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Paying for higher education

Characteristics of postsecondary students in 2002
Trends in tuition fees
Median expenditures for full-time university and college students
in 2001-2002

Sources and amount of funding
Conclusion

Reference

Between 1988-1989 and 1998-1999, college enrolment grew steadily and full-time enrolment at Canadian universities increased by 16%. University enrolment grew more slowly in the later 1990’s and part-time enrolment decreased, though recent data suggest a reversal in this trend since 1998-1999.

At the same time, the costs of going to college or university, including costs for tuition, books and school supplies, and living and accommodation expenses, have been rising faster than the rate of inflation. Many students must borrow to finance their education. Current information on who goes to college or university and how they finance their studies is essential for policy decisions around issues of access to, and financing of, postsecondary education (PSE). To address this need, the Postsecondary Education Participation Survey (PEPS) was conducted in February and March 2002. Here, we present some of the key results.

Characteristics of postsecondary students in 2002

According to PEPS, in 2002, an estimated 1.6 million young Canadians aged 18-24 (17-24 in Quebec ) had taken some form of postsecondary education after leaving high school. Young women were more likely to have gone on to postsecondary education than were young men. Two-thirds of young women (67%) pursued education beyond high school, compared to 57% of young men. Over half of those who went on to PSE had begun their studies at the age of 17 or 18 and the overwhelming majority, 86%, started before turning 20.

The decision to pursue postsecondary education can be influenced by many factors. Clearly, marks matter. Students who reported grades below 70% in the final year of high school were less likely to continue on to PSE than students who reported grades of 70% and above. About eight in ten young Canadians who said their grades were 80% or more and close to two-thirds of those with grades between 70% and 79% in their last year of high school went on to college or university compared to just over one-third of those with grades below 70%.

Parents play an important role. Youth who felt that their parents expected them to go on to postsecondary education were much more likely to do so than those who felt their parents did not expect them to go on (67% compared with 34%). Similarly, youth who had at least one parent with some postsecondary education were more likely to themselves pursue postsecondary studies than were 18-24 year-olds with parents who had not taken any postsecondary education (70% compared with 57%).

Participation in PSE rises with family income. Those 18-24 year-olds with estimated family earnings of $80,000 or more were the most likely to pursue further education beyond high school (83%). As family earnings decreased, so did the percentage of youth who went on to PSE. About two-thirds of youth with family earnings between $55,000 and $80,000 had taken some postsecondary education and this dropped to just over half when family earnings were less than $55,000.

Just over half, 53%, of 18-24 year-olds reported having any savings put aside for postsecondary education from any source. About 43% of them reported savings put aside by their parents and 23% said they had put aside their own savings for postsecondary education.1

However, it is important to note that while these factors may play a role in influencing who goes on to PSE and who does not, none of them plays a determining role. In fact, over half of the 18-24 year-olds whose parents did not have any postsecondary education went on to pursue postsecondary studies. Similarly, half of those who did not have any savings set aside for postsecondary education did go on.

When respondents who had not yet started postsecondary education were asked about what barriers they faced, about 40% identified financial reasons and just over one in five reported “lack of fit” with available programs.

Trends in tuition fees

The costs of receiving a postsecondary education in Canada increased substantially over the past decade. Between 1990-1991 and 2004-2005, for example, average undergraduate tuition fees in Canada more than doubled, rising from $1,464 to $4,172. From 1990-1991 to 1999-2000, undergraduate tuition fees rose by an average of 9.6% per year. Since 2000, the rate of increase has slowed to an annual average of 5.3%. Nevertheless, average tuition fees continue to rise faster than inflation.2 College fees, while lower than university tuition, have been increasing as well, as have related expenses for books, accommodation and living costs.

Figure 1. Rates of increase in undergraduate tuition fees versus inflation

Figure 1. Rates of increase in undergraduate tuition fees versus inflation
Note: Consumer Price Index annualized by taking averages from September of year X-1 to August of Year X.

Source: University tuition fees. Statistics Canada, The Daily, Thursday, September 2, 2004.

Tuition costs vary across provinces. In 2004-2005, for example, average undergraduate tuition fees were highest in Nova Scotia at $5,984, followed by Ontario at $4,960. At $1,683, fees were lowest for residents of Quebec attending university in Quebec . For the past four years, tuition fees have remained stable or decreased in Newfoundland and Labrador and they have been frozen in Manitoba, placing tuition fees in these two provinces among the lowest in Canada .

Tuition fees also vary widely by field of study. The largest increases over the past decade have occurred in dentistry, medicine and law. For example, in constant dollar terms, average Canadian tuition fees for dentistry more than quadrupled between 1993-1994 and 2003-2004, rising from $2,688 to reach $11,185; average tuition fees for medicine more than tripled and those for law rose from $2,159 in 1993-1994 to $5,715 in 2003-2004. In 2003-2004, average tuition fees were lowest for education, agriculture and architecture.

