By Carys Mills
Last September, Kristin Di Bona slumped down in the Podium building and sobbed.
She sat there for over an hour, trying to pull herself together. She had just found out that she owed $2,000 more in tuition than she originally thought and had three days to come up with the money. She had no idea where it would come from.
Despite a summer filled with 12 to 14 hour workdays at an office and two waitressing jobs, the nursing student had to take out a bank loan on top of OSAP to afford her tuition.
Di Bona isn’t the only one, and student activists have taken up her cause.
Drop Fees campaigns have become a cornerstone of student advocacy, fighting to lower tuition and make higher education accessible to everyone — without leaving graduates with a lifetime of student debt. Their rallies attract thousands of students who protest tuition hikes at government buildings. On Jan. 21, the Ryerson Students’ Union will hold a town hall to discuss the direction of the movement.
But a recent report from the Educational Policy Institute (EPI) would suggest that Di Bona has nothing to cry about. The study, called ‘Beyond Sticker Shock 2008: A Closer Look at Canadian Tuition, released in October 2008, claims that tuition across Canada has actually only grown a small amount in the past 10 years.
So if, as the study says, “It turns out that once tuition is adjusted for inflation and tax credits… it is no higher now than it was eight years ago,” are the students protesting the tuition hike just whining?
“Maybe this report makes sense to Alex Usher (the report’s author) sitting in his comfy chair with his calculator, but it doesn’t make sense to students and their families,” said Rebecca Rose, RSU VP of education.
Beyond the Sticker Shock said that the annual Statistics Canada survey that shows rising tuition is a barrier to post-secondary education is actually overstating tuition fee growth. Instead, the EPI study calculates Everybody’s Net Tuition (ENT), which subtracts tax rebates, tax credits and grants, as well as factoring in inflation.
The unadjusted national tuition average for 2007-08 was $5,229. After adjustments, the ENT national tuition average clocks in at only $2,980. Which means that the extra $2,249 was made up for in tax credits and rebates. Forty-five per cent of students redeem their tax credits/rebates every year, while 30 per cent goes to parents. The remainder is carried forward to be claimed the next year, said Usher, who is also vice-president and director of EPI Canada.
“The whole report is based on the fact that net tuition is so much less than what they call the sticker price,” said an indignant Rose. “But not one single student pays net tuition. You pay your tuition at the beginning of the year or in two installments. A tax credit that you may or may not get down the road doesn’t make it easier to get in the door. It’s ludicrous.”
In order to benefit from tax credits, students would have to be making enough money during the year for their income to be taxed. But this is often not the case, so many full-time students don’t receive their tax credit until after graduation. Because of this, Bruce Ball, Toronto chartered accountant and partner at BDO Dunwoody LLP, admits that for students “tax credits aren’t worth a whole lot.”
Ian Boyko, campaigns and government relations coordinator of the Canadian Federation of Students (CFS) said the possibility of getting tax back doesn’t tackle the issue of high tuition fees and living expenses.
“You’d get the tax back long after your rent was due,” said Boyko.
In Ontario, the average tuition for 2007-08, including ancillary fees, was $6,139. According to the study, the net amount that students actually paid was $4,066. Compare that to 1997-98 when average tuition was $4,066 and ENT was $3,333 and it becomes clear that even with fancy calculations tuition is still going up — for Ontario at least.
The national average is much lower than Ontario’s partly because of provinces like Manitoba, where net tuition has gone from $2,868 in 1997-98 to paying students $51 in 2007-08 to go to school — thanks to a tax rebate they collect six to 20 years after graduation.
Ontario’s current tuition framework is part of the Reaching Higher Plan. The $6.2 billion plan, released in 2005, was meant to improve the accessibility, affordability and quality of Ontario’s universities and colleges. This is the plan that caps an individual institution’s ability to raise tuition each year at a five per cent average across all programs. The Reaching Higher Plan was preceded in 2000 by a five-year cap that limited tuition hikes to two per cent a year.
In 2003, Ontario Premier Dalton McGuinty promised a tuition freeze as part of his campaign. For two years the freeze kept tuition at 2004 levels. At the same time, former premier Bob Rae was commissioned to write a report about the state of Ontario’s higher education and its funding.
The Rae Report ended up influencing the creation of the Reaching Higher plan.
When the five-year Reaching Higher Plan was announced in 2005, students protested the lifting of the tuition freeze. And now, with only a year left on the plan, Drop Fees activists see this as an opportunity to revamp the system.
“We knew the Reaching Higher Plan was expiring and that the government was going to have to develop a new framework for tuition fees. We decided that this was our time,” said Rose.
This includes tackling the rebate system.
“It’s completely unrealistic and false to say that tax credits help with the accessibility of education,” she said.
Perhaps most damning for supporters of the EPI report is that its own author agrees with Rose.
Usher said he wrote the report to show a balanced picture because tax credit increases have kept pace with tuition fees hikes. But he said, “Is it the most efficient way to deliver money? No.”
As he showed in the report, Usher said that tuition has been increasing at a slow pace over the last 10 years but, because of the faltering economy, there will soon be pressure to raise fees.
“The next three or four years in higher education are going to pretty ugly,” he said. There will be less money going into post-secondary funding and governments will need to cut budgets in 2011-12.
Usher also said that governments are not going to be able to dish out more money. In order to increase efficiency, universities might have to take measures like cutting back library hours and increasing class sizes. “The money has to come from somewhere,” he said.
Students are just hoping it doesn’t come from their bank accounts.