Our Bright Future

educated.solutions

OUSA

ontario undergraduate student alliance

OUR BRIGHT FUTURE A NEW VISION FOR HIGHER EDUCATION IN ONTARIO ONTARIO UNDERGRADUATE STUDENT ALLIANCE

2

OUR BRIGHT FUTURE

OUR BRIGHT FUTURE A NEW VISION FOR HIGHER EDUCATION IN ONTARIO ONTARIO UNDERGRADUATE STUDENT ALLIANCE NOVEMBER 2004

OUR BRIGHT FUTURE

3

ABOUT OUSA The Ontario Undergraduate Student Alliance (OUSA) is a coalition of elected university student councils from across Ontario. They have come together to protect the interests of Ontario ’s full- and part-time undergraduate students by providing research and ideas to governments on how to improve the affordability, accessibility and quality of post-secondary education in the province. These elected student representatives work together to set OUSA ’s policies and direction. The organization approaches its goal of advancing the needs of undergraduate students through three means: direct lobbying, issue awareness campaigns and research & policy development. OUSA represents the interests of over 125,000 professional and undergraduate, full and part-time university students across the province. our vision & mission OUSA strives to improve the accessibility, affordability and quality of undergraduate education in Ontario by: • conducting research to identify issues affecting the accessibility, affordability and quality of undergraduate education in Ontario; • developing credible and constructive policy to address these challenges; • lobbying the government to affect their undergraduate education policies; • organizing campaigns to effectively articulate the needs and interests of our members; • communicating research and policy to both educate and affect the opinions of stakeholders, Ontarians and government; and • building partnerships in the post-secondary education realm to accomplish our vision. member organizations Brock University Students ’ Union, Brock University McMaster Students Union, McMaster University Federation of Students, University of Waterloo University Students ’ Council, University of Western Ontario Wilfrid Laurier University Students ’ Union, Wilfrid Laurier University University of Windsor Students ’ Alliance, University of Windsor The Student Federation of the University of Ottawa joined OUSA as Associate Members on November 1st, 2004. The Alma Mater Society at Queen ’s University voted to become Full Members of OUSA on November 10th, 2004. home office staff Executive Director: Adam Spence Director, Research & Policy Analysis: Graeme Stewart Director, Communications & Member Relations: Kathe Rogers contact information 345-26 Soho Street Toronto, Ontario M5T 1Z7 T: 416-341-9948 F: 416-341-0358 E: info@ousa.on.ca W: www.ousa.on.ca

4

OUR BRIGHT FUTURE

TABLE OF CONTENTS

introduction ........................................................................................................................................ 7 Alison Forbes, President executive summary ........................................................................................................................... 10 DISCUSSION PAPERS system vision for higher education in Ontario ......................................................... 13 Adam Spence, Executive Director funding, tuition & student financial assistance ..........................................................

Graeme Stewart, Director, Research and Policy Analysis executive summary ..................................................................................... discussion ...................................................................................................... summary of recommendations ............................................................. appendices .................................................................................................... references ...................................................................................................... advancement & opportunity in higher education ...................................................

Adam Spence, Executive Director executive summary ..................................................................................... discussion ...................................................................................................... summary of recommendations ............................................................. appendices .................................................................................................... references ...................................................................................................... governance, accountability & assessment in higher education ..........................

Adam Spence, Executive Director executive summary .................................................................................... discussion ...................................................................................................... summary of recommendations ............................................................. appendices .................................................................................................... references ......................................................................................................

23 25 27 59 61 63 69 71 73 88 89 94 99 101 103 123 125 134

APPENDICES our response to the postsecondary review workbook ............................................ 143 Adam Spence, Executive Director income-contingent loan repayment policy paper ....................................................... 159 Graeme Stewart, Director, Research and Policy Analysis

OUR BRIGHT FUTURE

5

6

OUR BRIGHT FUTURE

INTRODUCTION A MESSAGE FROM OUR PRESIDENT It is necessary to begin by commending the provincial government for prioritizing education in Ontario by recognizing the timely need for the Postsecondary Review. There is growing consensus, not only in this province but across Canada and the world, that higher education is one of the most valuable investments a government can make for its communities. This initiative proves to students and other stakeholders that our concerns about the stability and future of the post-secondary education system in Ontario have been heard.

Yet, as January looms closer and the reality of how successful the Review has been will soon be realized, the provincial government and Mr. Rae must recognize that acknowledgment of the inherent value in this system is simply not enough. For too many years this system has taken a backseat to other public endeavors in both financial and political support. Stakeholders have been forced to actively lobby for government support to avoid systemic collapse, rather than pursuing avenues of development. As a result, Ontario has been left with a post-secondary education system that is struggling, stakeholders that fear the future state of a system that they continue to fight for, and a public that has never been shown the value of investing in such a system. Mr. Rae has been given the opportunity to change these realities facing our students, administrators and communities. The recommendations evolving out of the Review must communicate the valuable investment post-secondary education is to Ontario as a whole. Mr. Rae must prove to stakeholders that this system can be saved and does have a bright future in our province.

The Review means much more to students than a chance to hear dialogue on higher education in Ontario. This initiative has ensured us that our system does have a chance to develop and grow within the province. This process has given

Mr. Rae must prove to stakeholders that this system can be saved and does have a bright future in our province. us the opportunity to reflect on a system which we are intimately involved in. It has forced us to look internally, assessing how higher education affects us, but has also encouraged us to look externally, ensuring that we evaluate how the system affects society as a whole. Students across Ontario have taken this opportunity very seriously because we know the value of developing and supporting a successful-post secondary education system for all members of our communities.

The Ontario Undergraduate Student Alliance (OUSA) has prioritized the Review since its inception last spring. Just as Mr. Rae has concentrated on a collaborative approach, OUSA set out more than six months ago to get as many students as possible involved in this opportunity. All aspects of our participation in this initiative, from policy development to our awareness campaign, have been directed at encouraging input from the student body. Our approach to identifying key issues and developing our priorities has been based on consultation and research. Our organization has spent the past several months developing policy and recommendations that we believe will strengthen and stabilize the post-secondary education system in Ontario. By focusing on accessibility, affordability and quality, we have looked locally, nationally and internationally for ways to stop the current deterioration of our system.

We have focused our efforts in two ways. Throughout the summer, OUSA developed policy recommendations and educated solutions for our submission while creating an on-campus campaign to encourage student participation in the Review. The A Bright Future Depends on Higher Education campaign was launched in the fall at our six member schools in Ontario — Brock University, McMaster University, the University of Waterloo, the University of Western Ontario, Wilfrid Laurier University and the University of Windsor. (Note: Our membership has recently grown to include the University of

Students across the province have prioritized funding, tuition and student financial aid as key issues in creating an accessible, affordable and high-quality system in Ontario.

Ottawa and Queen ’s University.) This awareness-based campaign has encouraged student participation through our website, in on-campus events and in Review Town Hall meetings. It has been as important for our organization to ensure students feel educated and involved in this initiative as it has been to develop relevant policy work.

Throughout our consultations with students in this province, two messages became very clear. First, the system is struggling and students cannot continue to bear the growing burden of participating in an unsupported system. Secondly, students have made it very clear that we want to help — we need to be involved in the development of a better system.

Students across the province have prioritized funding, tuition and student financial aid as key issues in creating an accessible, affordable and high-quality system in Ontario. These three priorities are all intimately intertwined and one can not be evaluated or amended without assessing all others together. Although the provincial government must recognize the interconnectedness of each of these issues, this must not be taken as an excuse to grossly modify the current system. A low tuition fee does not devalue the need for an effective financial aid system, nor does the development of a progressive aid system mean that OUR BRIGHT FUTURE

7

INTRODUCTION funding can be decreased or tuition can increase. There is a fine line to balance between each of these pillars within postsecondary education in Ontario, and throughout this submission we have made an effort to address it.

Funding has been prioritized by students because it has the largest influence on the system. Funding cuts in this province have impacted all aspects of a student ’s post-secondary experience. As our province continues to remove public dollars, costs are being downloaded onto students. Through tuition, ancillary fees and new additional fees, students are quickly becoming the largest paying stakeholder group on campuses. Yet, as individual costs continue to skyrocket, there has been no increase in quality or satisfaction from students. Not only has the cost of participation become a barrier to higher education, the value of participation has now become a key issue for students. Funding has become the biggest issue for all stakeholders involved in this system; groups have united to urge the government to raise per student funding to the national average. The risk of ignoring this recommendation will impact all citizens in Ontario. The provincial government must ensure that higher education in Ontario remains a public good – a cost that is shared by all, as the benefit from post-secondary education is shared by all.

Tuition is a reality of today ’s post-secondary system. Both tuition fees and public tax revenues are primary funding sources for universities, and are important for the stability of our system. Yet, in the past ten years, tuition fees have begun to act as alternatives to public support. Students can not be the sole supporters of higher education in Ontario, nor can they fill

As our province continues to remove public dollars, costs are being downloaded onto students. the void left by a lack of public dollars. The downloading of costs has greatly affected the accessibility and affordability of the system, and the government must recognize the need to protect its participants. Tuition must be regulated by the provincial government and must reflect the cost of program delivery. Regulation allows for predictability and stability in a system that is on the verge of disarray. Publicly-defined tuition holds institutions accountable to the public and students for the expenses associated with program delivery, which is a growing concern supported by all stakeholders. Beyond regulation, the provincial government must accept its role in supporting higher education in Ontario. The financial contribution from both students and the government must be defined and protected by legislation as another means to rebuild the stability in our system. As tuition is the most visible cost to students, this fee must represent the goals for post-secondary education. We believe the system must be affordable and accessible to all qualified students — regulating tuition fees and defining student contribution in the system are the most effective ways to communicate these goals to both the public and the students. But regardless of how high or low these tuition fees are set, we believe that student financial aid is an essential way to increase accessibility within the system.

The Postsecondary Review has allowed stakeholders to look beyond these immediate concerns, which is important to ensure the long-term viability of higher education. Before our system can grow, funding, tuition and financial aid must be addressed, but, beyond that, we need to decide where we want the system to go. For many years, students have been victim

The Postsecondary Review comes at a time that could allow Ontario to emerge as a leader in higher education in Canada, if not globally. to the piecemeal approach of the provincial government in efforts to appease various concerns about the system. We have experienced programs initiated and canceled, money invested and pulled back, support announced but never seen to fruition.

Post-secondary education in Ontario has lacked direction for many years; we have spent so much time trying to keep our head above water that we have yet to decide what to do when we get to land. The Review has given us the hope that we may actually get to land; we may be able to start thinking about where higher education in the province can go from here.

In order to achieve the goals of accessibility, affordability and quality within post-secondary education, systemic changes are required. We have made an effort to look further into the issues facing all stakeholders in this system to develop educated solutions. Quality is a continuing concern for both the public and the participants within higher education. We have looked seriously into options that broaden the opportunities made available to students, which would enhance their experience in both the classroom and their communities. We have developed recommendations that will ensure students have the support and the capability to advance within the system and within their communities. We have also made an effort to address accountability and governance for our institutions and Ontario. The goal behind this submission in its entirety is to create a system that will be successful and accessible well into the future. We have worked to develop a stable base from which postsecondary education in Ontario can grow. Our policies and recommendations are student-directed concerns and ideas that have developed directly out of personal experiences within our system. It is with this expertise that we submit this document, 8

OUR BRIGHT FUTURE

INTRODUCTION understanding that the student voice must be one of the most influential in the Review.

The Postsecondary Review comes at a time that could allow Ontario to emerge as a leader in higher education in Canada, if not globally. As reliance on, and public support of, post-secondary education gains momentum throughout the world, Ontario is at a crossroads. The government must recognize the value in our current education system and the possibility for growth and development for the entire province. The Ontario public must stand up for this valuable component to a healthy society and ensure that it has the resources and support necessary to continue to grow. Stakeholders involved in the Review must make certain that the government does not follow along the path it has in the past, addressing concerns with small, ineffective quick fixes. Twenty years from now, Ontario could be a leader in post-secondary education, but for that goal to be achieved, we must see systemic changes immediately and the provincial government must accept its role in appropriately supporting our system.

We have heard over and over again the recognition that there is value behind supporting higher education. We have come to a time when we need to see this recognition supported in practice. OUSA has assessed many different issues surrounding higher education in Ontario and has developed well-researched solutions. Our home office staff, Steering Committee members and volunteers on our member campuses have worked hard to create a submission that reflects the concerns and needs of students across the province. Mr. Rae has given us the opportunity to provide the government with the student perspective. We have provided the light, the direction for developing a more accessible, affordable and a higher quality system in Ontario. A bright future for Ontario depends on higher education. Mr. Rae, light the way.

Alison Forbes, President Ontario Undergraduate Student Alliance

OUR BRIGHT FUTURE

9

10

OUR BRIGHT FUTURE

EXECUTIVE SUMMARY High-quality and universally accessible universities are absolutely essential to the social and economic development of Ontario and its citizens. Given this vital importance, the challenge before students, stakeholders and policymakers is to articulate a provincial higher education system which serves the ideals of access and world-class education within very specific economic and political realities.

Ontario ’s students have risen to meet this challenge.

The Ontario Undergraduate Student Alliance (OUSA), on behalf of its 125,000 full and part-time, professional and undergraduate members, has engaged in an unprecedented program of research and policy development in order to provide educated solutions to the critical problems facing university education in Ontario. The result of this process is the document before you.

Our Bright Future is a unique publication. For the first time, a student organization has approached reform of the university system as a whole, and tailored its recommendations to create a seamless system of intelligent, mutually supporting elements.

In each of the papers contained within, the problems plaguing the university system are explored as are the appropriate means for remedying the entire system in a socially and fiscally responsible manner.

OUSA ’s proposed system of higher education includes the following central elements: An overarching vision for the quality, accessibility, affordability, accountability and sustainability of higher education in Ontario that: • Embraces the shared responsibility for the operation and growth of the system; • Recognizes high-quality and accessible universities as a primarily public endeavour; • Ensures the accessibility and affordability of university education for all Ontarians; • Focuses on information-sharing, evidence-based change and clear objectives as the framework for continuous improvement within the system; and • Is predictable, accountable, transparent and above all, student-centric.

A system of responsible cost-sharing in university finance wherein: • The provincial government provides an appropriate amount of public funding to ensure excellence and accessibility; • Students are never asked to pay more than a fair share of the costs of their education; and • A progressive student financial aid system maximizes accessibility for all Ontarians while minimizing the negative consequences of debt.

A broad commitment to ensuring advancement into, and opportunities within, the university system for all Ontarians by: • Changing tuition fee policies, investing in financial assistance and providing incentives to individual institutions to ensure access for all qualified individuals; • Creating effective early-intervention and awareness programs for groups who are traditionally under-represented in higher education; • Facilitating co-operative accessibility data collection and system-wide access targets; • Providing the financial resources to institutions to facilitate greater student opportunity; and • Giving financial incentives for initiatives such as undergraduate research opportunities programs, campus incubators, idea accelerators, experiential education and international exchange.

A new system of governance, accountability and assessment for the higher education system in Ontario through: • A commitment to the principles of accountability to students, stakeholder involvement, continuous improvement, information availability, public accountability and institutional autonomy; • Guidance by a new coordinating body within a higher education information management system framework, equipped with proper tools and supported by student involvement; and • The development of new quality assessment and public information reporting procedures at the institutional level.

Students have waited years for a new system of higher education in Ontario that serves their needs while helping to fulfill their aspirations. With the Postsecondary Review currently underway, students have a powerful opportunity to help build a university system of which we can all be proud. Our Bright Future provides a roadmap to achieving this goal, and it OUSA ’s sincere hope that Bob Rae, the Postsecondary Review and the provincial government of Ontario implement its recommendations.

OUR BRIGHT FUTURE

11

12

OUR BRIGHT FUTURE

DISCUSSION PAPER SYSTEM VISION FOR HIGHER EDUCATION IN ONTARIO

by ADAM SPENCE OUR BRIGHT FUTURE

13

14

OUR BRIGHT FUTURE

SYSTEM VISION introduction: creating the vision

A famous Russian proverb states that, “Education is light, lack of it darkness. ” In Ontario, that light is fading.

We are fumbling in the dark behind other provinces and countries that are making great strides in the improvement of their systems of higher education. They have recognized the intrinsic value of universities, colleges and the trades to their own future success. We have not. Our economic productivity lags behind similar regions and we do not yet know the broader societal effects of long-term neglect.

Students have a dim view of their own future. They are faced with the prospect of tremendous debt loads and an increasingly competitive job market. Many do not feel that their undergraduate degree will be sufficient to provide them any opportunity beyond that of a desk jockey. This anxiety has pushed many university graduates to pursue an additional year of study at the finishing school of the twenty-first century – college.

This does not mean to suggest that an undergraduate experience is inherently more valuable than one at a college.

It does, however, suggest that something may be lacking in the university experience that previously existed. Perhaps it is a misunderstanding amongst students, parents and employers. They may believe that a liberal arts or science degree has limited potential. But university graduates should be adaptable, critical thinkers with unparalleled verbal and communications skills that can offer value for any path that they choose – career-wise or academic.

There may be a problem with the degrees themselves.

Shiny brochures and recruitment materials may draw in anxious parents and wide-eyed teens with the promise of world-class professors and their frontier-seeking research, intimate and interactive learning environments and state-of-theart facilities and libraries. Unfortunately, there is not always substance behind the glossy promotional materials. It is extremely rare for an undergraduate student to experience a meaningful learning opportunity with a world-class professor, or even engage in small-scale learning environments in their third or fourth years. Many students do not graduate with the simple skills of effective writing, communication or logical composition.

The university experience for a degree holder today is demonstrably lower than that of a decade or more in the past. Student to faculty ratios have skyrocketed, library collections have dwindled and classrooms continue to fall apart.

Over their time as undergraduates, students are often shortchanged.

All the while, university students have been asked to pay more.

Tuition fees have far outpaced public resources available through the financial assistance program, within a complex system that has increased restrictions to receive aid. Essentially, fewer people are getting access to fewer needed resources. Financial aid is broken.

Many more Ontarians have access to higher education, but many still do not. Despite record increases in enrolment driven by secondary school reform and burgeoning demand,

OUR BRIGHT FUTURE

many historically underrepresented groups in Ontario continue to fall behind their counterparts in access and educational attainment.

Unfortunately, our understanding of these problems and their effects are limited. Sources of information on higher education in the province are disparate at best, and it takes a review every five years to assess progress, policy impacts and future direction.

But there is hope.

Higher education in Ontario is not beyond repair. The eighteen public universities in the province have a tradition of excellence and provide the potential for an unparalleled educational experience. Our campus communities of teachers and learners are highly capable and committed to improving their institutions. Our province can rebuild a system of universities that is truly world-class and accessible, producing graduates and achievements that will ensure Ontario has a bright future.

In order to achieve this aim, the province must act as the catalyst for change and be committed to systemic improvement through the provision of resources for both institutions and students.

These financial resources are important, and perhaps paramount, but improvements will not merely occur with more money. A cultural shift must occur within institutions and amongst the general public. Institutions must re-discover the purpose and joy of teaching and learning. The public must be engaged in the process, and recognize the inherent value of higher education, beyond its ability to merely provide employment credentials.

This paper will describe the role of universities and outline the shared responsibility for the system amongst students, universities and government. It will then go on to propose core principles and values and will conclude by offering ten ways to change higher education in Ontario over the next twenty years.

This paper is only the beginning of our discussion.

Three additional papers from the Ontario Undergraduate Student Alliance will look at the issues and ideas suggested in this paper in more detail and depth.

Arguably, the provincial government will not have the power to implement all of the recommendations in this discussion paper. However, it is hoped that the ideas raised in this paper will light a fire of debate amongst all higher education stakeholders in Ontario.

15

SYSTEM VISION the role of universities

Higher education is the cornerstone of any successful society. Universities are centres for the development of individuals, ideas and entire societies. They are also facilitators for discovery and the transmission of knowledge. The following five statements will describe these roles: Universities act as catalysts for socio-economic advancement for both the individual and entire jurisdiction.

Higher education is a key determinant of the future economic and social success of any region or country. For centuries, education has been recognized as being integral to individual advancement. In one of his reports to the Massachusetts Board of Education, the influential Horace Mann wrote that, “Education, then, beyond all other devices of human origin, is the great equalizer of the conditions of men – the balance-wheel of the social machinery. ” Although this statement was made in 1848, it certainly applies to higher education today. It has been statistically demonstrated that the more an individual learns, the more they are able to earn.

Graduates are also healthier, less depressed, more likely to vote and participate in their children ’s education. This, of course, not only has benefits for the individual but society as a whole. The overall investment in higher education also has high rates of return for the government of any province or country, and it has been demonstrated that underinvestment hinders productivity. Consequently, any individual or societal restraints on higher education will prevent advancement.

Universities are places for learning, discovery and development of the individual student.

The philosopher of education, John Dewey, once said that for all forms of education, “Everything depends on the quality of the experience which is had. ” Furthermore, he believed that the quality of the experience was dependent on its influence upon future experiences. From this premise, Dewey was able to criticize the foundations of so-called ‘traditional education ’, in favour of a more progressive form that was dependent upon both experience and formative education as opposed to the mere mastery or acquisition of content.

This theory underpins the importance of experiences in higher education that contain opportunities for discovery and development. Those experiences driven by discovery and development will have a positive impact on future experiences, to the benefit of the learner and their environment.

Conceptually, this may be more important today, when information and environment changes on a daily basis. Those individuals with transferable skills who are able to discover and analyze will be the leaders and innovators of the twenty-first century. Therefore, we cannot operate a system of higher education whose main purpose is the transmission of content and the acquisition of certificates. Consequently, it is evident that the quality of higher education in Ontario should be driven by the opportunity for learning, discovery and development.

A university is a place for learning and discovery, as well as the development of ideas. This does not diminish the need for the mastery of content, but discovery should grow 16

beyond its current position in many institutions to be their primary goal. Students must have the opportunity to journey beyond the lecture hall, beyond regurgitation and beyond the A, B, Cs of multiple choice exams.

This concept of co-discovery and frontier exploration of ideas should drive the development of both students and institutions in Ontario. Students will benefit from the application of concepts learned outside the classroom, and it can be argued that there is no greater joy than that obtained by discovery. The opportunity to discover will also build on future experiences, academic or otherwise. Moreover, institutions that pursue this principle will produce corollary benefits for society as a whole. Both the discoverers and discoveries are products of the system, and can be retained for the benefit of all.

There should be meaningful opportunities for students in all levels of higher education that develop skills, enhance learning or provide experiences to allow them to move on to higher levels of education or the workforce. One cannot ignore the practical function of higher education as a developer of skills and experiences for future jobs or further studies – students, parents, government and employers demand it. However, one cannot also ignore the value that higher education can provide for moral and civic development, especially in the context of a province and a nation where youth are becoming less engaged in public life.

Universities are mechanisms for advancement into the workforce or higher levels of education.

For many, universities have a singular outcome: employment or further education. It is an inescapable fact that not all university students are going to school for the pursuit of learning or frontier discovery. [This is not to say that development and discovery cannot be a fortunate benefit of those pursuing higher education for these singular aims. However, institutions need to ensure that credentialing, or the assurance of a job for every graduate, does not become their singular aim.]

Universities are facilitators for research, technological development and the political vitality of a jurisdiction.

As institutions based on discovery and learning, research is a key component of any university ’s mandate. Arguably, universities are recognized as the supreme public institution for research. They receive hundreds of millions of dollars in research grants to explore important questions and develop solutions to intractable questions that are often in the public interest, including looking for cures to dangerous diseases.

Another beneficial by-product of this research, either intentional or unintentional, can be technological development.

Moreover, the leaders of tomorrow will attend universities today, and the ideas that they and their teachers discuss will undoubtedly influence politics and policy in the present. Abraham Lincoln once wrote that, “The philosophy of the classroom today will be the philosophy of government tomorrow. ” Edward Everett, a former President of OUR BRIGHT FUTURE

DISCUSSION PAPER Harvard University in the mid-nineteenth century, believed that education was a better safeguard of liberty than a standing army. Thus, it can be argued that the political vitality of any province, state or country is intimately tied with the efficacy of its system of higher education.

Universities are facilitators for the inter-generational transfer of knowledge, skills and experiences.

Universities today are important cultural touchstones.

As the highest institution of learning in our society, they play a key role in the inter-generational transfer of knowledge, skills and experiences. Their role now supercedes elementary and secondary education as the primary vehicle for this activity.

This functional ability for the transfer of skills and experiences may be more valuable today, as the capacity and complexity of knowledge continues to expand exponentially.

UNIVERSITIES Universities also play an important role in this framework of shared responsibility. They are also benefactors of a healthy system, but unlike students and the government, their financial responsibility is limited.

Generally, it is the responsibility of universities to be system stewards. They must be accountable to those who provide them with the financial resources for their operations – the general public, students and government. They are also responsible at a local level for ensuring accessibility and quality through the provision of institutional financial assistance and the assurance of a high quality experience.

This compact of responsibility does not end with the government, students and universities. Others have responsibility over the system, as benefactors of and investors in higher education, including faculty and staff, parents and employers.

a shared responsibility

core system principles & values

Higher education is a shared responsibility amongst government, students and universities. These public education partners each reap tangible benefits and provide significant resources to ensure the system ’s success. Their shared responsibility is outlined below: GOVERNMENT Primary responsibility for higher education rests with government. As the prime benefactor of a healthy system that creates jobs, generates tax revenue and drives socio-economic growth, the government is responsible for the lion ’s share of system funding. The general public, who shares these benefits in a compact with government, supports this system through taxation. This fiscal responsibility works to ensure the continued quality of the system.

The responsibility of government extends beyond financing. As a public endeavour that should be accessible to all those who are qualified, the government has a responsibility to foster access and provide assistance to those in need who wish to attend. Moreover, the government has a responsibility to ensure that the cost of education is affordable through the use of regulatory measures. The government is also responsible to the general public for the accountability of the system as an agent of their tax dollars.

STUDENTS Students, or more appropriately, graduates, receive tangible individual benefits to higher education, and thus should share in the responsibility for the system. Often, this is considered a matter of financial responsibility through the provision of fees. However, it should be clear that there are reasonable limits to the percentage contribution that is made, as graduates are not the sole beneficiaries of their education.

As benefactors of a healthy public system, students also have the responsibility to use their education to become active contributors to the economic, social and cultural fabric of the community that has contributed to their success.

OUR BRIGHT FUTURE

Given the challenges Ontario faces, the role that universities play and the shared responsibility that exists for higher education, there are many core system principles and values that should drive development over the next twenty years.

PUBLIC ENDEAVOUR Higher education, like public health care, is an endeavour that requires the involvement of all citizens for its ensured success. In turn, the success of a system of higher education has tangible public benefits for all citizens.

UNIVERSAL & EQUITABLE ACCESS As a tool for socio-economic development of individual citizens, it is important that all qualified persons are able to access higher education in Ontario.

