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IN MY OPINION

Spending smarter on student aid in Ontario

We have the necessary means if we re-allocate it to those truly in need.

By SPENCER NESTICO-SEMIANIW | FEB 24 2016

It’s not what you have, it’s how you use it.

Although this phrase has devolved from maxim to cliché, it’s something that our postsecondary sector should pay attention to. As a student leader at McMaster University, I have the opportunity to talk to my peers about their experiences on campus and the barriers they face navigating their education. For all the other challenges – lack of student space, inadequate health services, large class sizes – the near-ubiquitous problem concerning students is simply affording the cost of their degree. As tuition and other educational costs rise, students are understandably wary. Words of rising debt often fall on jaded ears – sure, school is expensive, but where do students think more money for universities is going to come from? My time advocating for students has convinced me that the issue of funding postsecondary education can move away from “how much?” and towards “how so?”

Alleviating the burden on students doesn’t always mean the government should be spending more. Sometimes it just means they could be spending smarter.

In Ontario in the early 1980s, students contributed less than 20 percent of university operating budgets; now, this number stands at over 50 percent. According to Statistics Canada’s National Graduate Survey, the average debt-laden student in Ontario shoulders over $26,000 in debt by graduation. Ontario also leads the country with the highest average tuition while also having the lowest per-student funding.

Fortunately, Ontario boasts one of the largest financial aid systems in Canada. However, when discussing our financial aid system, its opacity and deferred impact are not often taken into account. Students have a hard time determining what assistance is going to be made available to them; even when they do, the delay in its delivery (grants applied to loans or tax credits) can reduce its actual usefulness. Low-income, Indigenous, first generation, and students with disabilities are more likely to find the initial sticker price of an education a significant deterrent to attending university.

Given Ontario’s current fiscal situation (and the government’s commitment to eliminate the deficit by 2017), convincing decision-makers to make large, new investments in postsecondary education is understandably difficult. The 2015 provincial budget projected an $85-million decrease in postsecondary and training sector expenses, while the previous budget projected a decrease of $128.2 million. Further evidence around tighter control on postsecondary spending was apparent during the recent funding formula review, as universities and students were continually reminded of a zero-cost reshuffling of provincial funds for the new formula, in place of new investments into universities.

Despite the fiscal challenges that face the education sector, there are compelling opportunities to modernize universities and improve affordability for students.

First, a review of the money universities use for awards and scholarships could reveal potential avenues for improving affordability. In the 2013-2014 academic year, the Canadian Association of University Business Officers stated that more than $561 million was given out in scholarships, bursaries and prizes on behalf of Ontario universities. These funds can be awarded based on students’ needs or merit; however, new research by the Ontario Undergraduate Student Alliance suggests that the majority is awarded based on merit. In OUSA’s 2015 Ontario Post-Secondary Student Survey, 61 percent of students who received awards, scholarships or bursaries from their universities stated they were academic or extracurricular merit-based, while only 21 percent reported being granted awards based on financial need.

One key downside of merit-based scholarships is that they presume a “level playing field” on which candidates can demonstrate their worthiness. Low-income or marginalized students are less likely to have access to the kind of extracurricular or extra-credit opportunities that make university applicants stand out. Working part-time, caring for dependents and having low parental support are all factors that can impact student success. This is because these students are less able to focus their attention on their academics and are less likely to receive or seek out the support needed to perform well. All of these things combined can make merit-based assistance inequitable in its distribution. By mandating universities to no longer use public money for scholarships, bursaries, and awards, a significant portion of this $561 million would transition to those who need it most: students who face financial barriers in accessing education.

Second, a reallocation of existing funds used for tuition, textbook and education tax credits could improve the efficiency of funds. Each year in Ontario, the province earmarks approximately $340 million in postsecondary tax credits. On the federal side, this number is around $1.7 billion, with much of it being used by Ontario students. These tax credits can be claimed by students or the families of those participating in postsecondary education and have been a long-standing form of financial relief.

Despite the abundance of funding for these tax credits, there is little evidence that they actually achieve their purpose of increasing accessibility for those who need it most. Research demonstrates that parents from the lowest income quartile claim four times less than parents from the highest income quartile. Since low-income families pay less in income taxes, they are less likely to realize the full benefits of these credits. The inequity problem aside, these credits do nothing for upfront assistance. Many students and families do not use their tax credits until years after the student completes their degree. Reallocating this money to upfront, needs-based grants would ensure that existing resources are used more efficiently to actually bolster access to low-income students.

Spencer Nestico-Semianiw is president of the Ontario Undergraduate Student Alliance.

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