The Economics of Access:
ost Canadians know that tuition fees haverisen dramatically over the past 15 years.Today, average tuition fees for an arts and scienceundergraduate program are $4,214. That repre-sents an increase of 185% between 1990 and2004. During that same period, inflation rose by less than 40%. Average student debt is over$20,000 in most provinces, and many studentsare forced to work upwards of 20 hours a week tofinance their education.The effect this dramatic rise in tuition feesand student debt has had on low and mod-est income families has not been well doc-umented. Most provincial tuition policiestend to treat all students the same, arguingthat the long term benefits of post-second-ary education justify high fees. But, theseopportunities and benefits are not equally distributed.In this report we demonstrate the effectthat the rise in tuition fees has had on lowand modest income families. By trackingtuition costs as a proportion of after-taxfamily income, we demonstrate that theburden of rising fees has not been sharedequally. Contrary to those who wouldargue that low tuition fees are regressive be-cause students from high income familiesare overrepresented in the system, it is thepoorest Canadians who bear the biggestburden of fee hikes. When fees rise, accessis imperiled for students from low andmodest income families.The baseline we use for affordability is thecapacity of low-income families to fund apost-secondary education without goinginto debt. We do not assess the relative ef-fectiveness of student financial assistance inaddressing the affordability gap for poorfamilies because the majority of financialassistance available in Canada is in theform of repayable loans. As discussedbelow, loans impose a premium on thosewho cannot afford the up-front cost. Whileloans surely alleviate liquidity constraints,they do not make education more afford-able. The point of this study is to measurethe burden tuition fees impose on low in-come families. Loans do not relieve thatburden, they merely defer it.The main findings of the report includethe following:
Over the past 30 years, the burden of funding post-secondary education hasshifted radically from governmentsources to students and their families.Government revenues, as a portion of op-erating income, have declined from over80% in 1976 to 58% in 2004.
Tuition fees, measured as a share of after-tax income, have increased for allincome groups, but that proportion hasrisen most dramatically for low-incomefamilies.
Some of Canada's poorest provinces,including New Brunswick and Nova Sco-tia, have the highest fees. In Nova Scotia,those in the lowest quintile of incomewould have to spend more than 67% of their after-tax income to pay one year of university tuition fees.
Quebec and Newfoundland andLabrador, two provinces that have frozenand lowered fees respectively, havebucked the trend and lowered the propor-tion of after-tax income that poor familieswould have to dedicate to fees.
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The Fiscal Reality of PSE Costs for Low-Income Families