Higher Education Strategy Associates

Category Archives: student aid

October 16

Osgoode’s Income-Contingent Experiment

There’s an interesting experiment developing at Osgoode law school involving the creation of (what is being called) an income-contingent loan system.  Dean Lorne Sossin outlines the plan a little bit in his blog, here.  There are some fairly big details missing from this description, for the quite good reason that the Dean is leaving a number of design features open, pending discussions with the faculty’s students.  But one crucial thing about this program is being obscured by the term “loan”: namely, that no money actually changes hands.

The language of “income-contingency” can make things a bit confusing.  Canada, as I’ve argued before, already has a system of student loans that is substantially income-contingent – but they are income-contingent loans.  What Osgoode is considering is an actual Australian-style income-contingent fee.  This is quite different.

In North America, the way student aid works is that an institution charges students a fee.  A student asks the government for money via student aid.  The government gives the student money, and the student pays the institution.  Technology makes this little money circle move pretty quickly, but the basic point is the money moves through the student’s hands (legally, if not in fact) before it goes to the institution.  The fee is immutable, and the loan contract is between the student and the government.

In Australia, the Higher Education Contribution Scheme works somewhat differently.  There is a HECS “charge” – that is, an amount a student notionally owes.  But there is no loan that goes through the student’s hands.  When the student is admitted, there is simply an agreement that the student will pay that notional amount down over time through his or her earnings.  Most do so, and relatively quickly; others never do because their incomes never reach the necessary threshold to trigger payment (re-payment is not required below about $51,000).  But as the title says, it’s a contribution, not a fee.  The contribution is conditional on future income, and so there is no “loan” in the sense that we understand it.  This is effectively what Osgoode is trying out.

You can see why this idea might be attractive: for those people who are put off by the sticker price, the idea of waiving up-front tuition seems like a pretty good deal.  But there are some legal/administrative issues that might make this more complicated that it appears at first glance.  The most obvious is how to manage repayment.  In Australia, the government monitors graduates incomes and collects repayment through the tax system.  Osgoode, to state the obvious, does not.  If there’s an Achilles heel here, this is probably it.

But that’s not the only problem to solve.  The other issue is how the waived tuition will be reported to the government.  If it is reported as zero, it will reduce a students’ eligibility for loans and thousands of dollars’ worth of tax credits.  Some reduction in public loans probably makes sense since they have less immediate need for liquidity; however, if the students don’t get the tax credits *and* they repay their entire tuition, they would actually be worse off over the long-run.

Hopefully, some solutions can be found to these problems.  Because its nice to see institutions innovating in making professional education cheaper for a change.

October 07

Do the Poor Really Pay More?

There’s a trope out there that goes something like this: “Loans are unfair because interest on the loans means that needy students pay more in total to go to school than students who don’t need a loan“.  If it were true, this would indeed be problematic.  But the thing is, for the most part, it’s not.

Let’s follow two hypothetical students: Claudia and Eveline.  Claudia can manage to pay $25,000 for her four years of tuition, upfront; Eveline cannot, and she borrows $25K from Canada Student Loans and her provincial student aid program over four years.  Assume that inflation is a constant 2%, and that interest during the repayment period is 6.25% (over the last few years, real interest rates have floated between 400 and 450 basis points above inflation).

Student loans carry zero interest during the in-study period.  This means students actually make money while they’re borrowing because inflation eats away at the value of the loan before they’re required to pay it back.  In Eveline’s case, she effectively makes $1,125 between the September she starts and graduation day.

Then, of course, things start to work in the other direction.  Assuming Eveline takes eight years to pay off her student loan, she ends up making $4,321 in interest payments (figure is net of inflation).  Take away the $1,125 that Eveline “made” during the in-study period and the net interest cost comes to $3,196.

If that were the end of the story, the people who claim loans are “unfair” would be right; we would be discriminating against the poor.  But that’s not the end of the story because people who get loans usually also get grants.

If you’re an independent student making less than $38K per year and you apply for aid, you are nailed-on for an extra $2,000 per year – that’s $8,000 over the course of a degree.  Ditto if you’re a dependent student and your parents make less than $38K.  If you’re a dependent student and your parents make less than (roughly) $76K, you’re nailed-on for another $800/month – or exactly $3,200 over four years, which wipes out the interest cost of the loan.  Plus, of course, you get 15% of all interest paid as a tax credit – which means you actually come out ahead by a few hundred dollars.

