Student Finance News
Do grants do any good?
Closing the higher education gap is more complicated than making sure everyone can afford it
A study of university graduate rates in Quebec suggests that while needs-based grants improve university attendance, they don’t help university graduation numbers. In other words, Quebec’s additional needs-based grants did allow more lower-income students to go to university, but that increase did not mean that more of those students actually graduated.
This study raises at least two questions in my mind. First, if a student goes to university and does not graduate, has that student necessarily wasted the time and money spent? The study’s author, Mathieu Chemin, seems to think so, pointing out that the labour market rewards graduation, not attendance. But labour markets are not the only measure of the value of education. I would like to see data regarding how many students who attended university without graduating still view their time there as rewarding and valuable. A half-eaten meal is still nourishing; it may be all you need. Might there not be many who attend university for, say, two years, and then decide to move on to other things, but do so with a wider range of knowledge, a better set of critical skills, and a fuller sense of the world’s possibilities? I have known more than one student who fits this description perfectly.
But even if many students do end up wasting their time pursuing a degree they don’t finish, another question arises: Why don’t more of those low-income students end up graduating? The possible answers that suggest themselves to me relate to preparedness. For one thing, low-income students may live in areas with inadequate educational resources. If their schools, libraries, and museums are inferior (or absent), poorer students may not be as well-prepared for university study. Similarly, if parents are struggling to make ends meet and working long hours at exhausting jobs, they may be unable to take as active an interest in their kids’ learning (directly or by hiring tutors, say) as richer parents. Still further, low-income parents may themselves not have been to university and, as such, may (consciously or unconsciously) teach their kids to undervalue higher education, which might make their kids less likely to stick with it even when they do go to university themselves.
In short, lower-income kids may be less prepared and less enthusiastic about university in the first place, leading them to drop out before finishing. A 2007 Statistics Canada study concluded something similar about university attendance in general: that poorer students don’t attend university as often, but not because of money per se, but because of lower academic performance and differing parental expectations. If this is true, though, it doesn’t mean there is no problem. Instead, it may mean that we need to concentrate less on grants to lower-income students and look more closely at public education to see if it can play a greater role in letting disadvantaged kids know that university is an option, and getting them ready to realize that choice.
Helping the world. And me
Is volunteering about saving the world or enhancing a resumé?
Sara Minogue went to Tanzania expecting to make a contribution. A journalist with several years’ experience, she was drawn to a government-funded opportunity to raise the profile of human rights issues. Journalists for Human Rights, the Toronto-based NGO offering the eight-month program, sent her to Dar es Salaam to teach reporters how to effectively report on abuses. But when Minogue, who was 28 at the time, arrived at her placement in the capital city in 2006, she was struck by “how ridiculous” it was for her to be in a position of authority. The week-long pre-departure training JHR had provided touched on culture shock, human rights theory and the West African media, but left her with “very little clue about where I was going,” she says. As it turned out, many of her colleagues at the Media Institute of Southern Africa had university degrees, and all of them knew more about the human rights abuses in Tanzania than she did, she says. “I felt extremely silly and embarrassed.” Within two months, Minogue had quit. Other than writing a report for JHR, she says she spent the rest of her time “hiking around and hanging out” on Canadian taxpayers’ dime.
Canadians have a long tradition of sending youth to developing countries to build schools, work in orphanages and fight AIDS. Since 1960, an estimated 65,000 have gone overseas through the country’s major volunteer-sending organizations, and countless others have participated in church and corporate projects or internships sponsored by government and universities. But evidence is emerging that raises serious concerns about what these opportunities have come to mean. In regions plagued by issues that decades of international aid have been unable to resolve, it is often difficult for unskilled volunteers and interns to be anything more than tourists. And experts worry that instead of fostering cross-cultural understanding, the experiences may, in some instances, have the opposite effect — reinforce negative stereotypes in young Canadians, and breed resentment in the communities that host them.
Spending a summer saving the world has never been easier for socially engaged youth, provided they (or their parents) can pay. Even if they don’t qualify for a funded placement, an Internet search for “volunteer abroad” reveals thousands of opportunities, which range from a few weeks to many months, and can easily cost more than a year’s university tuition. “Ironically, these types of opportunities are much more accessible to rich people than to poor people,” says Josh Ruxin, an assistant public health professor at Columbia University who runs three development projects in Rwanda. His interns, who must pay their own way, spend about $6,000 for a four- to six-month placement. The increasing demand to “make a difference” (or at least feel as if you are) has led to a proliferation of private operators selling volunteer opportunities in far-flung locations. African Impact, for instance, advertises a lengthy list of “exciting and rewarding” programs. For US$2,300, participants can spend a month coaching football in Zambia, working with HIV/AIDS orphans in Kenya, or teaching disadvantaged children in South Africa.
