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The Progressive Economics Forum

Do High Tuition Fees Make for Good Public Policy?

This afternoon I gave a presentation to Professor Ted Jackson’s graduate seminar course on higher education, taught in Carleton University’s School of Public Policy and Administration.  The link to my slide deck, titled “The Political Economy of Post-Secondary Education in Canada,” can be found here.

Points I raised in the presentation include the following:

-Tuition fees have been rising in Canada for roughly the past three decades.  Yet, individuals in the 25-44 age demographic have the highest levels of household debt in Canada.  This raises an important question: Is it good public policy to be saddling this demographic with more debt?

-Post-secondary participation has increased quite significantly in the past half century.  Yet, not all groups participate in post-secondary education (PSE) to the same extent.  For example, in Ontario, students from low-income households, students who are Aboriginal, students with disabilities and students from families with no prior history of PSE participation participate at significantly lower rates than the rest of the population.  This raises another key question: to what extent do high tuition fees exacerbate these gaps?

-In the aggregate, the ‘return on investment’ from PSE is favourable to students.  But, again, not all people fare equally well.  Some people appear to derive no return on investment at all from PSE; but (virtually) all students have to pay  high tuition fees up front.  This raises yet another question: how fair is it to make all students pay high tuition fees up front if they are not all going to gain financially from the investment?

-Over the past decade, there has been a significant rise in enrollment from international students at Canadian universities.  This is especially the case for students coming from China and India.  I believe that the major reason for this increase stems from the considerably higher tuition fees paid by international students at most Canadian universities.  This raises more questions: Are Canadian universities exploiting vulnerable students from the Global South?  If yes, would there, in effect, be less exploitation if these students paid lower tuition fees?

Research looking at the British Columbia context (done by Iglika Ivanova) suggests that, as a group, university students more than ‘pay back’ to the public treasury the cost of their university education through taxation after graduation (in part because university graduates are more inclined to be employed and be paying more taxes than others).  This raises (yes) more questions: If, as a group, university graduates more than ‘pay back’ the cost of their university education to the public treasury through taxation, why should they also pay up front via high tuition fees?  Isn’t this, in effect, a form of ‘double taxation?’


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Comment from Joseph Savon
Time: February 6, 2014, 9:22 pm

“I believe that the major reason for this increase stems from the considerably higher tuition fees paid by international students” So a Canadian degree is a Veblen good?

Comment from Anonymous
Time: February 10, 2014, 8:28 am

When I went to an Ontario university as an international student a long time ago there were rumours that the low fees allowed marginally qualified students to attend university for a “party year” after which they would drop out. Higher fees were supposed to reduce this practice which was considered a cost to the taxpayer. Decades later as a Canadian citizen I believe that the lower fees that I would have paid made me less attractive to the universities I applied to and did not get into. I believe that keeping out Canadians is also a cost to the taxpayer but some taxpayers don’t want to pay taxes so ……..

Comment from Espoir Manirambona
Time: February 15, 2014, 4:55 pm

Post-secondary education should be free.

Comment from Ridha
Time: February 15, 2014, 6:19 pm

Interesting article , when I reflect on the reason of contagious higher fees paid by international students on domestic students and how some domestic students may have felt less attractive ( as commented by Anonymous) and by the same token ‘ the pay back’ which is equivalent to return on investment for public policy makers. This is clearly a wakeup call to our public policy to take a step back and review the tuition fees hike. Higher education should not be measured by which fees are more attractive, since many international students will return to their home countries while domestic students will remain in Canada to contribute and pay back. That being said, I suggest, as is the case in many international settings, any university student upon graduation who end up working in Canada for certain period of time (say between 3-5 years) should be waived all debts incurred from the cost of their university education, this is evidenced in a study by Iglika Ivanova who posit that “university students more than ‘pay back’ to the public treasury the cost of their university education through taxation after graduation”. This is again not a far-fetched dream as similar approach is implemented here in Canada with certain health sector professionals ( doctors) who starts a practice in far remote or in regions where physicians are in high demand see the link below
In the aggregate, public policy should serve the interest of the general public over a long range rather than for the immediate mandate/ term of a political group to solicit the favor of taxpayers since graduate students are also potential high taxpayers and the leaders of tomorrow.

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