Are there borrowers who don’t come out ahead?  Yes.  Those who borrowed but had family income high enough that they didn’t qualify for the middle-income grant likely wouldn’t receive a grant to offset the loan interest amount.  Borrowers who take more than eight years might end up with higher interest charges not covered by their grants (and possible remission).  There are enough variables here that it’s hard to say how many people this might include.  But remember – the base population that doesn’t get sufficient offsetting grants consists of dependent students with family incomes over $80K, that’s *maybe* 20% of all borrowers (and not the poorest 20% by any means).  Or to put it another way: probably something like 80% of borrowers are receiving more in subsidies than they pay in real interest over the life of their loan.

That’s a good thing – an outcome of our generous, if opaque, student aid system.  We should acknowledge it, celebrate it, and most of all get the usual suspects who adore this talking point to shut up about it.

October 06

Remembering the Axworthy Green Paper

It was 20 years ago today that then-Human Resources Minister Lloyd Axworthy presented the findings from his long-awaited “Green Paper” on social security to the House of Commons (the paper itself was released the day before, on October 5, 1994).  The back-drop:  Lucien Bouchard was leader of the opposition, Jacques Parizeau was the new Premier of Quebec, and we were on track for a referendum the following year.  Unemployment was over 10 percent; for youth, it was 20 percent.  Our basket-case status led to a run on the currency; the price of defending it was sky-high interest rates.  Interest payments on the federal debt were eating-up close to a third of the federal budget, so citizens were paying $1 for about 70 cents worth of services, and feeling pretty ornery about it. 

Basically, we were screwed.

By late summer it was clear that the Liberals were going to take an axe to pretty much everything in the next budget.  Where PSE was concerned, the day was looming when cash transfers would drop to zero and Established Programs Financing (the CHST was yet to be created) would become a tax-point-only affair.  It was at this juncture that HRDC minister Lloyd Axworthy decided there was no time like the present to start talking about re-designing Canada’s social security system, including student assistance.  This was either extraordinarily brave or face-palmingly stupid, depending on your point of view.

The upshot of the Axworthy student aid proposals – articulated in the general social security “Green Paper” of October 1994, and in a subsequent student aid “White Paper” in November – had its roots in some ideas that had been percolating 25 years earlier during Pearson’s second-term, when Tom Kent was the Liberals’ Policy guru.  Instead of sending money to the provinces to support higher education, why not give that money to students, either through scholarships or – this was the new bit, based on Ottawa’s straightened circumstances – loans.  And of course, this being the early 1990s, these were going to be income-contingent repayment (ICR) loans.

ICRs were all the rage in the early 90s.  Australia and Sweden had recently introduced them (Bill Clinton was in the midst of doing the same in the US), and in the former case, at least, they had permitted the introduction of fees that had made institutions better off, and permitted a major increase in university capacity – and all without negatively affecting access.  But of course, since it involved higher fees, the usual suspects in Canada had an aneurism, which led to an autumn of student protests.  Students and PSE institutions united, arguing that they wanted federal funding to go through institutions, not students.

The reforms died with a whimper – with little third-party support, the reforms basically died on the night of the 1995 budget, when transfers to provinces were slashed with no concomitant change in the loan programs.  But in the medium-term, the Liberals actually ended up accidentally enacting much of the Axworthy agenda.  Student Loans became substantially income-contingent through the improvement of Interest Relief (which later evolved into today’s Repayment Assistance Program), and transfers to students to pay for higher fees increased substantially through education tax credits, grants, and educations savings programs.  In fact, by the early 2000s, the feds had more or less replaced a couple of billion in transfers to provinces with an equal-sized set of transfers to individuals without anyone (including possibly themselves) really noticing.

The Green Paper was one of the great might-have-beens in Canadian social policy.  But because it’s remembered (not entirely correctly) as a failure, it’s unlikely we’ll see anything that ambitious in social policy ever again.  Shame.

August 27

The Problem at the Back End

Yesterday, we talked about how the Canadian aid system was both generous and clumsily organized, what with most of it being delivered through tax credits and loan remissions – neither of which shows up directly to reduce tuition at the time of registration.  This is something that needs to change; if we’re giving students so much money, we should at last give it to them in a form that is both useful and comprehensible.  So why can’t we do it?