AFFORDABLE In order to ensure access, the cost of education must be affordable for those who wish to attend.

OPPORTUNITY FOR CO-DISCOVERY One of the defining characteristics of a university is the interaction among teacher and learner for the purpose of co-discovery and exploration of a particular area of knowledge. This interaction was aptly characterized by Alfred North Whitehead, one of the key philosophers of education, who once said that, “The purpose of a university is to join the old and the young in imaginative methods of learning. ” CONTINUOUS IMPROVEMENT Ontario cannot only strive for the maintenance of quality and access at its colleges and universities. We exist within an increasingly competitive global environment where knowledge and, hence, the institutions of knowledge play a fundamental role in success and development. Consequently, communities must strive for the continuous improvement of their systems of higher education.

17

SYSTEM VISION STUDENT-CENTRIC A student-centric system will focus on the quality of the educational experience that a student has, as opposed to the individual economic benefits derived from a university education. This will ensure that universities will continually focus on the positive changes that a student can undergo from the start to the end of their university career, which is also a key indicator of quality. This would also be a move away from the role of institutions as providers of credentials or mere producers of degrees, which can have long-term impacts on the quality of the workforce, or the ideas that are generated from our institutions of higher learning. These ideas and individuals help our province to develop and improve.

A student-centric system can also have tangible benefits for the future funding of institutions. The happier, or more satisfied, that graduates are with their experience, the more likely they are to contribute as alumni.

HOLISTIC LONG-TERM COMMITMENT Any successful and sustainable system of higher education requires a holistic long-term commitment to ensure its success. There must be a political commitment to the improvement of the system. Without the will of the provincial government, it will be difficult to achieve the substantial change that is needed. Moreover, there must be a long-term resource commitment so that institutions are able to effectively plan and respond to any needs for improvement. Finally, we must ensure that there is a long-term commitment from the public to support the system.

PREDICTABLE There are a number of reasons for predictability in higher education in Ontario. The financial resources provided to institutions must be predictable so that they are able to ensure a high quality education. Students also deserve the same degree of predictability. The costs of education must be predictable to ensure that students are able to save for and afford to go to university. Moreover, the outcomes from universities must be relatively predictable to ensure that students are able to make educated choices on the opportunities available, the public is assured return on its investment and government is able to provide the resources required for improvement.

SHARED RESPONSIBILITY Higher education is a shared responsibility amongst the government, students and universities. Each is a benefactor of a healthy system and each makes significant contributions to its success. There are, however, reasonable limits to the responsibility that each has over the system, as none retains sole benefit.

TRANSPARENT & ACCOUNTABLE As public institutions receiving public funds, as well as revenue from students, universities must be transparent and ac18

countable in all of their activities – financial, academic and otherwise.

DIVERSITY Research clearly shows that the level of diversity on campus can have a positive impact on the quality of educational experience that a student receives. A more diverse campus would also ensure that students from all cultural and socioeconomic backgrounds are able to attend.

RESPONSIVE Charles Darwin once said that, “It ’s not the biggest, the brightest, or the best that will survive, but those who adapt the quickest. ” In a regionally competitive world where knowledge, technology and processes change along with the needs of students and society, a system of higher education must be highly responsive. If it is not, the system itself, and the society that relies on its success, risks falling behind those who are able to quickly adapt.

INFORMATION-SHARING In order to foster innovation in learning and improve the educational experience for students province-wide, institutions must be willing to share information about their academic processes and initiatives. This can even go beyond learning experiences, to include sharing information on areas such as best practices of the provision of institutional financial aid or meeting student financial need on campus. This openness of information sharing should also extend to ensure public access to important information about the institution.

CLARITY OF TARGETS & OBJECTIVES Universities, government and even students have a broad understanding of their aims. However, specific targets and objectives are rarely defined, and progress is almost never tracked. In order to move forward effectively, universities and government must set clear targets and objectives that are reasonably attainable.

EVIDENCE-BASED CHANGE Policy changes to higher education in Ontario are reactionary. Funding was cut, tuition skyrocketed and financial aid was kept static while the qualifications became more restrictive. The impact of these changes is often loosely considered, but is rarely assessed or enacted on the basis of a preponderance of evidence. Often changes are made based on their efficiency or their ability to be successful in a fiscally restrained framework. Essentially, it ’s like sending miners into a cave without a canary. In order to truly meet the demands of an accessible, affordable and high-quality system, systemic changes and their long-term impacts must be carefully considered.

ECOSYSTEM The axiom, “Everything is connected to everything else ” OUR BRIGHT FUTURE

DISCUSSION PAPER clearly applies to higher education. Universities are a key component of the broader economic and social ecosystem of communities, provinces and nations. Resource shortages, changes in participation or attainment, or the quality of teaching and learning can have a tremendous ripple effect on who is successful and who is not, the economic productivity of a region and its future organization.

Moreover, as mentioned in the Boyer Commission on Educating Undergraduates in the Research University, institutions themselves are intellectual ecosystems. Universities are communities of learners existing within a distinct campus environment that has shared goals and diverse characteristics.

ten ways to change higher education in Ontario

In higher education, there are no easy answers. There is not one simple solution that will transform the system such that it is completely accessible, eminently affordable and of the utmost quality. It will require the application of the principles and values above, numerous mechanisms for improvement and unyielding effort by all those engaged in the system.

The following list will outline ten ways to change higher education in Ontario. It should be noted that although this list is comprehensive, it is in no way complete, nor is it the only way to improve the system.

1. PROVIDE INSTITUTIONS WITH THE PUBLIC RESOURCES THEY NEED Universities are public institutions that require adequate funding to ensure that they are able to provide a high quality learning experience. This will also be a wise investment in the future socio-economic potential of the province.

RECOMMENDATIONS a. The provincial government should fund all students and increase operating funding to institutions so that it is in line with similar jurisdictions. b. The proportion of public funding provided to institutions should be protected by an act of legislation.

2. CONTROL COSTS & ENSURE THAT STUDENT FINANCIAL ASSISTANCE KEEPS PACE WITH STUDENTS Public financial assistance is given to almost half of all university students in Ontario. Unfortunately, that assistance has been far outstripped by increases in tuition fees and overall cost of education, while qualifications have become more restrictive. Moreover, despite financial need, not all students will apply for assistance, either because the process is too complicated or they believe that they will not qualify.

A student financial assistance program must keep pace with students in terms of their ability to connect with its resources. This may involve automatic assessment, or more user-friendly tools for application, or information about the

OUR BRIGHT FUTURE

program. The program must also be able to keep pace with costs which change over time, and are unique to certain geographic areas. It is also the responsibility of government to ensure costs are controlled so that the financial aid system does not need to continually play a game of catch-up, and that higher education remains affordable and predictable.

RECOMMENDATIONS a. The provincial government should control costs by regulating tuition for all university programs. b. The provincial government should ensure that the total available financial aid package should cover all the actual costs of attending university. (This may require the indexing of cost of living amounts to ensure that the total public resources provided to a student is always equal to their actual need.) A substantial proportion of any increases should come in the form of non-repayable assistance so that students are not saddled with out of control debt loads upon graduation. c. The provincial government should improve qualifications for financial assistance to eliminate categorical ineligibilities and ensure that all those who need assistance are able to qualify. d. The provincial government should improve communication with students by using the web more effectively and providing needsassessment summaries to foster transparency and clarity in the application process. e. The provincial government should ensure the financial aid system protects graduates by structuring debt repayment in a fair and progressive manner.

3. INTEGRATE THE UNIVERSITY EXPERIENCE INTO THE BROADER COMMUNITY The lecture hall is not the only locus for learning. Students can take their experiences outward into the broader community at a local or even international level to improve their range of experiences. This could allow students to become emissaries of knowledge from institutions to the outside world and vice-versa. This could also provide students with an additional means of discovery, and add to their set of skills and experiences as they pursue opportunities beyond their undergraduate degree.

RECOMMENDATIONS a. Universities should develop entrepreneurial challenges and campus incubators. b. The provincial government should develop a system of grants for those students who wish to pursue studies abroad.

19

SYSTEM VISION c. Universities should encourage the development of service learning and experiential learning opportunities in the community.

4. SYNERGIZE THE UNIVERSITY & LOCAL COMMUNITY AGENDA Beyond the need for alternative methods of learning beyond the lecture hall, there is also a need for the local community and institutions to synergize their agendas for mutual benefit. Universities can be a key component for economic development in the burgeoning cities agenda. Those cities that wish to succeed in an increasingly regionally competitive environment will have to recognize the importance of higher education to their overall success.

The integration of institutions with the communities to which they are a part may also provide an impetus for more public participation in the activities of the university. Consequently, this could help build public support and understanding of the issues that universities face.

There is recognition of the intersection of issues and interests, particularly in those communities where a town and gown committee or working group exists. However, in order to effectively move forward, institutions and cities must move beyond committees and take action.

RECOMMENDATIONS a. Municipalities and institutions should create an urban-university agenda or strategy. b. The provincial government should encourage the development of partnerships between cities and universities. c. Universities should work to integrate public spaces into their campuses, which may include public lectures or the creation of physical spaces that local citizens feel welcome to enjoy.

5. FOCUS ON THE INTERACTION BETWEEN TEACHERS AND LEARNERS As mentioned earlier, one of the key characteristics of a university experience is the unique emphasis on the interaction between teacher and learner. This process emphasizes the pursuit of scholarship and co-discovery as opposed to the pursuit of credentials or individual research glory.

As mentioned in the report of the Boyer Commission, this interaction can also help students become better equipped as consumers in the supermarket of information. Scholars are the best guides, as they, “ …have spent their lives gathering and sorting information to advance knowledge. ” RECOMMENDATIONS a. Universities should change faculty reward systems to emphasize the value of teaching. b. Universities should educate graduate students as apprentice teachers and provide additional training and resources for other teaching assistants.

20

c. Universities should evaluate teaching based on process and the skill development of students. d. Universities should engage in inquiry-based learning and develop undergraduate research opportunities programs. e. Universities should engage teachers and learners through available technologies [ie. learning commons, learnlink, etc.]. f. Universities should ensure that there is a capstone experience for students.

6. ALLOW STUDENTS TO BE PARTNERS IN THE ACADEMIC AGENDA AT UNIVERSITIES Students should be intimately engaged in the improvement of learning on their campuses. They are integral to the university ecosystem as partners in the learning experience and providers of significant financial resources to institutions. An opportunity to get engaged in driving the academic agenda at their institution will also foster ownership in the system, even when they have completed their time at university.

RECOMMENDATIONS a. Universities should be encouraged to create statements of institutional responsibility in partnership with students on their campuses. b. Universities should increase the participation of students on university committees and review panels.

7. CREATE A RELEVANT, TIMELY, ACCURATE, UNDERSTANDABLE AND COST-EFFECTIVE INFORMATION SUPERSTRUCTURE In order to improve, one must be able to know current conditions and predict future outcomes with some accuracy. Unfortunately, Ontario does not have that information readily available or in one source. In order to understand how Ontario can improve financial assistance, establish a new tuition fee policy or ensure that our participation rate is at an appropriate level, a systemic information superstructure must be put into place to track, report and utilize data. Ideally, this framework would also include local initiatives to track, report and utilize data to improve the quality of education at institutions.

RECOMMENDATIONS a. The provincial government should create an independent intermediary body between universities and government to collect, report and analyze data on the post-secondary education system. b. The provincial government should regularly track average financial information for students so that they have accurate cost of living estimates for each city that are made publicly available.

OUR BRIGHT FUTURE

DISCUSSION PAPER c. The provincial government should provide resources for institutions to create assessment and reporting mechanisms on the quality of education on their campuses.

8. ENCOURAGE THE DEVELOPMENT OF EARLY INTERVENTION INITIATIVES The issue of accessibility does not begin when students get their first tuition bill, or even when they apply for their school(s) of choice. The vast majority of students decide whether they will go on to higher education by late elementary or early high school. Therefore, it is important that Ontario develop initiatives that target students at an earlier stage of development.

RECOMMENDATIONS a. The provincial government should provide pre-entry financial aid to those students in need who have demonstrated ability. b. The provincial government should provide financial, social and academic programming support for at risk regions and groups. c. The provincial government should provide information to parents and students on the learning opportunities available at any early age.

9. EQUALIZE AND INCREASE THE PROPORTION OF QUALIFIED STUDENTS ATTENDING ALL LEVELS OF HIGHER EDUCATION It is clear that to compete in a knowledge-based global economy that Ontario will have to ensure that it has a welleducated populous. Moreover, higher education is clearly a tool for individual advancement. Unfortunately, there is a clear disparity in the individuals who attend all forms of higher education, particularly with respect to universities. Income, geographic location, parental education, cultural background and other characteristics all affect one’’s ability to access.

Opportunity must be opened up for individuals to attend traditional institutions, but the university experience must also respond to the needs to those who wish to attend. A number of countries have established open universities which can provide full or part-time studies that are available anywhere at any time. This could also alleviate the space crunch of current institutions and allow more individuals to pursue studies of their choice.

There must also be recognition of the value of all forms of higher education. University is not the only or ultimate pathway for all high school students, and pressures to push that agenda devalue the university experience as well as opportunities in college or the trades.

b. The provincial government should work to increase graduate enrolment in Ontario. c. The provincial government should set attainment and access targets for all levels of higher education including trades, colleges and universities (both undergraduate and graduate). d. The provincial government should create an open university of Ontario.

10. ENSURE THAT INSTITUTIONS ARE SUSTAINABLE In order to provide a high quality experience, institutions must be financially sustainable. This will require a degree of predictability of public funding that has been uncharacteristic of the province for the past decade.

Beyond financial sustainability, institutions also have a responsibility to be environmentally sustainable. Universities have an opportunity to take a leadership role in this sector, with their unique knowledge and community environments.

Moreover, it should be noted that a movement towards environmental sustainability will also provide long-term cost savings for institutions.

RECOMMENDATIONS a. The provincial government should make a longter m funding commitment to institutions through a funding proportion that is determined through an act of legislation. b. Universities should have an environmental sustainability policy with specific targets for energy conservation, waste reduction and transportation. c. All new buildings on university campuses should be green buildings.1

RECOMMENDATIONS a. The provincial government should provide targeted financial assistance to underrepresented groups.

OUR BRIGHT FUTURE

21

SYSTEM VISION conclusion

Higher education is vital for Ontario. Universities drive socio-economic growth, technological development and political discourse. They are places of learning, discovery and development and a means to pursue one’’s future life path.

They are also a key cultural touchstones in the transmission of knowledge, skills and experiences from one generation to the next.

Higher education is a shared responsibility amongst governments, students and universities. But it must always be a public endeavour. It must be universally accessible, affordable and provide opportunity for co-discovery. It is a shared responsibility that must be driven by continuous improvement, information-sharing, evidence-based change and clear targets and objectives. The system must be student-centric, transparent and accountable, predictable and responsive. The government must make a holistic and long-term commitment to ensure that this key component of the broader economic and social ecosystem of our communities is able to achieve its aims.

Ontario has the means to truly fulfill the role of universities and follow these principles. We can change higher education in Ontario if there is an honest commitment to improvement. It will require the partnership and drive of all those involved in the system and a collection of changes that focus on improving the quality, accessibility, affordability, accountability and sustainability of university education in the province.

If we do not make these changes, Ontario will continue to rush headlong into the dark. We will fall behind other provinces, regions and countries in economic, social, technological and political development. Irish poet and dramatist W.B. Yeats once wrote that education was the lighting of a fire. A bright future for Ontario depends on higher education.

22

NOTES 1 Green building practices offer an opportunity to create environmentally-sound and resource-efficient buildings by using an integrated approach to design. Green buildings promote resource conservation, including energy efficiency, renewable energy and water conservation features; consider environmental impacts and waste minimization; create a healthy and comfortable environment; reduce operation and maintenance costs; and address issues such as historical preservation, access to public transportation and other community infrastructure systems. The entire life-cycle of the building and its components is considered, as well as the economic and environmental impact and performance.

Description found at: http://www.sustainable.doe.gov/ buildings/gbintro.shtml.

OUR BRIGHT FUTURE

DISCUSSION PAPER FUNDING, TUITION & STUDENT FINANCIAL ASSISTANCE

by GRAEME STEWART OUR BRIGHT FUTURE

23

24

OUR BRIGHT FUTURE

EXECUTIVE SUMMARY SUMMARY From a student perspective, Ontario desperately needs a new financial arrangement for its universities. The three pillars of university funding —operating grants, tuition and student fiancial aid —have been grievously mismanaged and are in critical need of reform.

The time has come for a system of responsible cost-sharing, where an appropriate level of government funding is complemented by a fair amount of student contribution. Underpinning this arrangement is a financial aid system that provides enough funding to every student in need, without saddling graduates with excessive and unmanageable debt.

This paper seeks to understand the problems with the current university financial arrangement in Ontario, and propose a roadmap to a new system which actually works for students, their families and the entire province.

KEY FINDINGS The provincial government of Ontario seriously under-invests in the university system: • A 32 per cent enrolment increase in Ontario has been met with a 0.7 per cent decrease in real funding dollars over the past decade.

• Ontario lags behind the OECD and the rest of Canada in terms of the proportion of public funding provided to universities.

• Ontario lags behind the rest of Canada and the United States in terms of the amount of per-student funding provided to universities.

• This pervasive under-funding of the university sector has seriously compromised the quality of university education in Ontario, lead to an unprecedented increase in tuition and rendered the financial aid system thoroughly ineffective.

The current funding formula is not sufficiently student-focused or responsive to the funding needs of the system: •The current system uses the Basic Income Unit (BIU) as a divider, allowing the provincial government to determine the overall funding level regardless of the number of students in the system and the cost of delivering programs to these individuals.

The federal government of Canada also under-invests in the university system: •Federal contribution to Ontario universities lags well behind peer jurisdictions in the United States.

Students in Ontario are paying too much for their university education: • Students in Ontario pay for a greater proportion of their education than both the OECD and Canadian average.

• Average tuition in Ontario has increased by 139 per cent since 1993.

Deregulation of tuition fees hurts Ontario students: • Tuition in deregulated programs has increased, on average, by 261 per cent since 1993.

•Tuition in law, medicine and dentistry has seen the greatest increase.

The student financial aid system does not provide adequate funding to enough students: • The OSAP maximum award —$9,350 —has not increased since 1994.

• As a result of tightening eligibility requirements, the number of students receiving OSAP support declined 38 per cent between 1995 and 2002, despite a 19 per cent increase in enrolment over the same period.

The student financial aid system does not do enough to minimize both the size and impact of graduate debt: • The amount of non-repayable assistance has declined 62.9 per cent since 1996.

• The Ontario Student Opportunity Grant is applied to the yearly loan amount, disqualifying many students with substantial loans from debt remission.

• The provincial government continues to use the Canada Millennium Bursary to displace its own remission responsibilities.

• There is insufficient income-sensitivity in the current repayment scheme.

The student financial aid system does not adequately protect graduates: • There is no provision for graduates in financial difficulty to make partial loan repayments under the current system.

• Income-based debt remission is too difficult to qualify for under current regulations.

• Current insolvency and bankruptcy legislation is unfair to student loan borrowers.

OUR BRIGHT FUTURE

25

EXECUTIVE SUMMARY KEY RECOMMENDATIONS •The provincial government must provide enough funding to cover no less than 70 per cent and students must never pay for more than 30 per cent of the cost of university education in Ontario by 2011; • The provincial government must implement a 50 per cent increase in university operating funding by 2011; • The operating grant formula must use a student-based multiplier mechanism; • The provincial government must fund all currently unfunded students in the university system; • The federal government must institute a dedicated higher education transfer to the provinces; • All tuition in Ontario must be regulated; • Tuition fees should be separated into variable bands without distorted price differentials to reflect cost of program delivery; • The provincial government must remove unfair categorical ineligibilities from the financial aid system; • The financial aid package must be composed of two separate loan programs —one to cover the cost of tuition and associated fees, one to cover all reasonable cost-of-living expenses and both large enough to account for actual tuition and cost-of-living expenses; • There must be no needs-testing on the tuition loan; • The provincial government must develop an accurate assessment of total student education cost in Ontario; • The provincial government must implement a three-tiered system of non-repayable student aid, including up-front, back-end and in-repayment assistance; • Students from low-income demographic groups must be provided with partial tuition waivers; • The federal government must eliminate the tuition tax credit and provide the additional revenue to the provinces on top of the base Canadian Education Transfer for investment in non-repayable assistance programs; • The provincial government must not implement an income-contingent loan program in Ontario; • The provincial government must make provisions for greater income-sensitivity in graduate debt repayment, including allowing partial repayments for students in financial difficulty and a system of more easily accessible and effective income-based remission; • The financial aid system must be regulated and funded by the provincial government and administered primarily by individual institutions; and • The financial aid system must be designed to maximize student ease-of-use.

26

OUR BRIGHT FUTURE

FUNDING, TUITION & STUDENT FINANCIAL ASSISTANCE introduction

The time has come to ask an essential question about Ontario ’s university system: is it working?

The answer, at least so far as the province ’s students are concerned, is a simple ‘no ’.

Rising tuition places ever greater financial strain on students and their families. The financial aid system provides too little support for too few students. Post-graduation debt levels are spiraling out of control as students are forced to pay for a larger proportion of their education. While students are being pushed past the financial breaking point, quality at Ontario ’s universities continues to decline. Class sizes have increased dramatically, student to faculty ratios are now the highest in the country and long-neglected campus infrastructure is crumbling away, depriving students of the resources and facilities they need for a meaningful university experience. These unfortunate circumstances cannot be easily blamed on one political party or ideological viewpoint. Rather, they are the result of nearly four decades of unclear policy, weak financial commitments and missteps in the administration of the entire system.

While these problems are complex, their cause couldn ’t be simpler. In fact, every stakeholder group from students to faculty to the institutions themselves, regardless of interest or ideological slant, agrees on the root of the system ’s woes.

There just isn ’t enough money. For anyone.

Unfortunately, stakeholder agreement over ‘cause ’ does not readily translate into agreement on ‘cure ’. The issues of university funding, tuition and student financial aid have proven to be a highly divisive within the sector, often pitting administrators, faculty associations and students against one another.

More frequently, debates over the financing of institutions have seen these groups face off with the provincial government. These arguments, sometimes pragmatic and sometimes ideological in scope, tend to talk well past the point. While each group sticks to its interests and trumpets tired old positions, the critical problem of university under-funding remains ignored. What Ontario needs now are educated solutions to its university finances, not a shiny new version of an insoluble old debate. Students cannot afford to wait any longer.

To that end, the Ontario Undergraduate Student Alliance (OUSA) proposes a new system of public funding, tuition fees and student financial aid in Ontario. This new plan takes the best of the current system, bold ideas from around the globe and specific new measures designed to place Ontario ’s university system at the forefront of higher education quality and accessibility. While this paper is far from a complete system design, its principles and recommendations lay the foundation for a new financial deal for universities that really works for students, universities and all of Ontario.

will simply not function in the best interest of students, their families or the province.

On June 8th, 2004, the provincial Government of Ontario announced a review of higher education in the province, headed by former premier Bob Rae. This Postsecondary Review has a profound opportunity to make the changes desperately needed by Ontario ’s university system —to create three mutually-supporting financial pillars that guarantee student access, world-class education quality and graduates equipped to achieve their goals and the aspirations of a province. This is a daunting task, to be sure. It is the Ontario Undergraduate Student Alliance ’s sincere hope this paper provides a framework to help this review and reform process build universities of which we can all be proud.

In order to accomplish this mission, the Postsecondary Review must approach questions of funding and tuition with the following overarching principles in mind:

Principle One: Intelligent, comprehensive and studentfriendly financial aid program design is vital to the success of the university system in Ontario.

When it comes to university finance, it is important to understand that policy concepts —like cost-sharing and variable fees —are essentially neutral. In other words, their positive or negative impact on students is largely based on the actual design of the program. As the old saying goes, the devil is in the details.

In Australia, a supposedly progressive cost-sharing regime is seriously hampered by deeply regressive elements.

Similarly, despite lower costs relative to jurisdictions like the United States, Ontario has a surprisingly high level of graduate debt. This suggests that the implementation of greater cost-sharing in the province without corresponding reforms to financial aid is hurting students.

It is important for the Postsecondary Review, and the university system at large, to not only select and implement ‘concepts ’ for reform, but also design programs that actually work. The alternative is another decade of well-meaning measures that are unable to accommodate a dynamic reality.

Principle Two: Reform of any aspect of Ontario ’s university system must be holistic with clearly defined goals.

Just as program design is essential to a successful and meaningful process of reform, the design of the reform process itself must also be intelligent. This requires two separate commitments. First, the Review must examine the system in its entirety, with a proper understanding of how the three pillars —funding, tuition and student financial aid —are interconnected. Changes cannot be meaningfully made to one area without corresponding reforms in the remaining two. The THREE PILLARS The Ontario Undergraduate Student Alliance believes system must function as a unified whole, and should be dethat reforming the three financial pillars of the university sys- signed as such.

The United Kingdom is an excellent example of a jutem —government funding, tuition and student financial aid — is a critical first step in building a world-class system of higher risdiction that has attempted systemic reform of their univereducation. Without a strong financial foundation, the system sity system. The UK previously suffered the effects of illOUR BRIGHT FUTURE

27

FUNDING, TUITION & STUDENT FINANCIAL ASSISTANCE conceived and improperly designed reforms. The introduction of tuition fees and income-contingent loans in 1998 was largely unsuccessful because the two measures did not mutually support one another and were not accompanied by corresponding changes in how the government funded institutions. Although it will be several years before the success of the new UK system can be assessed, the design of the new arrangement is to be applauded. Each pillar is tailored to support the seamless operation of the system. Indeed, if the UK system proves unsuccessful, it will be because it was not properly implemented or undermined by a lack of political support.

Perhaps most importantly, the review and reform process must have a clear conception of what it is trying to accomplish. Almost since its inception, Ontario ’s university system has been dogged by fuzzy mandates and ad hoc reforms without any clear sense of what the system should do and what it should look like. To be effective, the Postsecondary Review must strive to build a system that serves clearly defined goals. For the Ontario Undergraduate Student Alliance, this goal is obvious and is a guiding principle of this paper:

Principle Three: The funding, tuition and financial aid structure in Ontario must guarantee the accessibility, affordability and quality of higher education for all students.

Students are the primary consumers and benefactors of the system. Indeed, without students there would be little reason for the system to exist. Therefore, it is essential the system be designed with their needs, interests and welfare in mind. Commitment to this principle will ensure the success of the Postsecondary Review and the Ontario university system as a whole.

FUNDING AND TUITION IN ONTARIO: A Snapshot From a government funding perspective, the last decade has not been kind to universities. Through the 1990 ’s and into the new millennium, the financial situation of Ontario ’s higher education system has been growing progressively worse.

