Higher Education Strategy Associates

April 02

Understanding Credit Transfer (Part 1)

Every once in awhile, the issue of credit transfer pops up.  Usually, it’s in the context of “learning efficiency” – some politician or deputy minister starts off with, “why can’t my son/daughter/constituent get full credit for previous learning”, and follows that with some diatribe about how universities and colleges “just don’t get it”, etc, etc.

Right now, this script is playing out in Alberta, where the Advanced Education Minister is asking institutions to create ten per cent more “seamless learner pathways”, whatever that means.

Now, it’s quite true that universities have incentives not to accept transfer credit, the reasons are both financial (receiving universities can make more money if they accept fewer credits), and reputational (high-status receiving universities will seem more exclusive if they accept fewer credits).  And there is certainly a public interest in reducing barriers of this kind.

The problem, though, is that there are some perfectly good reasons not to accept transfer credit.  Credits are not a universal currency; they need to be taken in particular sequences and combinations if they are to result in a degree.  One can’t take 120 History credits and expect to get a B.Eng.

Basically, a school accepting a transfer student needs to ask two questions: are this student’s credits of the right “level”?  And, are the credits relevant to the new program the student will be attending?  If the answer to either of those questions is no, then they are perfectly justified in rejecting the credit.

Most people focus on the issue of determining the “level” of credits – should it be done by bulky credit-transfer systems, like those in Alberta and BC? Or, should it be done through standards-based systems, like the European Credit Transfer System?  Those are important questions: the efficacy of the former seems to fall as the number of participating institutions rises, but nobody in Canada seems inclined to try the latter, because it’s too much work.

But, in fact, the bigger challenge is determining the relevance of old credits to new programs.  The whole point of specialized degree programs is that they offer something specific that others don’t; the more unique programs are, the harder it should be to transfer in credits.  This is why it’s completely baffling when politicians insist that institutions should simultaneously reduce program duplication and allow more transfer credit.  They’re two directives operating at cross-purposes.

And to make matters worse, the one thing usually ignored in this debate is actual data.  While n=1 might work for a features story, that doesn’t prove there’s a generalized problem.

But never fear, we at HESA actually have some real data on this subject, both from colleges and universities.  More tomorrow.

April 01

A Persistent Problem with Truth

When it comes to the subjects of debt and tuition fees, the Canadian Federation of Students (CFS) is the least trustworthy source on earth.  They lie.  Constantly.

To see the latest collection, just look at this press release, which averages roughly one lie per paragraph.  For instance:

“Since 2006, tuition fees have increased as much as 71 per cent in Ontario”.  The words “as much as” are doing a lot of work here.  For the vast majority of programs, the 5% annual increase has meant an increase of about 47%. And for full-time students benefitting from the 30% rebate, it’s only 17% – which is less than inflation.

“Average student debt after a four-year degree is $37,000 for debt from public and private sources”.  No, that’s the average for the small proportion (12% or so) of students who have debt from both public and private sources.  Across all students with debt, it’s in the $26,000 range.  Across all students, it’s about $16,000.

“The Ontario Liberals committed to reducing tuition fees by 30 per cent in the last election…”. No, they committed, quite specifically, to a rebate of 30% for full-time undergraduate students from families earning under $160,000.

“… their Ontario Tuition Grant has reached fewer than one-quarter of students in the province”.  As I pointed out, here, this is only true if you include 300,000 college part-timers taking less than one course per year, 60% of whom are having their education paid for by their employers.  Which, since no one thinks they need a tuition break, is pretty dubious.

“… untold number of youth being shut out of accessing a college or university education every year”.  Ontario has the highest rate of combined access to university and college of any province.  If tuition has an effect, the one place it isn’t showing up is in access rates.

These aren’t honest mistakes made by idealistic youth who aren’t good with statistics.  The CFS has many professional staff who are paid to know this stuff, some of whom have been around for decades.  They know perfectly well what the real data says; they just think that that lies are acceptable so long as they’re deployed in service of their cause.

And really, why wouldn’t they think that?  Ministers still meet with them.  Journalists and opposition parties, thinking them a reliable source, regurgitate their lies uncritically all the time.  Usually, when interest groups take this kind of liberty with the truth, they lose credibility and, hence, access to power.  For some reason, CFS never face any consequences for telling lies.

