Things have been bleak in higher education the last couple of years, and no doubt they will remain bleak for a while. But it recently became clear to me how we’ll know that we are turning the corner: it will be the moment when provincial governments start allowing significant rises in domestic tuition.
This became clear to me when I was having a discussion with a senior provincial official (in a province I shall not name) about tuition. I was arguing that with provincial budgets flat and declining international enrolment, domestic tuition needed to increase – and that there was plenty of room to do so given the affordability trends of the last couple of decades.
What affordability trends, you ask? I’m glad you asked. Affordability is a ratio where the cost of a good or service is the numerator and some measure of ability to pay is the denominator. So, let’s look at what it takes to pay average tuition and fees. Figure 1 shows average tuition as a percentage of the median income of couple families and lone-parent families aged 45-54. As you can see, for the average two-couple household, average tuition (which – recall last Wednesday’s blog – is an overestimate for most students) has never been more affordable in the twenty-first century. For lone-parent families, current levels of tuition are at a twenty-year low.
Figure 1: Average Undergraduate Tuition and Fees as a Percentage of Median Family Income, Couple Family and Lone-Parent Families aged 45-54, Canada, 2000-2024
Ah, you say, but that’s tuition as a function of parental ability-to-pay – what about students? Well, it’s basically the same story – calculated as a percentage of the average student wage, tuition has not been this cheap since the turn of the century, and in Ontario, it has dropped by 27% since 2017. And yes, the national story is to a large degree a function of what’s been going on in Ontario, but over the past decade or so, this ratio has been declining in all provinces except Manitoba, Saskatchewan and Alberta.
Figure 2: Number of Hours Worked at Median Hourly Income for Canadians Aged 15-24 Required to pay Average Undergraduate Tuition and Fees, Canada and Ontario, 1997-2024
And that’s before we even touch the issue of student aid, which as you all know is way up this century even after we take student population growth into account. In real dollars, we’ve gone from a $10B/year student aid system to a $20B/year system with the vast majority of growth coming on the non-repayable side, rather than from loans.
Figure 3: Total Student Financial Assistance by Type, Selected years, 1993-94 to 2023-2024, in Millions, in $2023
In fact, student aid expenditures are so high nowadays that across both universities and colleges we spend about $3 billion more in student aid than we take in from tuition fees. That’s NEGATIVE NET TUITION, PEOPLE.
Figure 4: Aggregate Non-Repayable Aid vs Aggregate Domestic Tuition fees, 2007-08 to 2023-24, in Billions, in $2023
So, yeah, affordability trends. They are much more favorable to students than most people think.
Anyway, the provincial official seemed a bit nonplussed by my reply: my sense is that they had never been briefed on the degree to which tuition increases have been thrown into reverse these past few years, and he certainly didn’t know about the huge increase in non-repayable aid over the past few decades. They didn’t push back on any of this evidence, BUT, they insisted, tuition fees weren’t going up because doing so is hard and it’s unpopular.
To which I responded: well, sure. But was raising tuition any easier or less unpopular in 1989 when the Quebec Liberal government more than doubled tuition? Than in the mid-90s when both the NDP and Conservative governments allowed tuition to rise? Than in 2001 when the BC Liberals allowed tuition to increase by 50%? This has been done before. There’s absolutely no reason it can’t be done again. The only thing it will take is the courage to put the requirements of institutions that actually build economies and societies ahead of the cheap, short-term sugar highs of chasing things like “affordability”.
Now, to be fair, I don’t for the moment see any provincial governments prepared to do this. If there is one thing that seems to unite provincial governments these days, it is an inability to make hard decisions. But this particular political moment won’t last forever. It might take a serious, long-term recession to knock it into various heads that no matter how much money we sink into them, natural resources and construction alone won’t run this economy. Eventually, we’re going to have to re-build the great college and university system we’re in the middle of trashing.
And we’ll know that moment has come when provincial governments agree that domestic tuition should rise again.
4 Responses
Most positive news I have heard for sometime. I don’t think raising tuition is a political winner. I see it more likely to be new programs launched that meet emerging demand at a higher price point. Think of an AI for business program or quantum computing. Without a higher price point no university would want to launch a high cost high demand program like this. Politicians can show voters that yes you pay more but you get more in demand job focused skills than from existing programs. I see differential tuition as where things will happen if Canadian Universities can come back from this current doom loop.
Thank you for the interesting analysis. I wonder, however, about what the trend would like like if it was based on the income available after paying for essentials such as housing, food, transportation, etc. How much money do students have after all that to cover the cost of education? I can remember the days when students could spend the summer flipping burgers and be able to afford school but now I don’t know too many students who can get away without working significant hours during the academic year. Makes me wonder…
I would think for many parents/students, and their elected officials across the board, affordability includes residence, meal plan, books, ancilliary fees, etc…
So while tuition has remained the same or dipped, residence and meal plans have close to doubled. The experience of being a student has gotten more expensive (and cushier, but even traditional double rooms are still a lot more expensive now than 20 years ago). I would be interested to hear about how much the cost of a meal plan has increased, relative to inflation, for example. And what the governments / universities could do to address affordability on that end, seeing as student food options seem to be in the grips of major food service corporations. We already know what happens when the government tries to address the cost of student housing 🙁
One wonders why, with net negative tuition, domestic students are charged tuition at all.
Wouldn’t it make more sense to hand the money to the universities directly, and reduce all the paperwork in applying for aid? This would also make the level of access more visible.