In the words of Robert Silverman, Dean of Arts and Science at Queen ’s University, “we ’re under-funded …that would be the short answer. ”1 In fact, Ontario ’s institutions have been subjected to two different kinds of under-funding: a slow starvation through stagnant funding levels, and active attempts to cut funding out of the university system and shift costs onto students and their families. The latter manifestation saw its heyday under the Progressive Conservative government of Mike Harris. Between 1995 and 1996 alone, university operating grants were cut by 16 per cent, or nearly $345 million.2 Funding levels have recovered since, but slowly. Ontario did not surpass its 1988 funding level until the 2003/04 school year.

These cuts had a highly damaging effect on both the quality and affordability of the province ’s institutions, damage which 28

persists to the present day.

Far more insidious, however, is the creeping underfunding that has afflicted the higher education system. In other words, the system has become more expensive and government money has simply not kept pace. It is a generally accepted fact that, “higher and other forms of post-secondary education are costly …the per-student costs of education are pressed upward at rates typically greater than the average rate of increase of prices generally —that is, greater than the prevailing rate of inflation. ”3 In Ontario, the expense of the university system has also been further driven upward by greater enrolment demand. Since 1990, university participation rates have increased from 18.1 per cent to 24.9 per cent.4 In addition, Ontario is in the midst of a demographic shift towards the 18 to 24-year-old age cohort. This means many more potential students vying for university spaces. Finally, the elimination of the Grade 13/OAC academic year from the high school curriculum saw two secondary school graduate classes enter the university system at the same time. As a result of these factors, enrolment has increased by an astonishing 32 per cent, or by over 78,000 students since 1990.5 Despite these trends, Ontario has consistently under-invested in the university system. Over the five year period between 1987 and 1992, operating grants increased 13 per cent.6 Conversely, during the ten year period between 1993 and 2003, operating grants actually decreased by eight per cent, despite a 21 per cent increase in enrolment over the same period.7,8 In total, a 32 per cent enrolment increase since 1990 has been met with a 0.7 per cent decline in real funding dollars over the past decade.9 ,10 This dramatic under-funding has lead to a host of serious problems in the university sector. First, the quality of the university experience has begun to noticeably decline. Ontario ’s student to faculty ratio is now the highest in the country, moving from 17:1 in 1988-89 to 22:1 in 1999-2000.11 Students are forced to learn in old classrooms and labs, use obsolete equipment and access declining library resources. Nearly 60 per cent of buildings on Ontario campuses are over 30 years old, and universities are increasingly unable to maintain or repair aging infrastructure.12 It is now estimated that under-funding has created an infrastructure debt on Ontario ’s campuses in excess of $1 billion.13 There is also a growing body of evidence that suggests continued under-funding of institutions may be hurting the economic viability of the province. In a 2003 report, the Task Force on Competitiveness, Productivity and Economic Progress reported that the continued under-funding of universities now accounts for 25 per cent of the province ’s productivity gap when compared to other peer jurisdictions.14 By far the most noticeable effect of under-funding in Ontario ’s universities is the corresponding rise in tuition and associated student impacts. Decline in public funding has led to greater ‘cost-sharing ’ in higher education, or “a shift of the higher educational cost burden from the exclusive or nearexclusive on government/taxpayers to a financial reliance on parents or students. ”15 In Ontario, this shift has been draOUR BRIGHT FUTURE

DISCUSSION PAPER matic. Over the past decade, tuition fees in the province have skyrocketed, rising 139 per cent from $2,076 in 1993 to $4,960 in 2004.16 In an effort to help universities leverage greater financial resources without increasing operating grant dollars, the provincial government also deregulated tuition in many programs, allowing fees to rise without control. Tuition in deregulated programs has virtually exploded, rising 261 per cent from $2,076 in 1993 to an average of over $7,500 in 2003.17 ,18 Students in law, medicine and dentistry pay considerably more than this average —$10,483, $14,355 and $17,087 respectively.19 The negative effects of tuition increases are most clearly seen in the provincial student debt levels. The average graduate with government student loans now owes $22,700 — the highest debt level in Canada.20 This is up 61 per cent from the 1998 debt level of $14,054.21 Nearly 40 per cent of the province ’s full-time post-secondary students now receive Ontario Student Assistance Program(OSAP) funding.22 Higher fees and the prospect of greater debt can act as a powerful barrier to students from disadvantaged demographic groups. Lower-income, rural/northern and Aboriginal students typically have a much lower participation rate than other groups in Ontario. In 1997, the last year of known reported data, the participation rate for 18 to 24-year-olds from families with incomes of $100,000 or more was double that of individuals from families with incomes of $25,000 or less.23 Total participation for the Registered Indian population has gone from 6.5 per cent in 1996-97 to 5.9 per cent in 2000-01, while the Canadian participation rate is at 11.5 per cent.24 ,25 The participation rate of rural students living beyond commuting distance from a university (80 km or more) is 11 per cent, less than half of those students who live within 40 kilometres of an institution.26 Clearly, Ontario ’s university system is under a great deal of financial stress, which in turn has placed pressure on the quality and accessibility of the province ’s institutions. The current financial arrangement is no longer tenable from the perspective of both students and university administrators, and must be reformed. Changes to the system must be focused on two areas: increasing investment in the university sector and re-structuring the means by which that investment is made.

Essentially, Ontario needs a new deal for its universities in which both students and governments pay their fair share.

THE QUESTION OF EQUITY IN HIGHER EDUCATION: Reconciling Access and Fairness in the University Sector In order to arrive at a definition of what exactly constitutes a fair government and student contribution, it is first important to understand the theoretical concept that underpins the entire debate around university finance —equity. In the world of higher education, there are essentially two competing definitions of equity: as a question of access, and as a question of broad social fairness. Both of these conceptions will be examined below.

OUR BRIGHT FUTURE

Equity as Access. Under this conception, university education is viewed as both an inherent social good and as a vehicle for maximizing individual development. As such, it should be available to all with the necessary academic qualifications and requisite desire to attend.27 It is therefore unacceptable that anyone be denied access to university on the basis of socio-economic status, ethnic background, geographic origin, or any other reason beyond academic preparedness.

Proponents of the equity as access view tend to advocate for heavily subsidized fees or the elimination of tuition altogether as recognition of the, “fundamentally greater ambivalence, the greater perceived opportunity costs and the arguably greater debt aversion of those from low income, rural, ethnic/linguistic minority backgrounds or, in come cultures, females. ”28 Equity as Fairness. Over the past few decades, it has become increasingly difficult for governments to justify tax increases to pay for the rising operating costs of university systems. This is primarily a question of the perceived fairness of total government support of higher education. In other words, citizenries are unwilling to completely subsidize through tax dollars systems that do not benefit all contributors. Under this construction, students must bear at least a portion of the costs of their education as matter of societal fairness. Since they derive a direct and undeniable benefit, they must financially contribute to the operation of the system.

Indeed, the benefits are difficult to deny. In 2001, the median household income in families in which the primary earner had a university degree was 51 per cent greater than households where the primary earner had a high school diploma.29 A recent TD Economics Paper further underlined the economic benefit, suggesting that university graduates receive a 12 to 20 per cent return on their investment in university education.30 Studies suggest that university graduates also tend to live longer and be healthier, possess greater communication skills and have greater self-confidence.31 Some individuals, like University of Toronto Professor David Stager, have even suggested that free or low tuition systems actually generate, “regressive re-distributive effects. ”32 In other words, cost-sharing is a more equitable proposition since:33 • •

•

Higher educational participation is not universal, and tends to include only the most interested and best prepared; The children of the wealthy disproportionately benefit from free or highly-subsidized higher education, since they typically have greater access to academic role models, good schools and other forms of cultural capital; and, The taxes used to support high tuition subsidies are proportional, or even regressive (such as sales taxes).

The upshot of these various political arguments is that it is not politically expedient to raise taxes in support of higher education, which would almost certainly be necessary in Ontario in order to increase the province ’s funding commit29

FUNDING, TUITION & STUDENT FINANCIAL ASSISTANCE ment. As the Canadian Federation of Students (CFS) notes, “post-secondary education subsidies may always involve some transfer of income from the less to the more educated. ”34 In a modern context, the essential political difficulty in total public funding of the education system seems to be that the ‘less educated ’ are generally opposed to subsidizing the ‘more educated ’. Proponents of this particular viewpoint tend to favour a variety of different policy prescriptions, from low tuition to completely private higher education systems where student fees account for all operating revenue.

These two conceptions of equity in higher education are often posited as being in fundamental conflict with one another. This, however, is not a necessary construct. Through careful and intelligently designed tuition regulation coupled with a progressive student financial aid structure, OUSA firmly believes that both conceptions of equity can be reconciled within the university sector.

COST-SHARING IN ONTARIO: A Practical Arrangement Universities in Ontario receive their funding from two primary sources: operating grants distributed by the provincial government and tuition fees paid by students. This system is an example of what Dr. Bruce Johnstone of the International Comparative Higher Education Finance and Accessibility Project calls ‘cost-sharing ’, and Ontario is not the only jurisdiction to embrace this arrangement. Around the globe, “governments are supporting the view that as there is a high rate of return to higher education over time, then it is only fair to expect that recipients of university education should share the costs associated with that education. ”35 Ontario, like other international jurisdictions, has moved towards cost-sharing as the result of the following factors: 1. The increasing political prominence of the equity as fairness argument, as described above.

2. The sheer need for an alternative source of revenue.

While the operating costs of the university system rise, the ability of governments to spend additional tax dollars has declined. Universities must compete with a variety of other compelling spending priorities —elementary and secondary education, public healthcare, public infrastructure, housing and care for the impoverished elderly, children and other dispossessed persons. Placed against these issues, higher education consistently loses in the public funding battle, especially since public funds are becoming increasingly scarce. The vagaries of the global economy are eroding government ’s ability to generate more revenue. As Johnstone notes, “globalization …increases the predilection, as well as the ability, of taxable individuals and enterprises to escape to lower tax venues. ”39 This fact, coupled with the equity as fairness argument cited above, tends to block attempts to raise taxes to pay for the university system. As a result, “higher education in most countries will experience a creeping austerity …tending consistently to outrun the likely increase in public revenues. ”40 The pervasiveness of this trend is most evocatively shown by German-speaking and Scandinavian countries. Traditionally bastions of free tuition, these jurisdictions have moved towards the adoption of tuition fees to provide more funding for under-funded institutions. In 2001, Austria became the first German-speaking country to adopt tuition fees.41 This occurred despite a higher personal income taxation rate than Canada, at 45 per cent compared to 32.4 per cent —a difference of 38 per cent.42 Indeed, “some increased costs borne by parents and students are probably both inevitable and economically rational. ”43 In light of this reality, a university system entirely funded by public tax dollars is not financially practical. Rather, financial responsibility for the system must be spread out to include reasonable financial contributions from all who benefit from the system itself. This observation leads to another guiding principle of this paper:

Principle Four: If an individual, group, organization, citizenry or government benefits from the university The requirement for an alternative revenue source to system, it is reasonable to expect them to contribute support the university sector arises out of a phenomenon that financially to the operation, maintenance and growth Johnstone describes as ‘creeping austerity ’. In other words, of the system. university education is increasingly expensive, and governments This principle is not an argument for a cost-sharing are increasingly unable to provide the needed funds. Over the arrangement wherein students bear the majority of operating past 20 years, increasing enrolment and sophistication in the costs through fees. Rather, this principle establishes a broad university sector have made the system more costly to oper- social responsibility for the maintenance of the university sysate. As Johnstone notes, “both the costs and prices of higher tem, from individuals and their families to the provincial and education tend generally to outpace the rate of inflation …this federal governments. is the well known ‘cost-disease, ’ first articulated by Baumal However, in accordance with Principle Three of this and Bowen: the rising relative cost tendency in labour-inten- paper, the student contribution level must never be allowed sive, largely productivity immune sectors of the economy such to compromise the accessibility of the system. Therefore, the as health care, education, most services, and the arts. ”36 Fur- challenge of modern educational policy makers is to ensure ther, these, “high and naturally rising per-student costs are students never pay a disproportionately high or unsustainable greatly magnified by pressures to expand enrolment. ”37 In- price to attain a university education. Also, a system of costdeed, Ontario is no stranger to cost-amplifying enrolment sharing must be accompanied by a progressive student finanincreases, as the number of students on provincial campuses cial aid system to ensure all students have the financial rehas increased 32 per cent over the past decade.38 sources they need to attend higher education without incur30

OUR BRIGHT FUTURE

DISCUSSION PAPER ring a punitive level of debt.

Stated another way, the system must be configured around the idea of responsible cost-sharing. The parameters of such a system are laid out in the following sections of this paper.

PILLAR ONE: PUBLIC UNIVERSITY FUNDING Strengthening the Public Commitment It is OUSA ’s opinion that the first step in developing an equitable and effective cost-sharing framework is to strengthen the government ’s role in financing higher education. In other words, the vital role public money plays in the university system must be recognized with increased, intelligent investment.

Principle Five: The provincial government has a clear responsibility to provide appropriate public funding to universities as an investment in the social and economic viability of Ontario.

Funding of universities through public tax dollars is a near-universal feature of systems of higher education. From the United States to Germany, Japan to Australia, universities receive financial support from governments as an investment in the social and economic viability of their societies. Although the amount of public support provided to institutions varies from nation to nation, the principle of citizen investment remains an important part of higher education around the world.

This public investment is well justified for both economic and social reasons. In 1998, Ontario ’s provincial government provided $2.1 billion dollars to the university system. However, it received nearly $3.2 billion in revenue linked to universities —a 58 per cent return on investment annually.44 The breakdown of this return on investment can be seen in graph one.45

An earlier study by A. A. Kubursi found that for every dollar spent on universities, four dollars are generated in the local economy.46 By these two indicators alone, Ontario is profiting enormously from its public university system.

Although harder to gauge, university education also generates considerable social benefits. Indeed, according to Johnstone, “higher education, publicly funded, is still essential to most forms of basic research, to the preservation and transmission of culture and to the strengthening of civic society. ”47 A TD Economics topic paper published in 2004 notes that graduates have better health, longer life, better communication skills, greater self-confidence and are less likely to participate in crime.48 They are also more tolerant of other races and more likely to vote in elections.49 In other words, investment in higher education is an investment in a healthy, dynamic and politically engaged citizenry. As noted by Nicholas Barr, architect of the new university system in England, “higher education creates benefits beyond those to the individual — benefits in terms of growth, the transmission of values and the development of knowledge for its own sake …thus, taxpayer subsidies should remain a permanent part of the landscape. ”50 The discoveries and ideas developed at universities also have significant benefits for the social vitality and economic competitiveness of a jurisdiction. University research has battled previously incurable diseases, introduced innovative technology and generated ideas that have shaped the fortunes of entire nations.

In order to remain competitive, Ontario must have a world-class system of higher education. Unfortunately, the continued under-funding of universities has helped to create a 10 per cent productivity gap with other peer jurisdictions.51 With this data in mind, it is clear that the provincial government must retain and strengthen its role as majority player in

Graph One: Inflow to Provincial Treasury from Universities, Total: $3.2 Billion, 2001

Inflow to Provincial Treasury from Universities, Total: $3.2 Billion, 2001 Expenditures made directly by institutions, $771,400,000

Commecialization/ transfer of university research, $38,800,000

Taxable expenditures by out-of-province students, $13,000,000

Graduates' incremental contribution to charities, $283,000,000

OUR BRIGHT FUTURE

Graduates' contribution to the Ontario tax base, $2,101,500,000

31

FUNDING, TUITION & STUDENT FINANCIAL ASSISTANCE Graph Two: Percentage of Operating Funding for Universities by Income Source, Ontario vs. OECD Countries, 2000

university finance.

Recommendation One: The provincial government must provide enough funding to cover no less than 70 per cent of the cost of university education in Ontario by 2011. 52 While the government responsibility to fund is clear, the question of what exactly constitutes an appropriate funding level is altogether hazier. Leaving aside the question of dollars and cents for the moment, it is important to determine what proportion of the total cost of university education the provincial government should pay. While there are no firm standards by which to evaluate government contributions, comparing Ontario’s funding levels to other jurisdictions yields important insights.

Internationally, Ontario lags well behind the Organization for Economic Co-Operation and Development(OECD) average for public funding of universities. This can clearly be seen in graph two.53 Clearly, there is a huge amount of variation among nations’ public support of universities. While Ontario’s public investment in universities does compare favourably to some international jurisdictions, it is well behind the overall OECD average for public contribution to university operating rev32

enue. There is also a clear university funding gap between Ontario and the rest of Canada, as seen in graph three.54 According to this data, Ontario also trails the rest of Canada in its proportion of public funding to universities.

Based on both an international and national comparison, Ontario is providing between 14 and 23 per cent less money than peer jurisdictions to its post-secondary education sector.

To redress this balance, the provincial government must commit to funding 70 per cent of the operating cost of the university sector. In the 2003/04 school year, the provincial government provided $2,215,681,159 to universities, accounting for 55.9 per cent of university operating revenue.55, 56 To meet the 70 per cent funding target, the provincial government will need to spend approximately $1.1 billion a year in additional funding at current tuition levels. Not only will this move help to bring Ontario in line with peer jurisdictions, but it will also stimulate the total regulation of tuition fees in Ontario. These positive results will be discussed in more detail later in this paper.

The provincial government also has the option to roll back tuition and maintain its current funding level in order to meet its 70 per cent funding commitment. However, since this action would result in a severe budget shortage for Ontario universities, OUSA does not recommend this option. Rather, OUR BRIGHT FUTURE

DISCUSSION PAPER the provincial government should instead freeze tuition at current levels, allow for inflationary increases in fees and increase its overall investment in the university sector.

Recommendation Two: The 70 per cent funding commitment must be guaranteed by an act of legislation.

An enduring problem in the university sector, particularly where funding is concerned, is the question of political will. A government can set bold direction and funding commitments for its higher education institutions only to have their actions undone by succeeding governments with different priorities or opposing ideological perspectives. To eliminate the political vagaries currently plaguing the university system, the 70 per cent minimum funding requirement must be entrenched in law. A funding contribution guaranteed by an act of legislation is much more difficult to circumvent than a simple policy provision or budgetary precedent. Protected funding commitments will provide security and predictability for Ontario ’s students, helping to provide a high-quality education while ensuring they will never have to pay a disproportionately high amount for their education.

Recommendation Three: The provincial government must implement a 50 per cent increase in university operating funding by 2011.

Currently, Ontario not only lags behind peer jurisdictions in the proportion of public funding provided, it is also severely outperformed in terms of the actual amount of

operating grants provided to universities. This disparity is immediately obvious in a comparison with other provinces, as seen in graph four.57 In fact, Ontario is dead last in terms of per-student university funding, $2,261 under the national average and $3,351 under the national leader, Newfoundland.58 Increasingly, Ontario also measures its success on an international level, particularly against peer jurisdictions in the United States. A sample of per-student funding figures in American public universities further demonstrates the province ’s dismal funding level, as seen in graph five.

In order to remain competitive, Ontario must raise its per-student funding levels to match those of its peer jurisdictions. A 50 per cent increase would generate a $9,024 per student operating grant, up from $6,018.59 Based on 2003/ 04 funding levels, this funding would require the provincial government to invest an additional $1.1 billion by 2011, or approximately $180 million in additional operating grants per year. This amount would place Ontario third in Canada, and comfortably above the national average. The province would still be well under the average American public school contribution, but this additional investment would at least provide some parity in the competition for the best and brightest undergraduate and graduate students, allowing Ontario to retain and develop more of its intellectual capacity. Moreover, increased investment would increase returns to the provincial treasury. With a 58 per cent annual return, an additional $1.1 billion investment would generate $1.738 billion in additional

Graph Three: Per Cent University Operating Income by Source of Income for all Canadian Provinces, 2000

Per Cent University Operating Income By Source of Income for all Canadian Provinces, 2000 100 78.6

69.5

72.4

71.6

70

69.1

67.6

66.8

30.5 21.4

27.6

27.8

28.4

30

30

31

33.2

40

32.4

50

42.7

58

60

57.2

70

42.1

PERCENTAGE

80

72.2

90

20

OUR BRIGHT FUTURE

Canada (other than Ontario)

Quebec

Newfoundland

Manitoba

Alberta

PEI

JURISDICTION

British Columbia

Private Sources

Saskatchewan

Public Sources

New Brunswick

Ontario

0

Nova Scotia

10

33

FUNDING, TUITION & STUDENT FINANCIAL ASSISTANCE Graph Four: Provincial University Operating Grants per FTE Enrolment, 2001/02

$7,249

7,500

$7,493

8,000

$7,821

$8,266

$8,279

8,500

$8,530

9,000

$8,704

9,500

$9,166

6,500 6,000

$6,018

7,000 $6,146

FUNDING PER STUDENT (CDN $)

10,000

9569

Provincial University Operating Grants Per FTE Enrolment, 2001-2002

5,500 Ontario

Nova Scotia

New Brunswick

Alberta

PEI

Saskatchewan

9 Province Average

BC

Quebec

Manitoba

Nfld

PROVINCE

tax revenue.

This funding increase would generate a variety of other positive results. First, it would redress the current imbalance between public and private funding, reducing the proportional student contribution to the desired 30 per cent maximum. Second, increased funding would help to close the productivity gap between Ontario and more competitive jurisdictions in the United States. Finally, and perhaps most importantly, an additional $1.1 billion in funding would help students by controlling their costs and ensuring a high-quality education.

If Ontario is genuinely interested in improving the quality and accessibility of universities, and increasing its overall economic competitiveness, it must get serious about its funding levels. An additional $1.1 billion dollars may be a difficult pill to swallow, but it is absolutely essential to the future of the system.

Recommendation Four: The provincial government must establish a small profit levy on businesses in sectors which rely on post-secondary graduates.

Concomitant with the principle that derived benefits equal responsibility in the university sector, businesses in the province also have a role to play in the financing of higher education in Ontario. An additional levy should be established on the profits of businesses in sectors which typically benefit from the university system. Such enterprises would include, but not necessarily be limited to, finance, law, information technology and engineering.

This is not a novel idea. Such a tax was also proposed 34

in the 1985 Wran Commission Report, which led to the formation of the HECS system in Australia.60 The tax would not be large —OUSA recommends a rate of one-to-two per cent. It would also only be applied to a business ’ actual profits, not total revenue. The implementation of such a levy would affirm the principle of shared responsibility for the university system, and help the provincial government meet its funding requirements.

Principle Six: The overall amount of funding must be determined and distributed to universities using a student-centred formula.

In order to ensure an adequate funding amount and an equitable distribution of operating grants to individual universities, the funding formula must be predominantly studentbased. In other words, the formula must be responsive to the actual per-student cost of delivery of various programs, the program choices of students and the total number of students in the system. This will ensure that universities always have enough funding to accommodate students and their academic choices.

Currently, operating grants are calculated through the Basic Income Unit (BIU) mechanism. Introduced in 1967, the BIU framework was created as a response to institutional demands for an objective mechanism to distribute funding.

Under this system, the BIU is a basic per-student funding amount determined by the government. Different academic programs are worth different amounts of BIUs, as seen in appendix one.61 These BIU values are then multiplied against the fullOUR BRIGHT FUTURE

DISCUSSION PAPER time enrolment counts per program to obtain an institution ’s operating grant.

The BIU is an attractive mechanism, as it is, in theory, responsive to both the number of students in the system and their individual program choices. However, there are a number of deficiencies with the current BIU mechanism which weaken its overall effectiveness in generating an adequate operating grant. To address these problems, OUSA recommends the following: Recommendation Five: The operating grant formula must use a student-based multiplier mechanism.

When it was first introduced, the basic income unit was, essentially, a multiplier mechanism. The provincial government determined the worth of the BIU for a particular year, and calculated the operating grant accordingly. Unfortunately, this characteristic was undermined almost immediately. By 1972, “a change in policy occurred, whereby the government determined the total available grant dollars, rather than the BIU value for the year. ”62 As a result of this shift, the BIU became: Purely a mechanism for determining the grants between institutions, rather than the determining factor for the total amount of operating support provided. The BIU was thereafter merely an artifact, determined by dividing the total available dollars by the total number of funding units in the system.63 By changing the BIU from a multiplier into a divider, its efficacy as a student-centred funding mechanism was se-

verely compromised. The practical upshot of this change was to make the decline in per-student funding more difficult to track, and to facilitate the progressive removal of real dollars from the university system. Adhering to a student-centric multiplier mechanism compels a government to fund according to the actual financial needs of the system. Without this requirement, operating funding has suffered a steady decline in Ontario, falling 0.7 per cent since 1990, despite a 32 per cent enrolment increase.64 ,65 OUSA firmly believes that any new funding arrangement for Ontario ’s universities must be built around a student-centric multiplier mechanism to calculate the amount and distribution of operating grants. Further, this ‘new BIU ’ should be set at a value commensurate with the appropriate funding levels described in Recommendation Three. If properly implemented, the multiplier mechanism will help to ensure universities have enough funding to deliver a high quality education to all enrolled students, regardless of their program choices.

Recommendation Six: The provincial government must fully fund all currently unfunded students in the university system.

An additional difficulty with the current funding formula is its tendency to create a phenomenon known as ‘unfunded BIUs ’. In other words, universities have more students than they are funded to accommodate. This is primarily due to the ‘corridor system ’ employed by the Ministry of Training, Colleges and Universities, whereby institutions and the province agree to yearly enrolment targets. A university is allowed to vary its enrolment three per cent above or below

Graph Five: Operating Grants per FTE Enrolment, Public Universities, Ontario and Selected U.S. States, 1999/00

14,000

$13,932

Operating Grants per FTE Enrolment, Public Universities, Ontario and Selected American States, 1999-00

FUNDING PER FTE ENROLMENT (CDN$)

13,500 13,000 12,500 12,000

$12,028 $11,572

11,500 $10,798

11,000

$10,650

10,500 10,000 9,500

$9,133

9,000

$8,513

8,500 8,000

$7,542

7,500

$6,938

7,000 6,500

$6,018

6,000 5,500 North California Carolina

Florida

Michigan All Peers

Great Lakes

New York

New Jersey

Texas

Ontario

STATE/PROVINCE

OUR BRIGHT FUTURE

35

FUNDING, TUITION & STUDENT FINANCIAL ASSISTANCE the target. If it goes below this corridor, basic operating grants are reduced. If the institution exceeds its enrolment limit, it receives no additional funding. It is this last scenario that is primarily responsible for the creation of unfunded students.

With no government funding to cover the costs of education for students outside the enrolment corridor, the operating budgets of institutions already coping with pervasive underfunding are strained even further.