Our tax credit system goes back to the Diefenbaker era (backstory here), but it really took off in the late 1990s when the education amount increased nearly eightfold in less than a decade.  Why such an increase?  Well, partly it’s because tax credits are politically convenient at election time – you can count them either as new spending or as tax cuts, depending on what audience you’re talking to.  But it’s also because provinces can’t hijack federal tax credits by diverting the money to other causes (e.g. the Harris or Charest tax cuts), or simply allow federal dollars to push out provincial ones (e.g. the Canada Study Grants for Students with Dependants).  Tax credits go straight from Ottawa to taxpayers.  So even though tax credits are a sub-optimal way of delivering student aid, they are superlative as a displacement-free method of delivering federal money.  If you don’t understand why that matters, you haven’t spent enough time in Ottawa.

Where provinces have built on tax credit nuttiness is by giving out large scale tuition rebates through the tax system.  Most provinces haven’t succumbed to it, but Saskatchewan, Manitoba, and New Brunswick have – and frankly they’ve gone bananas with it.  In Manitoba and Saskatchewan, students who finish a first undergraduate degree or college program qualify for one of those province’s graduate rebates. For graduates that remain in the province, these programs are so generous that literally everyone ends up receiving more in subsidy than they pay in tuition.  In Saskatchewan, students from families earning over $120,000 can end up receiving $34,000 in various forms of grants tax credits, while paying only $26,000 in tuition if they graduate in four years and stay in the province for seven years after graduation.

This, frankly, is nuts.  What’s the point of paying graduates $20K each to stay in Saskatchewan, regardless of pre- or post-study income?  Even if that argument had a smidgeon of validity fifteen years ago when it was introduced (amidst significant out-migration), now that Saskatchewan is a “have” province it looks more than faintly ridiculous.  Doesn’t Saskatchewan have more pressing needs than to pay middle-class kids to do what they were going to do anyway?

If we’re spending all this money making higher education cheap, we should spend it in a way that is more useful and comprehensible than tax credits.  The problem is, these kinds of subsidies are difficult to re-allocate because they benefit so many people.  But finding a way to re-allocate tax credit money is a must.  Stakeholder representative groups could do everyone a service by banding together and working out ways to give governments the necessary political cover to do the right thing.

August 26

What Students Really Pay

In a couple of weeks, Statistics Canada will publish its annual Tuition and Living Accommodation Cost (TLAC) survey, which is an annual excuse to allow the usual suspects to complain about tuition fees.  But sticker price is only part of the equation: while governments and institutions ask students to pay for part of the educational costs, they also find ways to lessen the burden through subsidies like grants, loan remission, and tax expenditures.  And Statscan never bothers to count that stuff.

Today, we at HESA are releasing a publication called The Many Prices of Knowledge: How Tuition and Subsidies Interact in Canadian Higher Education.  Unlike any previous publication, it looks not just at a single sticker price, but rather at the many different possible prices that students face depending on their situation.  We take ten student cases (e.g. first-year dependent student in college, family income = $80,000; married university student, spousal income = $40,000; etc.), and we examine how much each student would be able to receive in grants, tax credits, and loan remission in each of the ten provinces.  It thus allows us to compare up-front net tuition (i.e. tuition minus grants) and all-inclusive net tuition (i.e. tuition minus all subsidies) not just across provinces, but also across different students within a single province.

Some nuggets:

  • On average, a first-year, first-time student attending university direct from high-school, with a family income of $40,000 or less receives $63 more in subsidies than they pay in tuition, after all subsidies – including graduate rebates – are accounted for (i.e. they pay net zero tuition on an all-inclusive basis).  If they attend college, they receive roughly $1,880 more in subsidies than they pay in tuition (i.e. -$1800 tuition);
  • A first-year, first-time student attending university from a family with $40K in Quebec, after all government subsidies, pays -$393 in all-inclusive net tuition.  In Ontario, the same student pays -$200.  But if we were to include institutional aid, the student in Ontario would likely be the one better off, since students in Ontario with entering averages over 80% regularly get $1,000 entrance awards, while students in Quebec tend not to.  For some students at least, Ontario is cheaper than Quebec;
  • On average, college students who are also single parents receive something on the order of $11,000 in non-repayable aid – that is, about $8,500 over and above the cost of tuition.   In effect, it seems to be the policy of nearly all Canadian governments to provide single parents with tuition plus the cost of raising kids in non-repayable aid, leaving the student to borrow only for his/her own living costs.

The upshot of the study is that Canada’s student aid system is indeed generous: in none of our case studies did we find a student who ended up paying more than 62% of the sticker price of tuition when all was said and done, and most paid far less.  But if that’s the case, why are complaints about tuition so rife?

