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The Progressive Economics Forum

Ontario Student Debt

Last week, the CCPA released a paper by David Macdonald and Erika Shaker entitled Under Pressure: The Impact of Rising Tuition Fees on Ontario Families.

The paper does a good job of explaining which households have been most impacted by rising tuition fees in Ontario. Points made in the paper include the following:

-In light of rising levels of household debt, Canadian households are not in the same position to take on new debt today as they were 20 years ago.

-There has been growing income inequality over the past 20 years. Ontario households in the top quintile especially have clearly pulled away from the rest of the pack (even when one considers after-tax income).

-Undergraduate tuition fees in Ontario are now the highest in Canada. In 1990, the average university student in Ontario paid approximately $2,500 in tuition fees (in 2011 dollars). This fall, the figure will be roughly $6,500 (also in 2o11 dollars).

-A “middle income” Ontario family with a household member who graduated from university in 1990 had to dedicate about three months of their after-tax income to pay for the tuition fees. The equivalent for a household member graduating in 2011 would be more than six months. (For households in the lowest quintile, it was nine months in 1990 and would be almost two years today).

-The authors also offer calculations for what they term the “full education burden.” This calculation, in addition to including tuition, includes textbooks, tax breaks, living expenses and rent. In 1990, it would have taken 981 days for a household in the lowest quintile to pay “the full education burden” of a university degree (if they were to put all other household expenses on hold for that period). That figure has since risen to 1,268 days. But for households in the highest quintile, the figure has increased from just 135 days to 137 days!

-The authors provide some interesting figures in terms of the affordability of professional degrees. For example, in 1990, it took a household from the lowest quintile 286 days to pay tuition fees for a dentistry degree (again, if they were to dedicate every after-tax cent earned towards the tuition and ancillary fees, and put all other payments–such as food, rent and utilities–on hold). Today, it would take that same household 2,410 days to pay for a dentistry degree.

I believe the paper makes an important contribution to the debate around post-secondary education in Ontario, especially with a provincial election on the horizon.

Enjoy and share:

Comments

Comment from JR
Time: September 4, 2011, 2:13 am

I appreciated reading your brief summary of the CCPA paper. The key points of rising levels of household debt, increasing income inequality, full education burden and affordability do hit home.

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