Give Grits a B+ for this tuition aid plan

Opinion

Hey there, time traveller!
This article was published 04/04/2011 (4378 days ago), so information in it may no longer be current.

One of the most common complaints against the Liberal party’s promise to give every high school student with a mind to go to university or college either $4,000 or $6,000, depending on family income, is the very universality of the plan. The bulk of the families would be getting, as one National Post columnist put it, money that they “don’t need.” Poorer students would hardly benefit at all, the argument goes.

It is certainly true the available evidence does support this claim. Students, particularly those whose parents did not attend university, are very unlikely to react to financial aid or low tuition by actually pursuing post-secondary education. It is a sociological question more than an economic one.

However, the Canadian Learning Passport, if it is ever implemented, could become — maybe not the “game changer” the Liberals claim it would be — but a respectable move towards ensuring everyone with the intellectual capability will at least consider university, no matter what their background.

In an interview, University of Ottawa economist Ross Finnie, who specializes in student enrolment patterns, said one of the most challenging aspects of addressing questions of accessibility is the plain fact “people leave money on the table when economists would never in a million years imagine that they would.”

Researchers are “just at the point” now, Finnie says, where they are beginning to understand why people don’t always act like the rational individuals classical economics predicts.

All it takes is “a little bit of complexity” or a seemingly “banal hurdle” to keep people from taking advantage of funding for education.

At first glance, this would be a clear argument against the Liberal proposal. Taking advantage of the program is contingent on not only parents having the foresight to anticipate their children going to university, but the prudence to open a Registered Education Savings Plan, which is where the grants would be deposited.

In fact, the Tories have already created a similar program and participation rates, following Finnie’s analysis, are pretty much what would be predicted. If parents, where household income is approximately $40,000 a year or less, open an RESP for their children, the government will donate up to $2,000.

It is not as generous as the Liberal plan, but is targeted directly at low-income families. But, despite the intentions of the policy, more than 80 per cent of the money sits in government coffers unclaimed.

This is where, Finnie says, the strengths of the Liberal policy show. By making access to funding universal, it has the potential to change attitudes. It would be something on the minds of everyone, a commonality between wealthier and poorer families.

Because all students, or their parents, would have access to the same funding, it would make sense, for instance, for high schools to hold seminars on opening an RESP. It could become part of the broader educational culture. “If it is as universal as that, that might be the thing that boosts enrolment,” Finnie says. Whereas the Conservative program resembles something like food stamps for university, the Liberal plan targets everyone.

Another, somewhat unrelated, reason why the universality of the Learning Passport would be useful is it could encourage competition between universities.

Before Michael Ignatieff became leader of the Liberals, he endorsed the idea of calculating a portion of education transfers to the provinces “on a per-student basis to reward those provinces’ institutions” that are capable of attracting the best students. It would create a “market” in education that would “reward success.” Presently, transfers are made according to population, meaning if a province takes in a disproportionate number of out-of-province students, educating them becomes a burden. If a province has a relatively low post-secondary participation rate and attracts few out-of-province students, then it is better off.

When Ignatieff became leader of the Opposition, he dismissed his earlier support for changing the current arrangement because it would intrude on provincial jurisdiction.

As for the Learning Passport, transferring money to individuals does not carry the same jurisdictional concerns.

With this policy, Ignatieff has gone at least part of the way in promoting the education market he use to believe in.

By giving money directly to every student, as opposed to universities or provincial governments, to spend at any educational institution they choose, it creates incentives for universities and colleges to actually bother to attract them.

A policy that accomplishes that, while potentially addressing accessibility in a meaningful way, can only improve higher education in this country.

Carson Jerema is the editor of Maclean’s On Campus.