16 July 2013

Learn Now. Pay Later. #nlpoli

A college or university education has an undeniable value both to the student and to the society as a whole.

But should either party bear a disproportionate share of the cost of the education? 

Of course not.  The challenge for policy makers in the provincial government and at the university and the colleges in the province is how to strike a balance between the two. The one that’s been in place for the past decade works extremely well for students whose representatives  – not surprisingly – are pushing for an even sweeter and sweeter deal regardless of the financial implications to the university and the provincial government. 

Free tuition is fundamentally unworkable.  There’s no reason to believe that free tuition would improve participation rates,  successful completion rates, or any other desirable outcome for society.  By the same token, forcing students to bear the full cost of tuition up front would likely serve as a powerful deterrent since few individuals and families could afford the hundreds of thousands of dollars post-secondary education costs these days.

There might be an alternative.

The Oregon state legislature recently passed a public bill that directs the state’s Higher Education Coordinating Commission to look at a model of funding that would see students pay back the cost of their education through a payroll deduction or tax over the course of the working lives.

The “pay-it-forward” system – as proponents call it – would commitment students to pay the state three percent of their income annually for up to 24 years.  The Oregon approach is based on a system that’s been in place in Australia since 1989 as a way of funding higher education. 

The most obvious benefit of the system is that it ties repayment to future income, thereby more closely reflecting the cost of a post-secondary education. People who earn more, pay more.  They also pay it back when they are working, rather than rack up massive debt at the front end of their lives with relatively high interests applying as well.  Linking the payments back to the education system also builds stability into university and college funding.

This may not be the magic solution,  but the Australian/Oregon approach might be an innovative way to fund the province’s post-secondary system in the future.