Table 1: Average university tuition fees by faculty, Canada, 1993-1994 and 2003-2004 (in 2001-2002 constant dollars)
  1993-1994 2003-2004 % change
$ $
Faculty      
Dentistry 2,688 11,185 316
Medicine 2,579 8,967 248
Law 2,159 5,715 165
Commerce 2,051 3,805 86
Engineering 2,235 4,167 86
Science 2,178 3,769 73
Music 2,124 3,578 68
Arts 2,155 3,632 69
Agriculture 2,116 3,324 57
Architecture 2,234 3,419 53
Household sciences 2,152 3,498 63
Education 2,012 3,066 52
       
Undergraduate 2,148 3,837 79
Graduate 2,217 4,956 124
Note: This table was updated on June 23, 2004.

Source: Statistics Canada, 2003. Education indicators in Canada: Report of the Pan-Canadian Education Indicators Program Catalogue number 81-582-XIE.

Median expenditures for full-time university and college students in 2001-2002

Data from PEPS show that the median total amount spent by full-time postsecondary students was about $9,740 for an academic year of about 8-months duration in 2001-2002. Students spent more on food, accommodation, utilities and other non-educational expenditures during the academic year than they did on tuition, fees, books and supplies ($5,400 compared with $3,700).

Median expenditures varied by the type of postsecondary institution attended. Full-time university students tended to spend more during the academic year, $11,200, compared with $9,330 for college students and $4,550 for CEGEP students.

Full-time university students spent more than college students both for educational and non-educational items. The median amount spent by university students on tuition, fees, books and supplies was about $5,000 compared to $3,100 for college students. The spending gap between full-time university and college students was smaller on non-educational items, however; median expenditures on rent, food, telephone and other non-educational expenses was $6,200 for university students and $5,480 for college students.

Not surprisingly, living with parents or guardians while attending school had a big impact on non-educational expenditures at all levels of education. The average full-time university student living with their parents spent $4,400 on non-educational items compared to just over $8,160 for those who did not live with their parents. Median costs for full-time college students living at home were $3,700 compared to $8,100 for those living away from home. In 2002, over one third of full-time students lived away from home while attending postsecondary school.

CEGEP students spent the least, both on educational expenditures ($750) and annual non-educational expenditures ($3,720). Non-educational expenditures were lower for those attending CEGEP partly because three quarters of them lived with their parents or guardians while attending school. In Quebec, 40% of respondents were 16 years of age or less when first starting their postsecondary education, namely CEGEP, thus explaining the large percentage living at home.

Sources and amount of funding

Students use a variety of sources, such as earnings from employment, savings, non-repayable contributions or loans from parents, scholarships, government student loans, and bank loans to fund their postsecondary education. The source of funds most often used by students for the 2001-2002 academic year was employment earnings. Use of savings from employment prior to the beginning of the school year was reported by 77% of full-time students, with the median amount being $2,500; employment since the beginning of the school year, reported by close to two-thirds of students, provided $3,000.

The second most frequently used source of funding that did not have to be repaid came from parents, a spouse or partner, or other family members. Close to 60% of full-time students reported this source, with the median amount being $2,000. About 17% of students also reported receiving money from registered educational savings plans, trust accounts, savings bonds or RRSPs; the median amount received from these sources in 2002 was $1,500. Finally, 36% of students reported receiving non-repayable funding in the form of scholarships, grants, bursaries, scholarships or contributions from non-family individuals; at the median, these sources provided $1,600 in funding.

Despite having access to non-repayable funding from a variety of sources, many students found that they needed to borrow money to finance their studies in 2002. Government student loans were a source of funding for about 26% of full-time students in 2002, providing a median amount of $5,000 to those students for that year. Repayable funding received from parents, a spouse or partner or other family member was reported by 16% of students, with that source providing a median amount of $2,000. Finally, 14% of students found they had to take out private loans or draw on lines of credit to help finance their studies in 2002; the median amount borrowed was $5,000.

Conclusion

The past decade has been a period of tremendous change for postsecondary institutions in Canada. Tuition fees have risen steeply, as have the non-educational costs of attending college or university. Costs to students are significantly lower if they live at home while going to school, but many students either must, or choose to, live away from home while attending college or university.

Pursuing a postsecondary education is an important investment that many young Canadians choose to make, an investment that is expected to pay off in terms of finding rewarding work, good earnings potential, and employment security. Many draw on a range of sources in order to finance their education. Many of them work while going to school full-time and the majority of families also contribute financially and in-kind through the provision of free room and board. Still, many students incur significant debt in order to pursue a college or university education.

Having a postsecondary system that is accessible to Canadians has been an important policy goal as governments have recognized the value of having a highly educated, skilled workforce. Careful observation of the trends in participation in PSE is an essential tool for monitoring progress in achieving that goal.

Reference

"Access, persistence and financing: First results from the Postsecondary Education Participation Survey (PEPS)." Culture, Tourism and the Centre for Education Statistics - Research Papers. Statistics Canada Catalogue number 81-595-MIE2003007, free.

Notes

  1. Students could report more than one source of savings; in some cases, both the students and their parents had savings set aside for PSE

  2. See University tuition fees. Statistics Canada, The Daily, Thursday, September 2, 2004.


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