programs in other departments in significant ways. Given the fiscal state of the government of Ontario, this reality is even more salient.

However, even if fiscal resources were not as much of an issue, significant reduction or elimination of tuition fees (as a result of a massive increase in subsidization over the current framework in place on the part of the government) are not prudent policies if one is concerned about accessibility to post-secondary education.

Capping real tuition rates, reducing them or going for their outright elimination is not accomplishing the goal that most identify as fundamental — promoting accessibility for potential students whose incomes cannot accommodate the cost of higher education.

While seeming counter-intuitive, by taking any of the above actions policy-makers are wasting fiscal resources on those who can already afford education, rather than allocating it where it is needed most —low-income students. By allowing tuition rates to increase, the government (and individual institutions) can allow those who can afford tuition at cost to do so, while freeing up fiscal room to help those who cannot.

However, this position comes with a caveat. Complete deregulation is problematic in that it swings the pendulum too far.

Like working wages, there is a noticeable lag-time between tuition increases and the corresponding non-repayable grants and resources available for loans meant to help low-income students access higher learning.

This is precisely why the approach should be capped growth, rather than real tuition caps.

These growth caps could be indexed to various indicators, but the most appropriate indicator appears to be CPI (consumer price index) — an aid in determining the inflation in the economy. A more flexible and effective government loan system, in addition to a focus on better aid allocation on the part of individual institutions, will ensure that the gap can be effectively bridged or at least close to it (in Ontario, that means constantly evaluating and re-evaluating OSAP).

It is a given that this approach is not perfect. Debt loads faced by students post-graduation tend to be higher than other jurisdictions and no one need explain the problematic nature of massive personal debts.

But by fooling ourselves into thinking that our natural intuition is correct — that the lower the tuition fees (as a result of government subsidy) the better, we fall victim to the law of unintended consequences as we are worsening precisely what we are pledging to alleviate — barriers to post-secondary education. Without a sober second thought, I fear that we will not only fail to improve access, but we will waste valuable fiscal resources in the process.

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