All Posts Tagged With: "Educational Policy Institute"
Student summer employment slumps
For students 20 to 24, unemployment hits 14 per cent, the highest rate since 1997
In this story, published today, The Globe and Mail’s Elizabeth Church has some great anecdotes about students who are struggling in summer 2009′s tough job market.
Her article is timely, considering two studies that were recently released.
In Statistics Canada’s latest labour force survey, the agency found that compared with June 2008, employment was down 43,000 for students aged 20 to 24 in June 2009. That means their unemployment jumped 4.8 percentage points to 14 per cent, which is the highest June unemployment rate for these students since 1997.
StatsCan also found that the labour market for 17 to 19-year-old students is slumping. Employment for this age group was down 50,000 between June of 2008 and 2009. That brings their unemployment rate to 18.1 per cent, the highest since June 1998.
In another report released last February, the Educational Policy Institute predicted rising youth unemployment will add more than 105,000 new borrowers to the Canada Student Loan Program in the next three years. The study found that a one per cent rise in youth unemployment increases the demand for student loans by about six per cent.
For more from this story, click here. For Jobless? No, I’m funemployed click here.
Tuition fee increase debate continues
“Nobody has any idea how student aid works,” says post-secondary expert
Alex Usher, who raised a stir this week by suggesting that tuition fee increases are an acceptable means of raising additional funds for institutions hard hit by the economic downturn, has responded to his detractors in the Educational Policy Institute’s Week in Review.
Those with an interest in tuition fee and student financial aid policy should read the whole piece, but the two following passages are particularly well done and are central to Usher’s argument:
“Apparently, no amount of empirical, scientific findings about the determinants of access will change the debate about tuition fees. Over the last ten years, a lot of time, money and effort has gone into trying to figure out the effects of finances on access to PSE, and they have been very hard to find. Basically, at current levels of tuition and current levels of student financial aid, the effects of tuition as a barrier to education appear to be tiny or non-existent. I won’t bore you with the econometric data, but consider the weight of experience: BC raised tuition by 55% in two years in 03-05 – more people went to PSE after the cuts than before. Same with the 50-60% increase in tuition in Ontario in the mid-90s. Same with the 130% increase in Quebec in 90-91. As for the question of *who* goes to school – some of the worst results in terms of access from low-income youth come from Newfoundland, where tuition is quite low. Ontario does pretty well in comparison, even though tuition is around double here what it is there. But absolutely none of this matters, apparently. In the public mind, (and that of politicians, apparently), access is always and everywhere about money.
Nobody has any idea how student aid works. Many people evinced genuine concern about the less fortunate in case if a tuition rise. And of course, they’d be right…if we were to ignore the effects of student aid entirely. But the fact is that the less well-off are to a substantial extent protected by student aid. If their need rises, they don’t automatically get more debt; in many cases, grant and remission programs kick in more aid to help them. I think student aid is going to be called on to help an awful lot of new clients in the next few years – and it will be important for everyone who cares about fairness to defend these programs vigorously in the next little while, because I guarantee that the resulting explosion in program costs is going to make politicians eager to start cutting away at them. And if that means sacrificing programs which are more likely to benefit the wealthy, such as tuition tax credit programs, then so be it.”
Former chair of NL college board calls for free tuition
Ex-CEO says province should use Irish model for post-secondary education
Responding the Educational Policy Institute’s recent proposal that colleges and universities increase tuition fees by up to 25 per cent, a former chairperson of the College of the North Atlantic Board of Governors is instead calling for the implementation of free tuition in Newfoundland and Labrador following the model used for post-secondary education in Ireland.
Vince Withers, former President and CEO of NewTel Communications (now part of Bell Aliant) and an honorary graduand of Memorial University, told a St. John’s talk radio show that he “can’t understand why anyone would call for a dramatic increase in tuition fees”. Withers went on to say that he doesn’t believe that Premier Danny Williams will consider lifting the province’s fee freeze, which has been in place for over a decade.
Education think tank calls for tuition hike
Despite middle-class backlash, group says move is necessary to preserve quality of education
On the heels of the release of the 2008 Survey on Canadian Attitudes toward Learning, which suggests that Canadians are concerned about the existing costs of post-secondary education, the Educational Policy Institute has released a report advocating that provincial governments allow post-secondary institutions to increase tuition further in order to offset declining revenues. From The Toronto Star:
Dramatic tuition hikes must be part of a recession survival plan for Canada’s ivory tower, warns an education think tank.
