For many grade 12 students, spring is university application season. In Western Canada, youth living in families with an annual income over $100,000 are still more than twice as likely to attend university than youth with family income under $25,000.

This is hardly surprising, given average tuition fees run over $4,800 a year these days, but it’s fundamentally inequitable. It undermines social cohesion and there are real economic costs to all of us when we don’t fully utilize the skills and capabilities of all our citizens.

Reducing upfront costs for students would improve access to higher education and ensure that B.C. can reap the benefits of a well-educated work-force. And it’s more affordable than you think.

Conventional wisdom has it that higher education in B.C. is heavily subsidized because tuition fees don’t cover the full cost of education. But this common misconception ignores a second way in which students pay for their education: through higher taxes after graduation.

When these tax payments are added up over the course of graduates’ careers, it turns out that university students fully repay the cost of their degrees and then some.

Despite the pervasive stereotype of arts majors serving lattes at Starbucks, the reality is that higher education remains a great investment in today’s economy. University graduates experience shorter periods of unemployment, are more likely to work full-time and earn higher salaries than their peers with high school diplomas.

Census data shows that B.C. women in their 30s working full-time earned $56,000 if they had a bachelor’s degree, $40,000 with a college degree and only $33,000 with a high school diploma. For men, the corresponding figures are $74,000 for a bachelor’s degree, $58,000 for a college diploma and $50,000 for high school.

With higher earnings come higher income taxes and less need for government cash transfers like welfare and employment insurance. A new study I’ve authored for the Canadian Centre for Policy Alternatives calculates the value of the extra income taxes (net of transfers) paid by female university graduates over their careers at $98,400, and $155,400 for men. This at least than twice the actual cost to the province of a four-year under-graduate degree in one of B.C.’s public universities, $50,630, and tuition fees already cover 40 per cent of that… Read More

The Occupy movement has spread to Simon Fraser University, with a dozen students working to create an “open university” at the Burnaby campus.

“We’re trying to democratize education,” said SFU communications student Joseph Leivdal, a Burnaby resident and one of the organizers.

The group is identifying with the Occupy movement, a global wave of protests against social and economic inequality, but unlike their counterparts, the SFU students are not organizing blockades or pitching tents on campus.

Instead, they want to highlight underfunding from the provincial government and organize free public teach-ins on campus.

“Thirty per cent of Canadians who don’t go to school don’t go to school because of tuition rates. It’s an affordability issue,” said Leivdal… Read More

Feeling the squeeze? …

…Full-time undergraduate tuition has increased 4.3 per cent for the 2011-12 academic year, according to a report recently released by Statistics Canada. The move follows a four per cent increase in 2010-11.

According to the report, Canadian undergraduate students pay an average of $5,366. with the average Albertan paying $5,662, the fourth-highest amount country-wide.

The increase outpaces the Consumer Price Index, which was 2.7 per cent from July 2010 to July 2011.

People often point to the fact Alberta’s tuition prices are capped by the cost of living measure. However, it’s misleading as Alberta students also pay the highest mandatory non-instructional fees at $1,399.

Cash-strapped students may also be depressed to know books and supplies average $1,300 yearly…

…You’d be surprised by how wickedly low tuition fees were just forty years ago.

Back then, the government paid 84 per cent of a university’s operating cost, with students picking up only 13.7 per cent of the bill in the form of tuition fees. That means a Mount Royal College student would have paid something around $2,300.

Now, the government only foots 57.1 per cent with the student’s portion almost tripling to 34.2 per cent.

The original number doesn’t account for the cost of living raise, but the proportion of government-to-student cost is failing each student… Read entire article

Moody’s warns that student loan lending is unsustainable

Moody’s credit rating agency warns that “fears of a bubble in education spending are not without merit.”

Their new report uses entirely U.S. figures, but considering that the average amount of student loans owed by university students in Canada is similar to the amount owed by U.S. students upon graduation, ($27,000 versus $23,000), Canadians may worry too.

Moody’s argues that student loan lenders didn’t tighten their rules during the recession, unlike lenders in all other sectors. In fact, the growth rate in the total amount loaned to students continued to grow by 10 per cent per year. That’s despite the fact that the number of delinquent loans continues to grow too, while job prospects remain low. How will students be able to pay back all that money if they can’t find work?

Here’s an excerpt of their argument. For the full report, click here.

“The cost of tuition and fees has more than doubled since 2000 outstripping the inflation rate across all goods as well as the growth rates of energy, housing and healthcare costs…. With the cost of education continuing to rise rapidly, the value of schools’ endowments still well below their peaks, and state funding to universities being cut, students are being asked to shoulder an even larger share of tuition and fee increases.”

“Borrowers and lenders alike hope that the higher income resulting from the human capital investment justifies the cost of the loan. This has not been the case for recent graduates thus far…”

“Unless students limit their debt burdens, choose fields of study that are in demand, and successfully complete their degrees on time, they will find themselves in worse financial positions and unable to earn the projected income that justified taking out their loans in the first place.”