HESA

Higher Education Strategy Associates

Search Results for: "free tuition"

March 14

The Free Tuition Impulse

A few weeks ago I presented yet more evidence about why free tuition was mostly a subsidy for the rich and was unlikely, on its own, to do very much with respect to equalizing access (scroll through here and here if you really want to read me on this subject, though I imagine most of you are pretty familiar with my spiel by now). Someone asked me: “why don’t people like the Canadian Center for Policy Alternatives (CCPA), the Canadian Association of University Teachers (CAUT) and the Canadian Federation of Students (CFS) get this?  Surely they can read the evidence, why would they persist in touting a solution which is manifestly regressive”?

There are two possible answers to this question.  One is that in fact they have not read the evidence.  It exists, and they know it exists, but just haven’t read it.  As long as they don’t read the work which falsifies their notions, they can continue to hold these notions. To  paraphrase Upton Sinclair “It is difficult to get a man to read something, when his salary depends upon his not reading it”.

I actually got confirmation of this the other day on Twitter.  I was trying to get CCPA’s chief economist David MacDonald to explain why CCPA holds diametrically opposed positions on universal electricity subsidies (bad because they go disproportionately to the rich) and PSE subsidies (awesome, because they benefit the poor – which actually they don’t always, but that’s their story and they are sticking to it).  Basically, his two lines of defense were “it’s a public good” and “it doesn’t matter if most benefits go to rich because if we make education cheaper more poor students will go”.  The first, even if you assume he meant “there are positive externalities to higher education spending” (which is true) rather than “it fits economists’ description of a public good” (utterly false), is not a 100% sensible rationale as it arguably also applies to electricity to some degree (i.e. “there are positive externalities to people not freezing to death in their homes”).  But the second is ridiculous.  We know for a fact that tuition levels have almost nothing to do with access rates in part because targeted student aid actually works.  So I pushed him on it.  “Have you really read nothing about access problems in zero-tuition jurisdictions?  I asked.  Have you never looked at the rather substantive literature on finances and access”?  No reply.  Which, I think, tells you what you need to know.  People like David MacDonald and the CCPA simply do not want to know.  But that’s only half an answer: why don’t they want to know?  If they know that free tuition is ineffective as a remedy and regressive in distributional outcomes, why support it?  What other agenda is at play?

Well, a few years ago, when I was at a small event on Chile looking at the issue of tuition, I finally came to understand this problem.  A colleague and I were asking our Chilean counterparts: why do you want to make tuition free?  You must know it will make very little difference in access to higher education.  To which one of our counterparts replied:  the point is to get rid of the market.  The market must not decide in higher education.”

And so it is in Canada, I think.  The anti-tuition people are not fundamentally pro-access (though that is how they rationalize their position), so much as they are pro-state.  I suspect it’s partly due to a left-ideological stance which generally favours greater state involvement across the economy, but also partly to a naïve view about what would happen inside universities if the need to satisfy the market ever disappeared.  Such as: that public money would magically replace private money and continue to grow at a pace vastly outstripping inflation forever after.  Such as: nasty private sector Board member would be replaced by bureaucrats or more sympathetic public appointments or – better yet – make academics a majority on governing boards.   And magically, contrary to every bit of evidence from continental Europe, government running 100% publicly-funded universities would be less intrusive and meddling in institutional affairs than they currently are.

Once you realize that the free tuition argument is really a government vs. market argument and not a “how do we best equalize opportunities argument”, it becomes perfectly clear why evidence on the efficacy of tuition in promoting access doesn’t faze the usual suspects.  They don’t actually care about access.  They care about resisting the market.   The access stuff is just sheep’s clothing.

March 02

Bravo, New Brunswick

Readers may remember that about this time last year, I was giving the Government of New Brunswick a bit of stick for a botched student aid roll-out. Today I am pleased to give credit where it is due, and congratulate the folks in Fredericton for fixing the problem and developing a much better student aid system.

Let’s go back 12 months to pick up the story.  In February 2016, the Ontario government had come up with a fabulous new system which basically made a promise of grants equal to or greater than average tuition for students from low to mid-family incomes.  At family incomes above that, students received a declining amount of money out to about $110,000 at which point the grant flattens to a little under $2,000 (a remnant of the government’s ludicrous “30% tuition rebate” from 2011) and then falls to zero a little over $160,000.  With a bit of clumsiness this eventually, sort of, got branded as “free tuition for low- and middle-income students, which it isn’t, quite, but close enough for advertising.  Cue what is seen to be a major policy success.