Colleges and universities must consider charging more, despite a middle-class backlash, if they hope to avoid diluting the quality of education during the economic crisis, says the report by the non-profit Educational Policy Institute.
The report predicts fee hikes of up to 25 per cent in the next couple of years – in line with increases during the last recession – which would generate $1 billion to $2 billion for recession-hit campuses.
The full text of the EPI report can be downloaded here in .pdf format.
Overview of federal/provincial tax credits and rebates
Depressed by the price of university? These programs can help lighten your debt
Tax credits from the Government of Canada
Tuition tax credit: $400/month for full-time students, $120/month for part-time students.
Textbook and technology credit:$65/month for full-time students, $20/month for part-time students
Tax credits from provincial governments
Alberta and Ontario: $460/month per student
Manitoba and Saskatchewan: $400/month per student
All other provinces: $200/month per student
Tax rebates from provincial governments
Manitoba: Introduced in 2007, the “Manitoba Tuition Fee Income Tax Rebate” provides post-secondary graduates with a 60 per cent income tax rebate on their eligible tuition fees. The rebate can be claimed over a period of 6 to 20 years by any graduates who have completed studies at a post-secondary education institution after January 1, 2007 and now work and pay taxes in Manitoba.
New Brunswick: The “Tuition Tax Cash Back Credit”provides graduates from an eligible post-secondary institution, who live, work and pay provincial personal income tax, eligibility for a non-taxable rebate of 50 percent of their tuition costs to a maximum of $2,000 per annum (maximum lifetime rebate of $10,000). The graduate has 20 years to utilize the tax credit.
Nova Scotia: The “Graduate Tax Credit” is available to anyone living and working in Nova Scotia who graduated from an eligible post-secondary program on or after January 1, 2006. The Tax Credit is only accessible by application and can reduce the provincial portion of income tax by $1,000 for a single year (unused portions can be carried forward for up to two years). In 2008, the credit has been expanded to $2,000.
Saskatchewan: Introduced in 2007, the “Saskatchewan Graduate Tax Exemption” replaced the Graduate Tax Credit (whose value was increased in 2004 from $350 to $500 with a target of $1,000 by 2007) allows graduates of any recognized post-secondary institution to be exempt from provincial income tax for $10,000 per year, or $50,000 during the first five years following graduation. The exemption is likely to result in annual tax savings for a graduate of $1,100 or $5,500 over five years.
Rising tuition? It’s a myth
New study says the real cost of university is falling. One province is even paying its students
On Nov. 5, the streets of downtown Ottawa were flooded with angry students frantically waving red-and-black “Drop Fees” signs. Nationwide, thousands rallied, demanding protection from what everyone knows are skyrocketing tuition fees. This is probably the image that springs to mind when you think about the price of a university education in Canada: students protesting, and tuition fees that just keep going higher and higher.
But according to a new report by Canada’s only higher education think tank, the cost of a university education for the average Canadian is actually going down: when inflation and a growing list of federal and provincial tax breaks are taken into account, a degree is now slightly cheaper than at the turn of the century. The real cost of an education has fallen in most provinces. In Manitoba, real tuition costs are down more than 100 per cent in the last eight years—which means that the average student in that province is effectively being paid $51 a month to go to school.
These surprising findings come from a recent report from the Educational Policy Institute (EPI). Alex Usher, director of the Canadian arm of the international think tank and the study’s co-author, says the commonly held view that university is becoming unaffordable is just plain wrong. “By any reasonable measure, education is a lot more affordable now here than it was 10 years ago,” says Usher.
More: Overview of federal/provincial tax credits and rebates
Tuition and related fees have been steadily rising in most provinces. But according to, “Beyond the Sticker Shock 2008–A Closer Look at Canadian Tuition Fees,” the tuition sticker price is not the real measure of the cost of university. Governments are offering a growing list of tax credits and rebates, targeted at students, which greatly reduce the real cost of university. It’s as if you walked into a car dealership and saw that the sticker price of a car was $20,000—but were also told all buyers would receive a $5,000 rebate. The real cost of the car would be $15,000, not $20,000.
