Higher Education Strategy Associates

Category Archives: student aid

April 28

Trust, Transparency, and Need-Based Aid

If you look around the world at the kinds of subsidies made available to students, you’ll be struck by the fact that there are two very large chunks of the world where need-based aid isn’t the dominant form: post-Socialist Europe and Africa.  The reasons for this boil down to a simple issue: trust.

In the post-socialist countries, the preference for merit-based aid over need-based aid is a relatively recent affair.  Prior to 1990, access to university was restricted both in absolute numbers and on ideological grounds: in order to attend university one had to have correct “origins”.  This was another way of saying that if your family was considered too bourgeois, you weren’t allowed to attend (Vaclav Havel, for instance, was denied entrance to university on these grounds).  Though regimes eased up on this somewhat as the 70s and 80s progressed, class origins continued to play a role in admissions up to the end of the regime.

So when it came time for new, post-socialist regimes to come up with student aid policies, there was considerable suspicion about anything that looked like it discriminated based on something like class.  Preferences based on parental characteristics, quite simply, were too tainted by communism to be a viable political project: nobody trusted government to discriminate between students based on something like income.  Merit-based aid, on the other hand, was not so burdened by history, and gave the appearance of being “objective” in the sense that exam results were measured in a consistent way across the country, and could easily be used to differentiate between students.  The results, in a word, were trustworthy.

In Africa, the trust problem is slightly more complex, and less tractable.  There, the state lacks the ability to monitor individuals’ income and consumption through the tax system.  Trying to run a need-based system of aid without means of income verification is difficult, to say the least (in bits of Eastern Europe – especially Russia – income verification poses the opposite problem in that people are reticent about providing documentation that would help the government verify income).  Without income verification, need-based systems tend to rely on proxies like ownership of land or livestock, which is either very complicated or impossible to verify.  These systems quickly fall into disrepute: because it is possible to cheat them, everyone comes to assume that those who receive need-based aid have cheated.  And so again, something simple and transparent – like merit as measured through examination results – becomes the de facto standard.  Everybody knows it’s ludicrously regressive, because the awards inevitably go to students from families rich enough to pay many multiples of university tuition to attend the best secondary schools, but at least it’s transparent and not corrupt.

Japan has a similar issue: it has no need-based grants, because no one trusts that the tax system accurately captures parental income.  It does, however, have a need-based loan system.  When I asked someone senior there about why they trusted need-testing for one and not the other, he simply said “because people pay back the loans”.

All of which is to say that need-based aid requires that students and families trust that state institutions will deal with them fairly, and state institutions need to trust that families won’t try to lie to them (or, at least, have reasonably robust measures of discovering lies).  In Canada, we take this for granted, but we shouldn’t.   Without trust, and the transparency that tax-based verification tools provide, need-based aid simply wouldn’t exist.

April 24

A Fascinating Student Aid Experiment

One incredibly cool thing about this week’s budget is that it creates a policy experiment that may settle some age-old questions about financial barriers to education.  I speak of course of the abolition of the in-study income clawback.

When people talk about “financial barriers” to education, they are usually conflating two separate phenomena.  The first has to do with return on investment: if prices rise too high, students will say they are not interested because it’s more money than it’s worth.  Usually this is phrased as a matter of “I’ll to take on too much debt”, though the problem actually isn’t debt-related (borrowers and non-borrowers alike pay the same amount – a bad deal is no less crummy if you’re paying it out of pocket rather than resorting to loans).  The second has to do with liquidity: students might like to take a course, even if its expensive, but they simply can’t scrape together enough cash to pay the fees and keep body and soul together.  The solution to the first problem is to lower tuition and/or provide more grants.  The solution to the second problem could also be to provide more grants, but loans could probably achieve the same thing a whole lot more cheaply.

The thing is, when we talk about students having “financial barriers”, we never really specify which of these two phenomena is the main issue for students.  And this is a problem because it means we may not be getting the policy response right.  If a student has $20,000 in debt, and you have $1,000 to give them, does it make more sense to hand them the $1,000 and let them spend it how they like, or should you use it to reduce their debt?