It was such a success that New Brunswick decided to copy it later last spring.  Like Ontario, they built on the change to Canada Student Grants and eliminated some of their own tax credits (including the egregiously wasteful graduate tax rebate) to fund a “Tuition Access Bursary”, which guaranteed a grant equal to tuition (up to a maximum of $10,000, which was more generous than Ontario) for students from families making under $60,000. Which is great, right?  Well, yes, except the problem is, there was no phase-out for the grant.  At $59,999 in family income, there you were raking in $6500 or so in grants and at $60,001 you got $1200 in grants (the federal middle-income grant) and that’s not great social policy.  Making it worse was the fact that families in that $60K to $70K would also be losing a lot of money in tax credits that both the federal and provincial governments were ending in order to pay for this new benefit; my back-of-the envelope calculation was that in this range, parents were going to be about $1,200 worse off as a result of the change.

In any case, because I and others pointed out this flaw, the government after a brief period of defensive blustering decided it was best to go back to the drawing board and revisit the formula.  They did so and last week came up with a new “Tuition Relief for the Middle Class”, which basically involved taking a sliding declining scale of grants for families earning between $60-100,000 onto the existing Tuition Access Bursary (which has been renamed the “Free Tuition Program”).  Arguably, the New Brunswick program is now somewhat better than the Ontario program because 1) it’s not just “grants up to “average” tuition”, a caveat which I suspect is going to leave a lot of people slightly cheesed off when the program starts and 2) It still manages not to subsidize people up to that absurdly high $160K + threshold that Ontario insists on maintaining.  Ontario gets points for making its aid portable, though – New Brunswick’s program is only available to students who study in-province, which I think is a shame.

The announcement – which you know, hey guys, it’s a good news story! – was marred somewhat by some media sniping about how the number of beneficiaries is about 30% short of what was estimated last year.  To me this is neither here nor there: government cost estimates on year 1 of a new program are often a matter of throwing numbers at a dartboard.  The good news is that there is still money to either raise the entry threshold for the Free Tuition Program or (better still) expand the debt relief program or top up the amount of money available to high-need mature students and parents through the New Brunswick Bursary Program.

Now, all we need for this to be perfect is for New Brunswick to come up with a smart, credible monitoring program to examine the effects of these changes on participation over the next few years.

(New Brunswick folk: that’s on the way, right guys?  Right?  Well, you know where to find me if you need a hand…)

Anyways, as I say, credit where it is due.  Well done, New Brunswick.

February 22

Notes for the NDP Leadership Race

As contestants start to jump into the federal NDP leadership race, it’s only a matter of time before someone starts promising free tuition to all across the land.  Now, I’m not going to rehash why free tuition is both regressive and undesirable (though if you really want to take a gander through the archives on free tuition, have a look here).  But I do think I can do some public service by talking about federalism and higher education, or rather: what the feds can and cannot do in this sphere.

The entire Canadian constitution is based around a compromise on education dating from 1864.  Upper Canada came to the Quebec conference with one overriding aim: representation by population in Parliament, so that their superior population would give them the most seats in Parliament.  Lower Canada agreed if and only if a second, local, and equal tier of government was created which would have jurisdiction over education and health, because over-their-dead-bodies were a bunch of (mostly) Orangemen going to get their hands on a hallowed set of (mostly) French catholic institutions.

There’s nothing in there that stops Ottawa’s ability to give money to individuals for the purpose of education.  This is why, despite all the sturm und drang, Quebec never put up a legal fight to the Canada Millennium Scholarship Foundation: Ottawa can give cash to whoever it wants, whenever it wants.  But when it comes to dealing with institutions, their ability to direct money to areas of provincial jurisdiction is subject to provincial veto.  The provinces accept (with limits, in Quebec’s case) that the feds can flow money to institutions for the purposes of academic research.  Hence the Canadian Foundation for Innovation.  They do not accept that it can send money to institutions for operating purposes.

(Historical footnote: there was a period where nine out of ten of them were prepared to accept this.  Back in the mid-1950s, there was a ruse in which the federal government handed tens of millions of dollars every year (a lot back then) to Universities Canada – then known as the National Conference of Canadian Universities and Colleges – which it would then distribute to institutions.  In theory this was a canny work-around to the constitution.  In practice, it stalled because Duplessis blew a gasket and told Quebec universities that if they touched a dime of that money, he’d take it out of their provincial funding.  Pierre Elliott Trudeau then wrote a wonderful article in la Cite called “Federal Grants to Universities” explaining why Duplessis was 100% right and St. Laurent was in kookooland, constitutionally speaking.  It’s a great article, read it if you can.  Anyway, this arrangement lasted into the 1960s, when the feds got out of this arrangement and moved into per-capita grants instead.  And that door is now shut: there is no going back through it.)

Politically, there is a fantasy shared by some on the political left that the federal government can simply re-acquire policy leadership in the post-secondary field by passing an act of Parliament and adding great wodges of cash to existing transfers… with strings attached.  I’ve previously (here) torn a strip off the idea of a federal Post-Secondary Education Act, but let me focus here specifically on the idea that a generalized fiscal transfer could actually affect tuition fees.  Let’s just imagine how that discussion would go.