That’s what’s been going with Canadian university costs: sticker prices are going up, but student tax credits and rebates are increasing, too. “Since 1999-2000, these credits have completely offset out the effects of any increases in tuitions,” says the report. “[Tuition] is no higher now than it was eight years ago.”
In order to accurately measure real tuition costs, Usher and EPI created a measure that takes into account inflation, as well as the growing amount of tax relief offered to students, calling the resulting number “Everybody’s Net Tuition”. Over the past few years, governments have introduced a number of large tax breaks targeted at higher education students. For example, for every month that they are enrolled, full-time students can claim a $400 tax credit from the federal government; part-time students can claim $120 per month. The textbook and technology tax credit, introduced in 2006, gives $65 off a month to full-time students and $20 a month to part-timers. Usher says taking such tax benefits into consideration and subtracting them from average tuition gives a more accurate picture of what university actually costs.
Value of Available Tax Credits per Full-Time University Student (click on charts to enlarge)
National PSE strategy? Don’t hold your breath
PSE folks have been calling for national direction but Harper’s latest moves suggest it’s not on the radar
You wouldn’t know it from listening to Canada’s amnesiac higher education sector but, perhaps the biggest story regarding post-secondary policy to come out of last week’s federal budget was what wasn’t said.
Think back to last spring when Finance Minister Jim Flaherty announced an additional $800 million for the Canada Social Transfer with the caveat that it would be cordoned off for higher education. A one-time billion dollar transfer for post-secondary infrastructure was also announced. Or, put another way, the PSE sector’s Holy Grail.
Related story: Chained – Without leadership from education ministers, Canada lacks national direction
Details on what conditions might accompany the new money, we were promised, would be given later, presumably at the next budget. Well the next budget has come and gone (thanks to the Liberal party) and still no details on whether Ottawa will require the provinces to actually spend the money on education, as opposed to, say, roads and sewers.
This should have education advocates up in arms. Calls for a national strategy on higher education have been coming from the sector for years. Suggested initiatives have ranged from some sort of framework to define what constitutes spending on higher education, to enshrining educational standards from coast to coast, to the creation of a federal ministry of education. Canada is the only developed country to have no national education portfolio.
However, aside from a few assorted foot stomps decrying the absence of a coherent Canada-wide vision, the Educational Policy Institute was, evidently, the only group to acknowledge the omission: “suggesting that despite the fanfare that surrounded the creation of a PSE ‘transfer,’ the federal government actually considers this money to be an unrestricted transfer to the provinces.”
Even the Canadian Federation of Students, which issued four media releases on the budget was silent on this issue, despite long calling for a framework to make sure provincial transfer payments are actually being spent on education.
In any event, the lack of an overarching national plan for post-secondary policy, I would argue, is precisely how the federal government wants it. As a professor of PSE told me in an interview in the fall, “Stephen Harper doesn’t do social policy.” Nope, that is the responsibility of the provinces.
The scrapping of the Millennium Scholarship Foundation is also suggestive of this. Constitutional purists have long found the Fund offensive, not because of its perceived lack of accountability, or its alleged ineffectiveness, but because it is seen as an unnecessary intrusion into provincial responsibilities.
Those wedded to a more classical approach to federalism have argued that the money should have been transferred through adjustments to the equalization scheme, or, failing that, through the Canada Student Loans framework, which is what the Tories have opted to do.
True, the Student Loans program is often considered intrusive in its own right, but it is seen, by those who sleep with the BNA Act under their pillow, as the preferable (if imperfect) way to give grants to students, partly because it is an established program, and partly because banking falls within the powers of the federal government.
Of course this is nothing new. Stephen Harper’s goal of “clarifying” the division of powers and promoting a compartmentalized vision of federalism is widely acknowledged. Earlier this week Tom Flanagan, Harper’s mentor and former chief of staff, proudly announced that the government is well on its way to “re-engineering” the country.
Flanagan argued that because of cuts to the GST, to income and corporate taxes, and the end of massive surpluses, that the federal government is now “boxed in.” The provinces theoretically have more money due to modifications to equalization made last year, and if premiers want to invest more in social programs, they have more tax room to move into. Or so the argument goes.
If withdrawing further from PSE policy indicates affirming provincial responsibilities, the promise in last October’s throne speech to use Ottawa’s trade and commerce power to demolish interprovincial trade barriers is an affirmation of federal power. Classical federalism envisions a national government solely responsible for creating an economic space, with subnational governments tailoring social policy to their specific communities.