But what inspires idealistic twentysomethings to lend a hand often has less to do with philanthropy and more to do with “personal gain,” according to Rebecca Tiessen, a Dalhousie University professor examining the trend. Tiessen is one of two researchers conducting the study, “Creating Global Citizens? The Impact of Learning/Volunteer Programs Abroad.” Slated to wrap up in 2011, it is a first in its attempt to evaluate the implications of these programs through interviews with participants and host organizations in Malawi, South Africa, Peru, Guatemala, India and Jamaica. Though preliminary, the findings suggest these opportunities have become a “product” that can be purchased and cashed in for course credit or a line on a resumé. “There are fewer people saying, ‘I’m volunteering because it’s the right thing to do, it makes me feel good and I’m dedicated to social justice,’ ” says Tiessen. “There’s a more selfish or egotistical nature to the reasons.”
Before Kate Daley started her master’s degree last year, she shelled out $2,500 (not including airfare) to spend eight weeks in northern Ghana, helping out in an HIV/AIDS clinic and teaching at a school through Volunteer Abroad. Other than some small breakthroughs she made with the kids, the 25-year-old describes the opportunity as “more of an education for me.” It wasn’t Daley’s first time in a developing country. Similarly, the majority of the young people Tiessen interviewed had had more than one international volunteer experience. But even so, “the emphasis was still on how they could learn, how it would be useful for them,” says Tiessen. In the 30 pre-departure interviews she conducted with young Canadians about their motivations, “career” or “skills development” was mentioned 40 times — the most frequently cited response.
How to avoid financial pitfalls as a student
Be cautious of credit and plan ahead
It’s an education as essential for students as the pursuit of higher learning towards a future career, but it’s unlikely to be found on class schedules or the course calendar.
Financial planning should be a priority for students heading off to college and university, according to experts who say learning how to manage money can help young people avoid financial pitfalls that could saddle them with debt down the road.
Murray Baker, a Vancouver-based writer and educational financial consultant, said students should have a road map for the semester or year to assess their resources, like savings, bonds and scholarships, and determine when they’ll be available. They should also map out key expenses, like tuition, books and rent, allowing them to allocate their remaining funds. “By doing this, you know ahead of time what your expenses and what your resources are going to be,” said Baker, author of The Debt-Free Graduate. “If you see there is a shortfall and you start working, say, eight hours a week, far better to do this than to have no plan, and then say in the beginning of March, ‘Oh, gee, I’m totally out of cash,’ and then have to scramble.”
Al Nagy, certified financial planner with Investors Group Financial Services in Edmonton, said a general guideline is 10 per cent of everything students earn should be theirs to keep. “In the early years of expenses with tuition and that, the reality is there’s not a lot of saving going on for long-term; it’s usually short-term saving,” he said. “If I was to say 10 per cent of everything you earn should be yours to keep to a student that has graduated, you should be saving this for major purchases or long-term goals or medium-term goals. But when it comes to paying yourself first for students, I’m talking about setting a little bit aside for emergency issues and for fun stuff.”
For students living away from home, Baker said many are making a lot of financial decisions for the first time while dealing with “incredible pressure” to spend money to keep up with peers, but they can still have a great time socially without breaking the bank. For example, Baker suggests having a potluck with roommates instead of dining out. When you do, take advantage of student discounts which may be offered on certain nights. Most schools also offer activities on-campus which students can take part in at a minimal cost.
“It’s like when you go off travelling,” Baker said. “You can go to a city and spend a fortune going to all the places that the tourists go to that are very touristy and expensive, and you can have an equally, if not better, experience going to places where the locals go which are often a fraction of the costs.”
Students may also feel tempted to sign up for credit cards. Baker suggests avoiding them in first year entirely until you’ve got a handle on your expenses. If you still feel you must have one in second year, get a no-fee, low limit card, avoid cash advances and ensure you pay it off.
Nagy said credit is a double-edged sword: a good thing if used wisely, but very harmful if one gets carried away. “From a point of view of establishing credit, yes, do it, I encourage that, because it will help you down the road with your credit history; but at the same time, don’t use it for money you don’t think you’re going to have,” he said. “If you can’t pay it off every month, don’t be using it. It’s that simple.”