Ottawa: we want to give each of you money so that you bring your tuition fees to zero.  Quebec and Newfoundland, your fees are about $3000, so we’ll give you that per student…

Ontario: Our fees are $7500 a student or so.  Fork it over.

Quebec and Newfoundland: Hold it.

I could go on here about the nuances of fiscal federalism, but basically that’s the problem in a nutshell (for my American readers: in some less disastrous timeline, Hillary Clinton is facing exactly this problem as she attempts to implement her free tuition promise for public universities). There are ways the federal government could bribe provinces into lowering tuition.  In fact, something like that actually happened in Nova Scotia as a result of the NDP-Liberal budget deal in the minority Parliament of 2005.  But you wouldn’t necessarily get them to lower by an equal amount, and you definitely wouldn’t get them to go to zero because they have vastly different starting points.

So, here’s the quick heads-up to all prospective New Democrat leadership candidates: even if it wanted to, the Government of Canada has no sensible way to eliminate tuition nationally.  If you do manage to form a government, this will be broken promise #1.  So don’t promise it.  Instead, think about ways to support students which don’t involve tuition.  There is a whole whack of things you could do with student assistance instead.  And the best part is: if you use student aid as a tool instead of tuition, you can channel aid to those who actually need it most.

February 08

New York, New York

With the Republicans in control of both Congress and the White house for at least the next two years, the fight for “free tuition” is moving to the state level.  And so to New York, where Governor Cuomo has proposed a form of “free tuition” for anyone attending the City University of New York (CUNY) or the State University of New York (SUNY) and whose family earns less than $125,000.  So what does this mean exactly?

Well, to be clear, it’s not the same kind of free tuition Hillary Clinton was offering back in the election campaign.  (There are many kinds of free tuition, as I noted back here; refresh your memory, if you like).  Clinton was offering – with scant details – a vision where with enough federal funds, states and their public university systems would agree to stop charging tuition fees to students from families below $125,000 in income (or, roughly, 80% of the student population.  That idea was always a little bit pie-in-the-sky: the impracticalities of it were well covered by Kevin Carey at the time.  What Cuomo is offering instead is a top-up plan to make tuition “net free”.  Basically, he’s going to offer students below the cut-off line whatever amount of grants it takes to equal the amount they pay in tuition.  This payment, to be known as an ‘Excelsior Scholarship” (really), is thus equivalent to tuition minus any grants the student is already receiving from the federal or state governments via the Pell grant system.

Now, you might be saying to yourself: hey, that kind of sounds like the Ontario model.  That’s good, isn’t it?  To which the answer is: yes, it is a lot like the Ontario model.  It’s income-targeted net free tuition.  Except a) in some respects it’s going to be more like New Brunswick, with a big step-function (link to: ) at $125,001 instead of a nice smooth slope of benefits like Ontario and b) the threshold for getting full benefits is ludicrously high and has perverse consequences.

What do I mean by perverse consequences?  Well, the thing is that for students at the low-income level of the spectrum, federal and state grants already equal tuition.  So literally none of the money involved here is going to help them.  The biggest winners in the Cuomo proposal are precisely those people who get no grants right now – basically from families with about $80K and up in family income.  And yet these are the people who have the least trouble going to college right now.

The question here is: if you have a couple of hundred million dollars to spend, why would you give it to a group of people who have no issue attending in the first place?  Why not put money where it will be most effective? Columbia University’s Judith Scott-Clayton suggests there’s good evidence that money going to institutions creates better access outcomes than simply limiting the price.

Even Chile, once very keen on full “gratuidad”, has belatedly come around to this realization.  For budgetary reasons, the government was forced to limit its recent introduction of “free” tuition to students from families in the bottom six deciles of income.  This summer, the Chilean Treasury Department published cost estimates for the program.  In its present state the fully-phased in cost of the program will be 607 billion pesos (about $1.25 billion Canadian, or about $950M American).  Adding each of the next four deciles raises the price by about 350 billion, or 58%.  That is to say, free tuition for everyone would cost over 2 trillion pesos, or over three times as much as it costs for the bottom six deciles.  That difference is equal to 1.5% of GDP.  And what would be the purpose of spending all that money?  The very fact that it costs so much is a reflection of the fact that participation from these groups is already so high they don’t really need government help.  What kind of socialist government prioritizes handing over 1.5% of GDP to families in the top four income deciles?

In short, while targeted free tuition makes a great deal of sense, it really does need to be targeted.  If targeting weakens, the program becomes more expensive and less effective.  New York’s plan, clearly, suffers from insufficient targeting.  Ontario’s plan has it about right.  But beware: the Premier occasionally muses about extending the plan to higher income groups and there’s certainly a chance such an idea will make it into the policy conversation as the provincial election approaches.  That way madness and much wasted public funding lies.

