Pallister must put students first

Hey there, time traveller!
This article was published 12/10/2016 (3460 days ago), so information in it may no longer be current.

Premier Brian Pallister and his Progressive Conservative government have some big things planned for post-secondary education, of that we are sure. The specifics are tougher to pin down.

Looking at campaign pledges and statements made after last April’s election, the new government has many balls in the air when it comes to funding post-secondary education and supporting students.

The Tories announced shortly after winning the election they would maintain the increased annual operating grants to universities at 2.5 per cent and colleges by two per cent, roughly the rate of inflation. This is consistent with Pallister’s broader pledge to hold overall government spending increases to less than three per cent.

However, the plot thickened last week when Pallister said he may allow universities and colleges to hike tuition beyond the current cap, also tied to the rate of inflation. Pallister noted that while affordable post-secondary education is a priority, tuition is rising more slowly than overall costs, putting more pressure on government to increase annual operating grants.

The possible elimination of the tuition cap is not the only change coming. The province has already moved to alter the Manitoba Scholarship and Bursary Initiative (MSBI), an extremely popular NDP program that provides matching taxpayer grants for private donations, dollar for dollar. Last year, $4.85 million was paid out in MSBI grants.

The Tories promised during the election to increase the annual limit to $6.75 million, but there was a catch: the province would no longer match dollar for dollar. The Tories confirmed the pledge as policy in a May news release that received little attention.

There could also be changes coming to the way colleges and universities spend those matching dollars. Currently, all grants go to various school endowment funds, the interest from which pays for scholarships and bursaries. At the University of Manitoba, for example, a $10,000 donation would produce a scholarship or bursary of about $420.

Education Minister Ian Wishart said this week his government was “certainly going to change” the way the MSBI money is used to fund student aid.

He did not elaborate, but it seems obvious the new government wants more of its MSBI money spent right away, and not squirrelled away in endowment funds. The University of Manitoba’s main endowment fund sits at $635 million and produces about $10 million annually in scholarships and bursaries.

Sort through all of the statements and pledges, and the future of post-secondary education funding could look a little like this: continued annual increases to operating budgets in the 2.5 per cent range; a rapid rise in tuition fees; increased emphasis on private donations to fund scholarships and bursaries; more money available for matching MSIB grants but a lower overall ratio of government-to-private donations; and new requirements that MSBI grants be spent entirely in the year in which they were received and not used to pad endowment funds.

That’s a lot of change. Even so, it is unclear what effect the policy alterations would have on schools and students.

For the schools, eliminating the tuition cap would be a welcome opportunity to increase revenue. However, those benefits could be offset by changes to the MSBI. More matching money is available in theory, but private donations would have to go up significantly to qualify for the amount allotted to each school. It’s likely many schools wouldn’t be able to raise enough money to fully exploit their share of the total MSBI allocation.

For students, it’s a mixed bag. Any time tuition goes up, fewer students are able to afford post-secondary education, and those who can are more likely to be left with more debt. This could be partially offset if the province compels universities to spend more of the money they receive through MSBI, rather than depositing it in endowments that pay out pennies on the taxpayers’ dollar in scholarships and bursaries.

Then there is the effect on government. Allowing tuition to rise would ease the pressure on the province to increase annual operating grants. As well, the MSBI changes would definitely shift some of the financial burden to schools, encouraging them to ramp up fundraising efforts. That could allow government to slow or even reduce it’s annual support.

After all these changes are implemented, who benefits the most? Short-term, the benefits are focused on government. Pallister must cut spending to reduce his deficit, and most of the post-secondary funding measures he has introduced have the potential to do that.

For schools and students, the future is more precarious. Raising tuition may soften the blow from the smaller MSBI grants. But if tuition rises too quickly, then the number of students going to university and college will decline, and that will certainly hurt the schools. It is also certain the cost of post-secondary education will rise significantly as a result of these new policies. That means, at minimum, an escalation in student debt.

The Canadian Federation of Students estimates the average post-secondary debt load for a student in Ontario is $37,000. Students in Manitoba do not face quite the same dilemma thanks to lower overall tuition fees, but the point is that students and their families are taking on increasing levels of debt to pay for post-secondary education. That debt severely limits their ability to be full contributors to the economy for years after graduation.

These are big adjustments to policy that will mean, one way or the other, consequences for those who undertake post-secondary education. One can only hope Pallister is not putting too much emphasis on slowing the rate of spending, and too little on the long-term consequences of making post-secondary education too costly.

dan.lett@freepress.mb.ca