While such developments may be attributable to the Harper government, they reflect an ebb back to the constitutional division of powers that has been going on since at least the mid-1980s when the National Energy Program ended. And, as political scientist David Cameron argued in a 2001 paper, higher education serves as a pretty good barometer of the state of federalism in Canada.
In fact, PSE, especially in the past 20 years, resembles something close to exactly what constitutional purists have been calling for in the country more generally. Ottawa largely limits involvement to spending on research, which is justified (most agree rightly so) under the trade and commerce power, and transfer payments for education come void of even the whiff of conditionality (have been for decades).
What’s more, the consequences are pretty close to what would be predicted. Provincial systems are tailored to local preferences, be it through B.C.’s convoluted patchwork of universities, university colleges and degree granting community colleges, Ontario’s coterie of private institutions, or Quebec’s obscenely low tuition fees.
Now, whether or not the rest of the country will look like this when the Harper government is through remains to be seen. As is, if it is even possible (hello Canada Health Act). Or, perhaps, more importantly, if it is desirable.
What is certain, however, is that a national strategy on post-secondary education is as far away as it has ever been.
Victory!
Is giving more students less money really a success?
Many groups in the know are applauding (some more cautiously than others) yesterday’s announcement to replace the Millennium Scholarship Foundation with a government-run grant program. But many questions remain and the changes will lead to some casualties that have been overlooked so far.
As previously reported, Finance Minister Jim Flaherty confirmed the death sentence that has been hanging over the head of the Millennium Scholarship Foundation (MSF) when unveiling plans for a new grant system in the 2008 budget. The MSF’s $350 million annual budget along with the $138 million currently distributed through Canada Access and Study Grants will be rolled together into one big national grant program to be administered by the Canada Student Loan Program.
Although the Liberals are painting the move as a simple rebranding, the end of MSF will certainly change the landscape of student financial aid in Canada—if not only for the seemingly positive changes (the transparency of being a government program) but also for the smaller functions of the Foundation that have been quietly left out.
The Canadian Alliance of Student Associations (the Canadian Federation of Students’ rival) was quick to point out that the Foundation was not only about delivering grants, but also about research. “The Foundation was the only group that was doing research on access issues. Looking at Aboriginal students, low income students, and first generation students,” said Zack Churchill, CASA national director. “We haven’t seen any indication from the government that the federal research will be picked up.”
And while Churchill’s critics might argue that we have, say, StatsCan for post-secondary research, the Foundation’s unique approach to research will surely be missed.
Alex Usher, vice president and director (Canada) of the Educational Policy Institute, said that the government program will likely focus only on financial aid research. “There will nobody speaking for access anymore in terms of research,” he said.
Another Foundation program that was not mentioned in the budget was its merit-based scholarships. MSF awarded $12.6 million in scholarships annually. The scholarships were unique in that they took community involvement into account as well as marks.
Franca Gucciardi, executive director of the Canadian Merit Scholarship Foundation, said that this program was very important in terms of supporting talent and leadership. “As Canadians, we’re good at need, but not as good at merit,” she said.
Although the budget included a new and prestigious merit-based scholarship program for doctoral students, it doesn’t replace merit-based support for undergraduate students. “You don’t get to do your PhD unless someone supports you to do your bachelors,” Gucciardi said.
Although the Educational Policy Institute said the changes were largely a good news story, it found a couple of major holes in the proposed program. The potentially costliest problem is whether independent students are eligible for the grants. As it stands, it appears that independent students (those out of high school for long enough that they are not required to include their parent’s income when applying for grants and loans) will be able to apply.
Because the grants will be based on family income rather than need (costs minus resources), almost every independent student who applies will be eligible because their income will fall below the line. There may be as many as 500,000 independent students currently enrolled in Canada. But the budget for the new grant program only aims to provide funding to 240,000 students. Whoops! This could make the program cost well over $1 billion.
Usher also pointed out that at least two Canada Study Grants seem to be missing from the mix: funding for students with dependents, and female doctoral students. From the Educational Policy Institute’s discussions with Canada Student Loan officials so far, it appears that the $70 million in grants for students with dependents has been rolled into the new grant money. Officials did confirm that grants for students with disabilities will continue to be awarded.
