HESA

Higher Education Strategy Associates

Tag Archives: Free Tuition

May 19

Free Tuition, Sea of Japan Edition

To Tokyo, where the ruling Liberal Democrats are considering adopting a proposal from a small right-wing party (Nippon Ishin no Kai – roughly, Japan Restoration Party) to enshrine a constitutional right to free tuition.  This is not, it is safe to say, because of any principled attachment to accessible education – the party opposed free secondary education (which the Democratic Party implemented during its brief, mostly hapless, stint in government which ended five years ago) as recently as a couple of years ago, calling it “an unprincipled policy to buy votes”.

So what’s behind Shinzo Abe’s new ploy?  Two things.  First, Prime Minister Abe’s attempts to kick-start Japan’s long-stalled economy have had only middling success.  Free tuition would in effect be another Keynesian stimulus, freeing lots of family savings to be spent on other things.  Now, technically that doesn’t require a constitutional change, but some observers think Abe would not be able to get a free-tuition proposal worth 5 trillion Yen (C$60 billion) through a normal budgetary approval process; a constitutional amendment would make the spending automatic, thus circumventing the budget process.

But the bigger reason is much more Machiavellian.  Abe’s fondest political wish is to alter the Japanese Constitution, written in 1945 by US occupying forces, to remove Article 9, which bans Japan from having armed forces.  Though Abe himself if popular, this proposal is not: since World War II the Japanese have become about as peacefully-minded nation as one can imagine.  And so, Abe is trying to tie a constitutional amendment on free-tuition to a constitutional amendment on the armed forces to sweeten the deal.

A couple of points here.  First, this would be a policy reversal on a massive scale.  As R. Taggart Murphy noted back here Japan deliberately kept tuition, along with land values, high in the postwar period as a form of industrial policy (note: if you are interested in Japan and not reading R. Taggart Murphy, especially his magnificent book Japan: The Shackles of the Past, you’re doing it wrong).  High savings meant low interest rates, which gave Japanese industrialists access to cheap capital, which in turn gave them a big manufacturing cost advantage, and Japan rode this to economic success in the 1960s.  Basically, short term pain for long term gain. Now, Abe wants to reverse this process.

The bigger question, though – and not one I have seen discussed anywhere in the Japanese press – is how on earth one implements a free tuition promise in a country where somewhere between 75 and 80% of all students attend private universities.  Making tuition free at national (public) universities is a cinch, but – as Chile discovered a couple of years ago – trying to do the same with private universities without outright nationalization is kind of difficult.  Fees vary from one institution to another: how would each be compensated in a consistent manner?

There’s something similar going on the other side of the Sea of Japan, where new Korean President Moon Jae-in has promised to halve tuition fees.  This isn’t the first time Koreans have heard such a pledge.  In 2011, months of student protests forced then-President Lee Myung-bak to make a similar pledge; however, in the end nothing was done and fees stayed the same (fee levels in Korea are similar to those in Canada).  But again, it’s not entirely clear how once can effectively deliver on a fee-reduction pledge in a system which is dominated by private universities without partial or outright nationalization, which seems unlikely.

If I had to guess, I’d say Korea’s the likelier to implement policy change because a) I don’t think Article 9 is going anywhere, free tuition or no and b) the Korean government is just a lot better at getting stuff done.  But we’ll see.  Two stories to watch, for sure.

March 14

The Free Tuition Impulse

A few weeks ago I presented yet more evidence about why free tuition was mostly a subsidy for the rich and was unlikely, on its own, to do very much with respect to equalizing access (scroll through here and here if you really want to read me on this subject, though I imagine most of you are pretty familiar with my spiel by now). Someone asked me: “why don’t people like the Canadian Center for Policy Alternatives (CCPA), the Canadian Association of University Teachers (CAUT) and the Canadian Federation of Students (CFS) get this?  Surely they can read the evidence, why would they persist in touting a solution which is manifestly regressive”?

There are two possible answers to this question.  One is that in fact they have not read the evidence.  It exists, and they know it exists, but just haven’t read it.  As long as they don’t read the work which falsifies their notions, they can continue to hold these notions. To  paraphrase Upton Sinclair “It is difficult to get a man to read something, when his salary depends upon his not reading it”.

