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Category: Policy

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

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May 21, 2014 3 Comments

Nova Scotia Ditches a Bad Subsidy

About a decade ago, a really bad policy idea started making its way across the country’s “have-not” provinces.  I can’t remember if it started in Saskatchewan or New Brunswick, but within a couple of years it had spread to Manitoba and Nova Scotia, as well.  The details (and generosity) of this policy varied somewhat, but the gist of it was this: “let’s pay our graduates not to leave the province by refunding a portion of their tuition, via tax reductions,

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April 25, 2014 No Comments

The Canadian Way of Higher Education Subsidies

One of the biggest arguments in student assistance is about who to subsidize and why.  Unfortunately, because we are rarely explicit in the way we talk about subsidies, discussions tend to be a dialogue of the deaf. One school of thought says we should subsidize students based on their parental income.  Students from poor families need more help to succeed than students from wealthier families, and so the former should pay less, and so we should pay them grants to

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March 19, 2014 2 Comments

How ICRs can Become Graduate Taxes: The Case of England

As noted yesterday, graduate taxes and income-contingent loans have many similar features.  They both defer payments until after graduation, and they are usually payable as a percentage of marginal income above a given threshold.  In England right now, the payment scheme on ICR loans is that students pay 9% of whatever income they earn over £21,000 (roughly C$38,000).  The difference between the two is that with a loan you have a set amount to pay, and when it’s paid you’re

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March 18, 2014 2 Comments

Oregon’s “Pay It Forward” Scheme and the ICR vs. Graduate Tax Problem

You may have heard some rumblings from south of the border over the past few months with respect to a program called Pay It Forward (PIF).  The brainchild of a student group called Students for Educational Debt Reform, this idea was picked up by the Oregon assembly last summer; within a few months, over a dozen state governments were examining similar draft legislation. The basics of the program are these: instead of paying tuition, students agree to pay a percentage

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March 17, 2014 1 Comment

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