08 July 2013

Some inconvenient truths: goring some educational sacred cows #nlpoli

Friday turned out to be Post-Secondary Education Day with a post here on the impact of the freeze on tuition fees and a fascinating Telegram article on the Conservatives’ 2011 campaign pledge to replace student loans with needs-based grants.

Tuition was a bit of an issue in the 2011 provincial general election.  The Tory pledge is basically a variation on the New Democrat campaign platform plank in the same election to make wipe out tuition altogether. 

Supporters of the low or free tuition argument claim that by charging a tuition fee at all, “we are basically discriminating against poor people and the middle class.”  The Canadian Federation of Students likes the current tuition freeze and is loving up the idea of grants that would make tuition even cheaper or free.

The local rep commented in the Friday story in the Telegram that the current system “is the envy of people across the country.”


Provincial Liberal Andrew Parsons chimed in with a variation on the same line in the Friday story.  According to Parsons, he hoped the Conservatives would deliver their promise.  After all, if “we have more people availing of education and making it more accessible, then there’s got to be positives down the road when it comes to people getting out into the workforce.

That workforce argument turned up in another place, what the title of the post calls a “rebuttal” to the Friday post here over at the OccupyNL site.  Rebuttal is in quotes there because it really isn’t a rebuttal of the argument in the post or in previous posts.  Instead it talks about what the post supposedly “strongly implies.  There are lots of logical problems with the post commentary as well, which we will get to on Tuesday.

Rather than talk about what the Friday post implied, let’s start by recounting what it was about.  It’s one of the two arguments SRBP has made against the the current situation or any policy suggestion that would lower fees even more than they are.

Follow the money:  The free tuition/frozen tuition argument is causing a significant, negative financial impact on the university.  Frozen tuition robs the university of a source of cash.  The provincial government subsidy doesn’t make up the difference.  As a result  it seem that the university winds up doing all sorts of things to drag in some extra cash-flow like charging foreign students a higher fees, as CBC noted in early June. 

The Friday Telegram story highlights another aspect of the same problem.   Someone has to pay for the university and the cost of the current policy is only getting worse.

We’ve gone through that one, but it’s been a while since we’ve dealt with the second issue.  Let’s turn to that now.

Follow the benefit

Proponents claim that tuition fees are an obstacle to participation by otherwise deserving people from low and fixed incomes.  

There several good studies that call that conclusion into doubt.

SRBP cited a study by the Frontier Centre for Public Policy in 2011 that found that “young adults in low-tuition provinces were not, on average, more likely to attend university than young adults from high-tuition provinces.”  The study also concluded that there was “no correlation between low tuition levels and high rates of university participation in the specific case of young adults from low-income families. In fact, lower tuition provinces tended to have lower participation rates for low-income families than did high-tuition provinces.”

Of particular relevance to this province, the Centre founds that “low-tuition provinces Newfoundland (30.1 per cent) and Quebec (30.6 per cent) had the very lowest rates of university participation for young adults from low-income families.”

That 2011 study basically confirms the findings of a 2004 study by the Institute Economique De Montreal  that “low tuition fees are not linked to high enrolments”, contrary to what the student organizations and others proposing low or free tuition claim. 

The best that the Occupy NL rebuttal can do to support the argument offered by student organizations is to condemn the Frontier Centre as a right-wing think tank.  That’s telling since the simple correlation of the low-fee proponents is refuted by an equally simple examination of the evidence.  When you can’t cope with the argument, as the saying goes, people resort to the old fallacy of attacking the person or, in this case, the organization. 

Not surprisingly, those two statistical analyses conducted by people able to understand statistics are consistent with the December 2011 report of the Standing Senate Committee on  Social Affairs, Science, and Technology.  The committee did not recommend lower tuition fees because “there is no empirical study showing that a decrease in tuition fees would significantly increase the rate of participation in post-secondary studies.”  What’s more, the committee noted testimony it received that lowering tuition  - wait for it – “would be a counterproductive policy because it would be quite expensive and have very little impact on participation or equity of participation.”

The committee did find – in a penetrating insight into the obvious – that dramatic, sudden hikes in tuition fees would likely reduce current participation rates, overall.  That’s based on a study of deregulation of fees in Ontario professional schools in the 1990s. But overall,  the paper noted studies where marginal or gradual changes in tuition fees produced no significant change in participation rates.  As such, the senate committee suggested that fee increases ought to be predictable in order to allow students to adjust. 
The committee also noted that tuition fees were only one of the financial costs associated with post-secondary education.  They also noted that other factors affected both participation rates and performance.  Again, that’s basically consistent with the Frontier Centre and IEDM studies that looked at – as they noted – one specific factor.

As for the participation rates by students from different income backgrounds, it is interesting to note other testimony before the senate committee from Statistics Canada analyst Marc Frenette.  Students from higher income families are significantly more likely to attend post-secondary educational institutions (university or college) than those from lower income families. 

That’s interesting because it corresponds exactly to the conclusion of a study into a free tuition program the Irish government established in 1996. SRBP previously quoted Kevin Denny of the Institute for Fiscal Studies, who concluded that the “only obvious effect of the policy was to provide a windfall gain to middle-class parents who no longer had to pay fees.”  Another factor that Denny noted as an influence on post-secondary participation   - and achievement at the university and college level - was educational achievement in secondary schools.

As a last point, let’s note the extent of the Newfoundland and Labrador tuition subsidy both in absolute terms and in relative ones.  Students attending Memorial University today are paying roughly the same as students when the tuition freeze started more than a decade ago.  The impact of inflation has functionally reduced the cost of education to them today to about half of what it was initially, in real terms.  Thus, frozen tuition is delivering an even greater relative impact to current students compared to former ones and that’s without considering the different economic situation in the country today versus a decade or so ago.

Subsidizing Other Provinces

To give a sense of how big the subsidy is and who is benefitting, consider these 2009 calculations that came from one reader, based on information in a 2009 Telegram article.  SRBP has updated them to current figures.

Memorial University subsidized tuition is available to all Canadian students.  The number of students at MUN from Nova Scotia grew by more than 1,000% between 1997 and 2009. Macleans.ca reported that in 2010, MUN hosted 2.342 students from across Canada compared to a mere 137 in 1997.

Memorial University’s current Canadian tuition is $2,550 for two semesters.  According to the 2009 information that represents about 20 to 25% of the actual cost of delivering the student’s education.  That puts the actual cost between $10,200 (25%) and $12,750 (20%).  If we take the subsidy at the 25% level, that means that Newfoundland and Labrador taxpayers are spending about $18 million a year so that out-of-province students can receive a cheap education.  Nova Scotians are the largest single group of out-of-province students at Memorial.

On Tuesday…

The next step will be to look at the policy implications of all this for Newfoundland and Labrador.  It’s pretty clear from the information in this post, though, that, as the senate committee concluded, there is no evidence to believe decreasing tuition fees would increase university participation especially among low and fixed income individuals.  What’s more, if we look at other evidence, there’s no reason to believe that higher tuition fees would  - in and of themselves -  reduce participation at universities generally or even among students from low and fixed income families.  That concisely demolishes one of the main claims by proponents of frozen or free tuition.

What’s more, the available evidence indicates that participation rates for low and fixed income individuals are influenced by factors other than tuition. Academic achievement in grade schools has a greater influence than tuition fees in not only whether individuals will go to university or college in the first place (participation) but also how well they perform or whether they will complete a given program.