I actually got confirmation of this the other day on Twitter.  I was trying to get CCPA’s chief economist David MacDonald to explain why CCPA holds diametrically opposed positions on universal electricity subsidies (bad because they go disproportionately to the rich) and PSE subsidies (awesome, because they benefit the poor – which actually they don’t always, but that’s their story and they are sticking to it).  Basically, his two lines of defense were “it’s a public good” and “it doesn’t matter if most benefits go to rich because if we make education cheaper more poor students will go”.  The first, even if you assume he meant “there are positive externalities to higher education spending” (which is true) rather than “it fits economists’ description of a public good” (utterly false), is not a 100% sensible rationale as it arguably also applies to electricity to some degree (i.e. “there are positive externalities to people not freezing to death in their homes”).  But the second is ridiculous.  We know for a fact that tuition levels have almost nothing to do with access rates in part because targeted student aid actually works.  So I pushed him on it.  “Have you really read nothing about access problems in zero-tuition jurisdictions?  I asked.  Have you never looked at the rather substantive literature on finances and access”?  No reply.  Which, I think, tells you what you need to know.  People like David MacDonald and the CCPA simply do not want to know.  But that’s only half an answer: why don’t they want to know?  If they know that free tuition is ineffective as a remedy and regressive in distributional outcomes, why support it?  What other agenda is at play?

Well, a few years ago, when I was at a small event on Chile looking at the issue of tuition, I finally came to understand this problem.  A colleague and I were asking our Chilean counterparts: why do you want to make tuition free?  You must know it will make very little difference in access to higher education.  To which one of our counterparts replied:  the point is to get rid of the market.  The market must not decide in higher education.”

And so it is in Canada, I think.  The anti-tuition people are not fundamentally pro-access (though that is how they rationalize their position), so much as they are pro-state.  I suspect it’s partly due to a left-ideological stance which generally favours greater state involvement across the economy, but also partly to a naïve view about what would happen inside universities if the need to satisfy the market ever disappeared.  Such as: that public money would magically replace private money and continue to grow at a pace vastly outstripping inflation forever after.  Such as: nasty private sector Board member would be replaced by bureaucrats or more sympathetic public appointments or – better yet – make academics a majority on governing boards.   And magically, contrary to every bit of evidence from continental Europe, government running 100% publicly-funded universities would be less intrusive and meddling in institutional affairs than they currently are.

Once you realize that the free tuition argument is really a government vs. market argument and not a “how do we best equalize opportunities argument”, it becomes perfectly clear why evidence on the efficacy of tuition in promoting access doesn’t faze the usual suspects.  They don’t actually care about access.  They care about resisting the market.   The access stuff is just sheep’s clothing.

February 22

Notes for the NDP Leadership Race

As contestants start to jump into the federal NDP leadership race, it’s only a matter of time before someone starts promising free tuition to all across the land.  Now, I’m not going to rehash why free tuition is both regressive and undesirable (though if you really want to take a gander through the archives on free tuition, have a look here).  But I do think I can do some public service by talking about federalism and higher education, or rather: what the feds can and cannot do in this sphere.

The entire Canadian constitution is based around a compromise on education dating from 1864.  Upper Canada came to the Quebec conference with one overriding aim: representation by population in Parliament, so that their superior population would give them the most seats in Parliament.  Lower Canada agreed if and only if a second, local, and equal tier of government was created which would have jurisdiction over education and health, because over-their-dead-bodies were a bunch of (mostly) Orangemen going to get their hands on a hallowed set of (mostly) French catholic institutions.

There’s nothing in there that stops Ottawa’s ability to give money to individuals for the purpose of education.  This is why, despite all the sturm und drang, Quebec never put up a legal fight to the Canada Millennium Scholarship Foundation: Ottawa can give cash to whoever it wants, whenever it wants.  But when it comes to dealing with institutions, their ability to direct money to areas of provincial jurisdiction is subject to provincial veto.  The provinces accept (with limits, in Quebec’s case) that the feds can flow money to institutions for the purposes of academic research.  Hence the Canadian Foundation for Innovation.  They do not accept that it can send money to institutions for operating purposes.

