Higher Education Strategy Associates

October 30

The Cultural Determinants of Student Debt Policy

With the school year now back in full swing, one of the things you’ve undoubtedly heard, and will continue to hear, is the question of student debt, and how it has become “out of control”.  And in that spirit, I wanted to relay a little anecdote.

A few months ago, as part of a student loans-related project that I was working on in a Southeast-Asian country, I led a session for government and bank officials looking at possible loan parameters, and their potential cost implications.  One of the parameters, obviously, was the repayment period of the loan.  In most of my sample models, I had assumed that the period would look something like Canada’s – about 10 years.  But in most of the models the participants developed, the period was only 4-6 years.

Shorter repayment periods on student loans are pretty common in Asia – in China, 4-6 years is also the norm. The policy implications of shorter periods are straightforward.  If the government is providing interest subsidies, then shorter repayment periods will reduce those subsidies; if not, then shorter repayment periods reduce the total amount of interest paid by students.  Either way, the shorter the period, the greater the repayment burden to students, as they must distribute the repayment of a given principal over a shorter period of time.

None of this was an issue for the participants, who just viewed debt as something young people had to repay quickly in order to get on with their lives.  When I pointed out that, in some cases, this would mean repayments would take up between a quarter and a third of graduates’ income, there were shrugs.  Borrowers were, for the most part, young and unmarried, participants said, they can just live at home and pay it off quickly.  What about getting married, I asked?  Or buying a car, or a house?  Almost unanimously, the reaction was: “pay this one down first, then borrow again if you need to”.

At this point it occurred to me that the entire narrative around student debt in the developed world is based on the notion that post-secondary graduates ought to immediately be able to join the middle-class, with all the consumption privileges that implies.  Data suggesting that graduates are putting off purchases because of student debt are treated as prima facie evidence that student loan debt is out of control.  In Asia, on the other hand, this might be considered a sign of policy success.

I am not saying the Asian way is right and ours is wrong.  I am just saying it’s worth understanding the cultural biases behind our own policies – and occasionally asking ourselves how much we want to pay to keep those biases intact.

October 29

How Student Debt Became a Big Deal in Canada

If you go back to debates in the 1993 election, or Lloyd Axworthy’s famous Social Security “Green Paper”,  most of what you see in the discourse about PSE would be pretty familiar today: “higher tuition = less access”, etc.  But what you wouldn’t find was any discussion of student debt.  It just wasn’t something anyone talked about.

Partly, this was because there wasn’t a lot of student debt at the time.  Although federal and provincial loans programs were undergoing a series of changes (increases in loan limits, cuts in grant programs), which set the stage for much higher student loan debt, no one was feeling it yet. But the more important reason was that no one understood how potent “debt” could be as a political argument.  And it wasn’t student groups who would stumble upon this realization – it was the Association of Universities and Colleges of Canada (AUCC).

In the mid-90s, AUCC had a simple mantra: the sector needed to speak with one voice.  No squabbling with CAUT or student groups – find a package of measures everyone can agree on.  In 1996-7, that unity of purpose on the research file resulted in the creation of the Canada Foundation for Innovation.  I was hired by AUCC at about that time to try to do the same thing for student aid.  I thought the idea was nuts – at the time, university Presidents primarily saw student aid as a revenue-generating device, and students weren’t going to sign up for that.

What bridged the gap was the decision to focus on student debt.  Students and Presidents might have different views about tuition, but everyone could agree that student debt was bad.  Heck, Paul Martin was on TV every damn night, telling us debt was bad.  Different kind of debt, obviously, but such was the zeitgeist – who could possibly be in favour of more debt?  And so we decided to focus on that.