But maybe, for the sake of restoring honesty to debate, it should.

March 28

Enough with the Youth Declinism, Already

Can we please just stop with the “Generation Y are screwed” meme, already?  It’s utterly without foundation.

Last week, the Canadian Press ran an article about a poll, which said that, due to inflated housing prices, 72% of Canadians aged 19-33 were pessimistic about ever owning a house.   This sounds terrible – until you look at the actual data.

Census data shows that, in 2006, home ownership among 20-29 year olds was, in fact, at an all-time high.  True, the Teranet House Price Index does show that average house prices went up 40% since 2006, but that’s been offset by 5-year mortgage rates declining during that same period, from about 5.75% to 3%.  The result: although average housing costs have risen 40%, the cost of servicing a loan for an average house has only risen 6% (or, slower than inflation as a whole) since 2006.

Another big piece of youth declinism came via Rob Carrick of The Globe, who began his piece, “Young Adults really do Have it Tougher”, with the sensational claim that, “people aged 20-24 are 41% worse-off financially than their counterparts were in 1976”.

Here’s what the actual data looks like, going back to 1976.

Average and Median Incomes, 20-24 year-olds, Canada, in Real 2010 Dollars













It is indeed true that today’s students have it worse than those from 1976.  But since all that change effectively happened prior to 1992, it’s also true that students today are no worse off than they were 20 years ago.

So what happened in the 80s that changed youth incomes so much?  It’s not that employment rates have fallen; they’ve bounced around a fairly narrow range, in the high 60s and low 70s, for pretty much the entire past 40 years.  But when we look at hours worked, the puzzle solves itself nicely.

Average Hours Worked, 15-24 Year-Olds, Canada













Average overall hours worked dropped from 35 hours-per-week, to 28 hours-per-week – or, by roughly 20%. In 1976, among 15-24 year olds (Cansim doesn’t break it down to 5-year blocks, unfortunately), over half were working 40 or more hours per week; in 2010, less than 35% were.

And why did working hours fall?  The obvious answer is that PSE attendance in that age bracket nearly doubled in the period from 1976 to 1992, which left people with fewer hours available for paid work.  According to The Globe, this large increase in access now has to be re-interpreted as a disaster for young people, because enrolment curtailed their income in the short-term.  Yeesh.

For those of you still convinced there’s a generational crisis going on, have a look at this data from the Labour Force Survey.

Average Hourly Wage Rate by Job Status, 15-24 Year-Olds, Canada, in 2012 Dollars













A prize for anyone who can turn that graph into a convincing tale of generational woe.

March 27

Poor Barista, Rich Tradesperson

Many of you were kind enough to write in about my series on the relative value of Arts degrees versus tradescertifications, and the associated piece, which appeared in the Globe online.  I just wanted to finish off that series with a thought on how these memes are being propagated.  There are two points that I want to note, specifically.

The first is that the “BAs vs. welders” argument is always carried-out by a curious and unbalanced mix of anecdotes and data.  These stories basically all follow the same formula:

1)      The case against bachelor’s degrees tends to revolve around “over-education”, and always includes the point that some graduates work as baristas.   I spend a fair bit of time in Starbucks, and it seems to me that most baristas are students, rather than graduates, and those who are graduates are still pretty young.  This is to say, the graduate barista is a temporary phenomenon.  There aren’t a lot of aging graduate baristas; within eighteen months, they’re all either in grad school, or they’ve found a decent job.  Is this really such a big deal?

2)      The most frequent use of data is not – you’ll be shocked to hear – long-run outcome data, but data related to cost.  Tuition is up, debt is up, yadda yadda.  And yes, $25,000 debt would be freaking horrible… if barista was a permanent occupation, and the Repayment Assistance Plan didn’t exist.  But it’s not, and it does.  And so this objection is kind of beside the point.

3)      There’s never any quantitative data deployed in favour of the trades side – it’s always anecdotal.  Like this Maclean’s article, in which the entire trades side of the argument is a single case of a tradesperson in Alberta.  Partly, that’s because the data isn’t very good (you can get data by education, or by industry, but getting both is a pain), but it’s also because the available data isn’t very convincing.