The abolition of the in-study income clawback actually gives us a heaven-sent chance to understand how all of this works in practice.  The way the threshold currently works is that students get to pocket $100 a week with no clawback.  Everything above that amount is clawed-back at a rate of 100%.  In this way, up until now, work and loans have been perfect substitutes – working more doesn’t increase the amount of money you have to spend, it just means you have less debt.

But now, suddenly, work and loans are no longer substitutes.  Students who work just got handed a whole bunch more money in the form of larger eligibility for aid, which will usually be met through loans (though some will find their extra need met by remissible loans, which are essentially grants).  How they use it will tell us a lot about what students actually care about. If they keep all that new money – that is, if they maintain their work hours, take all the new loan money, and spend it – we can infer that the main issue for students is not debt, not return on investment, but liquidity.  On the other hand, if they choose not to borrow the extra money, it tells you that, in fact, debt and rate of return are the bigger issues.  Similarly, we can test sensitivity to borrowing by comparing the behaviour of students whose extra aid is made up of repayable loans vs. those whose loans will be forgiven: if there is no difference between the two, it’ll be a pretty good indication that students prioritize liquidity over lower debt.

For what it’s worth, my money’s on students caring more about the short-term than the long term: I predict they’ll take the extra money and spend it.  That will make life tougher for advocates of tuition reduction over greater loan remission: if the evidence suggests that students prefer to consume more in the short-term rather than save for the long-term, why should governments do anything other than provide greater liquidity through loans?

Though it probably isn’t what students had in mind when they lobbied for this measure, the learning opportunity afforded by this policy experiment is a golden one.  Let’s hope a research plan exists that will help us monitor the results so as to better understand students’ preferences.

March 03

Lowering Tuition in the UK

So, the UK Labour Party has decided that if it gets elected this spring (odds: probably just less than even), it will bring tuition fees down from their current maximum of £9,000/year to a maximum of £6,000/year.

Progressive, right?  Not in a million years.

As I pointed out back here, the weirdness of the UK system of fees and income contingent loans is that fees have risen so high that very few people – about one in five – are expected to pay it back given how the repayment system is set up (no payments on income below £21,000 [C$40,300], and 9% on the everything above it).  The rest – 80% or so – are expected to see at least some of their loan forgiven.  So if/when tuition gets reduced, those who were not expected to repay more than two-thirds of their loans will not see any benefit.  All that happens is that the debt they wouldn’t ever repay gets paid to institutions in advance, rather than lent to students and later forgiven.  Neither will universities be any better off: all that’s going to happen is that public funding will replace government funding pound for pound.

The benefit, in fact, would only accrue to those who were expected to pay more than two-thirds, and the largest benefit would go to that 20% who was expected to pay off their loans in full – i.e. the very best-off graduates (they don’t quite get off 100% scot-free; some part of this gain will be clawed back through higher interest rates on wealthy graduates).  This is why the BBC ended its Sunday interview with Labour higher education spokesman Liam Byrne, by asking the pointed question: “why propose something that benefits the Goldman Sachs graduate more than the social work graduate?”

Fair question – and so it was no surprise that Byrne ducked it, and stuck instead to his talking point that “the present system is unsustainable”.  I think by this he meant that the exchequer will spend ever greater amounts in future on forgiving loans – but if that’s the rationale, it’s hard to understand how bringing those payments forward makes it any more sustainable. And indeed, it’s worth remembering that the cause of the unsustainability (i.e. all that loan forgiveness for lower-earning graduates) is the thing that makes it at least somewhat tolerable and lightly progressive.

Now, one shouldn’t give the ruling Tory party too much – or indeed any – credit here.  The current fee/loan system was more or less designed by mistake; the Tories were under the delusion that very few universities would jack up fees to the maximum £9,000, and so the size of student debts (and hence loan forgiveness) came as a complete surprise to them.  If they could do it again, they’d undoubtedly make it far less generous to lower earners – and indeed, now seem intent on doing so by stealth, by freezing the repayment threshold and allowing inflation to erode its value.