As a matter of luck, in the summer of 1996, HRDC erroneously published an estimate stating that average debt among borrowers would reach $25,000 in 1998.  In fact, it would take another decade to do so, but the error allowed us to make invidious comparisons between student debt in Canada and debt among graduates of US private universities, where average debt at the time was about $17K.  Nothing spurred Chretien-era Liberals to action faster than invidious comparisons with the US;  All it took was one front page story in the Toronto Star, and suddenly student aid became a hot file.  A little help from our friends at CFS and other coalition allies, and all of a sudden, we had an entire federal budget dealing with student debt.

Bottom line: student debt didn’t organically become a political issue in Canada.  It was very much “invented” in Ottawa – a politically convenient way to paper-over the cracks of a lobbying coalition, and successfully cudgel against a sitting government at the same time.

October 28

Debt, Tuition, and Inequality

A few weeks ago, I noted on Twitter that back when I was in student politics (24 years and counting) we opposed tuition hikes because we feared their negative effect on access.  Back then, fees hadn’t increased in real terms in almost two decades, so there wasn’t much evidence either way on the issue.  More than two decades on, the evidence has accumulated, and, on the whole, it turns out that what we believed back then was mostly mistaken: despite much higher tuition, more students than ever are attending PSE, and more low-income students than ever are attending PSE.

As a result, it’s increasingly ridiculous to use access arguments against tuition increases: basically you’re reduced to slogans like, “tuition reduces access!  And it’s a disgrace more people are paying it every year!”  Given this, I asked Twitter peeps what the best grounds were for opposing higher tuition and debt.  The most common answer was some variation of “tuition/debt causes inequality”, on the grounds that graduates with debt accumulate assets more slowly than students without debt.

Superficially plausible, maybe, but still wrong.  Inequality doesn’t exist “because of” borrowing.  Everybody pays equal tuition fees; debt is incurred by those who don’t have the cash up front to pay for it.  Blaming student aid for inequality is just blaming student aid for the fact that some students come from poorer families, and others from richer ones.  You don’t have to condone inequality to realize that it’s a silly proposition.

So, students who go in rich don’t accumulate debt, and therefore end up richer at the other end; students who go in poor do accumulate debt, and therefore remain poorer at the other end.  But that would be true regardless of how fees are set.  If you reduce fees for all, everybody is made better by the same amount.  Poorer families end up with less debt, richer families get to keep more cash-in-hand.  For the abolition of fees to reduce inequality, it would have to create some kind of behavioural change among richer parents that would make them less likely to pass that extra money on to their kids.  And how likely is that?

These are all pretty basic observations, yet they rarely make it into the debate about tuition and debt.  Partly, it’s because inter-generational transfers complicate the analysis, but I think it’s mostly because debt makes people squirrelly.  As Margaret Atwood and David Graeber have pointed out in recent books, the concept of debt is tied-up with an enormous amount of cultural baggage, which makes it difficult to talk about in purely economic terms.  For the next couple of days, I’ll be unpacking some of these cultural issues, and how they affect our discourse on debt.

More tomorrow.

October 25

Daycare Subsidies, Tuition Subsidies

I see the Globe is currently doing a series on affordable child care.  It’s a good series, but it’s striking how different the tone is from public discussions on higher education, despite the evident similarities between the two policy fields.

This occurred to me a few months ago while reading a Globe op-ed from a new-ish parent, wondering why daycare was so unaffordable.  It was framed in the Globe’s very weird, class-politics manner, as: “My wife and I make $100,000 and we can’t afford daycare”.

(Sidebar for non-Torontonians: the tribes of downtown “Tronna” have literally no idea that a $100K family income puts them around the 80th income percentile, and that such whining makes the rest of Canada want to smack them upside the head.  Nice people, but clueless in this respect.)

One meme which keeps popping up here is that daycare users should receive greater subsidies, as day care is an expense that people incur at a time in their lives when they’re just starting out, have less capital, etc.  In higher ed, our answer to this problem is loans, which provide precisely this kind of income-smoothing.  So why not provide loans to help people afford daycare?