Enrolment projection is not by any stretch of the imagination an exact science. It is immensely difficult to predict how many students will accept admission offers, and institutions consistently get it wrong. This inherent problem was further exacerbated by an unprecedented 31 per cent spike in enrolment due to the double cohort.66 Across the university system, the total amount of unfunded student costs was estimated to be between $60 and $70 million in 2001.67 In 2003/ 04, there were 20,422 students ineligible for government operating grants, approximately seven per cent of the total undergraduate enrolment in the province.68 While most universities have at least some unfunded BIUs on campus, some have been hit particularly hard. Queen ’s University had some 2,296 unfunded students in 2003, 13 per cent of their total enrolment; 16 per cent of all BIUs were unfunded at Wilfrid Laurier University, leading to $7 million in lost revenue and a whopping 26 per cent of Nipissing ’s student body did not receive funding.69 Clearly, unfunded BIUs pose a serious problem in Ontario, and must be immediately addressed by the provincial government.

It is OUSA ’s opinion that unrealistic enrolment targets and institutional errors should not compromise the quality of education at Ontario universities. Unfunded students strain already overloaded university budgets, and prevent universities from creating smaller classes, improving classrooms, enhancing learning resources or addressing pressing infrastructure needs. Therefore, the provincial government must immediately commit to funding all currently unfunded students in the university system.

higher level of basic grants. ”70 In fact, this clause provides all the flexibility needed to dramatically reduce unfunded students within the corridor system. Unfortunately, the Ministry has proven resistant to frequent re-negotiations of enrolment targets, a stance partially to blame for the unfunded student problem.

It is OUSA ’s opinion that the provincial government must commit to yearly evaluations of institutional enrolment targets, with the goal of making the system more responsive to enrolment fluctuations. In addition, the Ministry of Training, Colleges and Universities must allow for emergency renegotiation of enrolment targets when institutions make errors or are subject to unanticipated enrolment demand. These two measures will go a long way to ensuring every student in the university system is funded by the government.

Principle Seven: The federal government of Canada has a responsibility to help fund Ontario ’s university system.

Just as students and the citizens of Ontario are responsible for the university system on the basis of the benefits they derive, the federal government likewise has a role to play in financing the system. From increased tax revenue to the economic benefits of university level research and development to increased overall prosperity, the citizens of Canada have much to gain from well-funded, broadly accessible provincial university systems. As such, the federal government must contribute towards the overall funding package provided to institutions.

Currently, the federal government of Canada does provide dedicated money to Ontario universities in the form of research funding and grants —$750 million in 2002/03.71 Article 91 and 92 of the Canadian Constitution limits the ability of the national government to directly fund institutions. In theory, the Canada Social Transfer (CST) provides money that could be used to supplement university operating grants.

However, there was no requirement under the Canada Health and Social Transfer (CHST) to spend any of the funding on Recommendation Seven: The provincial government higher education, nor do any such regulations exist under the must implement a more flexible system for determin- new Canada Social Transfer and Canada Health Transfer.72 ing institutional enrolment targets and corridors.

Provincial governments saddled with competing, and While the corridor system currently produces some often more politically saleable, spending priorities consistently highly negative results within the university sector, it is impor- spend the lion ’s share of CHST funds on healthcare and Ktant for the Ministry of Training, Colleges and Universities to 12 education. As a result, “very little federal re-investment retain control over enrolment levels to prevent sudden and occurred for Canadian post-secondary education through the unsustainable spikes in enrolment at individual institutions. To CHST. ”73 maintain this important control and help address the unfunded Consequently, the federal funding of Ontario lags well student issue, the corridor system must be made more flex- behind peer jurisdictions, as seen in graph six.74 ible. Namely, institutions should be able to re-negotiate their It should be noted the funding level shown above reenrolment targets easily and at regular intervals. flects federal research grants. Very little of the $2,207 actually In the Ontario Operating Funds Distribution Manual, goes towards base operating funding. Even with direct rethere is already a provision for re-negotiation of enrolment search funding, average federal per-student investment is over targets whenever needed. As the manual states, “with the agree- twice as high in the United States as it is in Canada. A renewed ment of the ministry, and if it approaches the institution be- national investment in universities would go far to overcome fore going above its ceiling, the institution may negotiate the provincial austerity by injecting needed funds into the higher establishment of a new corridor above its current level at a education sector.

36

OUR BRIGHT FUTURE

DISCUSSION PAPER Recommendation Eight: The federal government must institute a dedicated higher education transfer to the provinces.

In its September 2004 pre-budget submission, the Canadian Alliance of Student Associations (CASA) advocates for the creation of a dedicated Canadian Education Transfer (CET) from the federal government to the provinces.75 The new CET would have the following characteristics:76 1. A requirement that all money in the CET be applied to post-secondary education; 2. An initial funding level of $3.99 billion in annual cash transfers, increased annually according to annual inflation and demographic growth; and 3. An agreement with the provinces and territories stipulating they will not decrease their own post-secondary education spending when additional federal funding is provided.

OUSA strongly supports the CASA proposal for a dedicated post-secondary transfer, and believes such a program must be immediately implemented by the federal government. The CET would increase overall funding in Ontario ’s universities, improve quality and help guarantee equitable access for all students.

PILLAR TWO: STUDENT TUITION FEES Paying a Fair Share Tuition is a difficult concept to reconcile within a progressive view of higher education. On the one hand, imposing a user fee on higher education creates an obstacle to those who are unable —or unwilling —to pay. Conversely, a university system funded completely by taxpayers is both politically and practically impossible in the current Ontario context. At current levels of taxation, approximately 11.5 million Ontario residents provide $2.4 billion in operating funding to universities —about $240 for every man, woman and child in Ontario.77 In the face of spending priorities like health care, it is unlikely that the provincial government could eliminate or reduce tuition fees without a corresponding tax increase. Total public support of the university system would require a per-person share of approximately $540 to account for the lost fee revenue. Even within a progressive tax structure, this would represent a serious tax increase for all Ontarians. Given the persuasive ‘equity as fairness ’ argument outlined earlier in this paper, it seems likely such a measure would fail to gain widespread political support in the province. Moreover, 33 per cent of provincial revenue derives from sales taxes, which are regressive in the sense that they collect money from all citizens, regardless of income.

The answer, then, is to establish a progressive costsharing regime with reasonable and affordable student fees and effective financial aid to guarantee access for all qualified individuals.

Graph Six: Federal Government Grants and Contracts per FTE Enrolment, Ontario and Selected U.S. States, 2002

$6,362

7,000

$6,419 California

Michigan

5,000

$4,157

6,000

$4,428

$2,207

3,000

$2,394

4,000

$2,662

2,000

$965

1,000

$211

CDN DOLLARS PER FTE ENROLMENT

8,000

$7,406

Federal Government Grants and Contracts Per FTE Enrolment, Ontario and Selected American States, 2002

0 North Carolina

All Peers

Great Lakes

Florida

New York

Ontario

Texas

New Jersey

JURISDICTION

OUR BRIGHT FUTURE

37

FUNDING, TUITION & STUDENT FINANCIAL ASSISTANCE Principle Eight: All willing and qualified students in Ontario must be guaranteed equitable access to university.

Given the substantial social and economic benefits of higher education, it is unacceptable that any qualified student be prevented from attending for financial reasons. A commitment to this principle is particularly important in a system of cost-sharing, where students are responsible for bearing a portion of the cost of their education.

OUSA believes the best way to ensure equitable university access in Ontario is through the careful control of student costs and the development of a comprehensive student financial aid system. In other words, Ontario needs to implement a program of responsible cost-sharing.

Recommendation Nine: All tuition in Ontario must be regulated.

Between at least the late-sixties and the mid-nineties, the provincial government enforced a kind of de facto regulation over all tuition fees at Ontario ’s universities.78 This did not necessarily mean that they set tuition fee levels for all programs at all institutions. Rather, the government set the maximum rate of increase and each institution adjusted their fees to that amount as they saw fit. For example, between 199596 and 1997-98, all programs were able to increase by 10 per cent per year.79 On December 15th, 1997, it was announced that the government would no longer regulate tuition fees, aside from undergraduate arts and science programs.80 It should be noted that there were some loose requirements imposed by the provincial government over newly deregulated programs. For example, institutions that wished to deregulate engineering programs needed to demonstrate that they were meeting broad employment needs and increasing spaces with the additional funds.81 Following the deregulation announcement, some fees skyrocketed while regulated fees followed the same yearly 10 per cent increase path as they had since 1995-96. Regulations were further loosened on tuition-controlled programs in 199899 and 1999-2000, and undergraduate arts and sciences programs were allowed to increase by up to 10 per cent per year.82 Also included with the announcement of deregulation was the requirement for a proportion of the increase to be set-aside for financial aid. Institutions were required to setaside 30 per cent of any increase to institutional student aid programs, such as work-study or bursaries.83 This system remained in place until the official tuition freeze announcement in the 2003 Throne Speech, when all programs, aside from international student fees, were essentially regulated so that they could not increase over a two-year period.84 From OUSA ’s perspective, there are five compelling reasons why government must regain and retain control over all tuition fees in Ontario: 1. Control student cost. Tuition is the single largest expense faced by students, accounting for 24 per cent of a 38

student ’s total cost of schooling.85 Fluctuations in fees therefore have the potential to seriously impact the financial sustainability of attending higher education. Unfortunately, it is impossible to deny that student costs have spiraled out of control over the past decade. Average tuition in Ontario has ballooned by 139 per cent, and debt levels have followed suit. The average Ontario graduate who received OSAP support now owes $22,700 —the highest debt level in the country.86 ,87 As disturbing as these figures are, things are much worse in currently deregulated programs. Tuition has more than tripled, rising 261 per cent since 1993. While there is no specific debt data for graduates in these programs, it is reasonable to assume they owe considerably more than peers who graduated from regulated programs.

There are two essential problems with rising tuition and debt. First, higher up-front costs may serve as an obstacle to individuals from lower-income backgrounds. These individuals may lack the up-front resources necessary to attend university, and may not wish to incur a significant debt load to access higher education. As seen earlier in this paper, the lower participation in higher education by socio-economically disadvantaged groups remains a persistent problem in Ontario. The increase in fees has had notable impacts on the accessibility of deregulated programs. A study conducted by the Social Programs Evaluation Group at Queen ’s University looked at accessibility at Ontario ’s six law schools and revealed that tuition “liberalization ” had created a five per cent increase in enrolment for students from families in the top 40 per cent of the income distribution, and a participation decline for individuals from the middle 20 per cent.88 Decreases in enrolment were also seen for students from French-speaking backgrounds and from Northern Ontario.89 Second, high debt poses a serious financial burden for graduates. It limits career and life choices, and can lead to severe financial consequences if a graduate defaults on their student loans. Worst of all, student debt unfairly penalizes those most unable to pay for a university education —students from lower socio-economic backgrounds. Forced to borrow high amounts of money, these students will end up paying much more for their education than individuals with relatively low debt. A $28,000 loan paid back over ten years will cost a student $42,563 in total payments, with monthly payments of over $350.90 Although paying the same loan back in five years reduces the total cost to $34,874, the monthly payments for such a plan are a punishing $581 a month.

By using tuition regulation as a policy means to control student cost, the provincial government puts itself in a position to both manage financial barriers to higher education and reduce the overall indebtedness of its university graduates. In short, the provincial government will be in a better position to ensure the equitable access of its university system.

2. Prevent unfair distortions in fee levels. There are strong indications that under-funded institutions in Ontario are using deregulated fees to subsidize the operating budget of the entire university, not just the program in which the OUR BRIGHT FUTURE

DISCUSSION PAPER deregulation has occurred. Consider the case of law tuition.

Under the BIU formula, an arts student is worth one unit, while law students are worth 1.5. Based on this data, it is reasonable to assume it costs roughly 50 per cent more per student to educate a lawyer than it does a bachelor of arts.

However, average arts tuition in Ontario is $4,161, while average law tuition is 151 per cent higher at $10,483. It is difficult to avoid the conclusion that law tuition, like the tuition in many deregulated programs, is going to shore up the operating budgets of other departments.

OUSA believes the practice of extreme tuition differentiation for the purpose of leveraging additional revenue beyond program costs in unfair to students. Regulation, and a new tuition fee structure (see Recommendation Thirteen), would eliminate this inequity.

3. Ensure the predictability of student cost. In order to plan their finances effectively, it is important for students to know how much they will pay in tuition over the course of their program of study. Deregulated fees can rise sharply from year to year, making it difficult for a student to create an effective strategy. Moreover, once a student is instudy, a sharp increase in tuition could well push university beyond his or her financial reach, forcing their withdrawal from the program.

Total fee regulation is necessary in ensuring stable fees around which students and their families can plan. Allowing heavy fluctuation in tuition from year to year is irresponsible and harmful to the affordability of the system.

4. Preserve funding commitments. Tuition regulation is an important part of fulfilling the funding requirements and maintaining the student contribution cap described elsewhere in this paper. By imposing a 30 per cent maximum student contribution, the provincial government will be obligated to regulate tuition to ensure its financial commitments are maintained as specified by legislative act.

5. Ensure the stability and efficacy of the financial aid program. From a financial aid perspective, there are two very compelling reasons to regulate tuition. First, by controlling costs, students will borrow less money and graduate debt will be reduced. Second, by regulating tuition fees, governments make an investment in the long-term sustainability of their financial aid systems. In order to remain studentfriendly, financial aid programs must make provision for accompanying grant assistance, interest rate control, interest relief, debt reduction and ultimate debt forgiveness. These programs cost money. As fees rise, more students will need to borrow more money from the aid program. As a result, the cost of all the above debt control measures begins to increase. In relatively short order, deregulated fees will drive the expense beyond the government ’s ability to pay. The programs must then be rolled back or eliminated altogether, with correspondingly negative graduate impacts. Debt, already enlarged by inflated fees, will constitute a huge burden in the absence of any control and reduction programs.

Moreover, if fees are deregulated, the cost of education may end up outstripping the ability of the aid program OUR BRIGHT FUTURE

to effectively cover student costs. Indeed, the Ontario example demonstrates the grim possibilities of this scenario. Since 1994, average undergraduate tuition has increased by 139 per cent.

Tuition in deregulated programs has literally exploded, rising 261 per cent from $2,076 in 1993 to an average of over $7,500 in 2003.91 ,92 Students in programs like law, medicine and dentistry pay even more — $10,483, $14,355 and $17,087 respectively.93 Conversely, the maximum OSAP package — $9,350 —has not increased since the same year. In fact, due to inflation, the maximum aid is actually worth less now then the early 1990 ’s. Clearly, deregulation in Ontario has severely undermined the effectiveness of the OSAP system in meeting student needs.

The difficulty in maintaining a sound financial aid system in the context of deregulated fees is evocatively demonstrated by the American example. At private institutions with deregulated fees, student loan default rates are a staggering 45.5 per cent, as compared to 29.6 per cent for public institutions with much lower fees.94 The time has come to end the debate over tuition deregulation. To enhance the accessibility and affordability of the university system, the provincial government must aggressively re-regulate tuition in currently deregulated programs and adjust the fees in compliance with the 30 per cent maximum student contribution cap. Further, all tuition in regulated programs must remain under government control. These provisions are absolutely essential to creating and maintaining a regime of responsible cost-sharing.

Principle Nine: Students in Ontario have a responsibility to contribute a reasonable proportion of the cost of their education.

It is difficult to deny individuals receive financial and social benefits from their education. In 2001, the median household income in families in which the primary earner had a university degree was 51 per cent greater than households where the primary earner had a high school diploma.95 A recent TD Economics Paper further underlined the economic benefit, suggesting that university graduates receive a 12 to 20 per cent return on their investment in university education.96 In addition, individuals with a university degree have an unemployment rate half of that experienced by those with only high school qualifications.97 A 1999 Statistics Canada report showed that, “on average, someone with a bachelor ’s degree had a net worth 70 per cent higher than someone with only a high school diploma. ”98 Studies also suggest that university graduates receive a variety of non-financial benefits as a result of their education.99 Thus, in accordance with the principle of shared responsibility, it is reasonable to expect students to contribute to their education. However, the ‘equity as fairness ’ argument for student contribution must be balanced against a careful consideration of the need for equitable access to university education. While it is acceptable for students to contribute to the cost of their education, it is wholly unacceptable for this contribution to become a barrier to university attendance.

39

FUNDING, TUITION & STUDENT FINANCIAL ASSISTANCE Therefore, OUSA recommends the following provisions to facilitate student support of the system while maintaining an open door for all willing and qualified individuals in the province: Recommendation Ten: Students in Ontario must never pay for more than 30 per cent of the cost of university education by 2011.

Recommendation One of this paper calls for a guaranteed government funding level of no less than 70 per cent.

As a logical corollary to this proposition, students must never be asked to contribute more than 30 per cent of the operating cost of the university system. This puts Ontario in-line with both the OECD average (21.4 per cent of operating cost) and provincial average (30.6 per cent of operating cost) for student contributions. Imposing this control over tuition would also necessitate government regulation of tuition fees in Ontario, making this provision an important guarantor of Recommendation Nine.

It should be strongly noted that the 30 per cent cap is only a maximum. Fees can be set at any level, so long as they do not push the proportional contribution past the 30 per cent mark.

Recommendation Eleven: The 30 per cent student contribution cap must be protected by an act of legislation.

To ensure the 30 per cent maximum contribution cap continues to protect students regardless of the political party in power, it must be guaranteed by an act of legislation. This will make it much harder for incoming governments to compel students to pay for a disproportionately large portion of their education.

Recommendation Twelve: Tuition fees should be separated into variable bands without distorted price differentials to reflect cost of program delivery.

While the total regulation of all tuition in Ontario is a vitally important goal, the tuition structure must also allow for additional investment in particularly expensive or resourceintensive programs.

It is difficult to deny that different programs cost different amounts of money to operate. An engineering program, for example, has resource requirements far beyond the needs of a history department. This differential cost of delivery is already recognized by the provincial government through the weighting of BIUs. While an arts student is worth a single BIU, an engineering student is worth two, a medical student is worth five, and an individual pursuing a PhD is worth six basic income units.100 Since these programs cost more to deliver, it is reasonable to expect students to contribute more in tuition fees in accordance with the 30 per cent maximum contribution requirement.

Interestingly, graduates of high-cost programs tend to reap greater average returns to their tuition investment. Since more resources have been invested in their education, their degrees tend to be worth more in economic terms. As TD 40

Economics notes, “engineering, natural sciences, health science and commerce provide above-average returns, ” to graduates in terms of earnings.101 Higher up-front investment is thus more palatable in light of greater long-term financial benefits.

To recognize both the vital need to regulate tuition fees and the differential cost of program delivery, OUSA recommends restructuring tuition in Ontario into differential bands.

In other words, fees in all programs will be regulated by the government, but certain programs will be allowed to charge more.

A similar system is currently employed in the Australian university system. Their differential fee structure can be found in appendix two.102 While the actual mechanics of a differential fee structure in Ontario would likely differ from the Australian model, this is a useful conceptual template to consider. In Ontario, the different fee bands could roughly break down into the following categories: general arts and science; applied science, fine/performing arts and commerce; professional programs (law, medicine, nursing, dentistry and MBAs); and graduate programs.

A banded fee structure would allow the provincial government to leverage additional student support of expensive or resource-intensive programs while affording students the protection of predictable, regulated fees that will never exceed the 30 per cent contribution cap. Moreover, while there would still be differential fees in Ontario, the banding of tuition would see a reduction in most currently deregulated fees.

Recommendation Thirteen: The provincial government must reform the student financial aid system to ensure university access for every willing and qualified student.

It is OUSA ’s firm belief the various financial elements of the university system —funding, tuition and student financial aid —cannot be meaningfully separated. Therefore, any reform to the manner in which students and the government fund the higher education system must be accompanied by corresponding changes to the financial assistance system in Ontario. To be truly accessible to all qualified students, the university system needs an efficient, effective and progressive financial aid program. The structure of such a program will be the focus of the final section of this paper.

PILLAR THREE: STUDENT FINANCIAL AID Real Reform for Real Access.

The final pillar of university finance is also the most important in building a system of responsible cost-sharing.

Inasmuch as fair student contribution is a central component of institutional funding, the system must make financial resources available to ensure no student is prevented from attending university due to cost. Without an effective financial aid program, cost-sharing is an entirely untenable proposition for Ontario ’s students, graduates and their families.

Throughout the 1990 ’s and into the new millennium, OUR BRIGHT FUTURE

DISCUSSION PAPER Ontario has struggled with its student financial aid system. A succession of provincial governments has neglected the Ontario Student Assistance Program, leaving it to wallow with inaccurate cost assessments, unreasonable needs-testing provisions, insufficient aid packages and ineffective measures to control and reduce student debt. If the university system is to really work for students, financial aid in Ontario must be thoroughly and effectively reformed.

This is no easy task. As Bruce Johnstone of the International Comparative Higher Education Finance and Accessibility Project notes, “student loan programs are among the most complex, controversial, frequently misunderstood and potentially important elements in the financing of higher education. ”103 Nevertheless, the Postsecondary Review, provincial government and university stakeholders must approach the problem of financial aid with innovative new solutions and a broad commitment to investing in a system which is a facilitator of university access, not a barrier.

OUSA has long been focused on re-making financial aid with a strong student focus. This section represents the organization ’s vision of improving both the up-front and backend functionality of the system.

a short history of financial aid in Ontario

Before proceeding with an analysis of the financial aid system, it is important to understand how the current system came into existence. Prior to 1993, provincial financial aid was provided to students through the Ontario Study Grant Plan (OSGP). This program calculated assistance on a needs basis, subtracting a student ’s total financial resources from their total anticipated cost to arrive at the amount of support.104 The program awarded a maximum grant of $1,800 to $3,550, depending on a student ’s marital status, level of spousal support and number of dependents.105 A qualifying single student would receive an award of $2,550.106 This grant operated in conjunction with the federal Canada Student Loan Program (CSLP). Begun in 1964, the CSLP provided student assistance through financial institutions, with the federal government guaranteeing each loan and reimbursing banks for all defaults. In 1995, the federal government entered into a ‘risk-sharing ’ arrangement with financial organizations, whereby banks accepted a greater share of risk for defaulted loans in exchange for fixed government payments. In 2000, this risk-sharing was eliminated, and the federal government assumed total responsibility for the administration of the CSLP. Due to a variety of political and economic factors, the NDP government of Bob Rae decided to move away from the grant model in 1993. Politically unwilling and practically unable to invest additional public funds into chronically cashstrapped institutions, Rae ’s government elected to allow tuition fees to rise to leverage additional financial resources within the university sector. Rising fees would dramatically increase the cost of maintaining an effective level of grant support, so the OSGP was eliminated in favour of a loan-based system of support —the Ontario Student Assistance Program OUR BRIGHT FUTURE

(OSAP).

The OSAP loan is an example of a conventional student loan program. Such programs typically carry the following contractual elements:107 1. A rate of interest expressed as an annual percentage of the amount borrowed or still to be repaid; 2. A repayment period, or the amount of time a borrower has to repay their loan; and 3. A repayment mode, such as whether the payments are to be equal monthly installments, installments that start small and increase over time or some other arrangement OSAP is also a harmonized loan program, composed of funding from the CSLP and the provincial equivalent, the Ontario Student Loan Program (OSLP). The program is administered through individual financial institutions, with the provincial government assuming responsibility for defaulted loan payments. Currently, the CSLP accounts for 60 per cent of the funding awarded to students, and OSLP fulfills the remaining 40 per cent.108 The OSAP loan is needs-tested, with the total award determined by subtracting a student ’s total financial resources (including a required parental contribution) from their total estimated cost.

There are also a variety of debt remission or management provisions under OSAP. The most significant of these is the Ontario Student Opportunity Grant (OSOG), which remits all yearly student loan debt over $7,000. This program, financed entirely by the provincial government, helps ensure that no student who qualifies for the program will owe more than $28,000 to the government by the end of their studies.

Both the federal and provincial government fund an interest relief program wherein a student can apply for a six-month period of zero monthly re-payment with no interest. A student can receive a maximum of 30 months ’ interest relief.

Both the federal and provincial government also offer postgraduation debt reduction programs, where a student who has exhausted interest relief and who has a high debt-to-income ratio can have some, or all, of their outstanding debt forgiven.

The OSAP program currently costs the provincial government $356 million to operate.109 The greatest expenses include the debt remission provisions under OSOG, and payments to financial institutions to compensate for defaulted loans.110 A breakdown of all OSAP expenditures can be seen in graph seven.111 Despite the relative cost and complexity of the program, OSAP has done a very poor job in meeting the needs of today ’s students. The maximum OSAP award for a standard two-term school year is $9,350. This amount has not increased since 1994, despite a 139 per cent increase in tuition over the same period.112 A gradual tightening of eligibility requirements has also put financial assistance out of reach for many students. In 1995, 212,189 students received OSAP support; in 2002, only 130,687 students received government 41

FUNDING, TUITION & STUDENT FINANCIAL ASSISTANCE Graph Seven: OSAP Expenditures, 2002/03 Fiscal Year ($ Millions)

OSAP Expenditures, 2002-2003 Fiscal Year ($Millions)

Other Loans and Bursaries, $90.10

Administration Costs, $16.00

Interest on Loans, $28.80

Defaulted Loans, $96.00

money.113 This 38 per cent decrease in students occurred despite a 19 per cent increase in enrollment over the same period.114 Ontario students also cope with the highest debt level in Canada, at $22,700.115 This data highlights three broad concerns OUSA holds with respect to the financial aid system: 1. Not enough students in need are able to access financial support; 2. Students in need are unable to access enough financial support to adequately fund their studies; and 3. The financial aid system saddles students with an unacceptably high level of debt and does not do enough to protect graduates.

Due largely to rising fees, restrictive needs-testing and static assistance limits, these problems have come to thoroughly undermine the efficacy of the financial assistance system over the past decade. To quote former premier Bob Rae, “student aid is badly broken. ”116 In order to facilitate a system of responsible cost-sharing, the Postsecondary Review, Ministry of Training, Colleges and Universities, provincial government, stakeholders and students must commit to building a financial aid system that works for Ontario ’s students.

the importance of financial aid

Regardless of the funding and tuition model used by a particular jurisdiction, students will still need to access additional financial resources to pay for their studies. Even in countries with no tuition fees, students must cope with the associated costs of going to school, including rent, food and trans42

Loan Forgiveness (OSOG and Other Programs), $125.10

portation. This basic truth is exemplified by Sweden, a country with a long-standing tradition of zero tuition that operates a large income-contingent loan program. From books to rent to food to transportation, there are myriad costs associated with accessing higher education. In Canada, tuition accounts for between 25 and 33 per cent of actual student costs. The International Higher Comparative Education Finance and Accessibility Project estimates total Canadian student cost at $20,590, while tuition in Ontario hovers under $5,000 —less than one quarter of the total expense.117 Clearly, even in an environment of low or zero tuition, there is a definite need for financial aid which covers reasonable student costs without burdening graduates with excessive debt to ensure truly equitable access to higher education.

Thus, OUSA holds the following principle as essential to the development and operation of a progressive university finance system in Ontario:

Principle Ten: Every model of university education requires a high-quality, student-friendly financial aid program.