(Historical footnote: there was a period where nine out of ten of them were prepared to accept this.  Back in the mid-1950s, there was a ruse in which the federal government handed tens of millions of dollars every year (a lot back then) to Universities Canada – then known as the National Conference of Canadian Universities and Colleges – which it would then distribute to institutions.  In theory this was a canny work-around to the constitution.  In practice, it stalled because Duplessis blew a gasket and told Quebec universities that if they touched a dime of that money, he’d take it out of their provincial funding.  Pierre Elliott Trudeau then wrote a wonderful article in la Cite called “Federal Grants to Universities” explaining why Duplessis was 100% right and St. Laurent was in kookooland, constitutionally speaking.  It’s a great article, read it if you can.  Anyway, this arrangement lasted into the 1960s, when the feds got out of this arrangement and moved into per-capita grants instead.  And that door is now shut: there is no going back through it.)

Politically, there is a fantasy shared by some on the political left that the federal government can simply re-acquire policy leadership in the post-secondary field by passing an act of Parliament and adding great wodges of cash to existing transfers… with strings attached.  I’ve previously (here) torn a strip off the idea of a federal Post-Secondary Education Act, but let me focus here specifically on the idea that a generalized fiscal transfer could actually affect tuition fees.  Let’s just imagine how that discussion would go.

Ottawa: we want to give each of you money so that you bring your tuition fees to zero.  Quebec and Newfoundland, your fees are about $3000, so we’ll give you that per student…

Ontario: Our fees are $7500 a student or so.  Fork it over.

Quebec and Newfoundland: Hold it.

I could go on here about the nuances of fiscal federalism, but basically that’s the problem in a nutshell (for my American readers: in some less disastrous timeline, Hillary Clinton is facing exactly this problem as she attempts to implement her free tuition promise for public universities). There are ways the federal government could bribe provinces into lowering tuition.  In fact, something like that actually happened in Nova Scotia as a result of the NDP-Liberal budget deal in the minority Parliament of 2005.  But you wouldn’t necessarily get them to lower by an equal amount, and you definitely wouldn’t get them to go to zero because they have vastly different starting points.

So, here’s the quick heads-up to all prospective New Democrat leadership candidates: even if it wanted to, the Government of Canada has no sensible way to eliminate tuition nationally.  If you do manage to form a government, this will be broken promise #1.  So don’t promise it.  Instead, think about ways to support students which don’t involve tuition.  There is a whole whack of things you could do with student assistance instead.  And the best part is: if you use student aid as a tool instead of tuition, you can channel aid to those who actually need it most.

October 28

Priorities

Next week, everyone’s favourite Federation of Students is going to have a “Day of Action” to demand “Free Education for All”.  A few months ago I explained why some student groups think it’s a good idea to be protesting right now even while governments are quite sympathetic to them  (tl:dr: it’s because Sticking It To The Man is more important that achieving practical results).

Now to anyone who’s read this blog for more than once, it’s probably clear that I take a pretty dim view on the Free Education for All line.  I do believe there’s an argument for free education at the college level; however, beyond that, the case is pretty weak.  Low-income students already have net zero tuition in most of the country.  For students from families making $40,000, subsidies (that is, grants, loan remission and tax credits) are already larger than college fees in eight provinces – all ten if we include Manitoba’s and Saskatchewan’s graduate rebate programs.  They’re also larger than university fees in five provinces: Newfoundland, New Brunswick, Quebec, Ontario and Manitoba.  Put that altogether and it’s clear that over 90% of all low-income students are already paying net zero tuition and will gain little from eliminating tuition.  The big wins, therefore, are for richer students.

Free tuition does not reduce intergenerational disparities.  It cannot produce greater equity in enrolments without a massive and seriously unlikely displacement of upper-income students from universities.   And even Karl Marx understood that it was regressive.

But let’s put all that aside.  Let’s assume for a moment that we all agree that any regressivity which occurs in completely subsidizing education for students from wealthier backgrounds is offset by the inherent benefits of universal programs.  Or, let’s assume we agree with American scholar/author and free-tuition advocate Sara Goldrick-Rab (whose new book Paying the Price is very good by the way) that the only way to really ensure that the poor get the money they need is to subsidise the rich, too.  Programs for the poor are poor programs, she says, so only universality can save the poor. (I don’t think this is true in Canada – the Trudeau government has just shown how to do targeting with its changing tax credits into grants – but I grant the possibility it may be the case in the US, so let’s go with it for now).