Even as a data nerd, I understand that visceral examples – like, “poor baristas and rich plumbers” – carry more emotional weight than mere statistics.  I just don’t quite get why they carry so much emotional weight, when the data actively (and entirely) points in the other direction.

My second point to note about this debate is that, apart from Margaret Wente, the people who make pro-trades arguments are almost entirely male.  Now, maybe that’s because people who commentate on the labour force, and on higher education, are also mostly male, but I still think the near-total lack of women making the “more-welders-fewer-BAs” case is of some significance.

I’m Just sayin’.

March 26

The Curious Case of Disappearing Student Debt

If you’re one of those people who obsessively follows stories about student debt, it’s possible you’ve heard some rumblings about the latest Canadian University Survey Consortium (CUSC) survey, which seems to show a drop in student debt over the last three years.

CUSC is an important source of information about student debt in Canada.  Every three years, this consortium surveys a few tens of thousands of graduating students, and asks them (among other things) about their outstanding student debt.   We need this source of data because the National Graduate Survey only comes out every five years (too infrequent for most policy purposes), and the feds and provinces have yet to come up with a way to jointly report debt statistics (joint reporting being necessary, given that students receive loans both from federal and provincial governments).

Anyways, here’s what the CUSC data shows in terms of borrowing incidence:

Incidence of Borrowing, by Source, 2003-2012













The small uptick in borrowing incidence is about what you’d expect.  But where this data gets weird is when you look at the amount of total borrowing:

Mean Amounts of Borrowing (Among Those Borrowing), by Source, 2003-2012, in Real 2012 Dollars













Contrary to all expectations, overall debt fell by 14% in real dollars between 2009 and 2012.  So, what’s going on here?

One possible answer concerns participation in CUSC, which changes slightly from year-to-year.  Of the institutions who took part in the 2009 survey, twenty-six participated again in 2012; eight institutions left (notably Alberta, Calgary, UBC, and UVic), and ten came in (including York, Waterloo, Sherbrooke, and UQTR).  Clearly, the addition of a couple of low-debt Quebec schools, and the absence of high-ish debt schools from British Columbia, is an obvious possible explanation for this mystery.

Except: in 2012, for the first time, CUSC weighted its response data by the size of each institution’s graduating class.  Given the makeup of participating schools, this shift means that, in fact, 67% of weighted 2012 responses comes from high-debt jurisdictions (Saskatchewan, Ontario, New Brunswick, and Nova Scotia), compared to just 62% in 2009.  Given what we know about regional differences in debt, from previous National Graduate Surveys, the new sample should, ceteris paribus, have actually delivered a slightly higher debt number.  So the change in sample doesn’t seem to be the answer.

Other explanations?  Well, total grants issues in Canada did increase, slightly, after the replacement of the Foundation with Canada Study Grants, and the class of 2012 would have benefitted from a few extra years of Canada Education Savings Grants, but neither seems likely to have changed borrowing patterns this much.   It may also simply be greater prudence – students spending less in hard times.

Makes you wish we had better statistics, doesn’t it?

March 25

Lines in a Budget

We hope you liked our review of the 2013 Federal Budget.  Just to round off last week’s commetary on the all things budgetary, I thought I’d offer a few thoughts on the dangers of coming to snap conclusions about government policy from a budget document.

Obviously, there’s the problem of time.  It’s tough to try to get everything together, in a nice tight package, in the space of three or four hours; unlike the dudes who do news coverage for the networks and dailies, we haven’t spent all day in lock-up with the document.  That doesn’t just lead to the odd spelling error (oops), it means we sometimes miss things entirely.

The big(ish) one we missed this time was a little line on page 194, which says:

In the coming year, the Government will examine the Indirect Costs Program in consultation with the post-secondary sector, including the Association of Universities and Colleges of Canada, to ensure that the program is meeting its objective of reinforcing excellence in post-secondary research.

Now, this could mean a lot of things.  It could just be an indication that the government is planning to do some sort of due-diligence program review.  Worst case scenario (though I doubt this is the case), it means a penny-pinching government might be out to slash the program.

