THE much-maligned Liberal government at Queen’s Park has been in desperate need of some good press; last week, they got it. As part of the 2016 budget, they revealed a program offering free tuition to students whose parents make less than $50,000 a year. While the announcement set social media alight and has generally been well received, it is important to recognize the plan as a reallocation of resources, rather than a revolutionary investment in post-secondary education.
The new Ontario Student Grant (OSG) simplifies the existing student assistance program through synthesis. Grants and loans have already been available to low-income students through programs like the Ontario Student Assistance Program (OSAP) and the 30% Off Ontario Tuition Grant, which is available to students whose parents make less than $160,000. The new grant is designed to redirect the funding from the Ontario Tuition Grant, the Ontario Student Opportunity Grant, the Ontario Access Grants, and other grants offered by OSAP into one streamlined program. As such, the OSG is not a new program per se, but rather a cobbling together of pre-existing programs.
Although people are generally wary of the word free, the new grant will be cost-neutral for the government through the elimination of tax breaks. The $365 million handed out through the Tuition and Education Tax Credits will be eliminated in order to pay for the increased support for low-income families.
Now, in the proper context, the public reaction to the policy seems to dramatically outweigh the actual changes that have occurred.
In terms of the costs and benefits, any student in arts and science programs whose parents make less than $160,000 will welcome the changes. Those below the $50,000 mark will receive an amount greater than the average undergraduate tuition fee; those in the $50,000 to $83,000 bracket will receive at least an amount equal to average tuition; and those between $83,000 and $160,000 will receive a similar amount to the 30% Off Ontario Tuition Grant. For those not in arts and science, the previously existing Student Access Guarantee will cover the additional costs incurred by these more expensive programs.
The key benefit is that students no longer have to take out loans to receive the grants. Instead of receiving tax breaks in April and having to wait for government assistance while paying up front costs, students will have a tuition bill of zero from the start. This is important, as it does a better job of encouraging lower income families to actually apply for OSAP.
Much of the criticism of this new grant stems from the fact that it does not increase government spending in any way, and their thrifty approach to ‘free’ tuition is not as helpful as it could be. Some are critical that upper-middle class families will lose a tax break, while others point out that their average tuition fee figure of $6,160 is not actually accurate. Also, the additions of ancillary fees and living expenses are important to note, as they can amount to several thousand dollars more in expenses for a student.
As it stands, the new grant program will help families coming from the lowest income brackets, but families of the highest income brackets will have to continue to apply for the already existing loans through OSAP. Any further governmental support would require a substantial investment from a government trying to cut, rather than increase, their large deficit.
All this means is that this program functions mostly as an excellent publicity stunt for a struggling government. The perceived value of the OSG far outweighs the actual value. It does offer slight improvements in streamlining the process and providing money before having to pay tuition, but it also mainly just takes from the middle class and gives to the poor. A noble pursuit in any case, but not quite revolutionary.
Alex Hempel is a third-year student at Trinity College studying economics and European studies.