Think about it: both Early Childhood Education (ECE) and higher education are non-compulsory forms of education, which is why we ask people to pay for them (compulsory education should always be free).  In universities and colleges, we generously underwrite the education providers, and provide need-based aid – part loan, part grant – to help people who can’t afford to cover the remaining costs.  In most of the country, daycares are funded similarly, if less generously.  The outliers are Quebec, where funding comes almost entirely through core grants (with a little extra assistance available to low-income parents), and Ontario, where it comes mostly through individual fees (though significant subsidies for lower-income families exist).  Thus, outside Quebec, net price for daycare is on a sliding scale based on income, just as it is for university and college (though subsidies for daycare are MUCH simpler, and more transparent, than those for student aid – PSE could learn a lot from ECE in this respect).

So why not daycare loans (or “extended payment plans”, if the word “loans” is too icky)?  Why not give people like the author of this Globe op-ed piece – that is, people just outside the subsidy range (at $1500/month in fees, the subsidy in Toronto disappears at around $92,000), and who find it too burdensome to pay 25% of their after-tax income on daycare – a break by letting them pay fees over 6-8 years, rather than 3-4?  Unlike students, these are people with steady incomes – costs to the public should be minimal.

October 24

How Domestic Students Experience Internationalization on Campus

So today, my colleague Jaqueline Lambert and I released a paper on how Canadian students view the process of internationalization (you can download the paper here).  It’s a mixed bag, frankly.

On the one hand, we find pretty clearly that students buy into the principles of internationalization.  They are very positive about the goals internationalization is meant to foster (diversity, more global awareness), and they’re even enthused about how an increased presence of foreign students improves their schools’ prestige.  Over forty percent of students say they’ve made a close friendship with a student from another country.  Eleven percent of students have already had a period of study abroad, and another seven percent say they have definite plans to do so.  All good.

It starts getting trickier, though, where the interests of international and domestic students are not perceived to be aligned.  Half of students agree, to some extent, with the statement: the presence of international students in a classroom enriches a learning experience.  But fully a third disagree.  Similarly, a third of students say that the presence of international students has actually hindered their classroom experience.

Figure 1: Perspectives on International Students in the Classroom.












There are also concerns about competition for resources.  Thirty-eight percent of Canadian students say the presence of foreign students means greater competition for on-campus jobs, while forty-two percent say it increases competition for scholarship dollars.

Figure 2: “The Increasing Number of International Students Attending my Institution has led to____”.















But perhaps the most eye-opening consequence of internationalization has less to do with students from abroad, and more to do with professors.  Instructors with a less-than-perfect command of the language of instruction (French or English) are known to be common on campuses, and seven-out-of-ten students in our survey said they’ve had such an experience (more in STEM fields, less in humanities).  But when asked a more specific question – has a difficult-to-comprehend teacher significantly hindered your ability to perform or successfully complete a course? – fully one-third of all students said yes.

Figure 3: “Has a Difficult-to-Comprehend Instructor Significantly and Negatively Hindered your Ability to Perform or Successfully Complete a Course?”















Figure 3 shouldn’t be taken to mean that all hard-to-understand professors are foreign, or that foreign professors are hard-to-understand.  But there is a significant proportion of instructors – often foreign, often hired for their research ability – who are having a hard time getting their message across to students.  And that’s not really OK: students pay a lot of money for their education, and it shouldn’t be too much to ask that their instructors have the necessary language skills to teach them.

What to take from all this?  Students remain relatively positive about internationalization, and that’s good.  But there are some warning signs here.  Not everyone perceives internationalization as an unalloyed good; more attention needs to be paid to the dislocations it causes if internationalization is to continue to be seen in a positive light.


October 23

The Best CFS Chair Ever

I see Brad Lavigne has a new book out about his years as Jack Layton’s campaign strategist.  Time perhaps to mention his other big accomplishment: namely, being the best Chairperson the Canadian Federation of Students (CFS) ever had.