Or – and this is what they don’t tell you in civics class – it might amount to nothing at all.  Sometimes the Government of Canada puts stuff in budgets, and then never follows-up.  In 2011, the Government pledged to reallocate $60 million of HRSDC money, over three years, in order to “promote enrolment in key disciplines related to the digital economy such as science, technology, economics, and mathematics”.  Well, we’re heading into year three, and, as far as I know, this still hasn’t happened, which kind of makes you wonder how last week’s pledge of spending  millions promoting “in-demand” subjects is going to play-out.

Or how about this, from 2010:

The Government will engage in a new approach to providing  support to First Nations and Inuit post-secondary students to ensure that students receive the support they need to attend post-secondary education. The new approach will be effective and accountable, and will be coordinated  with other federal student support programs.

This also never happened.  And while the PSSSP is ripe for an overhaul, given this government’s not-altogether-happy track record with First Nations, it’s probably just as well that it didn’t.

A line in a budget is only a statement of intent.  It takes a lot of work to get it from there, to being the law of the land.  And you just can’t tell on budget night what’s what.

March 21

HESA’s 2013 Federal Budget Commentary

On Thursday afternoon, Finance Minister, Jim Flaherty, stood on the floor of the House of Commons, and delivered the Government’s eighth Federal Budget.  In lieu of an OTTSD for Friday, we at HESA have examined the document, and produced a commentary on its implications for higher education in Canada.

You can read our 2013 Federal Budget Commentary, here.

Thanks for reading.  And as always, let us know what you think.


March 21

A Dream Budget

Today is budget day in Ottawa.  Tonight, you’ll get our full budget coverage (replacing tomorrow’s morning blog), and if you’re of the twitter persuasion, you can follow my analysis from 4PM, on, at @AlexUsherHESA.  But for now, let’s think about what a good Canadian federal budget would look like for higher education.

In keeping with the times, this will be a completely cost-neutral budget.  We’ll start with some obvious places to cut: the elimination of the education amount and textbook tax credits (pure middle-class giveaways), and of in-school interest subsidies on Canada Student Loans Program (CSLP).  Together, those two should give us about $900 million/year to play with.

Now, where to spend it?

Let’s start with CSLP.  Using the money we’ve just taken-out of the program, let’s give it back to students in the form of a concessionary loan rate after graduation.  Instead of paying kids to borrow while they’re in school, and then hitting them with rates 400 basis points above the price at which government borrows, we could give them one even rate across their entire loan.  Winners: students who take a long-time to repay; Losers: those whose parents currently pay off their loans.  Cost: $300 million (or so).

Let’s take another $300 million and give it to Aboriginal Affairs, to double the size of the Post-Secondary Student Support Program (PSSSP).  If you want to expand access to PSE in Canada, there’s no better way to spend marginal dollars.  At the same time, rules should be amended so as to take program administration out of bands’ hands, and transfer it to aboriginal organizations, which have more administrative capacity (see: my 2009 paper on this, here).

Next, let’s go with $100 million, more or less unfettered, to the granting councils in the usual 40/40/20 configuration.  Then maybe $50 million to do something snazzy on university-research interaction.  As I noted a few weeks ago, traditional tech transfer just ain’t working in most places, and it’s time to come up with a new model.  I have no idea what that is, exactly, but I know I’d probably ask the guys at the UBC Industry Liaison Office to design it.

Then, another $125 million to some kind of new fund that would modernize and improve teaching at universities and colleges in Canada.  Let’s get scientific about improving pedagogy, and let’s get serious about helping institutions open themselves up to experiential learning, and get students involved in applied research.   Done well, this could be a huge branding opportunity for Canadian education as a whole.

Last, take $25 million and send it to Statscan so we can get a decent educational statistical system in this country.  Finally.

Chances of this being implemented: zero.  But I guarantee it’s a better and cheaper package than anything Flaherty announces this afternoon.

March 20

Skills Shortages (Part 2)

As I noted yesterday, much of the talk about skills shortages in Canada is data-free, and factually-challenged.  What, for instance, are we to make of claims that we have a huge shortage of people in the construction trades, when even a simple look at Labour Force Survey data tells a very different story?