But even if we assume all that, we still need to assume that there is money available.  And in one sense there clearly is:  governments can make anything happen if they want to.   They just have to decide to do it.  It is a political question more than a financial one.  But politics, as they say, is about choices.  And the issue is: what would we choose not to pay for in order to ensure that kids from above-median income families don’t have to pay tuition?

Peace-keeping?  Should we say no to a mission to Mali to keep wealthier kids from paying tuition?  Childcare?  Do we choose to invest less in childcare to make university free for those who can clearly afford it?  Or what about clean drinking water on First Nations’ territories?  More investments in mental health?

Because of entrenched interests and programs, it’s very difficult for democratic governments to move money from program to program.  When incremental money arrives, they have to assign it to whatever priorities they think most important.  It could go back to taxpayers via a tax cut, or it could go to pay down debt, or it could go into a priority spending area.  When someone says “government should eliminate post-secondary fees”, in practical terms what they are implicitly arguing is that “students from wealthier backgrounds (because those are the primary beneficiaries) deserve this money more than families with childcare needs, or First Nations families living in communities with boil water advisories.  I know they would explicitly deny this, but from the perspective of the government, which has to choose between competing priorities, this is exactly what is being advocated.  That’s how lobbying works.

To recap:  Free fees would help the rich most, would not reduce intergenerational inequality, will not work to reduce inequality of access, and to boot would take money away from other important policy priorities, many of which (e.g. First Nations’ health and sanitation) are transparently of higher importance.

Remember all that on November 2nd.

August 29

Welcome Back

Morning everyone.

We’re back for another term.  I hope everyone’s summer went well.  Let’s get started.

First, a quick round-up of the major events since I was last in the Daily blog business: on August 1, the new Canada Student Grants program came into effect, with all grants now 50% larger than they used to be (the offsetting bad news, the loss of a whole bunch of tax credits, kicks in on January 1).   The big Ontario scheme doesn’t kick in this year, but the New Brunswick Tuition Assistance Bursary (TAB) started at the same time as the federal program.  There’s a new Minister for Advanced Education in New Brunswick who has been given a mandate to re-engineer the TAB so that it’s design isn’t quite so cockamamie; that’s great news, but no word yet on if/when/how such a re-engineering might take place.

The new government in Ottawa hasn’t quite left its hyperactive phase, and so the government has been conducting two big consultations of note this summer, one on innovation policy and one on science policy.  The Innovation policy increasingly looks to me like a go-nowhere exercise, mainly because the Minister himself seems to have a very difficult time distinguishing “innovation” from “glitzy tech things”. Universities, of course, won’t mind this policy confusion (and may indeed be actively abetting it) because, if the government is going to be handing out money for glitzy tech things they’re going to be pretty close to the front of the line, regardless of what happens to actual innovation.

(An aside: I don’t have time to get into this now, but absolutely everyone interested in innovation policy  – especially our esteemed Minister – needs to go out and buy Mark Zachary Taylor’s The Politics of Innovation.  I’ll come back to this book later this week but suffice to say it’s a fantastic and important read.).

The other big issue in Ottawa this summer has been the increasingly weird and disturbing management flame-out at the Canadian Institute of Health Research.  Other granting councils are also dealing with stable-ish budgets (last year’s budget boost was welcome but in real dollars budgets are still below where they were in 2009) and increasing application rates, which are leading to ever-decreasing project success rates.  But only CIHR has chosen to deal with these challenges by simultaneously changing the criteria of its main funding programs AND pilotinga whole new adjudication system whose raison d’etre appears to be to avoid every piece of known good practice in terms of evaluating scientific proposals.  I’m not an expert on this stuff, so I urge you to read someone who is: Jim Woodgett, the Director of Research for the Lunenfeld-Tanenbaum Institute (for instance, this piece  and this one too).  How CIHR President Alain Beaudet has kept his job through all this nonsense is frankly a bit of a mystery; but the Minister’s office now seems to be aware of the scale of the catastrophe and so a trip to the high jump may not be far off.