February 02

Manitoba’s Golden Opportunity

It’s tough to be in government these days: prolonged slow growth means it’s difficult to keep increasing spending at a rate at which citizens have become accustomed.  Instead, with rising costs and little appetite to raise taxes or fees, governing often seems to be one long exercise in nickel-and-diming.  Higher education – in most of Canada at least – has felt some of this, but in truth has been insulated more than most other parts of the public service.

But the key role of government should not simply be to find ways to cut: it should be about increasing the effectiveness of public expenditures.  And in particular, making sure public expenditures are designed in such a way as to promote and not hinder growth.  That’s why, if there was one place in Canada I wish I could be an Advanced Education Minister right now, it’s Manitoba.  Because, as I explain in a new paper HESA is releasing today, Manitoba has a boatload of poorly-performing expenditures in higher education tax credits that could be re-purposed into areas which could really help the province.

Here’s the scoop: Manitoba has two tax credits – the Education Amount Tax Credit and the Tuition Fee Income Tax Rebate – which are neither particularly effective nor have many defenders within the higher education sector.  The former tax credit is a hold-over from the Diefenbaker era which all provinces (except Quebec) got stuck with in their portfolios when the provinces moved from a tax-on-tax to a tax-on-income system back in 2000.  In the past 12 months, the federal government, the province of Ontario and the Government of New Brunswick have all eliminated this tax credit because it was neither progressive nor efficient, and funneled that money back to student assistance.  The latter tax credit is effectively a tuition rebate for students who stay in the province, which is batty and wasteful for number of reasons I’ve previously outlined here. In any case, it is demonstrably too small to achieve its intended goal of convincing students who would otherwise not live in the province to live in the province.  The result is this money is a windfall gain to graduates, paying them to do something they were going to do anyways.  The elimination of these two tax measures could yield approximately $67 million per year in savings which could be spent more productively elsewhere within the higher education sector.

$67 million is a lot in Manitoba higher education.  Taking that money away from unproductive tax credits could fund a whole lot of new, useful investments.  These include:

  • Adding $14 million/year to provincial student assistance fund.  Spent correctly, this would be  enough to fund an Ontario-like “free tuition” guarantee to low- and middle-class Manitobans even if tuition fees were allowed to rise by a third (which, given how low tuition is in Manitoba, is probably a not a bad idea).
  • Investing $12 million/year to increasing supports to Indigenous students and expanding community delivery of programming in or near First Nations communities
  • Supporting the expansion of work-integrated learning at Manitoba universities and colleges with the creation of a dedicated $15 million/year fund.
  • Redressing a long-standing imbalance in post-secondary spending by increasing the number of seats in non-Metro Manitoba with a $15 million/year investment.
  • Creating an $11 million/year employer-driven “quick response training fund” to make it easier for employers with expanding businesses to access bespoke training.

In sum, for the price of two badly-designed tax credits, Manitoba could make real investments in access, both in terms of financial aid and providing spaces in under-served areas, increase support to Indigenous students and communities, improve the quality of education and provide more funds for employer-led training that could help relieve skills bottlenecks for investors.  How could you pass this up?  Who wouldn’t do this?

Over to you, Manitoba.

January 19

American Higher Education Under Trump

Tomorrow, Donald Trump will be sworn in as the 45th President of the United States (actually, the 44th person to be President: Grover Cleveland’s two non-consecutive terms screw up the count).  What does this mean for higher education?

First off, let’s recollect that where higher education is concerned, the US, like Canada, is a federation where the main decisions about funding public education are made at the state level. Decreased state investment in institutions and consequent rises in tuition have given the federal government a larger though indirect role in the system because the salience of student aid has risen.  And of course, the government spends an awful lot of money on scientific research, primarily but not exclusively through the National Institutes for Health (NIH) and the National Science Foundation (NSF).  And let’s also recollect that while the President names the Secretary of Education, a lot of control over specific budget items rests with Congress, which, despite being controlled by Republicans, will have ideas of their own.

Recall that Trump barely spoke about higher education during the campaign, other than endorsing an even-more-expensive version of income-based repayment than the existing one which was recently discovered to be costing nearly over $50 billion more than expected (short version: he wants to raise the repayment maximum from 10% of income to 12.5% but shorten the time before forgiveness to just 15 years).  Also, his education secretary Betsy DeVos, is a K-12 specialist (I’m using the term loosely) with very few known views on higher education.  I think it’s a given that their instincts will anti-regulatory and pro-market (which means things are looking up for private for-profits), but it’s hard to see them initiating a lot of new policy.  Which means the policy reins, such as they are, will likely be held by the Republican Congress and not the White House.

