Affordability of Affordability of Post-Secondary EducationPost-Secondary Education

By: Nick FalvoBy: Nick FalvoPhD Candidate PhD Candidate Public PolicyPublic Policy

Guest Presentation to Guest Presentation to Prof. Ted Jackson’s PADM 5227 Prof. Ted Jackson’s PADM 5227

ClassClass

Feb 9, 2012Feb 9, 2012

Rising Inequality

Canadian ContextCanadian Context

19791979 Gov’t grants covered 80% of Gov’t grants covered 80% of a a university or college’s university or college’s operating operating budgetbudget

20122012 Gov’t grants cover roughly Gov’t grants cover roughly 50% of 50% of a university or college’s a university or college’s operating operating budgetbudget

SourceSource: CFS, 2011.: CFS, 2011.

Rising TuitionRising Tuition In 1990, the average university In 1990, the average university

student in Ontario paid student in Ontario paid approximately $2,500 in tuition fees approximately $2,500 in tuition fees (in 2011 dollars). (in 2011 dollars).

In 2011, the figure was roughly In 2011, the figure was roughly $6,500 (also in 2011 dollars).$6,500 (also in 2011 dollars).

SourceSource: Macdonald and Shaker, 2011.: Macdonald and Shaker, 2011.

Rising Inequality Meets Rising Rising Inequality Meets Rising TuitionTuition

A “middle income” Ontario family with a A “middle income” Ontario family with a household member who graduated from household member who graduated from university in 1990 had to dedicate about university in 1990 had to dedicate about three months of their after-tax income to three months of their after-tax income to pay for the tuition fees. pay for the tuition fees.

Today: More than six months.Today: More than six months.

SourceSource: Macdonald and Shaker, 2011: Macdonald and Shaker, 2011

Rising Inequality Meets Rising Inequality Meets Rising Tuition (cont’d)Rising Tuition (cont’d)

For households in the lowest quintile, For households in the lowest quintile, it was nine months in 1990 and it was nine months in 1990 and would be almost two years today.would be almost two years today.

SourceSource: Macdonald and Shaker, 2011.: Macdonald and Shaker, 2011.

Yet, More Young People Enroll Yet, More Young People Enroll Today Than Ever Before…Today Than Ever Before…

University and College Participation Rates (Ontario)University and College Participation Rates (Ontario)

Enrolment as share of population aged 18-24Enrolment as share of population aged 18-24

Less Funding, More Less Funding, More StudentsStudents

Between 1985-1986 and 2007-2008, Between 1985-1986 and 2007-2008, annual federal cash transfers to Ontario annual federal cash transfers to Ontario for PSE (in constant 2007 dollars) for PSE (in constant 2007 dollars) ↓↓d from d from $1.4 billion to $1 billion. $1.4 billion to $1 billion.

During that same period, PSE enrolment in During that same period, PSE enrolment in Ontario increased by more than 60%.Ontario increased by more than 60%.

SourceSource: Clark et al, 2009: Clark et al, 2009

Class Sizes Getting BiggerClass Sizes Getting Bigger

The ratio of FTE students per full-time The ratio of FTE students per full-time faculty member at Ontario universities faculty member at Ontario universities ↑↑d d by 47% b/w 1987-1988 and 2007-2008. by 47% b/w 1987-1988 and 2007-2008.

During that same period, FTE enrolments During that same period, FTE enrolments per full-time academic staff at Ontario’s per full-time academic staff at Ontario’s community colleges almost doubled.community colleges almost doubled.

SourceSource: Clark et al, 2009: Clark et al, 2009

%age of Canadian University Students %age of Canadian University Students Who Work During the Academic YearWho Work During the Academic Year

19761976 25%25%

20082008 50%50%

SourceSource: CFS, 2011: CFS, 2011

Student Debt RisingStudent Debt Rising

For a four-year degree in Ontario, For a four-year degree in Ontario, student debt has risen by 175% in student debt has risen by 175% in the past 15 years.the past 15 years.