Overseas the big news is mostly in the UK (Brexit and the implementation of the Teaching Excellence Framework, subjects to which I’ll return over the next couple of weeks).  Hillary Clinton made a campaign promise to ensure that 85% of American students can attend a public university tuition-free, but it isn’t getting lot of press because almost nobody believes it’ll ever happen.  Still, we seem to be in a moment where governments (Ontario, Chile, the US) are increasingly interested in making higher education explicitly free for low and middle-income students.  We’ll see who else follows that trend in the next few months.

Finally, I have one small announcement to make with respect to this blog.  As y’all know, providing the reading public with expert commentary (well, commentary anyway) is a bit of a time sink.  But also, thanks to Statistics Canada’s cost-recovery policies, it’s a money sink as well.  I know many if not most of you dig this blog primarily for the data analyses – and I prefer writing data-pieces to think pieces – but the costs of obtaining that data are getting higher all the time. 

I’ve never really tried to monetize this blog the way Academica’s Top Ten does with its job posting thing; it seems like a hassle and it annoys some readers.  But equally, I can’t really justify blowing money on the blog either, and I need about $2500/year to get the data necessary to keep the interesting stats pieces coming.  So at some point in the next few weeks, I am going to launch a crowdfunding effort to raise that amount.  If you like the data work I do and think it’s valuable for policy discussions in Canadian higher education, please consider donating.   There will be tchotchkes.

That’s it.  Have a great term everyone.

 

June 01

Early Results from the Tennessee “Free Tuition” Experiment

You may remember a blog I wrote last year concerning something called the Tennessee Promise.  Described by some as a “free tuition” program, essentially what it did was ensure that every Tennessee student enrolled in a Tennessee community college received student aid at least equal to tuition.  In the fall, the state touted that first year, direct-from high-school enrollments in Tennessee colleges had increased by fourteen percent.  But now, however, some more complete data is available in the form of the State’s annual higher education factbook, which allows us to look a little bit more deeply at what happened.

What the numbers show is something a little bit weird.  If we look just at direct from-public-high-school -to-community-college/college of technology, the numbers are actually much better than initially advertised.  In 2014, this number was 13,527; in 2015 it was 17,550, and increase of nearly 30%.  That’s quite astonishing.

However, not all of this jump in enrollment at colleges came from “new” students.  To a considerable degree, the jump in the number of community-college bound students came from cannibalizing students who would otherwise have attended 4-year colleges, as shown in the figure below.

Figure 1: Public In-State Public High School Graduate Enrolment by System, Fall 2011-Fall 2015

2016-05-31-1

So, Community College and College of Applied Technology enrollment rose by about 4,000, but enrollments in 4-year colleges fell by 2,000, meaning effectively that half the growth came from people switching from other types of higher education. Still, net growth in enrollments at all levels was about 2,000 , or 6.8%, which is pretty impressive given that growth in the three previous years combined was only about 4%.  It sure seems like there is something positive going on here.  But what?

Well, free tuition promoters would have you believe that what’s happening here is a rush of previously-excluded poor students suddenly attending because education is more affordable.  Unfortunately, we can’t directly check students’ socio-economic backgrounds, so we can’t know for sure who’s responding to these lower net prices.  However, because the factbook shows transition rate by county, we can look at different enrollment responses by county median household income. Figure 2 plots the percentage increase in enrollments in each of Tennessee’s 95 counties against their median household incomes

Figure 2: Percentage increase in college-going rate, Tennessee 2015 over 2014 by County, vs County Median Household Income

2016-05-31-2

Pretty clearly, there’s no relationship here, which at face value suggests that participation rates of students from poor counties did not increase any faster than the rates of students from richer counties.  But that’s not quite right.  Remember we are looking at percentage increases, and poorer counties tend to have lower participation rates.  Therefore, in order for the percentage increase to be the same in richer and poorer counties, the percentage point increase actually has to be larger in richer counties.  (think about:  a 10% rise for a county with 30% participation rates is 3 percentage point; for a county with a 60% part rate, a 10% rise requires a jump of 6 percentage points).

So, a pure, unsophisticated simple-stupid pre-post analysis of the Tennessee data, suggests that the Tennessee Promise appears to have i) caused a 30% increase in 2-year college-going rates among high school graduates, half of which was diverted from other types of higher education and ii) caused a 6.8% overall increase in transitions to all forms of college, but that this increase did not primarily take place due to increases of the college-going rate of students from poorer counties.

