Salutary Lessons on Tuition Hikes from Quebec and the UK
In the summer of 2012, Quebec politics were convulsed by street protests and strikes led by student groups objecting to a proposed 75% increase in tuition fees from just over $2,000 to just under $4,000 between 2012 and 2018. Hundreds of thousands of demonstrators made clear their anger and managed to defeat the proposal. However the cause of the dispute–an attempt to provide more sustainable funding of Quebec’s public universities in order to maintain quality and accessibility–was not really addressed, much less resolved. McGill professor Daniel Weinstock rightly described this as a serious missed opportunity.
Meanwhile in the UK, that same year the maximum level of tuition fees in England and Wales rose from around £3300 to £9000 (equivalent to $17k Canadian per annum). When the policy was first announced in 2010 the move also led to widespread protests and hundreds of arrests across the country. However, unlike in Quebec, the austerity-driven UK government forced through the change.
The apparent intent of the UK change was to reduce costs to the government whilst securing sustainable funding for the sector. This was to be achieved by transferring the entire costs of the system to future generations of students who would discharge their student loans once their earning power merited loan repayment. It has now been established that the changes will result in zero net savings to the UK Treasury. Indeed by 2042, about £90 B of projected £200 B outstanding student loans will remain unpaid. The estimated default rate is currently 45% - comparable with some of the worst default rates in the US, i.e. those associated with private, for profit colleges.
A Polarizing and Divisive Debate
Anyone following the unfolding train wreck which is university tuition policy in the UK will not have missed the latest outbreak of divisiveness on the topic.
Having seriously alienated the coalition government with their rush to charge the maximum allowable tuition in 2012, the public universities in England and Wales have now been accused by their private sector competitors of failing to provide value for money for those tuition fees. In a recently published essay entitled "Why Does University Cost So Much" , Carl Lygo, Vice Chancellor of private provider BPP  writes, “I am left asking: ‘Where has all this extra money gone? I fear the answer may be that is has gone to boost pension funds, research, and Vice-Chancellors’ pay–anything but enhance the undergraduate student experience and the direct costs of undergraduate provision."
Of course it has not taken long for the defence of the public institutions to be mounted. Writing in the Guardian on the 6th February of this year, Nigel Carrington, Vice-Chancellor of the University of the Arts London sought to dispel “six myths about how universities spend their tuition fee income" including the fact that UK universities actually have no more money than before the 2012 change in funding regime. Carrington also noted that “the value of universities to the UK is enormous, generating £72bn in value to the UK economy in 2014 on a turnover of £27.3bn.”
Meanwhile, in the context of the forthcoming UK general election, a number of universities are challenging the opposition Labour party directly over its stated intention to reduce the tuition cap to £6000 because they fear this would mean less overall cash for the system.
In addition to this political toxicity, there are some deeply disturbing signs associated with the new UK tuition regime. One third of first- and second-year UK undergrads studying in English universities now believe that their program represents poor or very poor value for money—up from 18.3% in 2012. Only 41% think they are receiving good or very good value for money, compared with 70% in Scotland where most students pay no fees, i.e. if they are Scottish. And part-time and mature learners are abandoning the ideal of life-time learning in very large numbers. The number of mature first-year undergraduate students fell by 37 per cent between 2008-09 and 2012-13, according to data from the Higher Education Statistics Agency.
Sustainability for Whom?
Clearly the debate in the UK over tuition is now taking on a nightmare-like quality. But with global competitive pressures mounting, and the ability of provinces to adequately fund higher education now in serious question, we would be foolish to imagine that such a situation could never emerge in Canada. My fear is that we will default to the “students pay” outcome by omission rather than by strategic choice, but with serious consequences for access and the future life chances of our students nevertheless. There are three reasons why I believe we now risk stumbling into that unfortunate future.
First, as I argued in this forum in January, the lack of a properly coordinated national higher education policy in Canada not only leads to significant student debt, it also results in underperformance in important areas of national competitiveness . This remains a real handicap both for students and for the financial sustainability of our universities.
Second, as I have argued elsewhere , provinces like my own need to dramatically overhaul their university financing models to better reflect desired outcomes (including on access, affordability and employability), but are unable to reform those models in the absence of a new federal–provincial compact on university funding.
Third, if we do not significantly improve levels of innovation in our higher education institutions, these trends will compound with the inexorable result that financial shortfalls will continue to be borne disproportionately by students.
The trends are already clear.
According to the Canadian Centre for Policy Alternatives, tuition will have tripled in real terms between 1990-91 and 2016-17. Meanwhile, student debt grew 44.1 per cent from 1999 to 2012 according to StatsCan’s 2012 Survey of Financial Security. The annual value of full-time Canada Student Loans now exceeds $2 B.
And the future bodes no better. There are very few, if any, provinces in Canada that are signaling increased public investments in their universities. Flat funding, i.e. funding below the rate of university inflation , will inevitably require compensating tuition increases indefinitely, unless of course we decide to downsize the sector and thereby reduce access or choice for domestic students. Compounded 4–5% increases would take average tuition in Canada from $6k per annum to $9-10k per annum by 2025.
The Need for a National Debate
Because we need to avoid a UK-style outcome, and indeed a repetition of the events in Quebec in 2012, I am joining with faculty and student leaders in my own institution to call on our federal and provincial politicians to urgently address the national imperative of slicing through the Gordian knot of student debt, tuition policy and the sustainable funding of our universities. There are international examples – good and bad - that we need to learn from, but we cannot let the absence of effective federal and provincial coordination prevent us from pursuing better outcomes for Canadians for very much longer. Our higher education institutions need greater stability and future generations of university students deserve a better option.
It seems to me that the most elegant solution—adopted by the majority of G20 nations—would be the removal of student tuition altogether, funded by a system of progressive taxation at the federal level, and backed by needs-based living expense grants at the provincial level. Is this not exactly the debate we should be having in a federal election year in Canada?
One of ten essays in a new publication from the Higher Education Policy Institute entitled "What Do I Get?": Ten Essays on Student Fees, Student Engagement and Student Choice.
According to the BPP web site, "as one of Europe's leading professional training and education providers, [BPP has] over 2,000 staff in 40 worldwide locations and teach over 30,000 people a year."
Academic salary inflation typically runs at 3.5–4% per annum.