Unemployment by Industry, 2007-2012













Yeah, that’s right: workers in the social sciences, education, and government fields (mostly university graduates) have unemployment rates of about 3%, compared to 9% for workers in the construction trades.

But what about those huge pay increases we’ve been hearing about for skilled trades?  Well, they do exist – if you happen to be part of the 1.5% of the total workforce involved in resource extraction.  Otherwise, wage increases in trades pretty much mirror wage increases in the wider economy.

Wage Growth by Industry (selected industries) 2003-2012














Now, none of this is to deny that in some parts of the economy (skilled trades and health care, in particular), in some provinces (mainly Alberta and Saskatchewan), skills shortages do exist, and the inability to fill these positions creates a bottleneck to growth in some booming industries.  But, then, what’s the right policy response?  I haven’t got the answers, but I do have some thoughts:

1)      Be skeptical about “better labour market information” schemes.  Do we really think the unemployed don’t know that things are booming out west?  The problem is that retraining for in-demand jobs takes 3-4 years, by which time they may no longer be in-demand

2)      Be very skeptical about financial incentive schemes.  In February’s Policy OptionsKen Coates and Rick Miner proposed giving scholarships to students who go into particular, “in-demand” trades.  This, frankly, is bizarre: if jobs are going begging, shouldn’t wages rise to attract demand?  What business is it of government’s to subsidize particular occupations?

3)      Focus on Completion Rates.  There’s much talk about needing to “make trades more attractive”.  But new entrants to trades are close to all-time highs – more than double the rates of the late 90s.  As a recent CGA report cogently noted, the problem is that new apprentices aren’t finishing their programs.  Solve that, and the larger shortage problem is solved, too.

But my final thought is this: why can’t Alberta and Saskatchewan deal with this on their own?  Why is this a federal issue?  Cynics on the left may push the idea that it’s because Harper hates educated humanists, etc, etc., but I think it’s simply that this government listens to western business.  If they have a problem, this government will bend national policy to suit, just as previous ones bent national EI policy to suit Quebec and the Atlantic.

That’s Canadian federalism for you.

March 19

Skills Shortages (Part 1)

OK, apparently this week I’m going to have to talk about skills shortages, because it seems that people in Ottawa have LOST THEIR EVER-LOVING MINDS on the subject.

The basics of the policy discussion are as follows: Canada currently has an unemployment rate of about 7.5%, which is deemed too high.  Despite there being roughly 6 unemployed people for every job vacancy, there are some jobs which are going unfilled because of skills shortages.  This, everyone can probably agree, is a Bad Thing.

Conventional wisdom would suggest that the problem is a lack of aggregate demand – that is, a lack of jobs.  But there is an increasing drumbeat saying that the problem is one of aggregate skills – or, a “skills mismatch”.

So, which is it?  A jobs challenge, or a skills challenge?  And if it’s the latter, what kinds of skills are missing?

One way to look at the tightness of labour markets is to look at the ratio of unemployed-to-job openings.  Statistics Canada has been measuring this over the last couple of years, and here’s what they’ve found:

Ratio of Unemployed-to-Job Openings, by Province













The major determinant of unemployment is, as it always has been, regional economic disparity.  Everywhere outside the Prairies, the ratio of unemployed-to-job openings is over 6-to-1; the idea that skills mismatches are in any way driving unemployment in these areas stretches credulity.

That doesn’t rule out the skills mismatch hypothesis in other parts of the country, though.  But what kind of skills mismatch is it?  Is it true that, as one Conservative source allegedly said, “we have too many BAs and not enough welders”?  That’s a common meme, stemming in no small part from the constant rhetorical confusion between “needing more skilled workers”, and “needing more workers in the skilled trades”, which is not the same thing at all.

This can be easily verified.  Recently, CIBC put together a nice little report, which listed the 25 occupations showing signs of a skills shortage over the next few years.  Here they are, in the table below, listed in no particular order:

25 Occupations Showing Signs of a Skills Shortage (Source: CIBC)















Maybe five of those require apprenticeships; most of the rest require university degrees.  True, only one relates to BAs, but that suggests a need to put more money into expensive STEM problems, not shift students out of universities altogether.

But this isn’t the line we’re hearing right now from elected representatives.  Why, exactly, is that?  More on this tomorrow.

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