The mid-1990s were an ugly time in Canadian PSE.  Federal and provincial governments were broke, and cutting back everywhere.  Partly as a result of this, the student movement polarized – a more left-wing leadership took over the organization and purged the moderates, who returned the favour by leaving CFS, and joining up with a previously-unaligned group of schools to create the more moderate Canadian Alliance of Student Associations (CASA) (full disclosure – I was CASA’s first National Director).  In 1996, Lavigne became CFS chair.  He was seen as one of the hardliners, but when Lavigne got to Ottawa, it was clear that he didn’t want to just rant and rage at the government.  He wanted some wins for students, and he was prepared to compromise to get them.

And so with this intention Lavigne took CFS into a seven-member coalition to improve student aid, which included not only their nemeses at CASA, but also the University Presidents represented by AUCC.  The coalition kept clear of the divisive issues like tuition, and focused solely on issues of student debt, which everyone agreed was bad.  It held together on a common platform for over a year, which reassured the federal government that it would get approval, not opprobrium, for agreeing to invest in this file (less than 3 years on from an infamous macaroni-throwing event, involving then-HRDC Minister Lloyd Axworthy, this kind of re-assurance was still necessary).

The result was the 1998 budget, the single biggest investment in student aid ever made in Canada.  It expanded interest relief considerably, making life easier for hundreds of thousands of borrowers.  It created a set of grants for students with dependents (a key CFS aim at the time), the Canada Education Savings Grants.  And it injected – what would become – $3.6 Billion worth of grants into the student aid system through the creation of the Canada Millennium Scholarship Foundation. Had Lavigne not brought CFS to the table, it’s quite possible none of it would have happened.

Unfortunately, his own members turned on him, thinking he’d gone too far in terms of co-operation.  In the end, he was made to criticize the deal he’d done so much to facilitate – on the lunatic grounds that it was all unacceptable if the 1995 transfer cuts weren’t restored.  As a result, CFS never took ownership of what was clearly its greatest-ever success, and Lavigne’s work was never recognized for what it was: a real act of statesmanship.

CFS – heck, the whole country – could use more student leaders like him.

October 22

Faculty Salary Data You Should Probably Ignore

Recently, the Ontario Confederation of University Faculty Associations (OCUFA) published a comparison of American and Canadian academics’ salaries.  Using Canada’s National Household Survey (NHS) and the US Occupational Employment Statistics (OES) survey (which they described as being not quite apples-to-apples, but at least Macintosh-to-Granny Smith), they noted that average salaries for the combined college-and-university instructor population (the OES cannot disaggregate below that level) were $76,000.  In Canada, the figure was $65,000.  Hence, according to them, with the dollar at par, there is a 17% gap in academic pay in favour of the Americans… and much more of a gap if PPP is taken into account.

There are three reasons why this conclusion is deeply suspect.

First, OES and NHS are not even vaguely comparable.  One is a world-class instrument, based on administrative data collected at over 200,000 places of employment; the other: a self-report from a nonrandom sample of Canadians which has been widely panned as a steaming pile of horse manure.

Second, the actual numbers seem to be slightly off.  When I go to the OES, the category for 2- and 4-year post-secondary teachers (25-1000), I get $77,600.  The Canadian NHS files show that “university professors and lecturers” (category 4011) earn $87,978 and “college and other vocational instructors” (category 4021) earn $57,275.  Together, weighted, that’s an average of $70,033.  So, a 10% gap, not a 17% one.

Third, since the two countries don’t have identical proportions of instructors in the 2- and 4-year sectors, it’s hard to tell how well these numbers reflect differences among university professors.  Neither do we have any sense of the proportion of part-timers and sessionals in the count, on either side of the border.  In other words, this comparison is based on a hodgepodge of non-comparable data, and proves absolutely nothing with respect to relative salaries of professors on either side of the 49th parallel.