One thing that everyone seems to agree on is that basing the grants on income instead of need is a positive step. The Foundation’s grants were awarded according to the amount of money needed for the student’s educational program minus the student’s resources. Basically, if two students had exactly the same family income, but one chose to go to an expensive university and move away from home and the other chose to attend their community college and live with their parents, the first student would receive more grant money. It meant that students were being rewarded for making more expensive choices.
The new system will not take into consideration the costs of education, but only the family income of the student. The indirect result will be that more money will flow to college students in comparison to university students.
So although student groups can breathe a sigh of relief that the existing money going into grants in Canada won’t be axed along with the Canadian Millennium Scholarship Foundation, they should probably crunch the numbers before declaring victory (as the CFS did oh so quickly). MSF distributed an average of $2000 to 120,000 students each year. The new program plans to hand out grants to 245,000 students next year, but with no new money. So the individual student recipients will be getting less cash. Victory?
Budget 2008: Good works
Maclean’s columnist Paul Wells on changes to student aid in Canada
From Alex Usher at the indispensable Educational Policy Institute, a grown-up assessment of the student-aid provisions in yesterday’s federal budget. Alex demonstrates real design flaws that should be fixed before the Canada Student Grants are implemented. But a few things are clearer today than they were last night.
• Jean Chrétien’s Year 2000 bauble, the Canada Millennium Scholarships — designed to last a decade and scheduled to run out next year — will not leave a vacuum behind when they disappear. Despite major design flaws, the Millennium Scholarships were appreciated by student groups who worried mightily about their disappearance. (OK, try not to notice that only 621 people signed the CASA petition. Work with me here a bit.) And in retrospect, as millennium projects go — remember when everyone thought they needed a millennium project? Strange days — a massive investment in human capital did make a lot more sense than, say, a dome.
• Unlike the Chrétien-Martin formula of a one-time allocation to a “foundation” that is designed to be spent down to zero — and to produce a funding crisis in its last year — the Canada Student Grants are part of regular annual program spending. This means they are permanent, at least insofar as, like any other program, the only way to get rid of them is to shut down the budget line, which will get noticed if it ever happens. And the total amount in the grant program is budgeted, in the first few years, to increase every year, not to hold at a steady-state of about $350 million.
• The new grants reach massively more students than the Millennium Scholarships did, though they do it by giving each recipient less money. Whether you like that will depend on whether you would have qualified for one of the old awards. But the new grants also distribute the money in a different, smarter way: the CSG bursaries will be paid up-front, to keep students from incurring debt at the outset. Millennium scholarship money was typically paid after a student completed her studies, to help pay down debt that had already been incurred.
• The Millennium Scholarships suffered from more than a year of confusion at the outset because nobody could decide whether they were need- or merit-based. Chrétien wanted a substantial merit component. That eventually got sorted out, but the Tories avoid this confusion by launching two discrete programs: the CSG (income-based, which as Usher points out is different from need-based and, if your income is low, better) and the Vanier Canada Graduate Scholarships (scroll down, it’s in here somewhere). At first glance, these looked trivial to me — only 500 a year. But on a population basis, that makes the program comparable in size to the U.S. Fulbright program, and way bigger than the Trudeau Scholars program, which funds about 15 recipients per year. And those comparisons seem apt: the “merit” being rewarded here appears to be top-in-the-world merit, not garden-variety, you-win-if-you-get-an-A merit. Because the Vanier scholarships are international — foreigners can win them to study in Canada, Canadians can win them to help study abroad — they can, over time, constitute a powerful signal that Canadian universities aspire not only to house large student cohorts but, here and there at least, to encourage and welcome genius.
ON-THE-OTHER-HAND UPDATE: It looks like all the new money for the research granting councils is targeted toward specific fields of research. This is silly, and reflects the Harper government’s deep-seated conviction that surprise and individual initiative — whether it comes from the Tory back bench, the press gallery, or a laboratory somewhere — are bad news.
STRATEGY UPDATE: Still, wounded Liberals who don’t like being called chicken may ask, if on balance the budget does good things then why should the Liberals bring the government down?
Short answer: Because since when do Liberals want to be in the business of letting Conservative governments introduce useful budgets? If the opposition were working in its own interests, instead of second-guessing itself into a tailspin, it would already have defeated the Harper government before budget day.