Two reasons, basically.  First, Canada’s aid system may be generous, but it is also opaque.  We don’t communicate net prices effectively to students because institutions, the provinces, and Ottawa each want to get credit for their own contributions.  If you stacked all the student aid up in a comprehensible single pile, no one would get credit.  And we can’t have that.

The second reason is that Canada only provides about a third of its total grant aid at the point where students pay tuition fees.  Nearly all the rest, stupidly, arrives at the end of a year of studies.  More on that tomorrow.

May 26

Tuition Fees and Inequality

Stop me if you’ve heard this one before: it’s unfair that some people graduate with debt, and others don’t.  The ones that do tend to have started off poorer to begin with.  And so instead of being a means of social mobility, tuition ends up being a means of perpetuating it – the ones who start off poorer end up poorer.  That’s bad, and that’s why we should have no tuition.  Eliminate tuition and you eliminate inequality.

Let’s take this one-by-one.

First of all, eliminating tuition doesn’t eliminate debt.  Sweden, famously, has both free tuition and significant debt.

Second of all, while the notion that the poor are the ones with debt is mostly true, it’s not entirely so.  Some well-off kids borrow – usually in their fifth year when their parents’ income no longer counts against them in the need assessment process.  And some poorer kids get through without loans by working and living at home.

But the most important of all is a point articulated by the American writer Matt Bruenig in this article: eliminating tuition does not, in any way, change inequality between rich and poor students.  To a large degree, the kids who graduate without debt do so because their parents pay their bills.  If you make tuition free, it reduces (but does not eliminate) the need to borrow; it also means that wealthier parents get to save their money.  The gap between rich parents and poor parents is not made narrower: they are both saving the same amount of money.  And the idea that the gap between graduates is made narrower depends entirely on the notion that rich parents will look at all that money they’re saving and not pass it on to their kids.

Does anyone really believe that?  Does anyone really believe that if rich parents had more money they’d pass less of it on to their kids?  No?  Then your argument relating tuition to the perpetuation of inequality is wrong.

Bruenig makes the argument – correctly – that if you are going to base your tuition policy around the idea that it should serve to reduce inequality (something many sensible people would think is nuts), then the only way to do that is by charging sharply progressive fees.  Ask the kids from poorer families to pay little or nothing, and ask the kids from wealthier families to pay more.  And in practice the way you do that is by charging high fees and off-setting it with need-based grants.

Anything else fails the inequality-reduction test, simple as that.

May 21

Rationalizing Regressive Subsidies

A couple of weeks ago, I wrote a blog analysing the distributional effects of tuition reductions vs. targeted grants, and concluded that the latter was far more progressive in their impact than the former.  In response, Carleton professor Nick Falvo wrote a piece on OCUFA’s Academic Matters website saying that I was “wrong about tuition”.  Because some of his arguments are interesting – to his credit, he didn’t reach for the appalling argument that a regressive distribution of benefits is OK because the rich pay more taxes – I thought I would take some space here to respond.

Although Falvo claims to be demonstrating that my thesis about regressivness is wrong, at no point does he actually address the distribution issue.  Rather, he essentially concedes this point, and then make a series of arguments about why tuition reduction is preferable to targeted grants despite their regressiveness.

Falvo makes five separate arguments about the superiority of a free-tuition arrangement over a tuition-plus-grant arrangement.  The first is that free tuition is more “efficient” than grants because the administration costs are lower. But this is silly.  In fact, SFA administration costs in Canada run about five cents on the dollar.  Why you’d spend billions of dollars on one type of subsidy, just to save a few tens of millions by getting rid of the few hundred public servants who administer the existing programs, is a bit beyond me.

The second argument  is, essentially, that grants don’t work because sometimes tuition rises faster than grants.  But the more efficient solution to this – were this indeed a problem – would of course be to spend more on grants, not decrease tuition.

His third and fourth arguments are mutually contradictory.  One is that targeted subsidies create disincentives to work (the “welfare wall” argument); the other is that targeted grants are too complicated to understand, and that free tuition is more effective because it is easier to understand than a fees-plus-aid strategy.  The first implies that families have quite a good understanding about how subsidies work, and adjust their behaviour accordingly; the second implies that they don’t.  My view is that the second theory is more likely to be the correct one.  Sticker prices are simpler to understand than net prices.  The question really is whether this actually matters.  How much damage does poor communication actually do to access?  Is it sufficiently bad that we should spend an extra couple of billion on it?  For that to be the case, one would need to prove not simply that some people are deterred by financial barriers (undoubtedly true), but that they are deterred in large numbers because of their misunderstanding of extant financial incentives.  On the basis of existing evidence, I’d guess that’s not the case.