More direct comparisons are possible.  Oklahoma State University has been doing an annual survey of salaries at Public and Land-grant Universities – the grouping of US institutions that look most similar to Canadian universities – for 40 years.  The figure below compares the 2012-13 OSU data with that of Canadian profs from Statistics Canada’s last UCASS study (2010-11), as published by CAUT.

Canada vs US Professors’ Salaries













One can quibble with this graph, of course.  The Canadian numbers have probably gone up another 6-7% in the intervening two years.  The US numbers don’t include the income professors get from summer research grants, which would probably add another 10% or so to their averages (see here for that calculation).  But effectively, there’s about a 15% pay gap in Canada’s favour, if dollars are counted at par, not a 17% gap the other way.

Naturally, one could get into arguments about purchasing power parity, living standards, and the like – that’s all fair game.  What’s not fair game is using a set of bad statistics when better ones are available, just because the bad data happens to better serve your cause. You’d think an association representing academics, of all people, would know that.

October 21

“Academic Freedom” or “Freedom from Evaluation”?

So, you may have heard that the University of Manitoba Faculty Association (UMFA) is threatening a strike, starting tomorrow.  What you may not have grasped is just how thin the grounds for the strike are.

You can see the university’s full bargaining position, here; UMFA, in contrast, has publicly issued only a single note (responding to a missive from the administration, which it felt was misleading) and an open letter to students published in the Free Press.  Frankly, for a group threatening to disrupt the lives of tens of thousands of students, this is pretty poor form (St. FX’s faculty union was admirably communicative during its strike, last year).  But we’ll let that pass for the moment.

Refreshingly, UMFA says the strike is not about money.  Instead, they say it’s about academic freedom.  One key issue is the desire to enshrine the right to criticize the administration in the collective bargaining agreement – which, you know, is fair enough, though it’s not obvious that there are extant cases of intimidation or retaliation that would make this grounds for a walkout.

The more important file, according to UMFA, is performance evaluation.  What UMFA wants is – and I quote – with respect to tenure, pay, and promotion, “no prescribed journals, venues, enumeration of publications or dollar amounts of research funding may be established or taken into consideration.”

Now, I do understand the objection to prescribed lists of journals, but there are easy solutions here that would still ensure that professors are publishing in rigorous journals.  External reviewers could assess individual cases (I understand Waterloo does this), journal impact factors could be used, or, if that’s too passé, one could use citation counts as evidence that at least other scholars find your work useful.  I can also see that prescribing dollar amounts of grants might be problematic, though in many fields it’s not too much to ask for a number greater than zero.

And the administration apparently sees this, too – they’ve already conceded on both of those points (see: page 9 of the admin response). What the admin hasn’t given in on is the bit about enumeration.  Read the passage above again… UMFA does not want enumeration of publications to count for pay, promotion, or apparently even tenure, for God’s sake.

Mind-blowing, huh? I understand the arguments against “publish or perish”, but this is bananas.

From UMFA’s public communications, it’s difficult to escape the impression that this strike is really about redefining “academic freedom” as “freedom from evaluation”.  That’s not something any reputable university can accept, and it’s a terrible reason to disrupt students’ semesters.  Hopefully, everybody will return to their senses before tomorrow’s strike deadline.

October 18

Better Know a Higher Ed System – Scandinavian Labour Market Edition

A bit of a different tack for this week’s Better Know a Higher Ed System.  I’m not actually going to bore you by explaining the intricacies of four different systems of higher ed, or drone on about the ever-trendy Finnish polytechnics, or anything like that.  I am, however, going to tell you some nifty things about the way education and the labour market interact in these Scandinavian countries, and why, as a result, one should be quite careful when interpreting higher education statistics from this region.

There are three notable and interconnected facts about Scandinavia that you need to know:

  • The average age of Scandinavian students is much higher than it is elsewhere.  In Canada (indeed, throughout the Anglosphere) the four-year ages with the highest participation rates are 18-21.  In Scandinavia, it’s usually 21-24.
  • Scandinavian countries are usually considered to have the highest participation rates in adult education in the world.
  • Scandinavian countries are usually considered to have among the highest dropout rates from higher education in Europe.