SourceSource: CFS-Ontario: CFS-Ontario

And Then There Was And Then There Was Quebec…Quebec…

Among the lowest tuition fees in Among the lowest tuition fees in CanadaCanada

PSE participation in Quebec is 9% PSE participation in Quebec is 9% higher than in the rest of Canadahigher than in the rest of Canada

SourceSource: Martin and Tremblay-Pepin, 2011: Martin and Tremblay-Pepin, 2011

Comparing Student DebtComparing Student Debt

Average of debt for students enrolled Average of debt for students enrolled in their final year of a bachelor’s in their final year of a bachelor’s degree program who took out degree program who took out student loans is:student loans is:

Quebec: $15,000Quebec: $15,000

Ontario: $26,000 Ontario: $26,000 SourceSource: Martin and Tremblay-Pepin, 2011: Martin and Tremblay-Pepin, 2011

Canada’s Best-Kept PSE Canada’s Best-Kept PSE Secret: Newfoundland and Secret: Newfoundland and

LabradorLabrador Since 2003, N&L gov’t has Since 2003, N&L gov’t has ↑↑d funding for d funding for

PSE by 82%.PSE by 82%.

Average tuition fees for domestic students Average tuition fees for domestic students in N&L are now $2,600/yr, which is half the in N&L are now $2,600/yr, which is half the Canadian average.Canadian average.

SourceSource: Dunne and Falvo, 2011: Dunne and Falvo, 2011

Newfoundland and Labrador Newfoundland and Labrador (cont’d)(cont’d)

Enrolment in N&L’s only university and Enrolment in N&L’s only university and only community college by students from only community college by students from the other three Atlantic provinces the other three Atlantic provinces ↑↑d more d more than tenfold between 2001 and 2008. than tenfold between 2001 and 2008.

Since the late 1990s, # of people in N&L Since the late 1990s, # of people in N&L with student debt has with student debt has ↓↓d from 20,000 to d from 20,000 to roughly 8,000.roughly 8,000.

SourceSource: Dunne and Falvo, 2011: Dunne and Falvo, 2011

Concluding ThoughtsConcluding Thoughts

Across Canada, far more young Across Canada, far more young people enroll in PSE today than ever people enroll in PSE today than ever before.before.

Senior levels of government are Senior levels of government are paying substantially less per student paying substantially less per student than 30 years ago.than 30 years ago.

Concluding Thoughts Concluding Thoughts (cont’d)(cont’d)

Rising inequalityRising inequality—combined with —combined with rising tuition—rising tuition—is wedging households is wedging households apart in terms of PSE affordabilityapart in terms of PSE affordability

Compared to 20 years ago, top-Compared to 20 years ago, top-earning households see little earning households see little difference in terms of financial difference in terms of financial burden. Not so for other households burden. Not so for other households (i.e. the 99%).(i.e. the 99%).

Concluding Thoughts Concluding Thoughts (cont’d)(cont’d)

Many students cope by taking on Many students cope by taking on substantially more gainful substantially more gainful employment and student debt than employment and student debt than in the past.in the past.

These ‘coping strategies’ run the risk These ‘coping strategies’ run the risk of creating further wedges b/w rich of creating further wedges b/w rich and poor.and poor.

Concluding Thoughts Concluding Thoughts (cont’d)(cont’d)

Judging from rising student-faculty Judging from rising student-faculty ratios, it is fair to say that students ratios, it is fair to say that students today get less attention from tenured today get less attention from tenured faculty than in the past.faculty than in the past.

Concluding Thoughts Concluding Thoughts (cont’d)(cont’d)

Both Quebec and Newfoundland and Both Quebec and Newfoundland and Labrador have kept tuition fees Labrador have kept tuition fees considerably lower than in the rest of considerably lower than in the rest of Canada. Canada.

Though association doesn’t imply Though association doesn’t imply causality, both provinces have causality, both provinces have experienced high participation rates and experienced high participation rates and low levels of student debt.low levels of student debt.

Thank YouThank You

Contact InfoContact Info

Nick FalvoNick Falvo

PhD Candidate (Public Policy)PhD Candidate (Public Policy)

Carleton UniversityCarleton University

E-mail: nfalvo@connect.carleton.caE-mail: nfalvo@connect.carleton.ca