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Bank Economist Proposes Higher Tuition Fees

A article posted last night discusses a recent report on post-secondary education in Nova Scotia.  The report itself, released yesterday, was written by BMO’s former Chief Economist, Tim O’Neill. 

According to the article, O’Neill’s report calls for “complete deregulation of tuition fees” in Nova Scotia.  Moreover:

He believes that higher tuitions are more equitable because they force students, who are disproportionately from the upper strata, to bear a greater burden of the university cost. Under the current system, he argues, these students are subsidized by poorer taxpayers whose children do not attend university.

(O’Neill appears to be under the impression that Canada does not have a progressive taxation system.)

According to the article, O’Neill also argues that some of the increased revenue resulting from higher tuition under his plan should then be allocated towards financial assistance to low-income students. 

(I have blogged about the shortcomings of such targeted measures before.)

Also noteworthy, the article quotes Nova Scotia’s NDP premier, in response to the report’s recommendations, as saying that “everything is on the table.” 

I would like to note that, since the 1970s, university operating revenue from government grants has decreased very substantially in Canada.  Moreover, in the past two decades, the ratio of full-time students to full-time faculty in Canada has increased significantly for both colleges and universities.  In light of these developments, it isn’t clear to me why more “experts” don’t point the finger at senior levels of government and recommend increased funding, rather than pick on students.

UPDATE – A great op-ed written by the president of the Association of Nova Scotia University Teachers was published in the Chronicle Herald on October 1.

Enjoy and share:


Comment from Travis Fast
Time: September 19, 2010, 10:17 am

I wonder which private institutions stand to gain the most from the provision of deregulated tuition fees?

We need to start a campaign to get student loans (re)treated as any other loans vis-a-vis bankruptcy legislation. As it stands student loan debt is not eligible until 10 years after it issuance.

Comment from Iglika Ivanova
Time: September 20, 2010, 11:25 am

This kind of logic — the lower-income families don’t send their kids to university so we should just charge more — completely misses the point. If people with the right skills are not getting higher education because of their low socioeconomic background, then Canada is not making the optimal education investment.

There are social benefits to education above and beyond the private benefits of higher salaries that graduates can expect. There is also considerable uncertainty about individual outcomes, which may affect the investment decision of students. There are credit constraints. All of these are potential market failures and constitute good reasons for government to get involved in higher education.

Subsidizing tuition is one important contribution governments can make, but there are other interventions needed if we are to take full advantage of Canada’s people potential. Like investing in early learning for all kids.

Comment from Travis Fast
Time: September 20, 2010, 1:25 pm

I am still trying to figure out how you can target low income post secondary students. By definition students have low incomes. And I am also trying to figure out how young adults from rich homes can force their parents to fund their education? After the age of majority parents have no legal obligation to take care of their off-spring. BC tried means tested student loans and parents just wrote letters saying they refused to support their children. No upper middle class parents are probably smart enough to write such a letter in order to allow their offspring to access targeted subsdidies.

Comment from Purple Library Guy
Time: September 20, 2010, 7:53 pm

Funny how up until recently, the game was to swear up and down that high tuitions were *not* restricting the ability of lower income would-be students to access university. Now they do, but rather than lower the fees apparently we’re supposed to accept class-divided access and accentuate it . . . in the name of making the rich pay! That’s some pretty bare-faced gall.
Also pretty bare-faced gall in admitting that high tuition fees block access for lower-income students, but to be confident that the stenographic press won’t ask whether even higher ones shouldn’t be expected to make the problem worse. It’s amazing what can pass for an argument when the prevailing atmosphere says you never question what rich people tell us.

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