Make no mistake, this is still a very good outcome for a program that only costs $14 million per cohort per academic year; it works out to $7,000 per new student added to the post-secondary system, which is pretty cheap.  Nevertheless, it’s worth noting that those benefits don’t seem to necessarily accrue to youth from poorer backgrounds.

 

April 29

Free Harvard Fair Harvard

Harvard has a unique Governance structure.  Basically, it has two boards and no Senate.  One of the two boards – the Board of Overseers – is composed entirely of Harvard alumni.  It has thirty members and the membership turns over a bit each year with annual elections.  This year’s annual election is a bit of a doozy.

Back in January, an alumni and businessman by the name of Ron Unz submitted a slate of candidates – which included consumer activist and former Green Party presidential candidate Ralph Nader – on a “Free Harvard/Fair Harvard” platform.  His double-barreled manifesto, as its name implies, is to get Harvard first use some of its vast endowment to reduce tuition and second to move to a system of race-blind admissions.

What should we make of this?

Well, the first demand is ludicrous.  75% of Harvard graduates end up with no debt, either because they come from wealth and can afford the fees or have income sufficiently low that they received something close to a full ride (technically, Harvard doesn’t give a full-ride in the sense that a student will be expected to work a few hours a week no matter what, but it’s awfully close).   In practice, for a family of 3 with no assets outside of housing and retirement funds, income needs to be about $150,000/year before the aid package drops below the level of tuition (you can play with Harvard’s net price calculator here.  Pretty clearly then, making Harvard “free” genuinely would only benefit those with very high family income.  And frankly why would anyone want to do that?

The second demand is trickier.  The slate is making quite a bit of hay out of data that Asian-American students are being discriminated against in the application process.  Unz himself wrote quite a fierce piece on this in 2012, which suggested that as far as Ivy League admissions are concerned, Asians are the “new Jews” – a reference to the fact that Ivies imposed much higher entrance requirements on Jews than gentiles prior to WWII so that the former did not swamp the latter and drive away all those nice WASPs to whom the Ivies were in fact beholden for fund raising (this story is told in excellent detail in Jerome Karabel’s The Chosen, which is a history of admissions and the concept of merit at Ivy League schools).  Unz in effect argues – and it is difficult to disagree with him, based on the evidence – that increasingly the group that is “paying” for affirmative action (that is, policies which give Black and Hispanic students preferential access to spots at Ivy League schools) is Asian-Americans, not whites.

There’s no doubt that Unz’s narrative is troubling (though it should be noted not all his claims appear to be factually correct).  That said, his solution here is effectively to end affirmative action.  Given the extent to which Harvard graduates dominate public life in the United States, ending affirmative action would have an enormous effect on the ability of Blacks and Hispanics to access some of the upper corridors of American society.  Add that to the fact that Unz has in the past funded groups with some fairly unpleasant white supremacist associations, as well as sponsoring ballot initiatives against bilingual education, and you can see why some people think that behind Unz’ pre-occupation with fairness for Asian-Americans lie some much nastier anti-Black and anti-Hispanic prejudices.

The presence of the Unz slate has prompted the formation of an opposing “Coalition for a Diverse Harvard” slate, which is vigorously defending the current admissions system.   The balloting is by mail, and results will be announced on May 26th.  The results will be closely watched, particularly in a Presidential election year.  If Harvard’s own alumni – a group which you’d think would be in the tank for the Democrats – votes against affirmative action and for spending more endowment money on the richest of the rich, it will cause some interesting ripples in the campaign.  For that reason, I think it’s quite unlikely to come about, but then again I wouldn’t have guessed Ralph Nader would ally himself with this set of ideas, either.

April 19

The Balkanization of Canadian Student Aid

So, a couple of things happened late last week worth mentioning:

First, the Newfoundland Budget was released and as predicted it was a slash-and-burn exercise.  The province, facing a deficit of something like 8% of GDP, had to make major changes.  Unbelievably, the tuition freeze stayed, sort of (more on this tomorrow), but student aid took a hit.  Remember in 2014 when Newfoundland eliminated grants?  That’s over, the first $40 week in provincial aid is now a loan again.  But more importantly, the government has completely eliminated grants for students studying outside the province if their program of study is offered inside the province.  So, a law student going to Dal gets the grant, but if God forbid you want to study Science or Engineering somewhere other than MUN – it’s loans only on the provincial side (said students would still receive federal grants).

