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Tuition fee deregulation: Who pays?Trends in university tuition feesMeasuring socioeconomic background Changes in university enrolment patterns Conclusion Average tuition fees in Canadian universities have risen steadily over the past ten years. In fact, after several years of relative stability, tuition fees in Canadian undergraduate programs almost doubled over the last decade. The increases have been particularly large in professional programs (i.e., medicine, dentistry, and law). Questions around equity of access to postsecondary education in Canada continue to be hotly debated. One of the questions asked is whether the rising costs associated with attending college or university discourages students from lower and middle income families from pursuing postsecondary studies.Recent rends in tuition fees and the fact that those increases have been significantly higher in some programs than in others allows analysis of the impact of those changes on the participation of students from different socioeconomic backgrounds. This article reports on a recent study by Statistics Canada researcher, Marc Frenette, who addresses this question.1 Frenette finds that over the period of rapidly increasing tuition fees in professional programs in Ontario, enrolment patterns by socioeconomic background changed substantially. In fact, the share of students with parents at the two tails of the education distribution (those with no postsecondary education and those with graduate or professional degrees) increased, whereas the share of students whose parents had postsecondary qualifications below the graduate or professional level (college or a bachelor's degree) decreased. Trends in university tuition feesBetween 1995-1996 and 2001-2002, and after accounting for inflation, tuition fees rose by 132% in medicine, 168% in dentistry, and 61% in law, compared to only 34% in all undergraduate programs in Canada (Figure 1). These overall increases at the national level were largely driven by trends observed in Ontario, where tuition fees in professional programs were deregulated in 1998. In contrast, Quebec and British Columbia largely maintained their policy of regulating fees over the period 1995-1996 to 2001-2002. Other provinces had already deregulated fees or had experimented with deregulation to varying degrees.In Ontario, tuition fees rose dramatically in all three professional programs over the period 1995-1996 to 2001-2002. In medicine and dentistry, the increases were particularly large (241% and 315%, respectively). In law, tuition fees also rose by a considerable amount (141%). In contrast, tuition fees fell moderately in all three programs in British Columbia (between 10% and 12%). In Quebec, tuition fees fell by 9% in law programs; in medicine and dentistry, the increase in tuition fees was relatively small, though not inconsequential (29% and 14%, respectively). In Nova Scotia, Manitoba, Saskatchewan, and Alberta, the increases in tuition fees were situated somewhere in between the two extremes of Ontario on one end of the spectrum, and Quebec and British Columbia on the other. Figure 1. Average undergraduate tuition fees, selected diciplines, Canada, 1972-1973 to 2004-2005 (constant 2004 dollars) Source: Tuition and Living Accommodation Costs for Full-time Students at Canadian Degree-granting Institutions (TLAC), Statistics Canada. Frenette draws upon the large, sudden increases in tuition fees in professional programs in the late 1990s to examine the probability that recent graduates will enrol in professional programs as a function of their socioeconomic background. Family socioeconomic background is measured by information on parental education, which is highly correlated with family income, and is thus indicative of ability to pay for their children's postsecondary education. Frenette notes that between 1995-1996 and 2001-2002, total enrolment in professional programs in Canada rose by 21%. The main question asked in his study is: "Given the increase in tuition fees, which students filled these extra spaces? Measuring socioeconomic backgroundThe data are drawn from the 1995 and 2000 classes of the National Graduates Survey (NGS). Respondents were interviewed at graduation and again two years later (i.e., 1997 and 2002). This time frame spans the period before and after the introduction of the price deregulation in Ontario professional programs. Detailed information is available for the program of study completed in the reference year (i.e., 1995 or 2000), as well as for any further studies pursued by the graduate in the following two years as part of a program normally lasting at least three months and leading to a postsecondary certificate, diploma, or degree.Although the NGS does not contain information on family income, it is the only available data source allowing researchers to link the pursuit of professional studies to one's socioeconomic background over the period when Ontario professional programs were being deregulated (i.e., the late 1990s). Specifically, the highest level of education of the father and mother is available at a detailed level. These two pieces of information were combined by considering the highest level of education achieved by either parent, categorized as: no postsecondary education, a non-university postsecondary certificate, a bachelor's degree, and an 'advanced' degree (i.e., a master's degree, a doctorate, or a professional degree). Changes in university enrolment patternsOverall, enrolment patterns by socioeconomic background tended to change more substantially in provinces that saw larger increases in tuition fees. In fact, very little change is observed in Quebec and British