None of this, of course, is to say that more public funds wouldn’t be welcome in the UK.  The question is, if you had a couple of billion to spend, as Labour now seems to want to do, would you: a) give it to institutions so they can improve the education they provide?  b) give it to students from lower-income backgrounds by reducing their tuition upfront (as the UK did between 1998 and 2006)? or c) hand it over to the richest tranche of graduates?

For some reason, Labour’s answer is c).  And on the politics of it, it’s hard to say they are wrong – in a poll taken over the weekend, 60% of UK voters say they back Labour’s policy.  And of course it’s easy to understand why; if you’re not paying attention (and let’s be honest, most people aren’t), you might think the tuition fee policy was actually going to make life easier for all students.  And who wouldn’t vote for that?

Apparently UK politicians – like Canadian ones – seem to think it’s better to play populist games with tuition rather than to actually do things that help low-income students.  That’s deeply unfortunate, but unfortunately not surprising.

February 12

Free Election Manifesto Advice

OK, federal political parties.  I have some election manifesto advice for you.  And given that you’ve all basically accepted Tory budget projections and promised not to raise taxes, it’s perfect.  Completely budget neutral.  Here it is:

Do Less.

Seriously.  After 15 years of increasingly slapdash, haphazard policy-making in research and student aid, a Do Less agenda is exactly what we need.

Go back to 1997: we had three granting councils in Canada.  Then we got the Canadian Foundation for Innovation.  Then the Canadian Foundation for Sustainable Development Technology.  Then Brain Canada, Genome Canada, Grand Challenges Canada, the Canadian Foundation for Healthcare Improvement, The Canada First Research Excellence Fund – and that’s without mentioning the proliferation of single-issue funds created at SSHRC and NSERC.  On commercialization, we’ve got a College and Community Innovation Program, a College-University Idea to Innovation Program, a dozen or so Centres of Excellence for Commercialization and Research (CECRs) – plus, of course, the wholesale revamp of the National Research Council to turn it into a Canadian version of the Fraunhofer Institute.

It’s not that any of these initiatives are bad.  The problem is that by spreading out money thinly to lots of new agencies and programs, we’re losing something in terms of coherence.  Funding deadlines multiply, pools of available cash get smaller (even if overall budgets are more or less what they used to be), and – thanks to the government requirement that a large portion of new funding arrangements be leveraged somehow – the number of funders whose hands need to held (sorry, “whose accountability requirements need to be met”) is rising very fast.  It all leaves less time to, you know, do the actual science – which is what all this funding is supposed to be about, isn’t it?

Or take student assistance.  We know how much everyone (Liberals especially) loves new boutique student aid programs.  But that’s exactly the wrong way to go.  Everything we know about the $10 billion/year student aid business is that it’s far too complicated, and no one understands it.  That’s why people in Ontario scream about affordability and accessibility when in fact the province is nearly as generous as Quebec when it comes to first-year low-income university students.  For people to better appreciate what a bargain Canadian higher education is, we need to de-clutter the system and make it more transparent, not add more gewgaws.

So here’s the agenda: take a breather on new science and innovation programs; find out what we can do to make the system simpler for researchers; merge and eliminate programs as necessary (is Genome Canada really still worth keeping, or can we basically fold that back in to CIHR?) – while ensuring that total funds available do not diminish (a bump would be nice, too, but the simplification is more important).

As for student aid?  Do a deal with the provinces to simplify need assessment and make it easier for students to know their likely aid eligibility much further in advance.  Do a deal with provinces and institutions to convert tax credits into grants to institutions for a large one-time tuition reduction.  Do not, under any circumstances, do anything to make the system more complex.

I know it goes against the grain, guys.  I know you need “announceables” for the campaign.  But in the long run, it’s more important to do things well.  And to do that, we really need to start doing less.

January 13

Packaging Student Aid

One of the things about student aid that makes it such great fun as a policy area is that it’s as much about framing as it is about actual policy.  For instance, which of the following two policies would you like to have?

a)      A policy where students are asked to bear a huge amount of debt – over $100,000 in some cases for an undergraduate degree – over 25 years, and where three-quarters of students will never repay their loans in full; or:

b)      A policy where graduates are asked to pay a 9% surtax for 25 years, up to a maximum of about $100,000, but much less (possibly even $0) if their earnings are low.

