The end of targeted free tuition, eh?

Canadian tertiary education is not the easiest topic to follow from abroad.  A relatively de-centralised federation with power for education vested at the level of individual provinces, it can at times resemble a nation of ten Scotlands in the diversity of policy directions and initiatives being pursued.  

But Ontario is one province to watch closely.  It is by far the largest (roughly the population of Belgium in a territory the size of France and Spain combined, but with two-thirds of it packed into a 90-minute driving radius of the CN Tower), and contains about 40% of the country’s student population and several of its top universities. And with Augar due in England, it is in Ontario that big changes have just been announced that it would be worth keeping an eye on.

Grants for (almost) all

Four years ago, it was the then-Liberal government which dominated the news, introducing a policy which provided grants equal to average tuition to all students from families making under C$50,000 (roughly £31,000), and smaller grants on a sliding scale as family income increased. In some ways it is much like the Welsh grants system (for more details on this and similar policies around the world, see my paper on with Robert Burroughs, published by HEPI last September, entitled Targeted free tuition: is means-testing the answer?). This policy was successful in the sense that it got a lot of new students signing up for student assistance (which cost the government a lot of money); but due to the amateur-hour approach to program evaluation that predominates in Canada, it has not been possible to determine whether it actually increased tertiary participation.

Fast forward to last year, when a populist (for Canada) Conservative government led by Rob Ford (the elder brother of Toronto’s infamous late mayor) came to power, in part on a promise to eliminate a fairly large budget deficit. It has been clear for some months that the budget cut for all departments would be in the range of 10-15%; and it has also been clear for months that the Ontario Student Assistance Plan (OSAP), with its major recent spending rises, would be a major target. The question was how much of the free tuition program would be preserved (it could have been kept in form with eligibility thresholds reduced), or if not preserved, how the cut could possibly be massaged into a good-news story.

Savings, not cuts

The government has now unveiled its plans. The headline measure – or at least, the measure the government wanted in the headlines – was that universities and colleges have been instructed to reduce all tuition fees in subsidised programs (ie. all programs not 100% cost-recovery) by 10% for domestic students. This implies a financial loss of around $450 million to institutions (roughly 3-4% of total income), which will not be compensated in any way, all to the benefit of students.

For UK wonks who regularly freak out about differentiated tuition levels: fees have varied widely by program in Ontario for a couple of decades, with little obvious disadvantage to either students or institutions – so the exact amount by which each student will benefit depends on his/her program. But on average, this is probably worth about $700 per year to students in universities and $400 to students in community colleges/polytechnics.

At the same time, the government also announced changes to the Ontario Student Assistance Program. Details were in very short supply, because this is not a government which is yet comfortable with detail. But from the hints in the announcement, it sees like a number of things are happening:

  • The maximum grant size is being reduced for everyone; lost grants will be replaced by loans
  • The income threshold beyond which students are ineligible for grants is being lowered
  • Expected parental contributions are being raised – students are not considered fully independent at 18, so parents with means are “expected” to make a contribution to their children’s tuition based on income
  • The age at which students are considered independent of their parents is being raised
  • Interest is now being assessed during the six-month period between graduation and the start of loan repayments.

More debt, less fairness

The upshot of all this is that students are going to get more of their aid as loans and less as grants – and the total reduction in expenditures is on the order of $600 million. The lack of detail in the announcement means we can’t be totally sure about the impact of these changes, but it seems almost certain from the available information that the cut in grants experienced by each student will in the large majority of cases be larger than the benefit from the reduction in tuition.

In defence of its policies, the government is claiming that its tuition fee policy is making students better off – and that its changes to OSAP make the new system “fairer” than the old one. These claims are strictly speaking true if you look at each measure in isolation. Students are better off as a result of the tuition hike, and the grant system is “fairer” in the sense that its is now more tightly targeted on low-income students than the old system (which is a good thing).

But what’s important is the interaction between the two policies. Those students who are currently on student aid will nearly all be worse off as a result of the announcement, because the cut in grants will be larger than the cut in tuition. The only students who are unambiguously better off are those who do not use student aid, which is mainly students from quite wealthy backgrounds (the current family income threshold for eligibility is about $170,000, so everyone above that comes out ahead). And it is very hard to describe that as fair.

Institutions are facing a 3-4% cut in institutional funding, which will be challenging but will most likely be dealt with by admitting more international students.  Student aid expenditures are being cut back but only to about the level they were at in 2015, which wasn’t exactly an accessibility dystopia. Students will graduate with more debt than those who graduated last year, but less than, say, students who graduated around the turn of the century when grant aid was considerably skimpier. It’s a bad announcement for students and institutions – but not a disastrous one.

The sting in the tale

What might possibly turn the whole thing from bad to disastrous, though, was a third policy change which has little to do with budgetary solvency. The government announced that henceforth, students will have the ability to opt-out of all “non-essential non-tuition fees” charged by institutions.  It’s a little unclear what exactly counts as non-essential here, and the government sent slightly different messages in its press conference and in its instructions to institutions. But it very definitely applies to student union fees.

It’s not quite as sweeping or as severe a measure as the voluntary student unionism policies enacted by the Howard government in Australia in the mid-00s because it is both limited in scope and seems to envisage a process of opting-out rather than opting-in. But the forced loss of student union income will inevitably reduce both their income, and their ability to support the valuable activities which form the core of civic society on campus nd which give students many opportunities to learn the soft skills of co-operation and management that government claim to want institutions to nurture.

Amid significant cuts to both student aid and institutional budgets, we may discover a few years from now that it’s the changes to student activity funding that caused the most profound changes to Ontario campuses.

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