Some think tanks have been cautiously warning Canadians (and really most countries in the Western World) that as a result of new austerity measures and the demographic issues that are about to hit us, the real cost of tuition for the average post-secondary student will probably continue increase (above the rate of inflation). If you are wondering how ageing baby-boomers and their pension demands may affect the cost of education for their grandchildren, it’s important to consider the overall structure of Canadian post-secondary education. Even though most university students feel they pay more than enough tuition (and there is a fairly strong voice for a completely subsidized education for everyone who wants it, such as in the Scandinavian system) the government still funds about 60-80% of the cost for students at post-secondary institutions. The other 20-40% is of course passed on to the students through the various types of tuition fees that they are charged.
The Sun Never Sets On The English… Student Loans?
The situation in England over the last few years has been indicative of what other countries might expect according to some analysts. Some people might remember an incident last year where a group of mostly young people rushed the Royals’ car and rocked it back and forth while screaming obscenities. This was a direct result of a decision earlier that month to basically triple tuition costs overnight for English students (and thereby saving the government millions).
Cost Of Education – Invest In The Past or The Future?
With a stark new reality staring us in the face, will Canada scale back on how much it subsidizes the cost of education? The facts are that an ageing population is putting more strain on the system than ever before. As bureaucracy gets bigger and bigger it becomes less efficient, has a more powerful lobby, and subsequently becomes more expensive (see the recent Postal strike). Canadians are retiring earlier and living longer, and the system simply cannot sustain itself without raised taxes or cutting services. Raising taxes is never popular, and there is little doubt that it does result in stunting economic growth to some degree, especially business taxes. This leaves us with the current debate that is raging in the USA right now: What is the balance between streamlining government services and raising taxes? Will Canadians be asked to not only pay a larger part of their retirement, but a larger part of their child’s education as well?
We Are Competing Against More Than Ever Before With The Cost Of Education
I usually always come down on the side of private business, smaller government, and lower taxes, but this is one issue I think we need to look at very carefully. There is little doubt that the world is getting to be a more and more competitive place for young Canadians. The need for education is paramount to the survival of our economy. It is inevitable that manufacturing jobs, and other low-skill jobs will be outsourced to the poorer parts of the world that have few – if any – labour laws; therefore, the consensus is that we must have an innovation-rich approach to creating jobs in Canada (and the rest of the Western World). In order to facilitate this growth and innovation, we must keep our technological edge. With our public schools in rough shape (anyone want to debate this with a public school teacher who is already considering sending his future children to private schools?) our saving grace is our elite post-secondary system. We need to be able to get the brightest Canadians into these communities no matter what their financial background. At the same time, I don’t believe in the idea that post-secondary education is a right and I am of the opinion that there should be some private investment into one’s educational career.
How Much Help Do We Need?
So where does the balance fall? Should we move to a more American system that places a larger portion of the burden on individual families, yet offers many scholarships, bursaries, and grants in order to facilitate the brightest minds across their nation? Or should we invest in our future by moving to the Scandinavian model that sees everyone who wants a university education get one? I might be one of the only people in the debate who thinks our current compromise is actually a pretty fair one. I believe tripling tuition overnight is a terrible move in England, and that they will be seeing the effects of that decision for decades to come. I also think that allowing post-secondary education for free will hurt the efficiency of the program, curtail overall productivity in the workforce, and obviously result in higher taxes during a time where taxes already face upward pressure.
The current 70-30% split is a good one in my view. Parents should plan and save for their child’s education whether they want to pursue a MSN nursing, carpentry, or a music degree, saving is always a good idea. The nation should invest in the leaders of tomorrow. I dislike the consequences on either side of disrupting this balance. Ideally, I would like to see Canadians embrace the private philanthropy that has become so popular in the USA, and if I ever have an amount of money that allows me to do so I would love to create a trust that would act as a scholarship for years to come. One other option worth exploring is to subsidize areas where Canada needs workers most. One criticism of education and the new economy is that we are producing far too many liberal arts degrees (like the one I have on a shelf somewhere). I think a Liberal Arts degree is a great thing to pursue for one’s own enjoyment, but the fact is that we need creative engineers in all areas to create jobs for the rest of this country.
What do you guys think? Does the new reality mean that students should accept cutbacks just like other demographic groups, or is the best way to fuel the new economy through heavy government subsidization? I’d love to hear some creative solutions. Is the cost of education too high?