So what to expect?  Well, I think we can rule out any continuation of the Obama White House’s free college agenda, or anything vaguely like it.  That idea won’t disappear, but it’s something that’s going to happen in the states rather than in DC (witness Andrew Cuomo’s decision earlier this month to launch his own Ontario-like free tuition-plan).  Beyond that, you’re likely to see some cutting back on institutional reporting requirements, particularly with respect to Title IX, the federal law on sex-discrimination in education, and possibly a push towards more competency-based education.

Where it gets interesting, though, is on student-aid.  It’s not just that we’re likely to see cuts in things like loans to graduate students and (pace Trump’s own views) loan forgiveness.  We may see a return to more private capital in student loans (which would mostly be a bad things); we may also see institutions be required to pay for some of the costs of their own students’ loan defaults (an idea colloquially referred to as requiring institutions to have “skin in the game”.  Some think that the new Congress may push what are known as “Income Share Agreements”, which are kind of like graduate taxes only the entity giving the student money and then collecting a percentage of income afterwards is some kind of private investment firm rather than government.  One of the most crazy/plausible ideas I’ve heard is from University Ventures’ Ryan Craig who mused recently on twitter about setting rules whereby institutions might have to provide a certain fraction of total aid via ISAs in order to be eligible to receive federal aid.

On the research side: who knows?  Clearly, climate science is going to have a hard time.  But health sciences often do well under Republicans; the National Institutes of Health went from $18 billion/year to $30 billion/year under Bush Jr, for instance.  And Trump might decide to do something big and crazy like announcing a lunar base or a Mars mission (the former is a favourite of Newt Gingrich, the latter an obsession of Elon Musk, who suddenly seems quite close with the incoming White House), either of which would have substantial positive ramifications for university science budgets.  So we’ll see.

But put all this into some perspective: as far as Congressional priorities are concerned, changes to student aid are going to come several light years behind repealing Obamacare and dismantling various environmental protections.  The former in particular has some pretty serious budget impacts as repealing Obamacare is going to cost a ton of money.  That’s going to cause a scramble for offsetting budget cuts – one could imagine some pretty big across-the-board cuts in which higher education-related programs will simply be collateral damage.

It’s bound to be interesting, anyway.  Though I for one am glad I get to watch it all from a safe distance.

December 15

Books of the Year

I read a lot of books.  My guess is most of you do, too.  Here are the best ones on related to higher education which I read in 2016.

The year started with a lot of hype about the “4th Industrial Revolution”, a meme propagated by the Davos Crowd and which is meant to get us all in a chin-stroking mood about the future of work (and by extension, education).  There was even a book by Davos CEO Klaus Schwab, called The Fourth Industrial Revolution.  It’s garbage.   A grab-bag of new industries, no matter how gee-whizzy, does not a revolution make.  There is no fourth industrial revolution, and people who use this term should be publicly shamed.

Slightly more interesting on the pop econ side were a bunch of books from 2015: Martin Ford’s Rise of the RobotsJerry Kaplan’s Humans Need not Apply, Susskind and Susskind’s The Future of the Professions: How Technology will Transform the Work of Human ExpertsOf these, the Susskinds’ book is the only one that  deals with the issue sensibly, as it points out that, strictly speaking, robots replace human tasks not human jobs, and that jobs are going to increasingly be re-designed to focus on tasks that computers cannot do.  For the most part, those jobs are going to be ones requiring understanding of context and empathy (higher education, take note).

It was also a year to read about innovation policies.  I wrote approvingly back here  about The Politics of Innovation, which made the bold statement that countries need to perceive some kind of external threat in order to adopt consistently pro-innovation policies (comfortable, fleece-wearing Canadians, take note).  But there was another, much more technical book on innovation from a Canadian scholar (Jingjing Huo of the University of Waterloo) called How Nations Innovate: The Political Economy of Technological Innovation in Affluent Capitalist Economies.  This book reminded me a lot of Kate Pickett and Richard Wilkinson’s The Spirit Level, mainly because it uses the same shtick of running a lot of regression analyses on various types of data on OECD countries.  It’s interesting, and I certainly appreciated how Huo handled issues regarding the relationship between varieties of capitalism (co-ordinated v. laissez-faire) and varieties of innovation (process vs. product), but at the end of the day you have to believe that regression on 30 or so observations are meaningful, and I’m not sold on that.  Still, definitely one for innovation policy wonks to read if they haven’t already.

Related to issues of innovation generally were books about economic clusters and emerging industries.  Of these, the two that mattered were The Smartest Place on Earth: Why Rustbelts are Emerging Hotspots of Global Innovation by Antoine van Agtmael, Fred Bakker and Christopher Lane, and Steven Klepper’s Experimental Capitalism: the Nanoeconomics of American High-Tech Industries.  The former is a lot more positive about the role of universities in clusters than the latter, but a lot of the “success” factors for university-based clusters still come down to “there’s a cluster champion with some magic fairy dust”.  Alex Ross’ Industries of the Future is an OK airplane read but I doubt anyone will remember it five years from now.