Due to the vital importance of student financial aid to equitable university access, the system of support must be administered as a social good with the needs and interests of students taken as paramount. In other words, the financial aid system must not be structured as a business, with questions of cost-recovery subordinated to an overarching concern for the financial sustainability of both students and graduates.

Above all, the system must not be administered for profit.

The provincial government, as stewards of the citizens of Ontario, is in the best position to ensure a system of student support administered as an investment in both students OUR BRIGHT FUTURE

DISCUSSION PAPER program.121 These numbers do not inspire much confidence in the financial sector. As Johnstone notes, “the borrowing and lending of money …depends so fundamentally on the Principle Eleven: The financial aid system is a public — certainty of repayment. Without this certainty, the lender will either not part with his claims at all, or will do so only at a and therefore government —responsibility.

The past decade has seen a dramatic increase in student very high price (i.e. very high interest rate) so that the premiborrowing from private sector sources to finance their edu- ums from those who do repay can cover the inevitable losses cation. This assistance typically takes the form of loans or from those who don ’t. ”122 In other words, high default rates personal lines of credit. Canada-wide, some 30 per cent of mean that banks will be unwilling to lend money to students students access private aid, owing an average of $7,500.118 It unless they are able to protect their investment with premium is reasonable to expect a similar, or indeed greater, propor- interest rates. To make matters worse, students typically do tion of Ontario students to access private aid, as tuition in the not have established credit, nor are they able to offer any substantial collateral. This makes students even greater finanprovince is the second-highest in Canada —$4,960.119 OUSA has identified private student assistance as a cial risks to a lending institution and drives interest rates even highly negative trend in student assistance. There are four major higher.

Since government-funded student aid is not aimed at problems with private support: 1. Administered for profit, not for public good: producing a profit, this problem is largely eliminated. DeFor a bank, student assistance is just another form of con- faults are absorbed as costs of the program, and student debt sumer loan distributed as a money-making instrument. As is not subsequently magnified as the result of punitive interest such, private lending institutions are focused on their own rates.

It is absolutely essential the provincial government combottom lines, not the personal well-being of the student borrower. As a result, these loans are not administered in a par- mit to developing a public financial aid system which does ticularly student-friendly manner. Government assistance is not compel students to access private forms of support. The more appropriately viewed as an investment in the develop- current OSAP model fails to achieve this goal by providing ment of the individual, and can thus be structured in accor- static and insufficient funding which is too difficult to access dance with the principle of maximizing university access while for many needy students.

Approximately 27 per cent of students with governminimizing the negative impacts of graduate debt.

2. Repayment in study: Under almost every publicly ment loans also hold some form of private debt, while 19 administered student aid program, such as OSAP, a student per cent of students without government assistance have bank makes no payment on their government loan until six months loans or lines of credit. In addition, those on government after graduation. There is no such provision with private loans. support have a higher level of private debt than their counterThe average student with a bank loan or line of credit pays parts who receive no public support —$9,200 and $6,300 re$108 a month, or $1,296 a year, to service their debt. 120 This spectively.123 This data points to two related conclusions. First, represents the addition of a considerable financial burden to since those who receive publicly-subsidized loans typically repstudents who are already struggling to finance their studies. resent the neediest students, the fact that over one-quarter of 3. No provision for debt reduction: Under most these individuals must also receive private support to cover public student aid systems, students are eligible for a variety their costs indicates that the current financial aid package ofof programs aimed at easing the burden of loan repayment fered by OSAP is sorely lacking. Conversely, this may also and reducing overall debt. For example, students who receive suggest that many students are not receiving enough support OSAP benefit from debt-remission offered through the due to overly-strict or unrealistic income or parental contriOntario Student Opportunity Grant, interest relief at both bution expectations within the OSAP system, reducing their the federal and provincial levels and an additional debt reduc- total funding provision. Second, the above numbers indicate tion program offered on the Canada Student Loan portion that one-fifth of students without government support have of their debt. Private loans do not offer any of these pro- a significant amount of unmet need and therefore must turn grams. Such provisions are essentially subsidies; a business to private sources of assistance. Clearly, some aspect of the concerned with the bottom line has no interest in reducing OSAP assessment process is disqualifying these students outtheir profit margins to protect graduates. Thus, it is far easier right, compelling them to access bank loans to fund their studfor a student with private loans to fall into default and suffer ies. Given the substantial disadvantages of these private loans the full range of penalties for failing to pay —damaged credit, and lines of credit, forcing students into such arrangements garnished salaries and even the seizure of personal property. through insufficient funding or exclusionary assessment poli4. Higher Interest: Students invariably end up paying cies is entirely unacceptable. higher interest rates under privately-administered aid programs.

To eliminate this problem, the public financial aid sysThe primary reason for this is the low certainty of repayment tem must provide an adequate amount of funding to all stufound in student lending. In 2003 alone, there were 17,800 dents in need. The parameters of a public system of student defaulted OSAP loans in Ontario, which cost the province support which discourages private borrowing will be laid out $96 million —nearly 27 per cent of all expenditures on the below. and the overall economic and social viability of the province.

For this reason, OUSA believes:

OUR BRIGHT FUTURE

43

FUNDING, TUITION & STUDENT FINANCIAL ASSISTANCE an open door: providing enough resources for all students in need Principle Twelve: To ensure equitable university access for all Ontarians, financial aid must be available to all students in need.

The up-front ability of a student financial aid system to provide funding to students in need is an essential determinant of the overall effectiveness of the system itself. Currently, the OSAP program is failing this crucial test. By disqualifying groups of students outright or by whittling away the amount of assistance provided to others through inaccurate needs-assessment policies, OSAP is not reaching enough students with an appropriate level of support.

It is entirely unacceptable that any qualified student be prevented from attending university due to a lack of up-front financial resources. Therefore, Recommendation Fourteen: The provincial government must remove unfair categorical ineligibilities from the financial aid system.

Under the OSAP system, Ontario students who attend accredited universities outside of Canada, part-time students, students in academic difficulty and students in financial difficulty are all prevented from accessing the financial aid system.

Since these students are often in the most acute financial need, it is unfair to deny them the resources available to other students. To address this problem, OUSA recommends financial aid be extended to the following individuals: 1. Students should be able to access Ontario Student Loans for the purpose of attending institutions outside of Canada, provided they are offering accredited programs. The opportunity to attend post-secondary programs outside of Canada provides benefits for both individual students and the entire province. It provides access to a huge variety of unique and innovative programs not available in Canada, and offers students the chance to engage in the diversity of experiences and perspectives of the global community. Students returning home after an international experience similarly enrich the social and economic framework of Ontario, helping the province to become a truly global society competitive in emerging international markets.

In addition, by allowing students to access education outside of the country, OSAP can help relieve the over-crowding on Ontario campuses and allow for increased investment in quality, not just capacity.

2. OSAP should be available to part-time students.

Students who decide to pursue their education on a part-time basis often do so because of certain life circumstances —the need to continue working, family demands and their available finances. By participating in a reduced course-load, these students in44

crease their ability to work and earn money. Thus, it is reasonable to conclude that many part-time students are meeting their financial needs outside of the OSAP system. However, it is important to recognize that many of these individuals are not adequately selffunded and need the support of OSAP. For example, part-time students who must care for dependent family members may not have any more opportunity for work than their full-time counterparts. Furthermore, the high number of part-time students who are currently receiving financial aid from private sources (36 per cent) indicates that there are significant levels of need in the part-time student community that are not being addressed by the OSAP system.

The provincial government has the same obligation of support to part-time students as it does to individuals pursuing their studies full-time. In light of the lower tuition and greater opportunity for work involved in part-time education, it makes sense to allocate these students smaller financial aid packages. They should not, however, be excluded from government aid entirely and forced to access loans from private sources. Additional government aid should be made available for part-time students with dependent family members.

3. The student loan system should cease withdrawing financial support from students who fail academically to complete a minimum 60 per cent course load. The current OSAP system is unable to properly investigate the reasons for academic failure and provide appropriate remedies. The removal of financial support from students failing to meet the 60 per cent standard is a financial penalty for an academic problem. In short, it is an inappropriate measure bluntly applied. Individual academic institutions already have effective, personalized and remedial procedures for placing students on academic probation, and, if necessary, forcing them to resign from their studies. It is not the role of the financial aid system to force students to quit their education by withdrawing needed financial support. Furthermore, student financial aid should be based exclusively on need, not performance. Universities are decidedly better equipped to evaluate and correct a student ’s academic output.

Additionally, there are a variety of personal reasons for a student withdrawing from classes. Illness, family tragedy and changing life circumstances are all realities for university students. The last thing a sick or mourning student needs is a financial aid system denying funding or demanding the return of disbursed money because he or she is no longer able to achieve the 60 per cent course load standard. OSAP must OUR BRIGHT FUTURE

DISCUSSION PAPER therefore undertake to evaluate each student under the 60 per cent minimum individually, or discontinue the use of this regulation entirely.

4. Students with a poor credit history must not be systematically excluded from obtaining student loans. In order to fulfill its responsibility to ensure access to university education, the provincial government cannot deny funding to a student because they, in the logic of private credit, constitute a bad risk.

Since financial aid is not a business and a loan is an investment in human capital rather than the bottom line, participation in post-secondary education should not be contingent on financial history. As always, need must be the central funding determinant. A student with poor credit is particularly in need of financial aid, since they are clearly in financial trouble and will be unable to access private loans due to their financial past.

In the most recent provincial budget, $20.9 million in additional funding was provided to the OSAP system.124 This money was aimed at improving access to student loans for more than 50,000 students through eligibility reforms, including the provision of financial assistance to refugees and other protected persons. OUSA sincerely hopes the provincial government will continue this broadening of the student aid system to ensure all students in need are able to access the program.

Recommendation Fifteen: The financial aid package must be composed of two separate loan programs — one to cover the cost of tuition and associated fees, and one to cover all reasonable cost of living expenses.

Providing adequate financial assistance to students is a complicated undertaking. In order to better cope with this reality, OUSA proposes that the loan program be divided into two separate entities.

The first program would be designed to cover the cost of a student ’s up-front tuition fees. There would be no needstesting on this loan; the money would be available to all students regardless of parental income or personal financial resources. In addition, participation in this program would not be mandatory. If a student were able to pay up-front, they would be permitted to do so. Likewise, if a student were able to make a partial tuition payment, their loan award would make up the difference. This loan would be paid directly to a student ’s institution of choice, simplifying the disbursement process and preventing misuse of funds by the recipient. It is vital that students paying up-front do not receive any form of a discounted rate.

The second program would aim to cover a student ’s cost of living expenses. This loan would be needs-tested, with the amount of money distributed based on an accurate assessment of student cost weighed against the personal income of the student and a reasonable level of parental contribuOUR BRIGHT FUTURE

tion.

Both of these programs would be enhanced by a threetiered system of grants for all eligible students and additional non-repayable assistance to social groups with low university participation rates. These grants are described in greater detail below.

Dividing the existing loan into two separate programs generates three highly attractive benefits for Ontario students: 1. Facilitates a more progressive system of needs-testing which does not unfairly deny students needed support; 2. Provides the provincial government greater control over the use of disbursed funds; and 3. Allows for greater efficiency and transparency in estimating student costs.

Recommendation Sixteen: There must be no needs-testing on the tuition loan.

Needs-testing has not been a particular success in Ontario over the past decade. In particular, the parental contribution requirements and student income caps have prevented many students from accessing adequate financial aid.

It is generally assumed by the OSAP system that parents will support their children to the full extent of their abilities. In other words, a large portion of the family ’s disposable income will be directed towards their child ’s university education. Although OUSA affirms the critical role parents play in financing education, expectations for parental support must be reasonable and negotiable. It is patently unfair for students to be penalized for their parents ’ inability or unwillingness to contribute financial support. The reality is many parents provide far less assistance than the system expects, denying many students adequate student aid. In fact, only 46 per cent of students expect to receive financial support from their parents.125 At present, the average parental contribution stands at around $1,496.126 OSAP expects that a family of four (two parents) with an income of $55,000 will contribute $1,712.

The average family income for students at Ontario universities is slightly over $60,000.127 Clearly then, a significant number of students are not receiving the mandated amount of money from their parents. Consequently, many students are assessed for smaller loans, or are sometimes disqualified from financial support outright, based on a parental support expectation that is not being met.

In addition, as a student ages the incidence of family support declines. Between the ages of 19 and 24, the number of students receiving parental support declined from 88 per cent to 66 per cent.128 Currently, this decline is not recognized by the OSAP funding allocations.

The chief problem with the OSAP student income provisions is the exemptions for money earned during the school year. Students are currently allowed to make $1,700 dollars under the OSL portion, and $600 under the CSL component of the OSAP package. After these amounts are exceeded, a 45

FUNDING, TUITION & STUDENT FINANCIAL ASSISTANCE student ’s aid package will be reduced. Under these conditions, working during the school year is a more effective strategy for reducing total debt, rather than increasing the amount of money a student has to live on. Furthermore, a student with the maximum OSAP award, the baseline contribution from summer earnings and the $2,600 of exempt in-study income is still unable to meet the costs of their schooling.

There is also strong evidence that working students whose OSAP awards are scaled back due to employment earnings still have a large amount of unmet need. The mean private loan for a working student is $509, while an unemployed student receives $262 in private support.129 This suggests that working students are compensating for deductions to their government loans by turning to the private sector.

Given the undesirability of this form of assistance, forcing working students to rely on bank loans or lines of credit is wholly unacceptable.

These problems illustrate the problems associated with developing an accurate system of needs-testing. Even a reformed system would likely see many students in need falling through the cracks. In the present context, tuition is the one cost that cannot be avoided or reduced by students through personal choice. Therefore, the tuition loan program should not be needs-tested, and should be generally available to all students who wish to access the program. It is an unacceptable policy outcome that imperfect parental or student income requirements prevent an individual from accessing support to pay for the basic cost of university education in Ontario. Thus, the removal of needs-testing from the tuition loan would ensure that funding is available for at least the essential costs of attending university.

This is not an example of the ‘pay now, go later ’ style of student support exemplified by the Australian HECS system. It is merely a means to ensure that financial aid is available to all students who require financial assistance to cover their tuition fees. As with all student loan programs, the provision of up-front support necessarily involves some inherent deferment of costs. The primary difference between the tuition loan and post-paid fee schemes is that cost deference is not the primary goal of the program.

Critics of these types of aid programs frequently charge that the removal of needs-testing will lead to students without need accessing the program for inappropriate purposes.

This complaint is countered in three ways. First, by providing the tuition loan directly to institutions and not to students, the loan money cannot be spent frivolously by the student. Second, the tuition portion of the financial aid package remains a loan. If a student accesses the funding, they are expected to pay it back, with interest. Finally, the risk of misuse of funds is present in every student aid program, regardless of needstesting provisions.

Further, to ensure the sustainability of the tuition loan program, the removal of needs testing on the tuition loan must only occur in the context of regulated tuition and with ancillary fees still subject to student referendum.

46

Recommendation Seventeen: A reasonable and progressive needs-testing framework must be applied to the cost of living loan.

Since students are able to at least partially control their cost of living through personal choices, it is reasonable to expect progressive needs-testing to be applied to the noneducational portion of the financial aid reward. In addition, since this loan is disbursed directly to students, needs-testing can help prevent over-awards and irresponsible spending on the part of students.

To this end, the provincial government must develop a needs-testing framework with a reasonable parental contribution level and appropriate allowances for student income.

More importantly, this need-testing arrangement must be accompanied by an easily accessible appeals process which allows students to challenge their assessment in a transparent and expedient manner.

Principle Thirteen: To be effective, the financial aid package must provide enough funding to cover all reasonable education costs.

To be a true guarantor of up-front access, a financial aid system must make available all the funding a needy student requires to attend university. There are two primary aspects of ensuring the adequacy of the financial aid package: 1. Developing an accurate assessment of student cost responsive to the unique financial circumstances of each student; and 2. Adjusting the financial aid package to ensure all reasonable educational and cost of living expenses are covered by the financial aid award.

Recommendation Eighteen: The provincial government must develop an accurate assessment of total student educational costs in Ontario.

To facilitate financial access to university, a financial aid program must account for not only all of a student ’s educational costs (tuition, additional fees, books and equipment) but also their living costs. If a system does not properly understand the expenses facing a student, it will be unable to provide an appropriate level of support. To date, the OSAP system has thoroughly failed to properly account for actual student costs in Ontario.

The current maximum OSAP award for a two-semester school year is $9,350. This amount has not changed since 1994.

The Canada Millennium Scholarship Foundation estimates that the average student living away from home will need at least $14,512 to cover the cost of their schooling, while students living at home require $9,088.130 The International Comparative Higher Education Finance and Accessibility Project estimates student cost in Canada at an even higher level, with students paying between $9,239 and $20,590 to attend university.131 OSAP assesses the costs of students between $8,800 and $13,162. This data shows that, depending on the estimate, OSAP assessment of student cost is off by as much as OUR BRIGHT FUTURE

DISCUSSION PAPER 56 per cent. For a student struggling with university finances, this gap could well prove insurmountable.

Several conclusions can be drawn from this data. First, OSAP ’s assessment of costs are too low and do not accurately reflect the financial reality for Ontario ’s students. There is a $1,500 to $7,398 deficit between OSAP ’s calculations and the current costs for a student on the high end of the expense spectrum. This pervasive low-balling by the financial aid system is the chief reason why the current OSAP aid package has stayed so low for so long.

From OUSA ’s perspective, an accurate assessment of student cost will include all of the following expenses.

A. Under the Tuition Loan · Tuition · Additional (ancillary) fees B. Under the · · · · · · · · ·

Cost of Living Loan Books Educational equipment Amortized cost of a personal computer Food (adjusted by region) Rent (adjusted by region) Household maintenance (utilities, phone, internet, adjusted by region) Transportation Dependent Spouse/Children Additional costs incurred by students who must travel over 40km to attend university

Once an accurate measure of student cost has been achieved, it is then possible to design an aid package which adequately meets students ’ needs.

Recommendation Nineteen: Sensitivity to geographic circumstances should be built into the cost of living loan assessment process.

Students from rural or northern regions of Ontario incur unique costs to attend higher education. Unlike their urban counterparts, they do not have the option of living with their parents or guardians to reduce their costs. They must also cope with additional transportation costs, such as maintaining and operating a car or using mass transport.

Similarly, students attending school in heavily urbanized areas must cope with higher rental costs and associated expenses. While a student studying in North Bay may expect to spend $14,941 on their education, a student in Toronto will pay $18,507.132 Important research done at the University of Toronto further illustrates the inadequacy of the current OSAP assessment of costs and award amounts. The data shows that OSAP is just barely adequate in meeting the needs of a student living at home, and entirely inadequate in funding those students living in residence or off-campus, as seen in graphs seven, eight and nine.133 This data demonstrates that the rigid OSAP assessment process does not account for regional variation in cost. While the financial aid package does not actually meet any group ’s financial need, the situation is much worse for students living

Graph Seven: Comparison of Costs, OSAP Provision and OSAP Assessments for a Student Living Off-Campus, 2003

Comparison of Costs, OSAP Provision and OSAP Assessment for Student Living Off-Campus $20,000 $18,507 $18,000

COST ($)

$16,000

$15,277

$15,434

$14,941

$14,512

$14,000

$12,000 Actual Cost $10,000 OSAP Amount

$8,000 Toronto

London

Kingston

CITY OUR BRIGHT FUTURE

North Bay

Provincial Avg

OSAP Assessment of Cost

47

FUNDING, TUITION & STUDENT FINANCIAL ASSISTANCE Graph Eight: Comparison of Costs, OSAP Provision and OSAP Assessments for a Student Living in Residence, 2003

Comparison of Costs, OSAP Provision and OSAP Assessment for Student Living in Residence Selected Ontario Cities

$16,000 $15,000

$15,139

$14,932

$14,512

$14,439

$14,000

COST($)

$13,043

$13,000 $12,000 $11,000 Actual Cost

$10,000 $9,000

OSAP Amount

$8,000 Toronto

London

Kingston

CITY in Toronto —approximately 30 per cent of all the students in the province.134 Clearly, the lack of geographic sensitivity under the OSAP system is placing a large proportion of Ontario ’s students in a poor financial situation.

It is undeniable that educational costs vary by region and students face different expenses depending on their geographic origin. To be more sensitive to the individual financial needs of students, geographic sensitivity must be incorporated into the assessment process for the cost of living loan under a new financial aid system.

Recommendation Twenty: Both the tuition and cost of living loans must be large enough to completely account for actual tuition and cost of living expenses.

With the above concerns and recommendations in mind, the provincial government must immediately move to increase the financial aid package to better reflect the true cost of education in Ontario. This will ensure all students in need are provided with the resources to attend school and are prevented from relying on private sources of support. easing the burden: minimizing and managing debt

Principle Fourteen: Non-repayable forms of financial assistance must compose a significant portion of the student aid package.

In order to create an environment of support and encouragement for students entering the university system, and 48

North Bay

Provincial Avg.

OSAP Assessment of Cost

to reduce overall graduate indebtedness, it is vitally important that the financial aid system provide a robust series of grants and other forms of non-repayable assistance as part of the financial aid package. Non-repayable assistance is also extremely important in facilitating greater university access for lower income demographic groups, eliminating the greater perceived debt aversion and ameliorating the graduate effects of indebtedness. Unfortunately, very few countries around the world are providing enough public dollars to students in the form of grants.135 Ontario is no exception. According to new Canada Millennium Scholarship Foundation research, the average value of grants distributed to Ontario students fell 62.9 per cent to $766 between 1996 and 2002.136 Given the overall benefits of grant-based support, the provincial government must commit to providing more non-repayable assistance to Ontario students.

However, it is difficult to deny that grants are expensive. Therefore, if one of the goals of the financial aid system is to reach as many students as possible, grants cannot be the only form of financial assistance provided by a student aid program. The money required to provide a given volume of grants should be able to purchase a much greater volume of loans.137 For this reason, a sustainable and broadly accessible financial aid program must be composed of both repayable and non-repayable forms of assistance.

OUSA proposes a new, three-tiered system of nonrepayable assistance which will operate in concert with the student loan programs. The features of these new grant programs will be laid out below.

OUR BRIGHT FUTURE

DISCUSSION PAPER Recommendation Twenty-One: The provincial government must create an up-front, merit-based grant program similar to the Alexander Rutherford Scholarship program in Alberta.

The Alexander Rutherford Scholarship was created to “recognize and reward exceptional academic achievement at the senior high school level and to encourage students to continue their studies. ”138 It provides an award of up to $2,500 for students who achieve an academic average of 80 per cent in five designated subjects over their high school career.

The Rutherford Scholarship is both an excellent debt reduction mechanism and a form of pre-entry assistance. The award is first marketed to students in Grade 10, providing a financial incentive for continued academic achievement. Moreover, it promises students a substantial amount of financial support at a critical time. Approximately three-quarters of all students make the decision to attend university before age 15, precisely when the Rutherford Scholarship is presented.139 This has an encouraging effect on students, and may help promote access for groups traditionally under-represented in higher education. For a more thorough discussion on pre-entry assistance, please refer to Advancement and Opportunity in Higher Education included in this volume.

Recommendation Twenty-Two: OSOG must be applied to a student ’s total debt, not their yearly loan award.

By remitting debt on a yearly basis, OSOG ignores some students who have accumulated substantial debt. Con-

sider the following examples: Student A borrows $6,500 per year for all four years of their undergraduate degree.

Student B borrows $3,650 in their first two years of study, and $9,350 in their final two years.

Both students have accumulated $26,000 in debt by the end of their undergraduate education. However, since Student A stayed below the $7,000 OSOG threshold every year, he or she is now ineligible for debt remission. On the other hand, Student B qualified for the maximum award in his or her last two years of study and is eligible for OSOG. As a result, Student A still owes $26,000 while Student B ’s debt has fallen to $21,300.

To avoid this unfair disparity, OSOG must be applied to the total accumulated debt at the end of a student ’s period of study. If the program remits a pro-rated maximum of 25 per cent of total debt, then both students will receive equal debt remission.

Recommendation Twenty-Three: The Ontario Student Opportunity Grant (OSOG) must remit 25 per cent of the maximum student loan package regardless of the overall size of the package itself.

Under the present system, OSOG remits approximately 25 per cent of the yearly maximum award for students who

Graph Nine: Comparison of Costs, OSAP Provision and OSAP Assessments for a Student Living at Home, 2003

Comparison of Costs, OSAP Provision and OSAP Assessment for Student Living at Home, Selected Ontario Cities $9,600 $9,400

$9,396

COST ($)

$9,200

$ 9,088

$9,000 $ 8,805

$8,767

$8,800 $8,600

$ 8,464

Actual Cost

$8,400

OSAP Amount

$8,200 $8,000 To ro nto

Londo n

Kings to n

CITY OUR BRIGHT FUTURE

North Bay

P rovincial Avg.

OSAP Assessment of Cost

49

FUNDING, TUITION & STUDENT FINANCIAL ASSISTANCE Table One: Proposed Debt Remission Structure140 Aid Awarded

$60,000 $45,000 $30,000 $15,000 $10,000

Per Cent of Per cent of Maximum Award OSOG Remission 100 75 50 25 16.67

100 75 50 25 16.67

qualify. This is an immensely important debt control mechanism, and it must be expanded alongside a strengthened student loan program. Since OUSA advocates both an increase in the financial aid package and applying OSOG to total loan principle rather than yearly award, remission would be structured on a pro-rated basis around the 25 per cent maximum remission number.

For example, if the maximum financial aid award is $60,000, then a student in receipt of this amount would be eligible for the 25 per cent maximum amount of loan remission. Thus, this student would receive a $15,000 OSOG award, reducing the loan principle down to $45,000. Remission for students who did not receive the maximum award would be structured as demonstrated in table one.

This system will ensure maximum benefits for highborrowers, while simultaneously ensuring equitable distribution of remission throughout the financial aid system.

Recommendation Twenty-Four: The provincial government must cease using the Canada Millennium Scholarship program to displace the OSOG contribution.

The Canada Millennium Scholarship Foundation (CMSF), created in 1998 with a $2.5 billion dollar endowment from the federal government, has been relatively successful in supplying Canadian students with large amounts of grant-based support. The program supplies both merit-based scholarships and needs-based bursaries between $1,000 and $4,500, with an average award of $3,000. This funding is not directly disbursed to students; rather, it is paid to the provincial government and applied to the student ’s outstanding loan amount. On the surface, the Millennium Scholarship is an excellent means to reduce graduate debt. Unfortunately, the administration of the OSAP system has largely interfered with this program ’s full potential in Ontario.

Essentially, OSAP uses the Millennium Bursary to offset the OSOG program. Instead of utilizing both programs to reduce a student ’s debt, the provincial government uses the Millennium Bursary to relieve their own debt remission responsibilities. Once the bursary has been applied to the loan principle, a student is only eligible for another $500 in provincial debt remission. The consequences of this policy are extremely harmful to students, as seen by the displacement effects in table two.