If you’re a regular reader of the Guardian, you’ll probably recognize the first policy as being the one implemented by the Cameron government in 2012, to cover fees in English universities.  That’s the one the progressive types are always pointing at and shouting: “Look!  Students are being horribly indebted AND the government is losing lots of money through the program!  Quelle fiasco!”

But here’s the thing: that second program is also the English loan scheme.  As I’ve explained before, for the three-quarters or so of graduates not expected to pay off their loans in full, the scheme is simply a graduate tax.  It’s not explained that way, but that’s what it is.  It’s a packaging issue.

There’s something similar going on in student aid policy in the United States; namely, the interest in something called “Income Share Agreements”.  It’s been kicking around for awhile (the American Enterprise Institute wrote about it a year ago), but is getting more of a hearing these days because Florida Senator, and potential Presidential candidate, Marco Rubio is now backing it.  It’s basically a Human Capital Contract – someone gives you money today, and you agree to give them a set portion of your income for a set number of years.

If that sounds like a Graduate Tax, that’s because it’s exactly how a graduate tax works – the difference in this case simply being that you’re not giving that money to government, but rather to an individual who has chosen to “invest” in you.  The beneficiary is different, but the flow of funds is precisely the same.  But that difference is enough to get the idea some love from a Tea Party favourite.

And that is to say nothing of our experience in Canada where the CFS, which absolutely hates income-contingent loans, and has done so for years, applauded the introduction of the Repayment Assistance Program (RAP) – which basically makes the Canada Student Loans Program fully income-contingent – because the government simply chose not to call the program “income contingent”.

This all goes to show: in student aid, few people actually look at substance.  The real debate is about the packaging.

January 08

Canada Apprentice Loans: Adventures in Government

I know it’s exceptionally nerdy, but I highly recommend the experience of reading a new law’s regulatory impact statement, for no other reason than to get a taste of the sheer absurdity of government these days.

Take the regulations on the new Apprentice Loan Act. The executive summary on the cost-benefit of the program (scroll down a bit) reads as follows:

The Canada Apprentice Loan (CAL) will cost the Government of Canada (GoC) $74 million over 10 years, from 2014–15 to 2023–24. Benefits include income gains for additional apprentice completers as a result of the CAL. If a 10 percentage point increase in the completion rate due to the CAL were assumed, this would yield income gains of $185 million over 10 years, and net benefits to Canadians of $111 million.

The key word in that sentence is “assumed”. Or, in other words: they plucked some numbers out of the air to make the program look plausible.

To be fair to the folks who wrote this, there’s no good data available as to the likely impact apprentice loans might have on completion. There would be if the government had, at any time in the past six years, evaluated the effect of the Apprenticeship Incentive or Completion Grants, or the Tradesperson’s Tool Deduction. But the government hasn’t done any of this, so “assuming” numbers may have been the only way to go.

Another highly amusing aspect of the regulatory statement is the rationale for the program’s borrowing limit of $4,000/period of technical training. Supposedly, it’s equivalent to an apprentice’s lost earnings during a technical training period, but no source for the figure is given.

In all the largest occupational categories, the usual technical training period is 8 weeks. At a fairly generous estimate of $17/hr and 40 hours per week, the implied loss in gross earnings is about $5,440, with a net earnings loss of between $4,000 and $4,500, depending on what province you’re in. So the estimate is probably right, right?

Wrong. That math only works if you assume the apprentice does not receive EI during technical training. Once EI is factored in, apprentices would need to be making $25/hour in order to be losing $4,000 in wages per technical training period. Let me assure you: apprentices are not making $25/hour.

How could anyone make such errors, you ask? Simple: they aren’t errors. Nobody actually believes these numbers. They’re just made-up after the fact to provide cover for a decision that was made with an eye toward placating constituencies (read: construction companies) rather than addressing a real problem. It’s what happens when policy is made on the fly, and the public service isn’t asked for input until after budget night.