Falvo’s final point is that free tuition is a more politically saleable proposition than grants – because more people will benefit, it is easier to create and maintain voting coalitions in favour of it.  Even if that’s true, it is an appalling argument.  Stephen Harper certainly sold the Universal Child Care Benefit much easier than Paul Martin sold the (targeted) expansion of daycare spaces, but that doesn’t make it good public policy.

The argument that the only way, politically, to get a dollar to the youth from the poorest quartile is to give three dollars to youth from the richest quartile is an awfully convenient one… if you’re from the top quartile.  I simply don’t believe we have to settle for a system where the only way to get money to the needy is to buy-off the rich.  And I remain completely baffled why people who claim to be progressive actively promote such an idea.

May 09

Who’s Progressive?

To the extent that finances act as a barrier to higher education, they are an obstacle to those without resources – that is, those who tend to come from lower-income backgrounds.  It is, therefore, simply common sense that if you want to relieve financial barriers, you concentrate resources among those with the fewest means.

Except, it doesn’t seem to be common sense among many of those who consider themselves “progressive” in Canada.  “Progressives”, for reasons that are almost incomprehensible, prefer solutions that give far more money to students from high-SES backgrounds.  Why?  Good question.

The best way to focus aid is to use grants based on income (or, second best, on assessed need).  By using income-targeting, you can get money to exactly who you want.  Say you have $100M that you want to put towards affordability.  Want to give all of it to students in the lowest income quartile?  You can do that.  Split it between the bottom two income quartiles? You can do that, too.  Or maybe spread it out a little more thinly so that it cuts out gradually – say, 60% to bottom income quartile, 30% second quartile, 10% third quartile?  You can do that, too.  Grants make many different types of investments possible.

Figure 1: Some Possible Distributions of Grants Across Income Quartiles














But some people despise this idea.  Some people say things like, “lower tuition is the best form of student aid”.  Implicitly, because people from richer families are likelier to attend post-secondary education, the distribution of $100 million, if delivered in the form of a tuition cut, looks like this:

Figure 2: Distribution of Benefits of a Tuition Reduction, by Income Quartile














That doesn’t actually look so good compared to a grant, does it?  In fact, it’s even worse than it seems.  That’s because a $100 million reduction in tuition ends up affecting other types of aid as well.  For every dollar of tuition reduced, students and their families lose 21-28 cents (depending on the province) in tax credits.  And, to the extent that anyone has provincial need-based grants (as opposed to the mainly income-based federal ones), a dollar less in tuition means a dollar less in need, which in many cases means a dollar less in grant.  Thus, for high-need students (which is not quite the same thing as low-income students, though there is some overlap), a dollar less in tuition can mean $1.25 less in non-repayable aid.  That is to say, they are worse off after the tuition reduction than they were before.  But the rich kids who had no need of student aid to begin with?  They’re better off by $0.75.

All told then, if you spend $100 million to reduce tuition, the spread of benefits looks something like this:

Figure 3: Distribution of Benefits of a $100 Million Tuition Reduction, by Income Quartile, in Millions














Of the $100 million in reduced tuition, $42 million gets recouped by one level of government or another, either through reduced tuition tax credits or reduced grants.  Of the remainder, only 13% goes to the poorest quartile, and only 38% goes to the bottom half.

So, ask yourself: who’s progressive?  The folks who want to give 50, 60, or 100% of their money to kids from the bottom income quartile?  Or the folks who want to give almost three times as much to the top quartile as to the bottom?

May 01

Scare Tactics

So, my blog posts on Net Zero Tuition got some attention last week, not least because Margaret Wente took up the cudgels on the issue.  The reaction to it was disheartening to say the least.

From ordinary students and recent graduates, the response was basically some variant of the “n of one” reaction: “I pay attention, I have debt; therefore, it is not be possible that, across the whole, non-repayable aid had doubled, or that this country spends as much on non-repayable aid as it collects in tuition”.

This is what I call Solipsistic Social Science (SSS): when confronted with evidence that conflicts with previous beliefs, the reaction is not curiosity (e.g. “how is that possible”? Or, “why might that be”? Rather, it provokes outright denial: “if it’s not happening to me, it can’t be happening at all”.  Understandable? Maybe.  But it’s a bit sad coming from people with post-secondary education, though. Were I in a cattier mood, I’d suggest it’s a kind of disgraceful that PSE graduates might suffer from it, and it reflects badly on institutions themselves.