On the history of education front, there was Rens Bod’s A New History of the Humanities which is an enormous act of scholarship but not exactly a page-turner.  For a somewhat racier read (the term is relative) have a peek at James Turner’s Philology: The Forgotten Origin of the Modern Humanities.  John Axtell’s Wisdom’s Workshop: The Rise of the Modern University was meh (if American higher ed history is your thing, stick to Roger Geiger and John Thelin).   But maybe the best one I read all year was Tamson Pietsch’s Empire of Scholars: Universities, networks and the British academic world 1850-1939 which is a really well-done short (academic authors, take note) history which illuminates the way in which the settler universities of the British Dominions were intimately linked to one another through personal scholarly connections.

I read more books than I care to remember on global access and admissions systems.  The only one I can recommend for a general audience is College Admissions for the 21st Century Admissions, by Cornell University’s Robert J Sternberg, which details his work developing new types of testing to get at students attributes such as creativity and wisdom.  Lesson Plan, by Mike McPherson and (the since-deceased) Bill Bowen is a decent tour d’horizon of current US policy debates.  A.J. Angulo’s Diploma Mills is a very good short (again!) history of US for-profit education.  William Massy’s Re-Engineering the University is a very, very good book about financial management in universities which deserves an awful lot more attention than it has received.  If it had been this book that had gone viral in Canadian university administration five years ago rather than Dickerson’s Prioritizing Academic Programs and Services, we’d probably all be in better shape than we are today.

I do need to give a shout-out to one quite excellent work which almost no one in North America has read or will read, and that is Knowledge Production and Contradictory Functions in African Higher Education, which is hands down the best book to come out of any “developing country” on higher education in the last five years.  It’s a collection of pieces edited by Nico Cloete and Peter Maassen from work in the HERANA project, which is itself a genius project.  And from Routledge, the new book on University Rankings edited by Ellen Hazlekorn entitled Global Rankings and the Geo-politics of Higher Education is genuinely the best book ever written on the subject.  Yes, OK, I have a chapter in it and I would say that – but I genuinely think my co-contributors (including St. FX President Kent MacDonald) put me in the shade and it’s a great volume from start to finish.

But my number one book of the year?  It’s Sara Goldrick Rab’s Paying the Price.  Not because I agree with her conclusions, which involve making public 4-year universities tuition-free (I think that’s defensible for some 2-year programs, but deeply regressive at the 4-year level).  But rather because she has done such an incredible job bringing to life how tiny details of student aid policy can make such an enormous difference to the lives of students who depend on the system for money.   Her blend of research, policy and anecdote is extremely good, the stories of students trying their best to succeed in post-secondary education are inspiring, and her explanations of the minutiae of student aid policy are clear and concise.

Goldrick-Rab’s views on free tuition seem to be driven in part by frustration at all the petty problems inherent in student aid, and there’s a desire here cut through the brambles and do something radical.  What’s interesting though, is to compare her complaints about the US system to the actual reality of the Canadian system which – though far from perfect – has actually addressed many of the problems she confronts.  In particular, her view that universal benefits are preferable to targeted ones because “programs for the poor are usually poor programs” is directly contradicted in the Canadian case by things like the massively pro-low-income overhaul to student aid that we saw in Canada/Ontario earlier this year (see here and here).

But this is a quibble.  Goldrick-Rab wrote a page-turning best-seller about student aid.  I’ve been in the student aid business a long time and never thought this possible.  It’s a great book: read it.

October 28

Priorities

Next week, everyone’s favourite Federation of Students is going to have a “Day of Action” to demand “Free Education for All”.  A few months ago I explained why some student groups think it’s a good idea to be protesting right now even while governments are quite sympathetic to them  (tl:dr: it’s because Sticking It To The Man is more important that achieving practical results).

Now to anyone who’s read this blog for more than once, it’s probably clear that I take a pretty dim view on the Free Education for All line.  I do believe there’s an argument for free education at the college level; however, beyond that, the case is pretty weak.  Low-income students already have net zero tuition in most of the country.  For students from families making $40,000, subsidies (that is, grants, loan remission and tax credits) are already larger than college fees in eight provinces – all ten if we include Manitoba’s and Saskatchewan’s graduate rebate programs.  They’re also larger than university fees in five provinces: Newfoundland, New Brunswick, Quebec, Ontario and Manitoba.  Put that altogether and it’s clear that over 90% of all low-income students are already paying net zero tuition and will gain little from eliminating tuition.  The big wins, therefore, are for richer students.