Some of you may read this and think: “Aha! Tory perfidy!” But resist that impulse if you can. Harper’s government is hardly the only one that does this kind of thing: the Ontario Liberals’ 30% Tuition Grant is a far more egregious example of the same process, and a more expensive one too. The OTG costs hundreds of millions of dollars per year, where the Apprentice Loans are projected to cost just $7 million/year (yes, yes, the budget said it would cost $25 million/year – now they’ve decided it will be less).

The real problem is that when Canadian governments of any stripe want to claim they’re “doing something” about education, they simply start writing cheques to learners (or their parents) and Hey, Presto! Problem solved! But the only “problem” this solves is the perception that governments aren’t doing anything about education.  Improving education – actually making a difference in terms of completion rates, or graduate quality, or what have you – that takes work. That takes thought. That requires politicians to concentrate for more than a couple of hours.

Most of all, it requires investments in institutions. And increasingly, governments seem reluctant to make those investments.

December 03

Solving the Fees Problem

So, here’s the problem: Canadian governments are mostly broke.  Even the ones that didn’t look broke a couple of months ago (Alberta, Saskatchewan, Newfoundland) are now very definitely broke (especially Newfoundland).  There’s no money for PSE.  Everybody knows that.

So, equally, everyone knows that the only way institutions are going to avoid a crunch is either by turning themselves into finishing schools for the Asian middle class, or by charging domestic students higher tuition fees.  No one genuinely thinks the former is a sensible long-term solution, and yet that’s the way we’re heading because Canadian families and the politicians who represent them are resistant to the idea of a rise in fees.

To be clear, resistance does not arise because anyone really thinks fees deter access.  Even the dopiest politician knows that participation rates today are over 50% higher than they were 20 years ago when nominal tuition was about half what it is now (certain student groups are indeed that dopey, but that’s another story).  No, the reason people don’t want more fees is because too many people think that what universities and colleges are offering isn’t worth what they’re charging.

This is of course insane because, as we know, Canadians, on aggregate, are paying Net Zero Tuition for post-secondary education.  We have $7.2 billion going out every year in various forms of aid – exactly equal to what universities and colleges charge in tuition to domestic students – and apparently no one notices.  The focus is exclusively on the sticker price, never on the net price, which in many cases is negative.  This shouldn’t be a surprise, given the opacity of our student aid system.  We prevent students from working out their student aid package before they apply, and then we hand out as much of our aid as possible at the back end where no one will notice it.

It’s madness.  And it has to change.  We need to make it a lot more obvious what a great deal people are getting.  We need to make it so that when governments spend money to make it easier for people to go to school, the people being helped actually realize they are being helped.

This is going to require coordination.  Our confusing system is a product of the fact that many different players (feds, provinces, institutions) designed it so that it met their own administrative needs and desires for visibility, not the needs of students.  We need all of them to agree to make it less complicated, more predictable, and more visible.  That means, above all, ditching tax credits and either turning them into (hopefully targeted) grants or transferring them to institutions in return for a reduction in tuition.

Can’t be done, you say, because governments like to take credit for tax expenditures?  Tosh.  It’s abundantly clear that the public has no idea the credits even exist, so governments could hardly do worse than what they do now.  Besides, there’s precedent to show it’s good politics: in 2012, Quebec ditched some tax credits in order to pay for improved student aid, and back in 1999, Manitoba explicitly ditched a refundable tax credit to pay for a tuition roll-back (meaning the roll-back cost the government nothing, and students were in fact no better off at the end of the day, but boy did the NDP make hay out of that one).

So it’s doable.  But someone has to get the provinces and the feds to sit down together to make them do it.  The only people who can do this are the institutions: specifically, the Association of Universities and Colleges of Canada (AUCC) and Colleges and Institutes Canada (CIC).  Only they have the clout to get the provinces and the federal government in the same room to hammer out a deal.  And it’s eminently in their interest to do so.  Until Canadians rediscover what a fantastically good deal they actually have in their higher education system, the likelihood of more funds heading their way is pretty slight.

November 20

Independence Day

When should a student be considered independent of his or her parents for the purpose of calculating student assistance?  It’s a tricky question, which generates different answers in different parts of the world.