The more interesting reaction, though, came from “official” PSE groups, where the “but whaddabout” reaction reigned supreme.  Aid dispensed as high as tuition collected?  But whaddabout living expenses?  Large numbers of students receiving more in aid than they pay in tuition?  But whaddabout “lived experiences of struggling students”?

Now, some of those points are valid (and indeed I raised some of these myself back here).  But the utter inability of everyone to even acknowledge the data existence was kind of incredible.  OCUFA’s dismissed Margaret Wente’s article as being “tone-deaf”.  You see, it doesn’t actually matter whether everything she said was factual or not, the problem was “tone”.  And the only acceptable tone, apparently, is CRISIS.  The fact that government aid has risen significantly in real dollars over the past 15 years, or that rises in student aid since 1999 have more than kept pace with real increases in tuition, or that since 1999, student debt has been flat, and student debt burdens (that is, the percentage of average after-tax income used to repay educational debt) have fallen by a third?  That’s all “ideological”.

Well, you know what?  The sector needs to grow the hell up.  The reliance on perpetual crises isn’t just childish – it’s dishonest.  A decade worth of good policy-making on student aid means that higher tuition – which has helped institutional finances immeasurably – haven’t had many negative consequences.  That’s something to celebrate, but instead Canadian PSE groups try to pretend it never happened because they prefer the crisis narrative.

I get that people think that political traction is hard to obtain in the absence of a crisis.  But no matter  how worthy the cause, it’s not alright to pretend to knowingly ignore the truth in the attempt to drum up support.  Especially in higher education.  Our sector is supposed to be about truth, honesty, and rigour.  Ignoring those rules in the hunt for more money is unconscionable, and in the long run does more damage than good.

April 28

Mobility Responsibilities

Saying that we should remove barriers to student mobility sounds like a motherhood issue.  But scratch a little deeper, and you’ll see that, in fact, Canadians are pretty equivocal on the concept.

For starters, while everyone loves inbound mobility (come here!  It’s a great place!), there’s a pretty deep streak of protectionism in Canadian provincial governments on the issue of outbound mobility.  The sentiment of “let’s keep our kids at home” runs deep in many parts of the country.  It wasn’t until the advent of the Millennium Scholarship Foundation that all student aid programs became portable in most provinces (though Quebec maintains a policy of not funding students to go out of the province, unless the program is not offered in the province, “and it is in the interest of the Quebec collectivity”.  Yes, really).

But whose responsibility is mobility in the first place?  In Europe, with respect to tuition and student aid, it’s the receiving country who bears the cost – no matter where they’re from, students pay whatever the locals do, and have access to whatever student aid program the locals provide.  In Canada, our default assumption is that host provinces are supposed charge equal tuition to all Canadians regardless of their place of origin, but the responsibility for mobility on student aid lies with the sending province.  One can move from Nova Scotia to Manitoba and pay Manitoba rates of tuition, but one still has to rely on Nova Scotia Student Aid.

But there are exceptions.  The most clear-cut is Quebec’s insistence on charging tuition fees to out-of-province students.  Less clear-cut (but still clearly discriminatory), are the cases of Nova Scotia and Ontario.  The former provides tuition rebates to Nova Scotia students, but not to other Canadians.  Ontario has a variety of subsidies that are only available to Ontario students attending Ontario institutions (the tuition tax rebate is one, as are the many provincially-mandated, institutionally-managed access funds – funded through a “tax” on tuition paid by Ontarians and non-Ontarians alike).  These are all anti-mobility measures: they effectively create a two-tier tuition policy within a province, and (in Ontario’s case at least) provide extra subsidies to students who chose not to leave.

Interestingly, while Quebec’s two-tier tuition system is usually portrayed as a piece of xenophobia and rank insolence to other Canadians who, through equalization, are partially picking up the tab for Quebec’s lower tuition, Nova Scotia and Ontario are given a total pass, despite their policies having almost identical effects.

What that tells us is that Canadians don’t mind mobility barriers as long as they are dressed-up as “affordability enhancements”. Ultimately, such measures are self-defeating; as with trade barriers, eventually everyone is left worse off.  But there are enough small-minded politicians out there to ensure that these kinds of tactics always have a potential audience.  As budgets get tighter over the next couple of years, there’s a good chance we’ll see more examples of discriminatory tuition fees, loans, and grants being made non-portable across provincial borders.  I hope that’s not the case, but history doesn’t give me huge grounds for optimism.

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