Eliminating the Millennium Bursary displacement would generate huge benefits for graduates of Ontario ’s universities, 50

Rate of OSOG Remission 25 per cent 18.75 per cent 12.5 per cent 6.25 per cent 4.17 per cent

OSOG Award

$15,000 $8,437.50 $3,750 $937.50 $417

Final Balance

$45,000 $36,562.50 $26,250 $14,062.50 $9,583

particularly the neediest individuals who are forced to borrow more and who the Millennium Bursary is ostensibly designed to help. An additional reduction in yearly debt would reduce monthly payments, hasten repayment and could prevent defaults for many graduates.

Recommendation Twenty-Five: The provincial government must provide a robust series of effective grants to reduce the financial burden of student loans.

In addition to the explicit granting up-front and backend programs described above, the provincial government must commit to a system of effective grants, or spending programs designed to assist graduates in loan repayment. There are two essential forms of effective grants relevant to the Ontario system: 1. Interest Subsidization. Interest charges are a reality for any form of financial borrowing. However, since the student financial aid system is not administered for profit, there is greater purview for the reduction of interest charges and the reduction of the total cost of a loan. Currently, the CSLP portion of the loan is set at a fixed interest rate of prime +5 per cent, or a floating rate of prime +2 ½ per cent. The OSL portion of the loan is set at a floating rate of prime +1 per cent.141 OUSA strongly suggests the provincial government subsidize the interest rate to ensure no graduate pays higher than prime -1 per cent on their entire loan.

Interest subsidization helps prevent student loan borrowing from excessively amplifying the cost of education for relatively low-income students compelled to access repayable-support programs. Under the current system, a $28,000 loan paid back over ten years will cost a student $42,563 in total payments, with monthly payments of over $350 dollars.142 Although paying the same loan back in five years reduces the total cost to $34,874, the monthly payments for such a plan are a thoroughly unaffordable $581 dollars a month. It is unfair to require graduates to pay more for their education simply because they were unable to afford the up-front costs.

2. Debt Reduction in Repayment. These programs OUR BRIGHT FUTURE

DISCUSSION PAPER are designed to help graduates who are unable to pay back their loan by reducing the overall principle and shrinking monthly payments. These programs are immensely important to the system, and must be a spending priority for the provincial government. Debt Reduction in Repayment is discussed in greater detail later in this paper.

Principle Fifteen: The provincial government must provide extensive additional non-repayable assistance to students from vulnerable demographic groups.

One of the most powerful aspects of a grant is its ability to be targeted. This, “targeting, or selective subsidization, may be towards certain classes of students (e.g. low income or ethnic minority or high achieving), or towards the pursuit of other public purposes (e.g. encouraging more students to study education or medicine, or to practice in certain venues such as inner cities or remote villages). ”143 For the purposes of ensuring equitable university access for all Ontarians, the ability of grants to be targeted at lower income individuals is of central importance. Indeed, strong measures are needed to address the disparities in access currently plaguing Ontario ’s university system.

Lower income, rural/northern and Aboriginal students typically have a much lower participation rate than other groups in Ontario. In 1997, the last year of known reported data, the participation rate for 18 to 24 year olds from families with incomes of $100,000 or more was double that of individuals from families with incomes of $25,000 or less.144 Total participation for the Registered Indian population has gone from 6.5 per cent in 1996-97 to 5.9 per cent in 2000, while the Canadian participation rate now stands at 11.5 per cent.145,146 The participation rate of rural students living beyond commuting distance from a university (80 kilometres or more) is 11 per cent, less than half of those students who live within 40 kilometres of an institution.147 The reasons for these low participation rates are complicated. However, a key factor limiting university access is the lack of financial resources and the corresponding need to borrow larger amounts of money to attend school for students from lower income, rural/northern or Aboriginal backgrounds. Individuals from these groups have proven resistant to incurring a high level of indebtedness. This perceived debt aversion is often cited as a key deterrent to advancement into the university system.

Financial difficulties for certain demographic groups can also manifest themselves after a student graduates from university. This is due primarily to “entrenched wage inequities among different segments of society. ”148 Wage inequities in Canada are a persistent problem, and in many cases appear to be getting worse. In 1995, the average income of a woman with a university degree was 70 per cent of a male counterpart. In 2000, the average income of a university educated woman had declined to only 67.5 per cent of a man ’s average salary.149 These disparities can make it harder for individuals from groups facing these inequities to manage their monthly loan payments under the current OSAP system.

To address the up-front aversion and back-end wage inequity problem, additional non-repayable forms of assistance must be directed at affected individuals.

Recommendation Twenty-Six: Students from low-income demographic groups must be provided with partial tuition waivers.

While the two loan programs described above could provide enough funding for lower income and disadvantaged demographic groups to attend classes, the prospect of high debt may hamper access. Targeted non-repayable financial assistance towards these groups would help reduce graduate debt by off-setting borrowing. If it is provided up-front, nonrepayable assistance also creates an environment of support and encouragement for disadvantaged students, an important aspect of facilitating greater university access for all qualified students.

OUSA believes the best vehicle for targeted up-front grants is the provision of tuition waivers for students with relatively low incomes. The government would pay for a proportion of the institutional tuition fee, reducing dependence on the tuition loan program and reducing overall debt. These waivers would be generally available to students from the lowest two income quartiles, with the size of the award increasing as family income decreases. In other words, the tuition waiver would be income-dependent. This program would go a long way to overcoming the, “fundamentally greater ambivalence, the greater perceived opportunity costs and the arguably greater debt aversion of those from low-income, rural, or ethnic/linguistic minority backgrounds. ”150

Table Two: Consequences of the Millennium Bursary Displacement of OSOG

Financial Circumstance Maximum OSAP Reward Millennium Bursary Award OSOG Contribution Total Yearly Debt OUR BRIGHT FUTURE

Financial Results with Displacement $9,350 ($3,000) ($500) $6,850

Financial Results without Displacement $9,350 ($3,000) ($2,350) $4,000 51

FUNDING, TUITION & STUDENT FINANCIAL ASSISTANCE Recommendation Twenty-Seven: To address wage inequities, graduates from systemically disadvantaged groups must receive additional debt forgiveness.

Graduates from groups who systemically, on average, earn less income in the workforce relative to others could receive additional debt forgiveness, ameliorating the financial impact of the income imbalance between these systemically disadvantaged individuals and their relatively higher-earning counterparts.

Targeted back-end grants could also be applied to help solve the problem of unfair effects stemming from systemic wage inequities. For example, say 15 per cent of all debt is forgiven upon graduation for all students. If women systemically earn 32.5 per cent less than their male counterparts, then their rate of debt remission could be adjusted accordingly.151 Recommendation Twenty-Eight: The federal government must eliminate the tuition tax credit and provide the additional revenue to the provinces on top of the base Canadian Education Transfer for investment in nonrepayable assistance programs.

In Canada, all individuals paying tuition and associated education fees are eligible for a tax credit of $400 a month while a student is in-study. These credits can be used in one of three ways:152 1. Employ them to reduce a student ’s own income-tax liability; 2. A student may transfer credits to a parent, guardian, spouse or grandparent to reduce current tax liability; or 3. A student may carry forward the value of any unused tax credits to reduce their tax liability in subsequent years.

While they generate a definite financial benefit for students and their families, this program is not a particularly effective way to distribute student aid. First, tax credits are expensive. Canadian governments collectively, “spend almost 40 per cent of all their student financial aid dollars in the form of education-related tax credits. ”153 Moreover, tax credits are not distributed on the basis of need, and, “much of the money goes to students from higher income families …lower income families are unable to benefit because they do not have the tax obligations required to take advantage of the benefits or, at best, receive no more assistance than higher income families. ”154 In fact, 60 per cent of all education and tuition tax credits go to families with incomes above the national median. This is an unfortunate reality which is pulling valuable and scarce funding away from assistance for lower income and otherwise disadvantaged groups.

OUSA believes that the tuition tax credit should be eliminated, and the additional tax revenue be provided to the provinces to fund non-repayable assistance programs for students from vulnerable demographic groups. This reform will ensure that individuals who cannot pay for higher education 52

receive the funding they need while students who are in a more favourable financial situation make a more appropriate contribution to the university system.

The tax credit system is often viewed as a means to encourage greater participation in higher education. However, since the credit typically benefits only higher-income individuals, a financial incentive for attending higher education is better provided by an up-front, merit-based grant as described in Recommendation Twenty-One. This form of encouragement would be widely available on the basis of merit, not tax bracket.

Principal Sixteen: Repayment of graduate debt must be structured in a fair and progressive manner.

Given the necessity of offering both grants and loans in a student aid system, debt is an inevitable outcome. Alongside various debt control mechanisms, the manner in which a borrower repays his or her loan should be structured to minimize the financial burden. Generally speaking, repayment should be structured to ensure that monthly payments do not exceed an individual ’s ability to pay. If the repayment exceeds 10 per cent of monthly income, then payments will likely represent an undue burden.

Under the current OSAP system, there is insufficient flexibility in repayment to protect students from burdensome monthly repayments. As a conventional loan program, monthly payments are calculated against a fixed repayment period. Thus, a $28,000 loan paid back over ten years will generate monthly payments of $350.155 If an individual earned over $80,000 a year, this amount would not be a problem.

However, if a graduate were only making $26,000 a year, then this level of repayment could well prove unbearable.

The individual would likely default on their loan and incur the full range of financial penalties. Obviously, this is an unacceptable outcome for everyone involved.

To prevent debt from becoming untenable for a graduate, the system of repayment must be responsive to individual circumstances, and provide protection and relief to those who find themselves in difficult financial circumstances.

Recommendation Twenty-Nine: When consolidating their loans, graduates should be able to choose a repayment term which works for their unique financial situation.

A central component of making debt repayment work for graduates is the introduction of greater choice within the system. Graduates must necessarily be considered the most efficient arbiters of what financial arrangement works best for their career and life circumstances. Currently, all repayment under the OSAP system is calculated against a ten-year term. If students find they are unable to meet their monthly payments, they have the option of applying for a Revision of Terms. Under this provision, a graduate can extend their loan repayment term up to 15 years, thereby reducing monthly payments.156 To create greater choice and flexibility in repayment, OUR BRIGHT FUTURE

DISCUSSION PAPER the Revision of Terms program should be taken a step further. Under this new system, graduates would be able to select an eight, 10, 12, 14, 16 or 18 year repayment term at consolidation depending on their assessment of the monthly cost they are able to bear. Once within repayment, students must also be allowed to change their repayment term, with the understanding that monthly payments will change to accommodate the new schedule.

This flexible term arrangement must be accompanied by an information campaign designed to educate graduates in the benefits and disadvantages of relatively shorter or longer repayment periods. In particular, individuals must be made aware of the greater cumulative interest charges incurred as the result of an extended repayment term.

Recommendation Thirty: Graduates must not be required to begin repayment until their income exceeds an acceptable income-to-debt ratio.

Under a conventional loan program, repayments are typically calculated against a fixed term regardless of graduate income. In many cases, this can lead to monthly payments which exceed an individual ’s ability to pay. This is particularly problematic in the months immediately after graduation, when income may be low or uncertain as a graduate attempts to find gainful employment. To help eliminate this problem, repayment under the financial aid system must not begin until a suitable income-to-debt ratio has been achieved.

This provision is similar to the minimum income threshold concept applied in numerous income-contingent loan programs around the world. However, instead of triggering repayment at a fixed income level, an Ontario graduate would not begin making monthly contributions to their debt until their income-to-debt ratio rises to 1:1.5. For example, an individual with the average provincial debt level of $22,700 would not begin repaying their loan until they earn at least $15,133, while a graduate with a $30,000 debt would not pay until their income reached $20,000. This recommendation will help individuals gain a level of income stability before becoming responsible for their student loan, lowering the reliance on interest relief programs and protecting the individuals from the adverse consequences of default.

Recommendation Thirty-One: The provincial government must not implement an income-contingent loan repayment plan in Ontario.

At least from a theoretical perspective, OUSA believes it is possible to design an income-contingent repayment program (ICRP) that actually works for students. As Johnstone notes, “the principle of income contingency makes sense, if only to provide some guaranteed protection to the student borrower who has trouble making loan payments because of low earnings and who does not want to default and incur damage to his or her credit rating. ”157 However, just because it is possible to design a student-friendly program, does ICRP make sense for Ontario ’s students? To answer this question it is important to consider OUR BRIGHT FUTURE

both the discreet benefits of ICRP and the overall political and financial context of Ontario ’s university system. Unquestionably, ICRP makes monthly loan repayments more convenient for students. Further, almost all of the potentially negative aspects are controllable through carefully applied policy measures.

ICRP becomes considerably more problematic when placed within the broader economic and political realities of Ontario. In particular, OUSA is concerned about the following: 1. The expense of the program. In order to create a system that ensures the best results for students, a massive up-front investment and additional back-end funding would be required. A successful ICRP would require robust interest subsidization, debt forgiveness and targeted forms of non-repayable assistance to alleviate the potentially regressive aspects of the program. In the United Kingdom, interest subsidies alone cost the government £800 million a year.158 As private capital is both conceptually undesirable and practically difficult to ensure due to the lending risks associated with student loans, this funding would have to come from the public purse. Unfortunately, Ontario is currently experiencing a kind of creeping austerity in the university sector, “occasioned by a natural underlying higher educational cost trajectory, driven by rising unit cost pressures and magnified …by enrolment increases, tending consistently to outrun the likely increase in public revenues. ”159 In an environment of fiscal austerity and a large provincial deficit, OUSA is concerned this investment would pull money away from the funding of institutions already critically short of operating funds. Moreover, the lack of public dollars may lead to the implementation of an ICRP without proper graduate protection and corresponding negative individual impacts, or the rationing of the program leading to overly stringent eligibility requirements and insufficient financial support packages.

2. The persistent problem of wage inequity. As long as entrenched wage inequities continue in Canadian society, it will cause problems in the equity of any income-contingent repayment program. Under an ICRP, this workplace bias would translate into longer repayment periods. Add interest into the mix, and individuals from affected groups would end up paying considerably more to service their loan than those not disadvantaged by wage inequities. According to the CFS projection model, a woman with a $25,000 debt, at a 6.5 per cent interest rate, will end up paying $55,000, while a man with the same loan will only pay $42,000.160

53

FUNDING, TUITION & STUDENT FINANCIAL ASSISTANCE Wage inequities have persisted in Canadian society since the CFS released its projection model in 1997.

Indeed, the problem seems to have gotten worse. In 1995, the average income of a woman with a university degree was 70 per cent of a male counterpart. In 2000, the average income of a university educated woman had declined to only 67.5 per cent of a man ’s average salary.161 New Zealand ’s ICRP program provides an evocative demonstration of the dangers of income-contingent repayment. On average, women take almost three years longer to repay their debt than men, and individuals of non-European origin take over two years longer to pay off their loan than European graduates.162

repayment is not a feasible or desirable solution for Ontario students, it is still possible to build a greater amount of income-sensitivity into the student aid system. By making graduate repayment more responsive to individual income, debt is made more manageable. Moreover, greater income-sensitivity will help protect graduates from default and the associated negative financial impacts.

The two primary methods for introducing greater income-sensitivity into Ontario ’s financial aid system are: 1. Allowing students in financial difficulty to make partial, income-sensitive repayments; and 2. A system of income-based debt remission.

Both of these provisions are discussed at length in the next section of this paper.

Principal Seventeen: The financial aid system must protect graduates.

Insofar as a student aid system results in graduate debt, it must also make every effort to protect graduates from the negative impacts of indebtedness. A high debt burden may lead many individuals to default on their loans, resulting in damaged credit, garnished salaries and even the seizure of personal property. No matter how progressive the repayment structure, there will always be individuals who, for a variety of reasons, are unable to meet their financial obligations. Since the financial aid system is an investment in social and individual development, the program must make every effort to assist graduates who are unable to pay off their loan assistance.

An individual who is unable to meet their monthly repayment commitments also runs the risk of defaulting on It is OUSA ’s opinion that the problem of wage ineq- their loan. When a graduates defaults on their debt, the prouities is more cheaply and effectively salved through vincial government is left to pick up the tab. In 2002/03, nearly a conventional loan program, particular through in- 14 per cent of loans went into default, costing the OSAP system $96 million.163,164 By introducing greater graduate procome-based remission programs. tection into the financial aid system, the default rate could be 3. The political problem. Even if the system is intro- greatly reduced. Such protections would undeniably require duced within the context of controlled tuition and additional investment in the system. However, the money saved legislative guarantees, there is still a risk the ICRP will from payments on defaulted loans could well make these probe hijacked by a subsequent government to help shift visions self-financing, and could eventually result in additional more cost onto students. In OUSA ’s opinion, this is revenue being available within the financial aid system for expanded non-repayable assistance programs. The Provincial an unacceptable risk to bear.

Auditor of Ontario noted in a 2003 report that a one per For these reasons, the Ontario Undergraduate Student cent decrease in default rates would translate into a savings of Alliance recommends against the development and implemen- $3.5 million annually.165 There are essentially two elements to an effective systation of an income-contingent repayment scheme in Ontario..

A more thorough discussion of OUSA ’s position on ICRP tem of graduate financial protection. First, there must be rocan be found in The Hot Potato: Income-Contingent Repay- bust measures in place to help individuals who are unable to meet their monthly obligations, reducing or suspending rement Policy, included as an appendix to Our Bright Future. payment until the graduate is in a better financial situation.

Recommendation Thirty-Two: The provincial govern- Second, the system must assist individuals who, in the long ment must make provisions for greater income sensitiv- term, are making poor progress in repaying their loan with targeted debt forgiveness. ity in graduate debt repayment.

Such measures have worked before. In the United States, While an overarching system of income-contingent loan In this context of wage inequity, ICRP is problematic. However, there are still policy tools to help ameliorate the effect of wage inequities on income-contingent assistance programs. By subsidizing interest rates, the financial penalties associated with longer repayment could be largely removed depending on the overall amount of the subsidy. Moreover, a debt forgiveness provision would assist those with systemically lower salaries by not allowing interest to accumulate on unpaid principle for an unreasonable period of time. A final measure would be to offer proportionally greater post-study debt remission for disadvantaged groups. However, these programs are expensive, and would erode the cost-recovery potential of an ICRP program.

54

OUR BRIGHT FUTURE

DISCUSSION PAPER default rates were reduced from 22 per cent to 5.9 per cent between 1992 and 2002 through, “changes in loan management and the implementation of various default management strategies. ”166 Clearly, it is to the advantage of both the province and students to provide more mechanisms for graduate protection within the financial aid system.

Recommendation Thirty-Three: The provincial and federal governments must remain committed to providing an effective and accessible system of interest-relief.

OUSA believes the existing interest relief provisions under the OSLP and CSLP are highly beneficial to students.

By allowing graduates to enter into periods of interest-free zero repayment, the risk of default is greatly reduced. This helps ensure individuals are not subject to harmful financial consequences and that the provincial government is not left to pay off the defaulted loan.

Both the federal and provincial governments must remain committed to providing interest relief, and provide the appropriate additional resources to ensure the program remains effective in the face of an expanded financial aid system.

Recommendation Thirty-Four: The provincial government must allow for graduates in financial difficulty to make partial payments on their loans, calculated on an income-contingent basis and for a fixed period of time.

Although interest relief is an important part of the Ontario debt-management strategy, it is primarily a measure intended for students under severe financial stress. Many graduates in only moderate difficulty are still able to make at least partial payments on their loans, but are not permitted to do so. Rather, if a student does not qualify for total interest relief, then they will receive no assistance at all.

OUSA firmly believes graduates should be able to enter into fixed periods of partial repayment calculated on an income-contingent basis. In other words, the individual would apply for partial repayment status and their monthly charge would be adjusted to reflect an ‘affordable ’ proportion of income. While calculating the precise proportion of income to be repaid is beyond the scope of this paper, it is reasonable to suggest a rate of between four-to-seven per cent as an affordable level for a student in financial difficulty. The student would continue to accrue and pay interest charges during this period of reduced repayment. Like interest relief, income-contingent partial repayment would be limited to six month terms, with a maximum of thirty months partial repayment status allowed by the system.

Recommendation Thirty-Five: The provincial government must implement a system of more easily accessible and effective income-based debt remission.

Both the federal and provincial governments currently operate programs of income-based remission (IBR). Referred to as Debt Reduction in Repayment (DRR) in Canada, income-based remission is a form of assistance targeted at graduOUR BRIGHT FUTURE

ates who prove unable to pay back their student loan support. It is essentially a deferred grant program designed, “to reduce the outstanding principle on a student ’s debt to a level where he or she could pay off that debt on his or her own with no further assistance. ”167 This reduction would be based on an acceptable threshold of monthly repayment relative to individual or family income. By reducing the overall loan principle, monthly payments are also lowered. The financial burden on the graduate is thereby eased, as is the overall risk of default. IBR also has the potential of delivering some financial benefits to governments. As noted by the New Brunswick Advanced Education and Labour Student Support branch, “the IBR option would be considerably less expensive than traditional remission schemes. ” 168 Under the federal program, students are eligible for DRR if they:169 1. Have been out of school for at least five years, and their loan was consolidated in this five-year period; 2. Must have used all 30 months of benefits under the Interest Relief Plan towards the repayment of the outstanding Canada Student Loan; 3. The student loans must all be in good standing at the National Student Loans Service Centre or the managing financial institution, with no outstanding interest owing on the debt; and 4. Loan payments must exceed a given percentage of your income, as established by the Income Guidelines for the Canada Student Loans Program.

If a graduate meets these criteria, they are eligible for a one-time reduction of up to $10,000, or 50 per cent of the outstanding loan principle.170 Similarly, the Ontario government defines DRR eligibility as:171 1. Exhaustion of all interest relief assistance available from the Government of Ontario; 2. Not in default on outstanding Ontario Student Loan(s). If you are in default on your Canada Student Loan(s) and/or other provincial student loans, you may continue to be eligible; 3. No longer a full-time student for at least 60 months before applying for this program; 4. Not restricted from receiving OSAP assistance; 5. Not considered ineligible for an Ontario DRR payment due to misrepresentation or conviction of a criminal offence relating to a student loan(s); and 6. Total monthly student loan payments are greater than the acceptable monthly payment amount corresponding with family size and gross monthly family income.

If a graduate meets these criteria, they are eligible to receive three debt reduction repayments up to $4,200, $2,200 and $2,200 respectively, to a maximum of $8,600.172 Individuals who receive DRR in Ontario become ineligible for further Canada-Ontario Integrated Student Loan assistance, further periods of interest relief or any further grants or scholarships administered under OSAP.

55

FUNDING, TUITION & STUDENT FINANCIAL ASSISTANCE OUSA firmly believes these IBR programs are essential protections for graduates in financial difficulty. However, it is very difficult to qualify for these programs, making the benefits of income-based remission unavailable to the many individuals in need of repayment assistance. To address this problem, the system of DRR must be broadened to include all students paying an unacceptably high proportion of their income earlier in their repayment cycle.

To accomplish this goal, the following eligibility profile should be established: To qualify for Income-Based Debt Remission, a graduate must: · · · ·

a. Have good standing on loans; b. Have qualified for two terms of interest relief, or four terms of partial repayment status; c. Have debt in excess of $10,000; and d. Be paying more than 10 per cent of monthly income to service student debt.

Once a graduate is deemed eligible, they would receive a reduction in loan principle aimed at adjusting monthly repayments to below the 10 per cent of income threshold. After receiving their fist adjustment, a recipient of DRR would not be eligible for another reduction for two years, and the total amount of debt remission would be capped at 50 per cent.

These new eligibility requirements would allow more graduates to access the IBR program sooner after graduation when they are most financially vulnerable. This new system would also forgive debt on a more rolling basis, building in a greater degree of flexibility and graduate protection over the repayment term.

Recommendation Thirty-Six: The Bankruptcy and Insolvency Act must be amended to treat student debt like all other types of consumer debt.

Bankruptcy is an unfortunate consequence of a variety of personal, family and economic circumstances. Despite the stigma associated with a declaration of bankruptcy, it remains an important last-resort protection for individuals in severe financial distress. Unfortunately, under current federal legislation, the OSAP loan cannot be discharged as part of a personal bankruptcy claim unless the individual has been out of study for at least ten years.173 This provision is highly unfair to students. It is particularly hard on students from lower socio-economic backgrounds who have accrued a larger amount of debt and may thus experience greater difficulty in making their repayments.

Student loans also represent a huge amount of the total Canadian debt load. Thirty-one per cent of Canadian families have some form of student debt. For these households, student loans represent 51 per cent of their total debt.174 Clearly, treating student loans as less of a factor in personal bankruptcy is unfair and entirely out-of-touch with the current reality in Ontario. Denying one-third of Ontario families an 56

important financial safety net is incommensurate with financial aid as an investment in individual and social development.

With this in mind, the provincial government must actively lobby the federal government to amend the Bankruptcy and Insolvency Act to include all forms of government student financial aid. improving efficiency while reducing confusion: user-

friendly financial aid

Principle Eighteen: The financial aid program must be designed to maximize student ease-of-use while minimizing operating cost.

Alongside the central task of providing adequate financial support to all students in need while managing and reducing graduate debt, the student aid system must also aim for efficiency in administration. This efficiency is accomplished by both ensuring the cost effectiveness of the program and by facilitating easy access to information resources by students.

The current OSAP system is a confusing polyglot of numerous programs, piecemeal reforms and out-dated technological infrastructure. This dense web-like structure impairs the cost-effectiveness of the program, and pulls money away from actual financial support paid to students. It also poses a daunting barrier to students who wish to access financial support.

To address this problem, a simplified, de-centralized and student-centred system complemented by effective infrastructure must be created.

Recommendation Thirty-Seven: The financial aid system must be regulated and funded by the provincial government and administered primarily by individual institutions.

The entire OSAP system is currently administered from the Student Support Branch facility in Thunder Bay, Ontario.

Already geographically remote from the vast majority of the province ’s university students, this centralized operation may also not be the most financially efficient means of administering the financial aid system. There are numerous international examples of the financial benefits of de-centralized financial aid systems. The most powerful of these can be found in South Africa, where cost-neutral public programs are sheer necessities. South Africa cannot pour resources into the administration of its financial aid program as it struggles to come to grips with poverty, crime and an HIV/AIDS crisis.175 To that end, the National Student Financial Aid Scheme (NSFAS) has been successful in controlling administrative costs at two per cent per year, through an efficient technological infrastructure and cost-sharing with individual institutions.176 OUSA proposes adopting the South African administrative model in the Ontario financial aid system. While all funding and policy direction would come from the provincial and federal governments, individual institutions would be responsible for the up-front administration of the program.

OUR BRIGHT FUTURE

DISCUSSION PAPER Students would apply directly to the student awards offices at their home institutions, and the university would be responsible for assessing and disbursing support. To achieve this, the provincial government would need to provide additional financial resources to universities to expand their financial aid operations. However, the cost-sharing nature of this arrangement would still keep overall expenses below the current level.