But what if students find they’re in the red and need to dig themselves out of a financial hole? For credit card debt, Baker suggests applying for a consolidation loan from the bank to pay off the balance so they pay back the money at a lower interest rate. He also suggests going to the financial aid office to find out about bursaries awarded to students based on need.
In some provinces, there are also work-study bursaries, while some schools even have food banks if students are really struggling, he added. “What’s important is to not sit there and do nothing and let the interest charges on your credit card pile up,” he said. “Take some action and try and get that out of the way and make sure you’re not getting into that same trap again.”
Baker and Nagy agree it’s never too early to start saving, but where to invest funds depends on the individual. Baker said it’s important to determine when you’ll need the cash. Don’t invest in volatile or risky mutual funds if you’ll need cash in your first year and the investment could be worth less when the time comes to access money, he said.
Looking for scholarships as early as Grade 9 or 10 can help students determine the criteria they need to meet, whether it’s grades or community involvement, Baker said.
Above all, the key for students is to get organized, Nagy said. “This is as much of a learning process for managing your money as it is a learning process for your future career and so it’s a real growing up period,” he said. “Being organized will help you get a handle and stay on top of it.”
-with a report from CP
Canada liberalizes work visas for recent grads
Opposite to recent trends in the U.S. and U.K.
The Financial Times reports on new federal regulations that allow international students to remain in Canada for up to three years after graduation, as they look for work.Citizenship and Immigration Canada grants permits to recent graduates for vary lengths, depending on the amount of time the applicant studied in Canada and the length of the permit cannot last longer than the time spent in school. The completion of a four-year degree, for example, can earn a graduate three years in Canada. If a student spent less than eight months studying at a Canadian institution, they are not eligible for the program.Daniel Muzyka, dean of UBC’s Sauder School of Business, told the Times the regulations could mean more graduates apply for Canadian citizenship.”Obtaining a degree from a Canadian university also facilitates the application for permanent residency status and, subsequently, citizenship so students, especially at the graduate level, take advantage of this upon graduation.”The Times wrote that 64,000 international students studied in Canada last year.
Canadian academic salaries top world
China comes last in limited sample, no word on the variance statistics.
In a survey of academic salaries in 15 countries around the world, Canada came out on top, with an average monthly salary of $4,856 per month (in PPP dollars), and China came last with a monthly salary of $1,182.
No wonder we’re importing professors from Asia. Link; hat tip.That being said, I bet the variance in American academic salaries is much larger, since private American institutions have the ability to chase after the elite profs at far higher salary levels than average. Here’s a dated example. There have been rumours that select profs are starting to approach the seven figure mark in salary, while those toiling at low-ranked public American colleges can likely expect less than their Canadian counterparts.
Forget grad school!
Why the academic labour market may not be about to open up
For those taking the PhD plunge, the prospect of finding meaningful employment has always been a concern. Despite rosy predictions from the Association of Universities and Colleges of Canada (AUCC), the PhD job market may be heading into another tight period.
From the early 1990s to about 1998, the number of employed university professors (of all ranks) shrunk by 3,000, or close to 10 per cent. Many tenured positions were eliminated through retrenchment policies where universities calculated that paying out professors willing to retire early would lead to a more stable financial footing in the long run.Similar policies were implemented across the country and the average age of retirement for all Canadians dropped precipitously.
The trend eventually reversed, and between 1998 and 2006, about 22 per cent new faculty positions have been added, including a 37 per cent increase in tenured track appointments. The tight 1990s has, however, left the percentage of Canadian faculty aged 55 or older disproportionately higher than it otherwise would have been.
The AUCC assures us that at least 22,000 renewal faculty will be needed over the next 10 years. The lobby group is also certain that hordes of students supposedly entering university over the same period will further drive up the demand for university professors.Seems like a bright future for up and coming scholars everywhere, doesn’t it? I will set aside the claim that university enrolments will continue to increase, as Maclean’s has consistently challenged that assumption (see here and here).
The AUCC is working from the assumption that as the average retirement age normalizes, it will resettle to what it was before the 90s; that is, at 65. However, a number of trends suggest this might not be the case.For starters, mandatory retirement in the Ivory Tower is quickly becoming a thing of the past (see here, here and here).
What’s more, recent “corrections” in the market have threatened retirement savings and stock portfolios both in Canada and south of the border, further suggesting delayed retirement as faculty aim to recoup losses to ensure they will be as comfortable as they had planned.
As Brian Leiter, a University of Chicago philosophy professor, put it recently: “The catastrophic June in the stock markets means that a lot of faculty who might have been thinking about retirement in the coming year are going to postpone given the huge losses most will have suffered.”