Columbia, where tuition fees were frozen over the period. Provinces that saw moderate tuition fee increases (Nova Scotia, Manitoba, Saskatchewan, and Alberta) also saw moderate changes in enrolment patterns by socioeconomic background.Changes in enrolment patterns by socioeconomic background were most prominent in Ontario. First, students whose parents held a graduate or professional degree saw their probability of enrolment rise from 2.4% to 5.2% over the period. Students whose parents had no postsecondary qualifications also saw an increase (from 0.5% to 1.2%). Although this increase is smaller in absolute terms than the increase registered among students from very well educated parents, it is nevertheless as large an increase in relative terms. Finally, Ontario students whose parents had postsecondary qualifications below a graduate or professional degree saw their probability of enrolment decline quite substantially. Frenette suggests that one of the reasons that students from less-advantaged backgrounds increased their share of spaces in the more costly professional programs during this period was that student aid was adjusted to ease the burden for students in need. He also suggests that it is possible that many students from families in the middle-education group could not afford the increased tuition fees, yet did not qualify for the increased assistance dedicated to low-income students. For example, Ontario implemented a program whereby 30% of the tuition fee increases following deregulation had to be returned to the students in the form of student aid for those in need. Students' "unmet needs" - after government loans and other sources - were taken into account when assessing the size of the grant. Since many university graduates are not considered dependent on their parents, their socioeconomic background was not directly used, although some factors that may be linked to the parents' income were often taken into consideration, such as income from a Registered Education Savings Plan (RESP), ownership of a vehicle, and the gross value of investments. Similar information is collected on the Ontario Student Assistance Program (OSAP) form.Other data from the NGS show that, in 2000, 80% of medicine graduates who were no longer in school owed student debt at the time of graduation, and they owed, on average, $38,200.2 Three-quarters of medicine graduates had debts larger than $25,000. At the same time, the medicine graduates who did not pursue further studies (about a third did) appeared to be able to pay off their debt faster than the average bachelor's degree graduate. In spite of the size of their debts, over one-quarter (26%) of them had paid off their debt two years after graduation, compared to 22% for bachelor graduates overall. On average, medical graduates paid down 40% of their total debt in the two years after graduation compared to only 35% for bachelor graduates in general. Employment and earnings may account for some of these differences. Almost all medicine graduates who had not continued their studies were employed by 2002 (99%), and their average income in 2001 was almost $46,000. By comparison, 90% of bachelor graduates with debt were employed in 2002 with average income in 2001 of only about $33,000.ConclusionFrenette notes that other studies have found that while there are large differences in postsecondary enrolment rates across socioeconomic groups, this relationship did not change over a period of rising tuition fees.3, 4 However, the average increase in tuition fees when taking all programs into account was small in absolute terms (about $2,000) and gradual (over a 10- year period). He suggests that students and parents are better able to adjust to gradual and relatively small annual increases in tuition fees that take place over a long period of time. Such an adjustment is unlikely to occur when the increase is much larger and more sudden, as in the case of professional programs in Ontario. One result is a lower probability of enrolment among some students, in this case, among Ontario students from middle-educated families.Adjustments to government student loan programs can assist students in need. However, many of those who receive this assistance carry large debt loads when they graduate. The evidence suggests that graduates of professional programs are more likely to be employed than other graduates, especially those with a bachelor's degree and their earnings also tend to be higher. As a result, graduates of professional programs are likely to pay down their government student loan debt more quickly than other graduates. One implication of this finding is that large tuition fee increases in other programs, even if accompanied by easier access to student loans, may increase student debt loads without the prospect of improved earnings and job opportunities.Finally, students living in provinces where tuition fees are increasing steeply have the option of pursuing their studies in other provinces where tuition fees are more stable. However, that too is not without costs. First, living costs for students not living at home often equal or exceed tuition costs themselves. So, again, the question arises about who is willing and able to absorb those costs and who is eligible for student loan assistance. If Frenette's findings hold more generally, then it may be that under a deregulated postsecondary education system, all forms of higher education will be available only for those whose families who can afford the costs themselves or for those who qualify for student financial assistance. Many of those in the middle may find themselves in a situation where they can do neither.Notes
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