An initial up-front investment in technological infrastructure could also help to off-set the expansion of human resource capacity in individual student awards offices. In addition, the provincial government would also need to provide universities access to income tax information for students and their families in order to conduct financial assessments. This provision would generate a further benefit to institutions, allowing them to better gauge their disbursement of institutional-specific financial support. Indeed, de-centralizing the financial aid program to individual universities would allow for a greater harmonization between federal, provincial and institutional student assistance. Institutions would be able to tailor financial support to meet the unique needs of their students, increasing the overall effectiveness of the program.

As well as cutting overall administration costs and facilitating greater harmonization, de-centralizing the financial aid system would make it easier for students to access the program. Instead of struggling to contact a single facility thousands of kilometres away, students across the province would be able to receive help and guidance on their home campus.

De-centralization creates at least the opportunity for face-toface contact, improving the image of the program and fostering an atmosphere of support and encouragement for students.

Recommendation Thirty-Eight: The financial aid system must be proactive in communicating with students and providing information in a timely manner.

Currently, the OSAP system is rather passive in its approach to communication with students. Information is certainly available in both print and online formats, but the program makes no active effort to place this information in the hands of students. OSAP must take better advantage of times when they have student attention to provide information and develop a relationship of communication and support. The actual disbursement of loans is an excellent point of contact where the lines of communication can be opened, and students provided with information they need to understand and control their financial aid.

OSAP also makes very poor use of emerging electronic technologies to communicate with students. Email and a strong online presence would improve the flow of information dramatically, as described below.

Recommendation Thirty-Nine: The provincial government must invest in creating an effective online presence which allows students to access all the information they need on the financial aid system, provides powerful tools to help students plan their finances and alOUR BRIGHT FUTURE

lows for online applications.

The internet is one of the most powerful communication resources available to the financial aid system. Unfortunately, OSAP does not make adequate use of this medium, either in student outreach or program administration. To maximize the user-friendliness of the financial aid system, the provincial government must invest in a powerful new website which provides the following services: 1. Large information database. Students must be able to access information on every aspect of the student aid system through the website. Material on eligibility, applying, receiving assistance and repaying loans should be readily available through simple and easily navigable web pages. Powerful search tools should also be included to allow students to find desired material quickly.

2. Online estimation tool. The Canada Student Loans Program website provides users with the option of completing a brief eligibility questionnaire and receiving an estimate of the financial support the individual would be likely to receive. There is no such tool available on the OSAP website. This tool facilitates more effective financial planning on the part of students, and may help individuals feel more secure about their financial situation prior to commencing their studies.

A reasonably accurate and easy to use estimation tool would be central to an effective website for the financial aid program.

3. Online application. The current OSAP website allows students to apply for assistance online. This feature should be maintained and improved within a new online presence. In the context of de-centralized financial aid administration, applications would be sent to a student ’s home institution rather than a central processing facility.

4. Better use of email. Electronic mail is an effective means for the financial aid system to contact students, and vice versa. Recipients of financial aid should be able to register for a listserv which periodically sends students updates and important information. Likewise, the website should allow students to contact the administrators of the system with questions and be assured of an expedient response.

Recommendation Forty: The financial aid system must provide needs-assessment summaries to foster transparency and clarity in the application process.

At present, students are provided with exactly two pieces of information at the end of their OSAP assessment process: whether or not they qualified, and how much funding they will receive. The reasons for the decision are not included, leaving many students confused and frustrated. By providing applicants with an assessment report clearly outlining how the student ’s eligibility was evaluated, applicants are able to better understand the process. Further, assessment re57

FUNDING, TUITION & STUDENT FINANCIAL ASSISTANCE ports allow students to make informed decisions about mounting an appeal if they are unhappy with the process.

Recommendation Forty-One: The provincial government must offer student financial management programs for recipients of student aid.

Over 62 per cent of OSAP recipients are under the age of 24.177 Due to their young age and limited work experience, many of these students have never managed large amounts of money and effectively budgeted over an extended period of time. When these students are awarded OSAP support, they suddenly find themselves with substantial amounts of money and no real idea how to handle it. Improper financial management could leave students without money when they need it, or increase debt as individuals borrow more than they need. As part of its responsibility to students, OSAP must provide literature and conduct seminars designed to help students manage their financial aid. Budgeting, loan repayment and debt management should all be areas of focus to ensure students are able to manage their financial assistance in a sustainable manner.

58

conclusion

The university funding, tuition and student financial aid questions currently facing Ontario are not easy to answer. Simplistic views based on ideological perspectives or self-interest cannot provide the direction needed to build a system that works for students, stakeholders and the citizens of Ontario.

We need a principled system which is able to cope with the economic and social realities facing the university system.

Students have already waited too long for change. Coming off a decade of declining educational quality, high tuition, insufficient financial aid and rising debt, they are ready for a bold new system that provides real solutions to real problems.

It is OUSA ’s hope this paper has provided a roadmap to a system which provides a unparalleled education to every qualified citizen. Our firm belief is that a system of responsible cost-sharing, composed of appropriate provincial funding and regulated tuition complemented by a progressive and innovative student financial aid program, is the best way to balance equity in the university system while providing the needed revenue to establish a world-class system.

There is no alternative to change. Without intelligent reforms guided by a cogent vision for the future of the three pillars, Ontario ’s universities will continue to decline while becoming increasingly inaccessible to all students. The challenge for us all is to find the political will for creating a higher education system of which we can all be proud.

OUR BRIGHT FUTURE

DISCUSSION PAPER SUMMARY OF PRINCIPLES AND RECOMMENDATIONS

non-repayable assistance to students from vulnerable demographic groups.

PRINCIPLES 1. Intelligent, comprehensive and student-friendly financial aid program design is vital to the success of the university system in Ontario.

16. Repayment of graduate debt must be structured in a fair and progressive manner.

2. Reform of any aspect of Ontario ’s university system must be holistic with clearly defined goals.

18. The financial aid program must be designed to maximize student ease-of-use while minimizing operating cost.

3. The funding, tuition and financial aid structure in Ontario must guarantee the accessibility, affordability and quality of higher education for all students.

RECOMMENDATIONS 1. The provincial government must provide enough funding to cover no less than 70 per cent of the cost of university education in Ontario by 2011.

4. If an individual, group, organization, citizenry or government benefits from the university system, it is reasonable to expect them to contribute financially to the operation, maintenance and growth of the system.

5. The provincial government has a clear responsibility to provide appropriate public funding to universities as an investment in the social and economic viability of Ontario.

6. The overall amount of funding must be determined and distributed to universities using a student-centred formula.

17. The financial aid system must protect graduates.

2. The 70 per cent funding commitment must be guaranteed by an act of legislation.

3. The provincial government must implement a 50 per cent increase in university operating funding by 2011.

4. The provincial government must establish a small additional levy on businesses in sectors which rely on post-secondary graduates.

5. The operating grant formula must use a student-based multiplier mechanism.

7. The federal government of Canada has a responsibility to help fund Ontario ’s university system.

6. The provincial government must fully fund all currently unfunded students in the university system.

8. All willing and qualified students in Ontario must be guaranteed equitable access to university.

7. The provincial government must implement a more flexible system for determining institutional enrolment targets and corridors.

9. Students in Ontario have a responsibility to contribute a reasonable proportion of the cost of their education.

10. Every model of university education requires a high-quality, student-friendly financial aid program.

11. The financial aid system is a public —and therefore government —responsibility.

12. To ensure equitable university access for all Ontarians, financial aid must be available to all students in need.

13. To be effective, the financial aid package must provide enough funding to cover all reasonable education costs.

14. Non-repayable forms of financial assistance must compose a significant portion of the student aid package.

15. The provincial government must provide extensive additional OUR BRIGHT FUTURE

8. The federal government of Canada must institute a dedicated higher education transfer to the provinces.

9. All tuition in Ontario must be regulated.

10. Students in Ontario must never pay for more than 30 per cent of the cost of university education by 2011.

11. The 30 per cent student contribution cap must be protected by an act of legislation.

12. Tuition fees should be separated into variable bands without distorted price differentials to reflect cost of program delivery.

13. The provincial government must reform the student financial aid system to ensure university access for every willing and qualified student.

14. The provincial government must remove unfair categorical ineligibilities from the financial aid system.

59

FUNDING, TUITION & STUDENT FINANCIAL ASSISTANCE 15. The financial aid package must be composed of two separate loan programs —one to cover the cost of tuition and associated fees, and one to cover all reasonable cost of living expenses.

16. There must be no needs-testing on the tuition loan.

17. A reasonable and progressive needs-testing framework must be applied to the cost of living loan.

18. The provincial government must develop an accurate assessment of total student educational cost in Ontario.

19. Sensitivity to geographic circumstances should be built into the cost of living loan assessment process.

20. Both the tuition and cost of living loan must be large enough to completely account for actual tuition and cost-of-living expenses.

21. The provincial government must create an up-front, merit-based grant program similar to the Alexander Rutherford Scholarship program in Alberta.

22. OSOG must be applied to a student ’s total debt, not their yearly loan award.

23. The Ontario Student Opportunity Grant (OSOG) must remit 25 per cent of the maximum student loan package regardless of the overall size of the package itself.

24. The provincial government must cease using the Canada Millennium Scholarship program to displace the OSOG contribution.

25. The provincial government must provide a robust series of effective grants to reduce the financial burden of student loans.

26. Students from low-income demographic groups must be provided with partial tuition waivers.

27. To address wage inequities, graduates from systemically disadvantaged groups must receive additional debt forgiveness.

tingent loan repayment plan in Ontario.

32. The provincial government must make provisions for greater income sensitivity in graduate debt repayment.

33. The provincial and federal governments must remain committed to providing an effective and accessible system of interestrelief.

34. The provincial government must allow for graduates in financial difficulty to make partial payments on their loans, calculated on an income-contingent basis and for a fixed period of time.

35. The provincial government must implement a system of more easily accessible and effective income-based debt remission.

36. The Bankruptcy and Insolvency Act must be amended to treat student debt like all other types of consumer debt.

37. The financial aid system must be regulated and funded by the provincial government and administered primarily by individual institutions.

38. The financial aid system must be proactive in communicating with students and providing information in a timely manner.

39. The provincial government must invest in creating an effective online presence which allows students to access all the information they need on the financial aid system, provides powerful tools to help students plan their finances and allows for online applications.

40. The financial aid system must provide needs-assessment summaries to foster transparency and clarity in the application process.

41. The provincial government must offer student financial management programs for recipients of student aid.

28. The federal government must eliminate the tuition tax credit and provide the additional revenue to the provinces on top of the base Canadian Education Transfer for investment in grant programs for vulnerable demographic groups.

29. When consolidating their loans, graduates should be able to choose a repayment term which works for their unique financial situation.

30. Graduates must not be required to begin repayment until their income exceeds an acceptable income-to-debt ratio.

31. The provincial government must not implement an income-con-

60

OUR BRIGHT FUTURE

DISCUSSION PAPER appendix one: provincial BIU weights, 2003/04 Program Category BIU Weight 1. General Arts and Science 1 2. Accounting, Commerce, Applied Arts, Physical Education, Law 1.5 3. Agriculture, Engineering, Nursing, Education, Music 2 4. Dentistry, Medicine, Veterinary Medicine 5 5. [Graduate] Commerce, Journalism, Public Administration 2 6. [Graduate] Education, Fine Arts, Humanities, Social Science, 3 Mathematics, Law 7. [Graduate] Engineering, Dentistry, Medicine, Music, Nursing, 4 Science, Veterinary Medicine 8. [Graduate] All PhD (except for direct entry from BA) 6

OUR BRIGHT FUTURE

61

FUNDING, TUITION & STUDENT FINANCIAL ASSISTANCE appendix two: Higher Education Contribution Scheme (HECS) tuition bands, 2003/04 BAND BAND 1: arts, social sciences, humanities, behavioral sciences, education, visual/performing arts, nursing, justice and legal studies BAND 2: mathematics, computing, other health sciences, agriculture/renewable resources, built environment/architecture, sciences, engineering/processing, administration, business and economics BAND 3: law, medicine, medical science, dentistry, dental services and veterinary science

62

TUITION FEES $3,680 ($3532.80 CDN)

$5,242 ($5,032.32 CDN)

$6,136 ($5890.56 CDN)

OUR BRIGHT FUTURE

DISCUSSION PAPER references Stewart, Graeme. “Whither Arts? ” Educated Solutions. 2004, 13.

Council of Ontario Universities. Ontario Universities – 2004 Resource Document. Toronto: Council of Ontario Universities, 2004, 2.

3 Johnstone, Bruce. Non-Repayable Financial Assistance: The Variety and Cost-Effectiveness of Grants. Quebec City: CMEC-OECD Canada Seminar on Student Financial Assistance, May 2004, 9.

4 Council of Ontario Universities. Compendium of Statistical and Financial Information – Ontario Universities, 2002-2003. Toronto: Council of Ontario Universities, 2004, 3.

5 Ibid, 3. This calculation also used an estimated 2004-2005 enrolment level of 326,000 FTEs. 6 Council of Ontario Universities. Ontario Universities – 2004 Resource Document. Toronto : Council of Ontario Universities, 2004, 3.

7 Ibid, 3.

8 Council of Ontario Universities. Compendium of Statistical and Financial Information – Ontario Universities, 2002-2003. Toronto: Council of Ontario Universities, 2004, 3.

9 Ibid, 3.

10 Council of Ontario Universities. Ontario Universities – 2004 Resource Document. Toronto : Council of Ontario Universities, 2004, 2.

11 Council of Ontario Universities. “Issue: Faculty Renewal. ” 2002 Briefing Notes. September 2002.

12 Ibid, 23.

13 Canadian Association of University Business Officers. Point of No Return: The Urgent Need for Infrastructure Renewal at Canadian Universities. Ottawa, 2000, 23.

14 Martin, Roger L. Investing for Prosperity: Second Annual Report of the Task Force on Productivity, Competitiveness and Economic Progress. November, 2003.

15 Johnstone, Bruce. The Economics and Politics of Cost Sharing in Higher Education: Comparative Perspectives. University of Buffalo: International Comparative Highere Education Finance and Accessibility Project, 2004, 1.

16 Statistics Canada. “University Tuition Fees. ” The Daily. September 2, 2004. As found on http://www.statcan.ca/Daily/English/ 040902/d040902a.htm.

17 Statistics Canada. “University Tuition Fees. ” The Daily. August 12, 2003. As found on http://www.statcan.ca/Daily/English/ 030812/d030812a.htm.

18 Based on Council of Ontario Universities Survey of Fees, 2003.

19 Stewart, Graeme. Back to School: A System Under Stress. Toronto: Ontario Undergraduate Student Alliance, 2003.

20 Usher, Alex and Sean Junor. The Price of Knowledge: Access and Student Finance in Canada. Montreal: Canada Millennium Scholarship Foundation, 2002, 186.

21 Ibid, 184.

22 Ministry of Training, Colleges and Universities. Student Assistance in Ontario: An Overview. April 2003.

23 Corak, Miles, Garth Lipps and John Zhao. Family income and participation in post-secondary education. Ottawa: Statistics Canada Family and Labour Studies Division, October 2003, 11.

24 Ibid, 39.

25 Department of Indian Affairs and Northern Development. “Section 3: Education. ” Basic Departmental Data – 2002. Ottawa: First Nations and Northern Statistics Section, March 2003, 38.

26 Frenette, Marc. Too far to go on? Distance to school and university participation. Ottawa: Statistics Canada Business and Labour Market Division, June 2002, 13.

27 Johnstone, Bruce. Cost-Sharing and Equity in Higher Education: Implications of Income Contingent Loans. University of Buffalo: International Comparative Higher Education Finance and Accessibility Project, 2003, 6.

28 Ibid, 7.

29 Statistics Canada. “Household Income Groups (24) in Constant (2000) Dollars and Selected Demographic Educational, Cultural and Labour Force Characteristics of Primary Household Maintainer (87) for Private Households, for Canada, Provinces and Territories, 1995 and 2000 – 20% Sample Data. ” 2001 Census. Ottawa: Statistics Canada, April 2004.

30 TD Economics. Investing in Higher Education Delivers a Stellar Rate of Return. January 2004, 1.

31 Ibid, 2.

32 Stager, David A.A. Focus on Fees. Toronto: Council of Ontario Universities, 1989, 125.

33 Johnstone, Bruce. Cost-Sharing and Equity in Higher Education: Implications of Income Contingent Loans. University of Buffalo: International Comparative Higher Education Finance and Accessibility Project, 2003, 7.

34 Canadian Federation of Students. Compromising Access: A Critical Analysis of Income Contingent Loan Repayment Schemes (2nd Edition). November 1997, 42.

35 Van Harte, Meagan. Can Student Loan Schemes Ensure Access to Higher Education? University of Buffalo: International Comparative Higher Education Finance and Accessibility Project, 2002, 1.

36 Johnstone, Bruce. Non-Repayable Financial Assistance: The Variety and Cost-Effectiveness of Grants. Quebec City: CMEC-OECD Canada Seminar on Student Financial Assistance, May 2004, 9.

37 Johnstone, Bruce. Responses to Austerity: The Imperatives and Limitations of Revenue Diversification in Higher Education. University of Buffalo:International Comparative Higher Education Finance and Accessibility Project, 2001, 2.

38 Council of Ontario Universities. Compendium of Statistical and Financial Information – Ontario Universities, 2002-2003. Toronto: Council of Ontario Universities, 2004, 3.

39 Johnstone, Bruce. Cost-Sharing and Equity in Higher Education: Implications of Income Contingent Loans. University of Buffalo: International Comparative Higher Education Finance and Accessibility Project, 2003, 4.

1

2

OUR BRIGHT FUTURE

63

FUNDING, TUITION & STUDENT FINANCIAL ASSISTANCE 40 Johnstone, Bruce. Responses to Austerity: The Imperatives and Limitations of Revenue Diversification in Higher Education. University of Buffalo:International Comparative Higher Education Finance and Accessibility Project, 2001, 5.

41 Dr. Bruce Johnstone. Cost-Sharing in Higher Education: Tuition, Financial Assistance and Accessibility in Comparative Perspective.

University of Buffalo: International Comparative Higher Education Finance and Accessibility Project, 2003, 7.

42 Organization for Economic Cooperation and Development. Average personal income tax and social security contribution rates on gross labour income. As found on: http://www.oecd.org/document/60/0,2340,en_2649_37427_1942460_1_1_1_37427,00.html.

43 Dr. Bruce Johnstone. Cost-Sharing in Higher Education: Tuition, Financial Assistance and Accessibility in Comparative Perspective.

University of Buffalo: International Comparative Higher Education Finance and Accessibility Project, 2003, 7.

44 Council of Ontario Universities. The Economic Impact of Ontario ’s Universities. Toronto: Council of Ontario Universities, January 2001, 4.

45 Ibid, 4.

46 Kubursi, A.A. The Economic Impact of University Expenditures. Toronto: Council of Ontario Universities, 1994.

47 Johnstone, Bruce. The Economics and Politics of Cost Sharing in Higher Education: Comparative Perspectives. University of Buffalo: International Comparative Higher Education Finance and Accessibility Project, 2004, 11.

48 TD Economics. Investing in Higher Education Delivers a Stellar Rate of Return. January 2004, 2.

49 Higher Education Funding Council for England. Benefits for Higher Education Reach Far Beyond the Job Market. April 2003.

50 Barr, Nicholas. “Financing Education: Lessons from the UK Debate and Elsewhere. ” The Political Quarterly. 2003, 372.

51 Martin, Roger L. Investing for Prosperity: Second Annual Report of the Task Force on Productivity, Competitiveness and Economic Progress. November 2003.

52 For the purposes of this paper, OUSA defines ‘cost of university education ’ as the total expense of delivering programs and providing adequate resources for learning. In addition, corporate support and private donations have not been included in OUSA ’s assessment of the university system. While an important source of revenue, non-tuition private support is a relatively minor player compared to students and the provincial government.

53 The Organization for Economic Cooperation and Development. Relative Proportions of Public and Private Expenditure on Educational Institutions (1995, 2000). As found on: http://www.oecd.org/dataoecd/0/14/14483672.xls.

54 Council of Ontario Universities. Ontario Universities – 2004 Resource Document. Toronto: Council of Ontario Universities, 2004, 16.

55 Ministry of Training, Colleges and Universities. Total Consolidated Operating Grants for 2003-2004 – Final Allocations. July 14, 2004.

56 Council of Ontario Universities. Ontario Universities – 2004 Resource Document. Toronto: Council of Ontario Universities, 2004, 16.

57 Ibid, 22.

58 Ibid, 22.

59 Ibid, 22.

60 Griffith University. Higher Education Contribution Scheme. As found on: http://www.gu.edu.au/vc/ate/content_he_hecs.html.

61 Ministry of Training, Colleges and Universities. The Ontario Operating Funds Distribution Manual. Toronto: Government of Ontario, 2002, 30.

62 Ibid, 4.

63 Ibid, 4.

64 Ibid, 4.

65 Council of Ontario Universities. Compendium of Statistical and Financial Information – Ontario Universities, 2002-2003. Toronto: Council of Ontario Universities, 2004, 3.

66 Ontario University Application Centre. Undergraduate Confirmation Statistics – September 2004. As found on: http:// www.ouac.on.ca/news/ucon/sep04/summary.html.

67 McMaster University. Senate Meeting Minutes. October 19, 2000. As found on http://www.mcmaster.ca/bog/00OCTBOG.HTM. 68 Council of Ontario Universities. Compendium of Statistical and Financial Information – Ontario Universities, 2002-2003. Toronto: Council of Ontario Universities, 2004, 9.

69 Ibid, 9.

70 Ministry of Training, Colleges and Universities. The Ontario Operating Funds Distribution Manual. Toronto: Government of Ontario, 2002, 7.

71 The Postsecondary Review. Higher Expectations for Higher Education. Toronto: Government of Ontario, 2004, 22.

72 Effective April 1, 2004, the CHST was split into the CHT and CST. 73 Canadian Alliance of Student Associations. Think Education: Bigger Picture, Brighter Future. Ottawa: Canadian Alliance of Student Associations, 2004, 5.

74 Council of Ontario Universities. Ontario Universities – 2004 Resource Document. Toronto: Council of Ontario Universities, 2004, 28.

75 Ibid, 6.

76 Ibid, 6.

77 Ministry of Training, Colleges and Universities. Total Consolidated Operating Grants for 2003-2004 – Final Allocations. July 14, 2004.

78 Royal Commission on Post-Secondary Education in Ontario. The Learning Society: Report of the Commission on Post-Secondary Education in Ontario. Toronto: Queen ’s Printer, 1972.

79 Legislative Assembly of Ontario. “Statements by the Ministry and Responses – Economic Statement. ” Hansard. December 15, 1997.

80 Legislative Assembly of Ontario. “Statements by the Ministry and Responses – Economic Statement. ” Hansard. December 15, 1997.

81 Ibid.

82 Ontario Confederation of University Faculty Associations. 1998 Ontario Budget: Summary & Analysis. May 1998.

64

OUR BRIGHT FUTURE

DISCUSSION PAPER Legislative Assembly of Ontario. “Statements by the Ministry and Responses – Economic Statement. ” Hansard. December 15, 1997.

Bartleman, James K. “Strengthening the Foundation for Change. ” Speech from the Throne. November 20, 2003.

85 International Comparative Higher Education Finance and Accessibility Project. “Higher Education Expenses Borne by Parents and Students, Canadian Colleges and Universities, First Degree, [Academic] Year 2001-02. ” Database: Student-Parent Cost by Country. University of Buffalo, 2004. As found on: http://www.gse.buffalo.edu/org/inthigheredfinance/canada_table.htm.

86 Statistics Canada. “University Tuition Fees. ” The Daily. September 2, 2004. As found on: http://www.statcan.ca/Daily/English/ 040902/d040902a.htm.

87 Usher, Alex and Sean Junor. The Price of Knowledge: Access and Student Finance in Canada. Montreal: Canada Millennium Scholarship Foundation, 2002, 186.

88 Social Program Evaluation Group. Study of Accessibility to Ontario Law Schools. Queen ’s University, 2004. As found on: http:// www.law.uwo.ca/mainSite/info-news/AccessibilityExecutiveSummary.pdf 89 Ibid.

90 Ontario Student Assistance Program. Repaying Your Loan. As found on: http://osap.gov.on.ca/eng/not_secure/repay.htm.

91 Statistics Canada. “University Tuition Fees. ” The Daily. August 12, 2003. As found on: http://www.statcan.ca/Daily/English/ 030812/d030812a.htm.

92 Based on Council of Ontario Universities Survey of Fees, 2003.

93 Stewart, Graeme. Back to School: A System Under Stress. Toronto: Ontario Undergraduate Student Alliance, 2003.

94 United States Government Accountability Office. Student Consolidation Loans. August 2004. As found on: http://www.gao.gov/ highlights/d04843high.pdf.

95 Statistics Canada. “Household Income Groups (24) in Constant (2000) Dollars and Selected Demographic Educational, Cultural and Labour Force Characteristics of Primary Household Maintainer (87) for Private Households, for Canada, Provinces and Territories, 1995 and 2000 – 20% Sample Data. ” 2001 Census. Ottawa: Statistics Canada, April 2004.

96 TD Economics. Investing in Higher Education Delivers a Stellar Rate of Return. January 2004, 1.

97 Ibid, 2.

98 Ibid, 2.

99 Ibid, 2.

100 Ministry of Training, Colleges and Universities. The Ontario Operating Funds Distribution Manual. Toronto: Government of Ontario, 2002, 32.

101 TD Economics. Investing in Higher Education Delivers a Stellar Rate of Return. January 2004, 2.

102 Griffith University, Higher Education Contribution Scheme. As found on: http://www.gu.edu.au/vc/ate/content_he_hecs.html.

103 Johnstone, Bruce. Student Loans in International Perspective: Promises and Failures, Myths and Partial Truths. University of Buffalo: International Comparative Higher Education Finance and Accessibility Project, 2000, 1.

104 Ministry of Training, Colleges and Universities Act. Regulation 775: Ontario Study Grant Plan. Government of Ontario, 1990. As found on: http://www.canlii.org/on/laws/regu/1990r.775/20040304/whole.html.

105 Ibid.

106 Ibid.

107 Johnstone, Bruce. Cost-Sharing and Equity in Higher Education: Implications of Income-contingent Loans. University of Buffalo: International Comparative Higher Education Finance and Accessibility Project, 2003, 9.

108 Ontario Student Assistance Program. Student Assistance in Ontario: An Overview. April 2003.

109 Office of the Provincial Auditor of Ontario. 2003 Annual Report. Toronto: Queen ’s Printer, 2003, 246.

110 Ibid.

111 Ibid.

112 Statistics Canada. “University Tuition Fees. ” The Daily. September 2, 2004. As found on: http://www.statcan.ca/Daily/English/ 040902/d040902a.htm.

