One of the biggest arguments in student assistance is about who to subsidize and why. Unfortunately, because we are rarely explicit in the way we talk about subsidies, discussions tend to be a dialogue of the deaf.
One school of thought says we should subsidize students based on their parental income. Students from poor families need more help to succeed than students from wealthier families, and so the former should pay less, and so we should pay them grants to reduce the net cost of attendance. Then there’s a second school of thought, which says that the way to focus subsidies is to focus on needy graduates. Forget the upfront subsidies: the people we need to support are the ones who don’t do well out of their education, and as a result remain low-income for years. The third school of thought holds that everybody should receive the same subsidy no matter what their parents make, or what they make afterwards. And then there’s a final school of thought, which says we should reward “good behaviour”, however defined.
Other countries are pretty explicit about their choices. The Americans go pretty heavy on the parental income track (though the beneficial effects of this are counteracted by other funding and policy choices). The UK is quite explicit about using the graduate income track as a means of subsidy: everybody borrows oodles of money to pay expensive tuition fees, and the ones who make out worse get these loans forgiven (eventually). Much of Europe – especially Scandinavia – operates under the third school of thought, even at the price (in a few countries) of having an unnecessarily badly-funded system as a result. The fourth view is surprisingly widely-held around the world, as it applies to anywhere that has a dual-track system of higher education (most of the ex-socialist countries of Europe, much of Latin American and Anglophone Africa) where “meritorious” students get first crack at the subsidies.
In Canada, we have a mish-mash of strategies, partly because we’re a federal system, so coherence is always a problem, and partly because we have a real tendency to reach for solutions before fully articulating the problem. Our student aid system mostly works on the parental system, but allows students to declare independence relatively early (in practice, age 22), which effectively moves to the universal system. We have a relatively generous Repayment Assistance Program (RAP), which uses the needy graduates approach. And though we aren’t especially heavy on merit awards, our $700M/year Canada Education Savings Grant, which rewards savers, is just a variant on the “reward good behaviour” approach.
You see, Canada just doesn’t do joined-up coordinated approaches; rather, we tend to just reach for whatever looks shiny, and implement it. The result is a system that spends wildly in all directions, with nothing resembling an underlying philosophy. Each individual program is arguably successful on its own terms, but the result is a system tha is arguably less successful than it could be if we focused spending on one or two of these pathways.