Tuition fees have not gone up, says report

Student leaders counter that tax credits and grants aren’t the same as lower tuition

CHRISTINE LEONG

In spite of the frustration students have expressed against rising tuition fees, recent reports from the Educational Policy Institute (EPI) claim to have found data contradicting the notion that tuition fees are rising and that universal subsidies such as tax credits and tuition freezes are the reasons behind this.

The EPI published their conclusions in the August 2006 report, “Beyond the Sticker Price,” stating that “net tuition” — the amount after non-repayable subsidies are taken into account — has only increased by 25 per cent over the past decade and not at all since 1999- 2000.

In fact, a decrease in net tuition is observed in some provinces, such as Manitoba and Ontario.

The report points out that while students and families pay tuition, they also receive transfers from governments such as education tax credits and grants, “which are specifically designed to offset tuition,” according to the reports introduction.

“[From 1999-2000 to 2003-04], Manitoba is $800 . . . down in net tuition for government grant recipients and down $1100 for students with and without government grants,” said Alex Usher, vice-president of EPI and the author of the report.

According to the report, education tax credits act as a kind of tuition rebate. These credits have increased more than 80 per cent nationally over the past 10 years on a per-student basis.

Phillippe Ouellette, national director of the Canadian Alliance of Student Association (CASA) disagreed with EPI’s definition of “net tuition.”

“EPI defines ‘net tuition’ as tuition plus tax credits plus grants. And all together they are saying net tuition has not gone up,” said Ouellette. “This is all based on ‘if’ students use these services.

The report stated that 45 per cent of all tax credits are used by students themselves in the same year, 35 per cent are transferred to parents or spouses, and 20 per cent are carried forward to a future year. Usher wrote in the report, “The timing of the payment is irrelevant. Tax credits reduce the ‘net cost’ of tuition dollar for dollar.”

Ian Boyko, spokesperson for the Canadian Federation of Students (CFS), argued that tax credits are an ineffective means of improving post-secondary access for lower-income students.

“A tax credit eight months later or years later isn’t going to help [students] pay for tuition fees,” said Boyko.

The report notes that tax credits are ineffective, but in the sense that such universal subsidies might have decreased the average grant value in the past decade. As a result, the report says, low-income students (grant recipients) across Canada paid almost $600 a year more in net tuition in 2003-04 than five years earlier. The net tuition for wealthier students, or non-grant recipients, increased by less than $20 in the same period with the help of these universal subsidies.

“New tuition freezes and tax credits are costing governments billions of dollars annually, but do not target aid to those who need it most,” wrote Usher along with Sean Junor of EPI in the July report, “Student Aid Time-Bomb.” This report estimates a potential $800 million hole in the Canadian student financial aid system by 2010 and claims that universal subsidies are the first threat to the system.

“Some people think [government funding] should be spent thinly and that everybody should benefit; we shouldn’t pick and choose. I personally don’t agree with this opinion, neither is this the view of EPI. I think we should set priorities,” maintained Usher.

Ouellette agrees that financial assistance should be targeted at improving post-secondary access to lowincome, under-represented families. However, he emphasized that where CASA and EPI disagree is the cost of tuition for Canadian students.

“Tuition costs are the root of the problem for access to post-secondary education. The government has regulated it too high,” said Ouellette, also noting that “sticker shock” — the price of tuition that is usually displayed before subsidies are taken into account — is discouraging a lot of prospective students from low-income families from applying to university.

Both Boyko and Ouellette asserted a need for a balance between tuition fee reductions and grant value inflations.

“Tuition fee reductions are an important step in improving access . . . but that has to be done in concert with improving needs-based grants,” said Boyko.

Usher said the government is already contributing a lot to the postsecondary system.

“There is way more money put into post-secondary education than years ago,” commented Usher. “Way, way more.”

Ouellette maintained tuition costs are a major influence in a student’s decision to attend post-secondary education.

“The wall is continuously building itself higher and higher and that wall is what students have to get over to obtain university education,” he said.