Most student loan schemes require some kind of test of parental income for at least some of their clients.  In some places, it’s a way to save money – there isn’t enough to go around, so let’s prioritize the less well-off.  In other places (including Canada), it’s because there’s a recognition that education is something that families (not just the student) pay for, and so family incomes need to be taken into account.

Not everyone goes along with this logic.  In some parts of Europe – Scandinavia in particular – the age of independence is 18.  Everybody, regardless of their family income, is considered equally wealthy (or equally poor, depending on how you look at it), and therefore automatically has access to grants and a fairly generous set of loans (about 85% of Swedish students opt to take the loan).  This approach makes more sense from an equity point of view in Scandinavia than it does here, because of smaller disparities in family income, but that’s not really why they do it.  Rather, the policy fairly explicitly is about making young people independent of their parents by giving them financial aid.  Which, to put it mildly, isn’t a goal most Canadians associate with student aid.

The question for most countries with respect to independence is when to end it.  In Australia, it’s essentially when you turn 25.  In the US, you’re independent if you’re 24 or over, if you’re a graduate student, if you’re a veteran (or are on active duty in the reserves or national guard), if you’ve ever been in foster care, or if you have children.  Quebec has no age limit, per se: if you’ve ever been married, ever spent two years in the labour force without going to school, or have finished 90 university-level credits (which effectively means “in graduate school”), or are seven years out from finishing your last period in full-time studies you’re considered independent.

The rest of Canada has a threefold test – like Quebec, it has the 24-month labour market test and the married test, but otherwise, the requirement to become independent is simply to be more than 4 years out of secondary school.  In practice that means independence at 22, which is pretty much the lowest age for any country that makes the dependence/independence distinction.

Why does Canada have such convoluted rules that don’t invoke a specific age?  Basically, it’s the quality provisions (i.e. section 15) of the Charter, which says you can’t discriminate by (among other things) age, unless you have a really good reason to do so.  Now, in the Gosselin decision, the Supreme Court held 5-4 that governments could in fact explicitly discriminate on age in social programs (the case involved a Quebec policy that provided lower welfare rates to people under 30).  But the student aid rules date from before Gosselin, and have never been subsequently re-written or simplified.  And, near as I can tell, Justice Department lawyers aren’t convinced that the existing rules would pass muster, even post Gosselin.

Hence the ludicrous rules on the Canada Student Grant, which basically guarantee a $2,000 grant to anyone with “family income” of under (roughly) $40,000, but where “family” for independent students basically consists of the student’s own income.  In practice, this means the CSG is a universal grant for independent students.  Which is nuts – and also a major reason why CSL program expenditures are rising so quickly.

If we were a little tougher on independent undergraduate students (many of whose parents are relatively well-off), we could probably spend more money on deserving, poorer undergraduates.  It’s a trade-off we should think about making.

November 17


If I could ban one word from higher education discussions, it’s “affordability”.  It’s a word without precision, and, particularly when used as a synonym for “accessibility”, it’s downright misleading and harmful.

The worst is when someone uses the raw price of a good – in this case tuition – to indicate “affordability”; as in: “tuition went up 5% last year, and that makes it less affordable”.  This is simply asinine.  When the price of milk or gas goes up, we don’t wring our hands about the “affordability” of milk or gas.  We don’t do this for two reasons.  The first is that “affordability”, as a concept, is a ratio and not a point. It’s a function not just of price, but of available resources.  If people were serious when talking about affordability, they would be talking about it in terms of fractions, not prices.

(This of course raises a question – what should we use as a denominator?  When I talk affordability, I tend to use mean or median family income, because nearly all students entering post-secondary education for the first time are drawing on family resources to do so.  The Canadian Centre for Policy Alternatives tends to use much smaller numbers as a denominator, like whatever the minimum wage happens to be.  I get where they’re coming from on this – many students, as they get older, pick up more of the burden of their education costs [though they also tend to earn significantly more than minimum wage].  My number will tend make the fraction fairly small.  Their number will make it look large.  Who’s right?  It depends; to some extent, we both are.)