Second, the premier of New Brunswick announced pretty much out of nowhere that low-income students in his province would be free and that details would be available from the Ministry of Advanced Education “in a few days” (at time of writing we’re still waiting).  Not many details yet – from the few nuggets available it sounds a lot like the Ontario program (provincial tax credits are being axed) – which is of course a Good Thing.  But one key point did come out, namely that the grant would not be portable.  If you chose to leave New Brunswick, it would be loans only on the provincial side.

I. Am. Furious.

The extent to which young people in Atlantic Canada are treated as “resources” to be hoarded is just appalling.  It’s almost never “how can we attract young people”, it’s “how can we keep the ones we’ve got from leaving”.  From a very young age, bright young people are essentially sold a bill of goods by guidance councilors and community leaders – “don’t leave the province, it’s a betrayal to leave the province, you are our future”.   The guilt-trips are outrageous.  And now along comes provincial policies in Newfoundland and New Brunswick to use financial means to punish students who have the temerity to want to study outside the province. 

At least you can sort of excuse the Newfoundland one on grounds of austerity because financially that government really is in trouble.  But New Brunswick?  They canned a huge graduate tax rebate last year and promised to re-invest the money.  There is no way that amount of money wouldn’t cover an extension of the program to out-of-province students.  Hell, Ontario actually cut total grant + tax-credit dollars in its announcement and still managed to extend the coverage of its new grants (currently, the Ontario Assistance Grant is portable but the Ontario Tuition Grant is not – the new grant is fully portable).  Instead, New Brunswick is doing this specifically to try to divert New Brunswick students away from out-of-province schools in order to give its own universities more tuition revenue and hence obviate the need for the province itself to actually pony up some money.  Brian Gallant calls that a win; we’ll see if he thinks the same when New Brunswick lose students after Nova Scotia and PEI retaliate in kind.

Now look, I get it.  People want what’s good for their communities, and the economics of Atlantic Canada have been scary for decades.  It’s easy to retreat into a defensive shell.  But holding your own youth hostage is not cool.  Those kids aren’t resources to be hoarded; politicians need to let them go and succeed wherever they want to succeed.  Student aid should be about expanding opportunity, not limiting it.

These changes need to be reversed.  And if the provinces won’t do it on their own, the federal government should change the legislation underlying the Canada Student Loans Program to penalize partner provinces whose loan programs don’t provide mobility across Canada.  More than ever before, their programs are built around federal largesse – Ottawa should extract something in return.  And freedom to study without penalty anywhere in the country is a right worth fighting for.

May 25

Free Tuition: A Rocky Rollout in Chile

So the big news last week in Santiago was the announcement of the start of the “free tuition” plan, which was part of President Michelle Bachelet’s election platform in 2013.  Only it’s not quite free tuition, and it’s still not clear how it will be paid for.

I’ve written previously (back here) about the Bachelet promise, and the potential difficulties with implementing it in a country where most higher education is provided by private institutions, and forced nationalization is expressly prohibited in the constitution.  To those difficulties have been added the fact that the big tax hike the government thought would finance its reforms to compulsory and post-secondary education isn’t in fact going to raise quite as much money as previously expected, due mostly to a slump in the price of Chile’s main export, copper.   Not to mention the fact that the President herself has seen her approval ratings crater due to corruption allegations regarding her son.

The announcement last week left a lot of questions unanswered.  Free education, the President said, would now be available to “el 60% de los estudiantes más vulnerables”, which sounds like 60% of students, but based on the number of students estimated to benefit – roughly 250,000 students, or a quarter of the total – actually seems to mean “students from the poorest three income quartiles”.  There was no explanation of how institutions would be compensated for taking students.  And the President added a curious phrase, saying that students would be able to “accedan a la gratuidad completa y efectiva, sin beca ni crédito”. One hoped that the intention here was to underline that she meant free tuition and not just free net tuition (i.e. where grants offset the cost of fees).  However, some – including the academic and former Minister Jos Joaquin Brunner – have wondered whether it might mean that those who receive free tuition will lose eligibility for student aid.

