Scrap the tuition cap

Adam Daifallah
National Post

Tuesday, November 16, 2004

MONTREAL -- There's a lot of griping on Quebec university campuses these days. Both students and administrators are unhappy with the current state of funding and tuition fees, and Jean Charest's Liberal government doesn't seem prepared to make the necessary tough decisions.

In September, the province announced that $103-million in annual non-repayable student grants would be converted into repayable loans. This translates into as much as $2,000 or more in loans per year for students who need financial aid. The grant cuts have turned Quebec's students fiercely against the Liberals, and they took to the streets last Wednesday in a massive protest. Mr. Charest's own Liberal youth wing is publicly opposing the plan.

At first glance, it is hard to shed a tear for the students. Compared to other provinces, Quebec offers a great deal. Tuition fees, which have been frozen since 1994, are a mere $1,800, some of the lowest in the country. (But for out-of-province students, the fees are about $4,500 annually, and double that or more for those from outside the country, but that's another story.)

Quebec has an extremely generous financial aid budget. Student debt here is by far the lowest in Canada: those who pay for their educations with loans graduate with an average of about $13,000 in debt, while the average for the rest of the country is around $22,000. (Consider also that more than one-third of Quebec students admitted to bachelor programs in the past three years went to private high schools, where parents fork over more in tuition than for university.)

An extra $2,000 a year in loans may not seem like much for the privilege of gaining a post-secondary education, which offers the graduate a solid prospect of a good income and high quality of life. But when you look at who will be affected by the cuts, they make little sense. About 45% of Quebec university students take out loans or grants. The grant cuts, then, mean higher debt loads for those who are most in need, and no change at all for those who have the means to pay up front.

Meanwhile, Quebec's cash-strapped universities are trying to find ways to bring in new funds. The principal of McGill University, Heather Munroe-Blum, says McGill is facing an $8-million operating deficit this year alone. And the problem is getting worse, not better. There will be a 20%-30% increase in university enrolment over the next eight years. If Canadian universities want to remain competitive, according to Ms. Munroe-Blum, they will have to attract $6.4-billion in new research funding and an additional $6.2-billion in operating revenues. Quebec's university system is underfunded by $375-million a year compared to the Canadian average.

Where will this money come from?

The best solution, for universities and students alike, is to remove the decade old tuition freeze. McGill has been pushing for this. Increases in tuition should be coupled with a commensurate increase in student aid dollars, so that those without the means to pay are not turned away.

The current tuition scheme is a boon to the rich and the middle class, who could -- and should -- be paying more for a university degree. The Charest government knows that, but doesn't want to take the political risk of scrapping the cap. If they thought they could avoid taking a political hit by cutting grants instead of allowing tuition to go up, they were sorely mistaken. Either decision was bound to be unpopular, but at least tuition hikes would bring the universities more money.

The Ontario government took this approach under Mike Harris, the former premier, starting in the mid-1990s. Tuition was allowed to increase by up to 2% annually and institutions were forced to increase financial aid proportionately. The government began forgiving every penny over $7,000 of provincial student loans each year.

Despite alarmist warnings at the time from student groups about an undermining of accessibility, this policy has proven successful. Enrolment levels continue to rise. In March, the University of Toronto published results of a 2003 survey that found a 15% increase over the previous year in the number of undergraduates coming from homes with parental income lower than $50,000. The number of doctoral students from the same income group grew by 35%.

These improvements are a direct result of the needs-based funding model. According to the U of T, needs-based aid has gone from $1.5-million a year 10 years ago to $40-million today. And the university found that only 8% of graduates had debt-loads of more than $25,000. A new study from the Canada Millennium Scholarship Foundation has concluded that student debt levels actually fell by 33% between 1996 and 2003, despite increases in tuition of 50%.

By allowing Quebec tuition fees to increase and come closer into line with those in the rest of the country, the government would assist the province's universities in raising some much-needed cash. The recent decision to cut grants was an unimaginative and shortsighted move, one that Mr. Charest is bound to regret, come the next election.

Adam Daifallah is a Sauve Scholar at McGill University.