Thousands of students from U of T, Ryerson, York, George Brown, and other GTA post-secondary institutions joined together yesterday to deliver a united message: “Reduce Tuition Fees.” Those yellow placards have become a common sight at schools, on Facebook, and now at Queen’s Park.
It goes without saying that education is a great boon to society and its individual members. With a university degree, one’s chances of getting a job in Canada and abroad are greatly multiplied. A degree also helps one move up the income ladder with greater ease. With a larger number of highly qualified individuals, the economy will grow faster, and investments are more likely to pour in to take advantage of local talent. But is reducing tuition fees the best way to bring about this desirable economic scenario?
The cost of university is jointly covered by government funding and student tuition. Let’s assume that education costs X dollars, of which students currently pay half (the rest being covered by taxes). Over time, X grows because the cost of education rises: new and better buildings are built (such as the new Hazel McCallion Library at UTM), top professors need to be paid more, energy costs rise, and so on. To cover the extra costs, as X rises, either student tuition has to go up or government funding has to increase.
Milton Friedman, a Nobel Laureate in economics, once astutely noted that there are “no free lunches.” The additional money has to come from somewhere, and government funding cannot simply increase without creating a ripple effect on taxation of income, sales, and profit. Whatever the increase in funding, the government will squeeze out the same amount or more from taxpayers. In effect, what the yellow placards should be saying is “More taxation on the population.”
This is ironic. Students chose to attend university. As future lawyers, doctors, and accountants, they are the beneficiaries of their education. Now they are asking-actually, forcing-taxpayers, among them immigrants and low-income earners, to foot the bill for the benefits students will later receive.
Some taxpayers are more than happy to help students pay for university through scholarships or grants, whether provided by the schools themselves or sponsored by the private sector. However, governmental coercion through additional taxation destroys this goodwill and dissuades people from contributing to scholarship funds because taxpayers are already subsidizing the tuition freeze.
Government funding usually comes with a lot of political baggage, so to support a tuition freeze universities would be forced to court the government for a larger share of funding. Governing the university would become more about lobbying and less about pleasing student needs and achieving higher academic standards.
In any ranking of world MBA programs, American graduate business schools hold almost all of the top 50 spots. The European Commission’s rankings of the world’s universities reveal that the world’s best universities are clustered in the U.S. Out of the top 20 schools, only three are found outside the U.S, two of which are Oxford and Cambridge.
The common factor among these American institutions is that they are private. Canadian universities fare pretty well in these studies- U of T was a respectable 24th in the EC report-because students still pay half the bill. Interestingly, universities with no tuition fees are nowhere near the top spot. Not a single Irish or German university can be found in the top fifty. Canadian schools would likely suffer a similar fate if tuition fees were to decline.
It is not true that low-income and minority students are disadvantaged by higher tuition fees. During the 1990s, tuition in Australia and New Zealand increased faster than anywhere in Canada, coming close to reflecting the true cost of higher education. At the same time, the enrolment of students from low-income situations increased by a whopping 44 per cent. The proportion of women and Maori students also increased because universities, for the first time, could afford to help the lowest-earning applicants. A few years ago in the U.S, Harvard began providing full scholarships to all students whose parents earned less then $50,000 USD annually.
A reduction in tuition fees will place an unnecessary tax burden on the rest of the population. The calls for a tuition freeze may seem to support a good cause, but the realization of such a freeze would only come about at great harm.
