Wednesday, October 22, 2008

We need more need-based student assistance

I’d like to take a break for a moment from topics campaign, leadership and other to comment briefly on a pet area of mine: post secondary education.

I came across this article from today’s Globe on a recent Canadian Millennium Scholarship Foundation study of financial assistance programs that makes some interesting observations:

Financial aid from all levels of government hit a record $7.1-billion in 2007, but only 61 cents of every dollar of that total was targeted to students based on need, compared with 80 cents 10 years ago, says a study to be released today by the Canadian Millennium ScholarshipFoundation.

The increasing use of universal programs such as tax credits and postgraduation rebates by governments is driving the change, the study finds, causing a growing share of aid to go to those who can already afford higher education.

"We have no evidence that these programs are going to lead to the kinds of results we often talk about when we look at student support - better access, more affordability and persistence [staying in school]. "We have no evidence that a tax credit can do that," said Joseph Berger,
one of the authors of the report.

The article does note that students received a record $4.1 billion in needs-based aid in 06-07. But the increased proportion going to those that don’t need it is troubling in two ways. First, helping low income students should be the focus. Two, by giving more assistance to those that can already afford tuition, you’re making it easier for universities to raise tuition even further, which only makes it harder for low income students.

I think its great overall student aid funding has been increasing. Frankly, though, I’d be fine with a lower overall figure if more of it went to those that really need it. It’s tempting for governments to just go the tax-credit route and make it universal – they get more credit with more voters. But it does nothing to promote access, which should be the goal of any student aid initiative.

I was actually pretty impressed with the Liberal education platform this election, particularly the emphasis on needs-based scholarships and de-emphasizing the parental income test in the student loan program. It was much improved over the 2006 Liberal education plank, which I found lacking.

Just in case any of the parties in this parliament decide to try to work together on policy in the next little while, I’d like to encourage them to take a look at re-jigging student aid. You can work within the existing fiscal framework, just move the priorities around a little.

Incidentally, my own student loan just moved down from five to four digits, which both pleases and depresses me at the same time.

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Devin Maxwell said...

More needs based funding for post-secondary education has been the mantra among student groups in Nova Scotia for more than a decade. Meanwhile, the province continues to provide little while the federal government continues to provide funding based on the number of students attending university FROM a particular province rather than on the number of students attending university IN a particular province.

...and King's College in Halifax recently appointed John Hamm, who sat idly by as tuition fees in the province more than doubled and became (by far) the highest in Canada, to a cushy well-paid position on its Board of Directors (despite vociferous opposition from students). That's accountability...

Anonymous said...

I agree completely with your assessment here. The confluence of higher tuition fees, higher living expenses, and public policies that do not provide sufficient help low-income students is increasingly barring deserving students from accessing a post-secondary education.

ALW said...

This is a question of allocating scarce resources, and if it’s between merit-based and needs-based awards, who gets what. The bigger question is: why do we support a system that caps tuition rates, effectively subsidizing the wealthy who could afford to pay far more? If tuition was allowed to float at market rates, universities could charge mediocre affluent students what the market would bear, and turn around and use those surplus funds to beef up student aid for those with merit but no means.

Everyone always carries on about how pricey exclusive US schools are, but the sticker shock down there is largely mythical - no student is going to get turned away from Yale or Harvard because of an inability to pay, because those schools have massive pools of student aid available precisely because they charge the rich the full amount to go to school!

I realize much of this is ideological differences of opinion, i.e. education a right versus a privilege, the role of public institutions versus private ones. But we should at least acknowledge that the reason there isn’t enough money to help poor students is because we’re spending part of the subsidy they’d otherwise have on people who don’t need it!

Jeff said...

alw, there's a third component when it comes to allocations that you overlooked: general programs (like wide tax breaks) that are neither need or merit based, but benefit all, including those that don't need the help.

On tuition caps, with the exception of BC in the 90s I'm not aware of many real tuition caps. That is to say, increased may be capped, but not very tightly. I went to uni on Mike Harris Ontario, and my tuition nearly doubled over 4 years, each increase the max "cap" allowed by the province.

While I don't agree with you on letting tuition float at market rates, I do think there's common ground around better allocating existing resources. There needs to be a balance between need and merit-based assistance. Right now with the broad-based tax initiatives around education the last Harper government brought in, we are subsidizing those mediocre affluent students you talked about more than we need to. Divert those resources to assistance both need and merit, and let them pay the regular, already subsidized anyway (through direct uni funding) tuition rate.