Now, you’re probably thinking: how exactly are these things interconnected?  Well, it has to do with these countries’ labour markets working completely differently than anywhere else.  As explained to me by a few different sources (including some senior Scandinavian civil servants), Scandinavian employers actually tend to hire based on skills rather than credentials.  It’s not entirely clear how or why this happens – it’s certainly not because of newfangled “badges” or any such thing.  It’s just their culture.

As a result, it’s quite common for students to go to school, study for a few modules, get the desired skills, and then move into the labour market.  Later, they can simply slip back into the system and finish their studies. You can see how this would distort the statistics from everyone else’s point of view: the first transition causes a lot of – what, to the outside world, looks like – drop-outs; the second creates the illusion of a fabulous system of lifelong learning. But they are, in fact, two sides of the same coin: students are just taking a leisurely path through studies, mixing periods of study with periods of work. Because they can.  Which, let’s face it, is pretty cool (as is much else about Scandinavia).

But there’s a cautionary tale here, as well.  We’re accustomed in the age of publications, like the OECD’s Education at a Glance, to compare countries based on international statistics, and to think that there’s something we can learn from “leaders” in particular categories.  But it’s not always true.  Scandinavian “success” at lifelong learning is ultimately a byproduct of a very unique set of attitudes amongst employers with respect to hiring young people.  And you just can’t import that.

October 17

Innovation Literature Fail

So, I’ve been reading Mariana Mazzucato’s, The Entrepreneurial State.  It’s brilliant and irritating, in equal measures.  Brilliant because of the way it skewers certain free-market riffs about the role of risk and entrepreneurialism in the innovation process, and irritating because it’s maddeningly cavalier about applying business terms to government processes (in particular, the term “risk”, which Mazzucato doesn’t seem to understand means something entirely different in government, if losses can be made whole through taxation).

Anyways, one thing that occurred to me while reading was just how America-specific much of the literature on innovation is.  Take the Defence Advanced Research Projects Agency (DARPA).  In innovation policy circles it’s generally considered a wicked-cool way of organizing Big Science: it’s project-based, it brings teams together from both academia and business, and it has substantial independence.  And, of course, the basic research has produced things like GPS and the Internet (still the core anecdotes used to back the “government-should-be-involved-in-research” argument). 

Brilliant, right?  So why doesn’t everyone have a DARPA?  Why doesn’t Canada?

The answer is that DARPA wouldn’t make any sense here.  Our government agencies don’t have enough of the “big problems” that DARPA is designed to solve – or, at least, that could be solved at a price we can afford.  And frankly, we don’t have enough private-sector research scientists to make headway into these kinds of projects, anyway.

More broadly, the American system of funding science works because of a particular combination of factors: the problems needing to be solved, the presence of major private sector research efforts, a particular type of venture capital industry, and scale.  Canada – like most countries in the world – would, at most, get part-marks on any of those four criteria.  So why do we think that policies based on American examples work for us?

Take questions of “applied” vs. “basic” science.  Maybe the classic Vannevar Bush formulation of, “government funds universities to do basic research, and companies do the applied stuff” only makes sense in the US context.  Maybe without the VC culture, or the private sector research culture, the idea that government should only be playing in the “basic” side of the continuum doesn’t make any sense. Maybe countries who aren’t quite at the technological frontier don’t get as much bang for their buck in basic research as America does.

This is just speculation on my part, of course.  But I’m tired of the innovation literature assuming that US-inspired solutions will work here.  Just for once, I’d like to see some literature and policy prescriptions based on what works in Korea, the Netherlands, and Scandinavia.  There’s probably a whole other set of policy lessons to be learned, if only we looked for them in the right places.

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