Weirder by far is the President’s decision to simply exclude some institutions from the process.  Universities that are members of CRUCH (an acronym meaning “Council of Rectors”) – 16 public and 9 private universities that make-up the older (pre-1973) higher education system – were included, as were a selection of the country’s Institutions Professional (basically, Polytechnics), and its Centros de Formacion Tecnica (basically, community colleges).   But the country’s 35 private post-1973 universities were pointedly left out of the program.  No reason for this was forthcoming; and in case you’re wondering, it’s not solely because they are private, as all the IPs and CFTs are private, and they were included in the scheme.  One senses that some decades-old animosity between university sectors is playing-out here.  Whatever the reason, it puts Chile in the weird position of giving free tuition to median-income students attending a CRUCH university, and giving nothing beyond loans to students from the bottom of the income scale studying in the same program at a private university.

In theory, the government is committed to implementing full, across-the-board free tuition at some later date.  But it’s unclear exactly when this will happen and, given the situation in the private universities, whether it will in fact cover all forms of education.  Will it, for instance, cover graduate studies?   Will it cover 7 or 8 years of undergraduate education (currently the norm), or only the first 4 or 5?  Most importantly: how are institutions going to be compensated for taking all these students for free?

Hopefully, all of these questions will be resolved expeditiously.  But with only seven months remaining until the implementation date, Chileans are still in the dark about a lot of important details.

October 15

Free Tuition in Chile

Last fall, Michelle Bachelet was once again elected as President of Chile, on a considerably more radical platform than that which propelled her to the same position eight years earlier.  One of her many campaign promises was to make higher education completely free.  This is a Big Deal.  It’s not like Germany, where tuition was only ever a derisory sum; in Chile, tuition payments are equal to 2% of GDP, a larger percentage than anywhere else in the world, outside Korea.

So, ten months on from re-election, how are they getting on with things?  The quick answer is: slowly.  But not for want of trying.

The heart of the problem is a constitutional provision, dating from the Pinochet era, which guarantees Chileans the freedom to make a living however they want.  Effectively, this prevents the government from compulsory nationalization.  In higher education, where the vast majority of institutions are private (though some of them receive public funds), this makes effectuating the Bachelet promise difficult.  So the government has gone down the route of trying to buy private institutions’ obedience by paying student fees on students’ behalf.

Now, the government isn’t stupid; it’s aware that private universities are likely to respond by raising fees.  That’s why they intend to rely on something called a “reference tuition fee”.  This is an invention of the Chilean student aid system, which is the only one in the world that takes the Bennett Hypothesis (i.e. that student aid encourages cost inflation in higher education) seriously.  Basically, Chilean loans programs don’t provide 100% of tuition – they only cover a “reference” fee, which ranges from about 80% to 100% of the actual fee.  The problem is that reference fees vary significantly: the fee for a law program at one institution may be vastly different than at another.  So the first task to make this work is to create a “standard” reference fee – but this is causing enormous problems.  Set it too high and you risk getting fleeced by the institutions; set it too low, and institutions will opt out of the system.  It’s not clear that the government will be able to find such a not-too-hot-not-to-cold fee.

Although the government claims to be able to fund the one-time cost of transferring 2% of GDP from the private to the public sector via new taxes, some independent observers question whether it will, in fact, be able to fully replace the tuition income institutions will lose.  Even if this money can be replaced, it’s not exactly clear where money will come from to fund future system growth or system quality improvement.

More generally, there’s a question about value-for-money in this policy.  Even the proponents of free fees don’t dwell on the promise that the system will become more equitable.  Access to higher education and stratification in Chile are already reasonably good: indeed, their access outcomes look a lot like Canada’s, despite significant fees in both the public and private sector, and the fact that Chile’s (mostly private) system of secondary education creates enormous inequities in outcomes, meaning room for improvement is not great.

Mostly, what proponents of free fees in the Chilean system believe is that “the market should not decide” in higher education.  Which, you know, fair enough.  Only two problems: i) historically, the state tends not to be so hot as a master, either; and ii) in a country that has as many challenges as Chile, is such a goal worth 2% of GDP?  Honestly?

Page 1 of 212