Short answer: not really, no. But judging by this Chronicle Herald article last week entitled “Eliminating Tuition Fees would Buoy Bluenose Economy“, bad ideas die hard. So let’s think this one through.
As I wrote back here, there are basically four ways to lower tuition or reduce student debt. Government can raise taxes to pay for it, borrow to pay for it, re-allocate spending to pay for it, or reduce the cost of educational provision (i.e., cut spending on equipment and salaries). If you choose the taxing, re-allocating, or cost-reduction methods, the net effect on the economy as a whole is zero. Yes, students gain, but others lose, so it more or less nets out (exception: taking money from profs with a high propensity to save and giving it to students with a high propensity to spend actually probably would make a bit of a difference in the short-term, but since no one’s actually proposing that we’ll leave it aside). Only by borrowing to reduce tuition/debt could government actually achieve the goal of a short-term boost; but then again, deficit spending on anything gives the economy a short-term boost. What’s the case for spending it on students?
(A colleague has since pointed out to me that in theory there is a fifth option: the government could expand the money supply by printing money and using it to buy down student debt. But that’s: a) not an option open to a provincial government; and, b) really unlikely to be used by a federal government, so I think we can confidently give this one a miss.)
There is certainly a case in Nova Scotia at least for spending some money on controlling student debt. This is not a province that spends a whole lot on student aid – as we at HESA noted in our work on net prices, entitled The Many Prices of Knowledge. Nova Scotia is for most students, by most measures, one of the most expensive places to study, so there’s not much doubt that some targeted assistance is in order. But free university tuition for everyone is obviously regressive, so making a case for that option is much harder.
The article doesn’t address the issue of regressivity but it does make quite a different case, which is that a province in as bad a demographic and economic situation as Nova Scotia needs to toss a bone to its youth. And for what it’s worth, that’s true: the situation for youth in Nova Scotia is pretty dire, and out-migration is a serious issue. But if that’s the problem you’re trying to combat, why give the biggest subsidies to that section of youth who: a) mostly come from better-off families; and, b) are likeliest to be making high salaries in the future? Why direct money to them and not youth who haven’t accessed PSE?
If Nova Scotia really wants to do something big and bold, something that will attract or retain youth, and isn’t quite as brutally regressive, it should think about creating a type of tax rebate for all youth – say a 50% reduction on provincial taxes for anyone born within the last thirty years. That’s a heck of a message to send to young workers – and one that might resonate outside the province as well. And yes, okay, it’s still regressive, but likely less so than free tuition because at least it includes some benefits to those who don’t attend PSE.
Worth a thought, anyway.