Free tuition does not reduce intergenerational disparities.  It cannot produce greater equity in enrolments without a massive and seriously unlikely displacement of upper-income students from universities.   And even Karl Marx understood that it was regressive.

But let’s put all that aside.  Let’s assume for a moment that we all agree that any regressivity which occurs in completely subsidizing education for students from wealthier backgrounds is offset by the inherent benefits of universal programs.  Or, let’s assume we agree with American scholar/author and free-tuition advocate Sara Goldrick-Rab (whose new book Paying the Price is very good by the way) that the only way to really ensure that the poor get the money they need is to subsidise the rich, too.  Programs for the poor are poor programs, she says, so only universality can save the poor. (I don’t think this is true in Canada – the Trudeau government has just shown how to do targeting with its changing tax credits into grants – but I grant the possibility it may be the case in the US, so let’s go with it for now).

But even if we assume all that, we still need to assume that there is money available.  And in one sense there clearly is:  governments can make anything happen if they want to.   They just have to decide to do it.  It is a political question more than a financial one.  But politics, as they say, is about choices.  And the issue is: what would we choose not to pay for in order to ensure that kids from above-median income families don’t have to pay tuition?

Peace-keeping?  Should we say no to a mission to Mali to keep wealthier kids from paying tuition?  Childcare?  Do we choose to invest less in childcare to make university free for those who can clearly afford it?  Or what about clean drinking water on First Nations’ territories?  More investments in mental health?

Because of entrenched interests and programs, it’s very difficult for democratic governments to move money from program to program.  When incremental money arrives, they have to assign it to whatever priorities they think most important.  It could go back to taxpayers via a tax cut, or it could go to pay down debt, or it could go into a priority spending area.  When someone says “government should eliminate post-secondary fees”, in practical terms what they are implicitly arguing is that “students from wealthier backgrounds (because those are the primary beneficiaries) deserve this money more than families with childcare needs, or First Nations families living in communities with boil water advisories.  I know they would explicitly deny this, but from the perspective of the government, which has to choose between competing priorities, this is exactly what is being advocated.  That’s how lobbying works.

To recap:  Free fees would help the rich most, would not reduce intergenerational inequality, will not work to reduce inequality of access, and to boot would take money away from other important policy priorities, many of which (e.g. First Nations’ health and sanitation) are transparently of higher importance.

Remember all that on November 2nd.

October 11

Hillary’s Higher Education Plans

Barring some sort of catastrophe, it now seems pretty clear that Hillary Clinton will be the 45th President of the United States.  There is a reasonable chance (51.6% in Monday’s FiveThirtyEight forecast) that the Democrats could regain the Senate and an outside chance that they could also regain the House.   Those odds probably change a bit in the Democrats’ favour once some post-grope polls come out later this week, but the basic outline of a post-November 7 world – Hillary in charge, with a split Congress – is now pretty clear.  What does it mean for higher education?

Well, you wouldn’t know it from any of the debates – we’ve now gone 270 minutes without a single second being spent on education – but higher education is a major plank in Hillary’s platform.  But her policies on higher education have evolved somewhat over the course of the campaign, mostly because her primary opponent Bernie Sanders’ success with millennials convinced her she needed a big, expensive, youth-oriented policy, and higher education (apparently) is it.

Hillary’s plan, release just prior to the July convention and known as “The New College Compact” consists of two pillars.  The first involves creating a system of “free tuition” at public universities for students from families with under $125,000 by 2021 (it would start at $85,000 in 2017 and rise by $10K each year thereafter) .  On the fact of it, this is a bit like what the Ontario Liberals and the Chilean socialists have developed, only more generous (i.e., using a higher cut-off point).  But the costing on this plan is – to put it mildly – hazy.  Her costing documents speak of spending $450 billion over ten years, but the tuition take from 4-year public alone is north of $55 billion, and that’s not including either the cost of 2-year colleges or the extra costs that would accrue if free tuition induced hundreds of thousands of students from private colleges to switch into the public system (the New America Foundation has correctly warned that not including funding for system growth could well result in a reduction of access for lower-income and minority students as middle-class students switching from privates could push out less-prepared lower-income kids from a fixed number of spaces).

The problem here is that the US (like Canada) is a federal system, with education a responsibility of the states.  The federal government can promising anything it likes about tuition, but at the end of the day it is states who have the final say.  The best the feds can do is work out a system of carrots and sticks to entice the states into a program.  The wording of the plan seems to imply that states who want to get reduce tuition will sign up for grants from Washington in return for meeting certain conditions – one of them being pouring more money of their own into their systems.  But the progress of Obamacare, which required considerably less from states but has only brough two-third of states on board so far, should give everyone pause.  On top of that, of course, the President alone can’t appropriate funds unilaterally.  Congress would need to be on-side as well, and the Democrats are still a long way from being able to make that happen.  Which is why most higher education analysts in the US seem to assume that the plan is more talk than action: a rhetorical statement which can attract voters rather than a plan likely to be implemented.