Which brings us to the second issue: there are people for whom a night out at the movies is affordable, and others for whom it is not.  For some people a Mercedes S-500 is affordable, for others (most of us) it’s not.  Demand curves slope downward, and affordability matters at the margin, not the average.  Most people are simply not affected by an increase in price.  Even in the largest tuition increase in history – the English tuition hike of 2012, where tuition rose by nearly $9,000 – the net effect on applications was only about 5%.  To the extent that affordability affects accessibility, the issue is always about how it affects student at the margin, not how it affects the average student.

That’s why student aid is important.  Student aid helps the students at the margin (or at least it does so everywhere outside Ontario, where “needy” has been re-defined by a vote-grubbing government as anyone with income under $160,000).  Having grants offsetting higher costs is precisely the way affordability concerns should be dealt with – provided you think that affordability is an access issue.

The problem is, for most people the question of affordability is about almost anything other than accessibility.  For most, it’s about making sure that whoever is paying for tuition has more money in their pocket to have a better “quality of life”.   Parents – you deserve that second vacation each year rather than paying tuition!  Students – you should have smaller loan repayments on your way to being the upper-middle class of tomorrow!

Affordability – as a ratio – is thus an important concept in the way we design student aid to help students at the margin.  But the way most people try to explain the concept, and the purposes for which they deploy the concept, are either wrong or disingenuous.  We need to talk a lot more about access and a lot less about affordability.

November 10

Three Rules for Politicos

So I see that the Government of Ontario has announced what is possibly the most boutique student aid program of all time.  If students volunteer at the 2014-15 PanAm Games, they will be exempted from the pre-study period contribution (a contribution from the money you earn up to 16 weeks prior to the start of your studies) for 2015-16, and will be get a 12-month grace period on their loans (instead of 6-month) before needing to start repayment.

<puts computer away>

<sighs, drinks some Red Bull, looks out the window wistfully>

<slams head against desk violently, yelling “WHY?  WHY MUST THIS PROVINCE BE GOVERNED SO BADLY?  WHY?>

<Breathes deeply.  Opens computer again>

OK, three things here.  Three things every politician in the country desperately needs to understand:

1)     Exploiting Unpaid Labour =/= Encouraging Voluntarism.  If it’s mandatory – as in “mandatory volunteering hours in high school” – it’s not volunteering.  If you pay for it in kind, it’s not volunteering.  This kind of thing demeans the notion of actual volunteering.

Oh wait, you’re worried that you’re asking someone to do too much for nothing?  Then PAY THEM, you gibbering moron.  Pay them for their work.  It’s not hard: we’ve been doing it since the end of serfdom.

2)     Stop Using Student Aid as an Indirect Government Policy Tool.  This seems to be in everyone’s playbook these days.  Not enough money in the PanAm kitty because you’ve blown it all on buying out incompetent executives?  Use student aid as a way to attract cheap labour!  Having trouble filling rural nursing or legal aid positions?  Use student loan forgiveness as a recruitment tool!

No.  No, no, no!  Student aid is about giving money to students to complete their studies.  If you want to play labour market games, do so directly.  Problem finding nurses for rural areas?  Have the damn Health Ministry pay them more.  Otherwise, you’re sending the message that you only want nurses from poorer families – the ones whose parents couldn’t give them enough money to keep them off student loans – to work in rural areas.

3)     No More Boutique Programs.  Student aid is already way too complicated.  Governments are collectively throwing $5.6 billion into student subsidies – that is, about 78% of the value of domestic tuition fees (institutions throw in another $1.6 billion on top of that).  And yet everyone thinks the cost of education is sky-high: students and parents simply do not understand the subsidies they are being given.  That is a clear sign of policy failure. 

Basically, if you’re thinking up boutique policy in student aid you’re part of the problem, not part of the solution.  I realise this may come as a shock to the Ontario Liberals, who appear not to know any way to govern other than through policy boutiquery, but it’s true.  The priority for the coming years must be to simplify the system, not to tack on more bells and whistles.  Period.

Got that, politicos?  Pay the kids for their work, keep student aid simple, and tell the other ministries to stop using student aid as a way to backstop their own policy failures.  Stick to those three rules, and you’ll do all right.

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