Leiter estimates that demand for philosophy doctoral degree holders, the labour market is retracting to what it was about 15 years ago. In the early 1990s “there were 2.3 candidates per job,” and though that number slackened to 1.4 by the beginning of this decade, Leiter predicts that “we will be back at 2.3 before long, if we are not there already.”
While this is not necessarily representative of all disciplines, fields in the humanities such as philosophy are always hardest hit.It is true that even if the economy gets worse in the U.S., things could play out differently up here. However, Canadian and American PhDs compete in the same job market. If the academic labour market tightens in the U.S., that just means more American PhD holders competing for jobs up here.
Of course, none of this means that baby-boomer professors won’t have to be renewed. It simply means that the renewal will be rather flat, as opposed to the explosion the AUCC has apparently predicted. But as anyone scrounging around for a tenure-track position will tell you, there is a limited time frame after one first earns their PhD before their degree is considered “stale,” ultimately condemning them to a lifetime of hopping from one sessional appointment to another.
Add to this the fact that though a good deal of tenure-track positions have been added in recent years, many have been replaced permanently with sessional contract positions—as well as the reality that many who will retire in the coming years never earned tenure to begin with—and the rosiness of the academic labour market vanishes. Never mind if universities feel the need to re-implement retrenchment policies.
In fact, a slacker and easier academic labour market might have already come and gone. We just missed it.
The university money crunch
What do you do when your student loans just aren’t enough?
Questions are welcome at jeff.rybak@utoronto.ca. Here’s one I received the other day:OSAP is only giving me so much money this year. I needed more money for books and rent but that is unlikely considering I’m an undergrad and I’m not yet considered an “independent.” I don’t want to have to drop out of university because I have $2,000 left to pay. I’m thinking I can either 1) ask for emergency assistance or 2) get a loan from a bank or 3) Borrow from a relative who isn’t stingy. What would you recommend in this type of situation?I’ll address these possibilities in order, and then talk about money that’s left to pay from last year.Requests for emergency funding (from the university I suppose?) are probably a last-ditch option. In my experience, they tend to be reserved for students who are about to get kicked out of their apartments and similar. So while I’d encourage you to keep your eye on that, they’ll only ask if you’ve explored all other options anyway, so you might as well do that first. It’s good you’ve realized this funding exists, however, and I’m pretty sure that just about every institution has some last line of funding, to ensure that students don’t end up on the street. It really is emergency assistance, but at least it’s there.Private bank loans are certainly possible. They don’t tend to have a lot of faith in unsecured undergraduate loans, but here’s where you can much more easily (and without embarrassment) ask for family help. The bank may want someone to co-sign your loan, and even if they don’t absolutely require it the co-signature of a more secure relative may get you a better rate. As an example, students in professional programs such as medicine or law can frequently secure loans at prime lending rate or prime plus 0.5%. Prime right now is 4.75% a year, so prime plus half would be 5.25%. You probably can’t do quite that well, even with a relative co-signing (banks have greater lending faith in professional programs), but you can absolutely do better with this option than other lending rates. More about that below.It’s always nice if you can hit up family for a loan. If it isn’t too embarrassing for you, and doesn’t create hardship for them, then I’d certainly go that route if it’s available. You sure aren’t going to get better terms on a loan from a bank, as the relative isn’t likely to charge you interest at all. Now, be realistic. Just because you feel certain relatives may be well off it still doesn’t mean they have thousands of dollars sitting around that they aren’t using. So approach the topic carefully to avoid embarrassing either yourself or anyone else. But if you do have relations you feel like you can ask, I’d certainly go for it.Now, if you’ve still got $2,000 to pay from the year just past I assume it’s still sitting on your balance due to the university? God, don’t do that anymore, or at least look into it closely. Here at U of T the interest they charge on unpaid balance is 1.5% compounded monthly. That’s almost 20% per year – or worse than your average credit card. Compare that to the prime lending rate I referenced earlier. On a $2,000 balance, over one year, that can make the difference of several hundred dollars. We’re talking real money. So once you secure a private line of credit from a bank (assuming you do) don’t ever carry a balance with the university again. Move it immediately to less expensive credit. That, or pay it off immediately with help from a relative, rather than leave it there throughout the year.Debt sucks. Remember that private debt won’t come with interest-free status or relief after school, so try to keep it to a minimum. But certainly use it where you need to. Hope that helps.—-As noted, questions are welcome. Even the ones I don’t post will still receive answers, and where I do use them here I’ll remove identifying information.