The second part of the Clinton plan involves a three-month moratorium on student loan repayment allowing all borrowers – including those in repayment – to re-finance their loans at a lower rate.  There is a fair amount of scepticism about how effective this measure might be.  As Robert Kelchen of Seton Hall University (possibly the shrewdest US student loans pundit out there), wrote in The Conversation a couple of months ago, the most-indebted graduates tend not to be the ones with the high default rates because default is most commonly associated with dropouts and hence lower levels of debt, and also because over 40% of borrowers in the US are now in income-based plans and so changing the level of interest will have minimal effects on repayments.  In other words, it will be a big income transfer to younger Americans, but not necessarily one that will do much to increase access or reduce defaults.

So after the election, what we can probably expect is a situation quite similar to what we had prior to 2014: a President and a Senate with a desire to make college more affordable (though not necessarily in particularly efficient ways), with a House implacably opposed and states offering indifferent support.  But a catastrophic Republican result in the House – which remains a possibility following this weekend’s stampede of defections – might result in some very rapid and drastic policy changes from the new administration.

Stay tuned for November 8th. 

September 23

Social License and Tuition Fees

So, to Johannesburg, where South African Education Minister (and Communist Party chief) Blade Nzimande finally announced the government’s decision on tuition for next year. He was in a tricky place: students are still demanding free tuition (see my previous story on the Fees Must Fall movement here) and will not accept a hike in fees. Meanwhile, universities are quite rightly feeling very stretched (it’s tough trying to maintain developed-world caliber institutions on a tax base which is only partially of the developed-world): with inflation running at around 6.5%, a fee freeze would amount to a substantial cut in real income.

So what did the minister do? He pulled an Ontario (or a Chile, or a Clinton, if you prefer). Tuition to rise, but students from families with income of R600,000 or less (roughly C$56,000, or US$43,000) would be exempt from paying the higher tuition. Who exactly was going to verify students’ income is a bit of a mystery since the cut-off for student financial aid in South Africa is considerably below R600,000 (a justified cause of further student complaint), but no matter. The basic idea was clear: the well-off will pay, the needy will not. The exact amount extra they would pay? That would be up to individual universities. They could set their own tuition but were strongly advised not to try increasing fees by more than 8%.

It took student unions less than five seconds to find this inadequate and to denounce the government. Several unions have threatened to boycott classes if their institution raised fees.

This raises an interesting question. Why, if students in Chile and Ontario are claiming victory (or partial victory at least) over their fee regimens, do South African students reject it? Well, context is everything. The key here is government legitimacy, or lack thereof.

Let’s take the Charest government in the Spring of 2012. The tuition fee increase that the government proposed was not excessive, and poorer students in fact might have been better off once tax credits were factored in. But absolutely no one paid the slightest bit of attention to the policy details. This was a government that had outstayed its welcome, and was badly tarred by corruption scandals (my favourite joke from that spring: what’s the difference between a student leader and a Montreal mafia boss? Only one of them has to forswear violence in order to get a meeting with the Minister of Education). It had a good, saleable plan, but literally no political capital on which to draw. The plan, as we all know, failed.

(By the by, this is why, if the Couillard government is going to move on tuition fees, it’s going to have to do it this year. Their window is closing.)

I could go down the list here. The big anti-tuition fee protests that got the President of South Korea to promise to reduce tuition in the spring of 2011? That was at the tail end of a profoundly unpopular Presidency (though to be fair in Korea it’s the rare presidency that doesn’t end in profound unpopularity). The Chilean tuition protests of 2011-2? Also at the end of an unpopular presidency. By contrast, the largest tuition fee increase in the history of the world – the increase announced for England in the fall of 2010 – was essentially met with only a single rally, in part because the measure was introduced by a brand-new government which led in the polls. Basically, you need “social license” in order to do something unpopular on tuition fees. Some governments have it, others don’t.

The South African government is in precisely this kind of legitimacy crisis right now. It is not a simple matter of President Zuma’s unpopularity, though his increasingly kleptocratic regime is profoundly unhelpful. It’s a bigger crisis of post-apartheid society. Formal racial equality exists, but equality in economic opportunity, equality in educational opportunity: those are still very far away and in many ways are not much better than they were 20 years ago. Today’s youth, born after Nelson Mandela’s release from prison, no longer feel much loyalty to the ANC as the leader of “the struggle”. They simply see the party as being incompetent, corrupt, and incapable of delivering a better and more equal society.

And it’s that anger, that rage, which is driving the #feesmustfall movement. I think there’s a real chance this won’t end well; there has already been a serious uptick in violence on South African campuses. South Africa’s universities, unfortunately, may end up as collateral damage in a larger fight for the country’s future.

 

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