113 Schmidt, Sarah. “Fewer Ontario Students getting Provincial Loans. ” The National Post, Nov. 27, 2002, Pg A4.

114 Council of Ontario Universities. Compendium of Statistical and Financial Information – Ontario Universities, 2002-2003. Toronto: Council of Ontario Universities, 2004, 3.

115 Usher, Alex and Sean Junor. The Price of Knowledge: Access and Student Finance in Canada. Montreal: Canada Millennium Scholarship Foundation, 2002, 186.

116 The Postsecondary Review. Higher Expectations for Higher Education. Toronto: Government of Ontario, 2004, 3.

117 International Comparative Higher Education Finance and Accessibility Project. “Higher Education Expenses Borne by Parents and Students, Canadian Colleges and Universities, First Degree, [Academic] Year 2001-02. ” Database: Student-Parent Cost by Country. University of Buffalo, 2004. As found on: http://www.gse.buffalo.edu/org/inthigheredfinance/canada_table.htm.

118 Ekos Research Associates. Making Ends Meet: The 2001-2002 Financial Survey. Montreal: Canada Millennium Scholarship Foundation, March 2003, 103.

119 Statistics Canada. “University Tuition Fees. ” The Daily. September 2, 2004. As found on: http://www.statcan.ca/Daily/English/ 040902/d040902a.htm.

120 Ekos Research Associates. Making Ends Meet: The 2001-2002 Financial Survey. Montreal: Canada Millennium Scholarship Foundation, March 2003, 86.

121 Office of the Provincial Auditor of Ontario. “The Ontario Student Assistance Program. ” 2003 Annual Report. Toronto: Queen ’s Printer, 2003, 260.

83 84

OUR BRIGHT FUTURE

65

FUNDING, TUITION & STUDENT FINANCIAL ASSISTANCE 122 Johnstone, Bruce. Student Loans in International Perspective: Promises and Failures, Myths and Partial Truths. University of Buffalo: International Comparative Higher Education Finance and Accessibility Project, 2000, 2.

123 Johnstone, Bruce. Student Loans in International Perspective: Promises and Failures, Myths and Partial Truths. University of Buffalo: International Comparative Higher Education Finance and Accessibility Project, 2000, 56.

124 Government of Ontario. Ontario Budget 2004. May 18, 2004. As found on: http://www.gov.on.ca/FIN/bud04e/index.htm.

125 Ibid, 47.

126 Ekos Research Associates. Making Ends Meet: The 2001-2002 Financial Survey. Montreal: Canada Millennium Scholarship Foundation, March 2003, 52.

127 Statistics Canada. Census families ’ median income, Canada, provinces and territories, 1990 and 2000. As found on: http:// www12.statcan.ca/english/census01/products/analytic/companion/inc/tables/medincpro.cfm.

128 Ekos Research Associates. Making Ends Meet: The 2001-2002 Financial Survey. Montreal: Canada Millennium Scholarship Foundation, March 2003, 51.

129 Ibid, 45.

130 Hemingway, Fred. Assessing Canada ’s Student and Need Assessment Policies. Montreal: Canada Millennium Scholarship Foundation, March 2003, 13.

131 International Comparative Higher Education Finance and Accessibility Project. “Higher Education Expenses Borne by Parents and Students, Canadian Colleges and Universities, First Degree, [Academic] Year 2001-02. ” Database: Student-Parent Cost by Country. University of Buffalo, 2004. As found on: http://www.gse.buffalo.edu/org/inthigheredfinance/canada_table.htm.

132 Runzheimer Canada. Student Cost of Living Study. Toronto: University of Toronto, 2003, 3.

133 These graphs are an amalgam of data from the Student Cost of Living Survey by the University of Toronto Student-Administration Joint Working Group on OSAP Reform/ Runzheimer Canada and Assessing Canada ’s Student and Need Assessment Policies by the Canada Millennium Scholarship Foundation.

134 Council of Ontario Universities. Compendium of Statistical and Financial Information – Ontario Universities, 2002-2003. Toronto: Council of Ontario Universities, 2004, 7.

135 Johnstone, Bruce. Non-Repayable Financial Assistance: The Variety and Cost Effectiveness of Grants as Opposed to Loans. University of Buffalo: International Comparative Higher Education Finance and Accessibility Project, 2004, 2.

136 Junor, Sean and Alex Usher. “Focus on Ontario. ” The Price of Knowledge 2004: Access and Student Finance in Canada. Montreal: Canada Millennium Scholarship Foundation, 2004.

137 Ibid.

138 Alberta Learning Information Service. Alexander Rutherford Scholarship for High School Achievement. As found on: http:// www.alis.gov.ab.ca/scholarships/info.asp?EK=11.

139 Council of Ontario Universities. University Applicant Survey Highlights. November 2003.

140 All of these figures are hypothetical, and this model is purely conceptual.

141 Ontario Student Assistance Program. Student Assistance in Ontario: An Overview. April 2003.

142 Ontario Student Assistance Program. Repaying Your Loan. As found on: http://osap.gov.on.ca/eng/not_secure/repay.htm.

143 Johnstone, Bruce. Non-Repayable Financial Assistance: The Variety and Cost Effectiveness of Grants as Opposed to Loans. University of Buffalo: International Comparative Higher Education Finance and Accessibility Project, 2004, 7.

144 Corak, Miles, Garth Lipps and John Zhao. Family income and participation in post-secondary education. Ottawa: Statistics Canada Family and Labour Studies Division, October 2003, 11.

145 Ibid, 39.

146 Department of Indian Affairs and Northern Development. “Section 3: Education. ” Basic Departmental Data – 2002. Ottawa: First Nations and Northern Statistics Section, March 2003, 38.

147 Frenette, Marc. Too far to go on? Distance to school and university participation. Ottawa: Statistics Canada Business and Labour Market Division, June 2002, 13.

148 Canadian Federation of Students. Compromising Access: A Critical Analysis of Income Contingent Loan Repayment Schemes (2nd Edition). November 1997, 34.

149 Government of Canada. Pay Equity Review. Ottawa: Department of Justice, 2004. As found on: http://canada.justice.gc.ca/en/ payeqsal/6005.html.

150 Johnstone, Bruce. Cost-Sharing and Equity in Higher Education: Implications of Income-contingent Loans. University of Buffalo: International Comparative Higher Education Finance and Accessibility Project, 2003, 6.

151 Government of Canada. Pay Equity Review. Ottawa: Department of Justice, 2004. As found on: http://canada.justice.gc.ca/en/ payeqsal/6005.html.

152 Finnie, Ross, Alex Usher and Hans Vossensteyn. “Meeting the Need: A New Architecure for Canada ’s Student Financial Aid System. ” Policy Matters. August 2004: 5(7), 14.

153 Ibid, 16.

154 Ibid, 16.

155 Ontario Student Assistance Program. Repaying Your Loan. As found on: http://osap.gov.on.ca/eng/not_secure/repay.htm.

156 Ontario Student Assistance Plan. Repaying your Loan. As found on: http://osap.gov.on.ca/eng/not_secure/ repay.htm#Revision%20of%20Terms.

157 Johnstone, Bruce. The Economics and Politics of Cost Sharing in Higher Education: Comparative Perspectives. University of Buffalo: International Comparative Higher Education Finance and Accessibility Project, 2004, 3.

66

OUR BRIGHT FUTURE

DISCUSSION PAPER Barr, Nicholas. “Financing Education: Lessons from the UK Debate and Elsewhere. ” The Political Quarterly. 2003, 373.

Johnstone, Bruce. Responses to Austerity: The Imperatives and Limitations of Revenue Diversification in Higher Education. University of Buffalo: International Comparative Higher Education Finance and Accessibility Project, 2001, 5.

160 Ibid, 35.

161 Government of Canada. Pay Equity Review. Ottawa: Department of Justice, 2004. As found on: http://canada.justice.gc.ca/en/ payeqsal/6005.html.

162 Canadian Federation of Students. Compromising Access: A Critical Analysis of Income Contingent Loan Repayment Schemes (2nd Edition). November 1997, 34.

163 Office of the Provincial Auditor of Ontario. 2003 Annual Report. Toronto: Queen ’s Printer, 2003, 261.

164 Ibid, 246.

165 Ibid, 261.

166 Ibid, 261.

167 Association of Universities and Colleges of Canada. The Student Assistance Reform Initiative: Reviewing Student Assistance in Canada. Ottawa: Association of Universities and Colleges of Canada, 1997, 5.

168 Advanced Education and Labour Student Services Branch. Income Based Rebates (IBR): An Alternative for Dealing with Student Debt Load. Fredricton: Government of New Brunswick, 1994, 9.

169 National Student Loans Service Center. Debt Reduction in Repayment. Government of Canada, 2004. As found on: http:// canlearn.ca/nslsc/repay/On/nlObtRepAss.cfm?LANGNSLSC=en&IT=PUBLIC&row=5.

170 Ibid.

171 Ontario Student Assistance Program. Ontario Debt Reduction in Repayment. Government of Ontario, 2004. As found on: http:// osap.gov.on.ca/eng/not_secure/DRR.htm.

172 Ibid.

173 Ontario Student Assistance Program. Repaying Your Loan: Failing To Repay Your Loan. As found on: http://osap.gov.on.ca/eng/ not_secure/repay.htm#Failure%20to%20Repay.

174 Centre for Educational Statistics. “Student Debt from 1990-91 to 1995-96: An Analysis of Canada Student Loans Data. ” Education Quarterly Review. 5(4).

175 Van Harte, Meagan. Can Student Loan Schemes Ensure Access to Higher Education? University of Buffalo: International Comparative Higher Education Finance and Accessibility Project, 2002, 1.

176 Ibid, 8.

177 Ontario Student Assistance Program. Student Assistance in Ontario: An Overview. April 2003.

158 159

OUR BRIGHT FUTURE

67

68

OUR BRIGHT FUTURE

DISCUSSION PAPER ADVANCEMENT & OPPORTUNITY IN HIGHER EDUCATION

by ADAM SPENCE OUR BRIGHT FUTURE

69

70

OUR BRIGHT FUTURE

EXECUTIVE SUMMARY SUMMARY Advocates, academics and politicians in nations, provinces and regions around the globe argue that higher education must be both accessible to all qualified students and of the utmost quality. This premise is clear, but two questions arise. Why should all qualified persons have the chance to go to college or university, regardless of social or economic standing? And what are characteristics of a high quality education, if any can indeed be broadly defined? Hopefully, the concepts of advancement and opportunity offer foundational support to the argument about access and quality to begin to offer some answers these questions.

For the purposes of this paper, two basic answers will be presented. True access allows all individuals to advance their own, and their jurisdictions ’ status without barriers. Moreover, one characteristic of a quality experience is the provision of opportunity for discovery or development.

KEY FINDINGS Higher education is a wise public investment that advances an individual ’s and a jurisdiction ’s socio-economic status: • In 2001, the median household income in families in which the primary earner had a university degree was 51 per cent greater than households where the primary earner had a high school diploma.

• In 2002, university graduates in Canada contributed 33 per cent of all income tax revenues, but only made up 16.1 per cent of the total population. It should also be noted that university graduates only received 9.1 per cent of government transfers.

• In Ontario, it is estimated that the ongoing underfunding of education, particularly post-secondary, accounts for roughly 25 per cent of the province ’s productivity gap when compared to other peer jurisdictions.

• For every public dollar invested in universities, four dollars is returned to the local economy.

• According to a study performed in the United Kingdom, post-secondary graduates are, “ ….less depressed, healthier, more likely to vote in elections and help with their children ’s education … ” Low-income students are underrepresented and face many barriers to higher education: • In 1997, the last year of known reported data, the participation rate for 18 to 24 year olds from families with incomes of $100,000 or more was double that of individuals from families with incomes of $25,000 or less.

• Participation rates for low-income groups increased from the late seventies to the late nineties, but the percentage difference in participation between the highest income and lowest income quartiles has remained roughly the same at 20 per cent.

• In 2000, every ten per cent increase in parental income was associated with a 2.5 per cent increase in the probability of university attendance.

WHY? • Low-income families are unable to save. Less than one-fifth of families with incomes of less than $30,000 are saving for higher education for their children, whereas two-thirds of families with incomes above $80,000 are doing so.

• The proportional cost of higher education is increasing for low-income families. The total cost of education as a proportion of household income has increased by 5.8 per cent. This means that one year of university costs more than one-third of total income for more than one in five Ontario families. (674,515 families in the province.)

• Actual costs of education have increased tremendously over a historical timeline. In the past ten years, tuition fees have increased by over 130 per cent. In the past twenty years, tuition fees have increased by 133 per cent beyond inflation.

• Parental education may also affect university participation, particularly for low-income individuals.

Aboriginal students are underrepresented and face many barriers to higher education: • Aboriginal participation in higher education is approximately half that of the Canadian population as a whole.

From 1996 to 1999, the post-secondary enrolment rate for Registered Indians aged 17 to 34 averaged 6.5 per cent, while the Canadian total was 11.5 per cent.

• Aboriginal Ontarians are roughly three and a half times less likely to have a university degree than the average Ontarian.

WHY? • The proportional cost of higher education is also increasing for Aboriginal families. It is as high as that of lowincome families.

OUR BRIGHT FUTURE

71

EXECUTIVE SUMMARY • Total cost of higher education is causing some Aboriginal students to opt out. One in three Aboriginal Canadians referred to financial reasons, or the requirement to work, as a reason for not completing their post-secondary schooling. However, inadequate finances were not the only factor – family responsibilities were cited as another major reason for inability to complete post-secondary studies.

• Culture and cultural preservation may also play a role in access for young Aboriginals.

Rural students are underrepresented and face many barriers to higher education: • The participation rate of students living beyond commuting distance from a university (80 kilometres or more) is 11 per cent. This rate is less than half of students who live within 40 kilometres of an institution.

• Rural Ontarians are much less likely to have a university degree when compared to their urban counterparts. In 2001, 9.8 per cent of rural Ontarians held a university degree, whereas 18.9 per cent of their urban counterparts had one.

WHY? • Geographic distance from a university is a major factor.

• Cost also plays a major role, given the proportional and actual increases. Rural Ontarians have a lower median income than the provincial average.

• Parental education may also play an important role. In areas beyond commuting distance from a university, students with parents who have a university degree are almost three times as likely to attend as those who do not.

Debt aversion also influences one ’s ability to attend: • A U.S. study concluded that debt impacted students ’ decisions to pursue certain pathways in medicine, particularly the decision to enter a primary care specialty.

• A study undertaken by Universities UK found that debt aversion deters participation in higher education for lowincome groups.

• Dr. Diana Green, Vice-Chancellor of Sheffhield Hallam University and the Chair of the Student Debt Project Steering Group in the UK, said that, “ …the current policies, which are based on the accumulation of debt, deter participation among those who are the focus of widening participation policies. ” There are many barriers to high quality opportunities that foster discovery and development for Ontario ’s students: • Our institutions don ’t have the required public funding to create high quality opportunities for discovery and skill development. Ontario ’s universities have the lowest per student funding for Canadian jurisdictions -- $6,018 in 200102, as compared to the national average of $8,279, and $9,569 in Newfoundland, the national leader. Ontario is also at the bottom when compared to all 50 U.S. states in per cent change in operating funding to universities in the past ten years.

• The ability for students to engage in co-discovery with faculty is decreasing. The student to faculty ratio is now the highest in the country, moving from 17:1 in 1988-89 to 22:1 in 1999-2000. It has been estimated that Ontario requires an additional 13,500 new faculty to meet increased enrolment and retirements in this decade alone.

KEY RECOMMENDATIONS The provincial government should: • regulate and restructure tuition in Ontario so that it is predictable, reflects cost of program delivery and there are no significant price differentials between programs; • provide more robust and targeted student financial assistance for students going into higher education; • provide targeted pre-entry financial aid to qualified students in the early stages of secondary school; • implement early intervention programs to encourage future participation in all levels of higher education; • establish measurable system-wide participation and educational attainment goals for all pathways of higher education; • create an open university of Ontario; • increase overall base funding to the national average to allow universities to hire more qualified faculty, ensure the sustainability of current programs and create high quality educational opportunities for students; • provide financial incentives for universities to develop comprehensive undergraduate research opportunities programs, campus incubators, entrepreneurial challenges and idea accelerators; and • create a grant program for university students to engage in international exchange.

72

OUR BRIGHT FUTURE

ADVANCEMENT & OPPORTUNITY introduction outputs of its public institutions.

Colleges and universities can be extremely effective economic and social accelerators for both individuals and entire societies.

The value of higher education as a mechanism for economic development is clear, as seen in a jurisdiction such as Ontario. The ability to advance into and complete a university education has a significant economic advantage for individual Ontarians. The greater the educational attainment of an individual, the more they are able to earn. In 2001, the median household income in families in which the primary earner had a university degree was 51 per cent greater than households where the primary earner had a high school diploma.2 This trend has been echoed by a number of studies, including the recent TD Economics publication, Investing in a Post-Secondary Education Delivers a Stellar Rate of Return.3 The broad economic impact for any jurisdiction with a high proportion of individuals with higher education is also clear. The more citizens are able to earn, the more productive the overall economy becomes and the more revenue a government can obtain. In 2002, university graduates in Canada contributed 33 per cent of all income tax revenues, but only made up 16.1 per cent of the total population.a It should also be noted that university graduates only received 9.1 per cent of government transfers.b Consequently, underinvestment in higher education and decreased participation or low educational attainment can limit economic progress. In Ontario, it is estimated that the ongoing underfunding of education, particularly post-secondary, accounts for roughly 25 per cent of the province ’s productivity gap when compared to other peer jurisdictions.4 Moreover, it has been estimated that for every public dollar invested in universities, four dollars is returned to the local economy.5 It is also quite evident that higher education is a powerful mechanism for the social development of citizens and their geographic region. Higher education can produce critical thinkers and innovators, as well as a healthy, informed and engaged citizenry. According to a study performed in the United Kingdom, post-secondary graduates are, “ ….less depressed, healthier, more likely to vote in elections and help advancement: higher education with their children ’s education … ”6 Graduates from higher as a tool for individual and societal development When examining the concept of advancement, there education were also found to be tolerant of other races and are at least three important items to consider. First, there is were almost twice as likely to read to their children when the effect of education on future economic and social capac- compared to individuals who had not graduated from secity. Higher education advances an individual ’s socio-economic ondary school.7 The discoveries and ideas developed at higher educastatus, as well as that of the region in which they reside or receive their education. Second, there is the ability of an indi- tion institutions like universities can also have tremendous vidual to move freely into and within any level of education overall benefits for the health, economy and political vitality they wish to pursue without financial or other restraint. To of any jurisdiction. Universities have driven research that has restrain movement within the system for financial reasons or battled previously incurable diseases, and provided the faciliotherwise impedes an individual ’s ability to advance their socio- ties for innovative business ideas and political theories that economic status. Third, there is the importance of retention have shaped the fortunes of cities, regions and even nations.

Unfortunately, there are many Ontarians who do not of intellectual, economic and social potential that is developed by a public system of higher education. It is in the have the ability to advance into and within higher education. broad public interest to receive the greatest benefit from the For the purposes of this paper, five target groups in Ontario Advocates, academics and politicians in nations, provinces and regions around the globe argue that higher education must be both accessible to all qualified students and of the utmost quality. This premise is clear. Everyone who is academically qualified and wants to go should go. When they get there, and during their tenure among whatever halls of academia they select, they should have a valuable experience.

Access is fairly easy to describe, but, unfortunately, the definition of quality is rarely, and often vaguely, defined.

But why should all qualified persons have the chance to go to college or university, regardless of social or economic standing? And what are characteristics of a high quality education, if any can indeed be broadly defined? Hopefully, the concepts of advancement and opportunity offer foundational support to the argument about access and quality to begin to offer some answers to these questions.

For the purposes of this paper, two basic answers will be presented. True access allows all individuals to advance their own, and their jurisdictions ’, status without barriers.

Moreover, one characteristic of a quality experience is the provision of opportunity for discovery or development. Accordingly, this paper is driven by five basic principles: 1. In the public sphere, a system of higher education functions as a catalyst for socio-economic development; 2. All academically qualified students should have the opportunity to advance into and within all levels of higher education; 3. Ontario must diligently work to retain the intellectual, economic and social potential that is developed; 4. At the individual level, a university is a place of learning and discovery, as well as for the development of ideas; and 5. There should be meaningful opportunities for students in all levels of higher education that develop skills, enhance learning or provide experiences to allow them to move on to higher levels of education or the workforce.

This paper will explore these concepts and offer recommendations that could be applied in Ontario in order to effectively ensure access and quality within its system of higher education.1

OUR BRIGHT FUTURE

73

ADVANCEMENT & OPPORTUNITY Graph One: Total Cost of University Education in Ontario as a Proportion of Low Income Earnings, 1995 to 2000

Total Cost of University Education in Ontario as a Proportion of Low Income Earnings, 1995 to 2000 38.00% PERCENTAGE

36.00%

36.52%

1999

2000

34.85% 33.65%

34.00% 32.00%

36.08%

32.54% 30.73%

30.00% 28.00% 26.00% 1995

1996

1997

1998 YEAR

with lower university participation rates or educational attainment have been selected for review. This paper will attempt to review their participation status and completion rates, outline potential reasons for their non-participation and highlight their current socio-economic status.

LOW-INCOME ONTARIANS Participation rates for low-income individuals are perennially lower than higher income groups. In 1997, the last year of known reported data, the participation rate for 18 to 24 year olds from families with incomes of $100,000 or more was double that of individuals from families with incomes of $25,000 or less.8 It should be noted that participation rates for low-income groups increased from the late seventies to the late nineties, but the percentage difference in participation between the highest income and lowest income quartiles has remained roughly the same at 20 per cent.9 Moreover, Statistics Canada estimates that every ten per cent increase in parental income was associated with a 2.5 per cent increase in the probability of university attendance in 2000.10 It is uncertain whether this correlation between income and participation has increased, particularly with significant tuition increases caused by deregulation in Ontario in the midto late-nineties. Statistics Canada has drawn conclusions up to the start of this decade; however, there is no apparent data specific to income quartile and participation beyond 1997.11 There are a number of factors that contribute to lower participation rates for low-income students. Low-income families are less likely to save for post-secondary education, which puts potential students in these families at a disadvantage with respect to financial resources for university, college or other studies. Less than one-fifth of families with incomes of less than $30,000 are saving for higher education for their children, whereas two-thirds of families with incomes above $80,000 are doing so.12 This inability to save may be driven by a changing fi74

nancial dynamic among low-income families. For example, between the mid-eighties and the turn of the century, lowincome families became less likely to own a home and the proportion of total household equity contained within these homes increased tremendously. The proportion has moved from one in three to one in four families holding a residence as an asset, while the financial value of that investment has increased by over 50 per cent.13 Moreover, although the percentage of low-income families with financial assets has increased by five per cent, the average value of those assets has decreased by over one third.14 These statistics demonstrate that fewer low-income families have the liquid financial resources to place into savings for advancement such as higher education for their children.

This inability to save is compounded by a proportional and actual cost increase for higher education in Ontario. The proportional cost of education is considerable when examining low-income families. In 2000, the total cost of education for one student represented at least one third of all pre-tax income for more than one in five Ontario families.15,16 This represents a total of 674,515 family units in Ontario.17 The proportion of this cost has also increased over the past five years, when comparing total cost of education and low-income cutoffs as determined by Statistics Canada.18 Between 1995 and 2000, even though low-income cutoffs have increased, the total cost of education in Ontario as a proportion of low-income earnings has increased by 5.8 per cent.19,20 This can be seen in graph one.

The actual costs of education have also increased tremendously over the past ten years. Average tuition fees in Ontario have skyrocketed by 137 per cent, well beyond the Canadian average.21 This trend represents a clear increase that is well beyond inflation, which can also be seen in a historical context. Over a forty year timeline, between 1964 and 2004, tuition fees have increased 35 per cent above inflation in Ontario.22 ,23 If ancillary fees are taken into account, manOUR BRIGHT FUTURE

DISCUSSION PAPER datory education fees have increased by 55 per cent above inflation.24 ,25 ,26 Over a twenty year timeline, between 1980 and 2000, tuition fees increased by 133 per cent beyond inflation.27 Total costs associated with going to university have also increased, placing additional financial barriers in front of low-income students. Total cost of education estimates for a student living away from home at an Ontario university are $14,512 on average, and can climb as high as $18,507 for students living in Toronto.28 ,29 Other non-financial characteristics may affect the advancement of low-income individuals into higher education.

For example, a preponderance of research suggests parental education levels affects university participation, particularly for low-income individuals.30 ,31 However, some studies have concluded that parental education may not affect participation.32 It is therefore difficult to establish a primary causal link between parental education and participation, particularly for low-income families, as they are characteristically more likely to have lower levels of parental education.

Unfortunately, these barriers and lower participation rates only build upon existing barriers to socio-economic advancement and intergenerational mobility for low-income individuals. In the 1990s, children from higher income families could expect to earn up to twice as much as children from low-income families.33 This income advantage has been increasing over the past two decades.34 Unless low-income individuals are able to have equal access to higher education pathways including university, their future earnings will be limited and the socio-economic status of many Ontario families will remain in a low-income cycle.

ABORIGINAL ONTARIANS Aboriginal participation in higher education is approximately half that of the Canadian population as a whole. From 1996-

99, the post-secondary enrolment rate for Registered Indians aged 17 to 34 averaged 6.5 per cent, while the Canadian total was 11.5 per cent.35 Moreover, participation and total enrolment has decreased over the past five years of reported data.

Total participation for the Registered Indian population has gone from 6.5 per cent in 1996-97 to 5.9 per cent in 200001.36 Total enrolment for Registered Indians and Inuit individuals has also decreased, from 27,172 in 1997-98 to 25,825 in 2001-02.37 Aboriginal Canadians must also battle with issues of continued advancement in their studies. Completion rates for university are quite low. In 1996, only three per cent of Registered Indians, and 1.8 per cent of Registered Indians On Reserve, had a university degree, compared to 13.3 per cent for the rest of Canada.38 Even Aboriginal women, a group with a significantly higher completion rate, are much less likely to have a degree than the average Canadian woman. In the last year of reported data, 12 per cent of off-reserve and nine per cent of on-reserve Registered Indian women claimed university as their highest level of schooling compared to 21 per cent of non-Aboriginal women.39 A perspective on participation and completion rates can be seen in graph two.40 There are a number of factors that could contribute to lower participation rates for Aboriginal Ontarians. The proportional cost of education for Aboriginal families is as high as that of low-income families. In 2000, the total cost of education was roughly one third of median family income for Aboriginal households in Ontario.41 ,42 This proportion has increased in the past five years of reported data, despite a proportional increase in median income for Aboriginal families when compared to the rest of Ontario.

Given these statistics, it is not surprising that inadequate financial resources have been cited as a primary reason for inability to complete post-secondary studies. One in three

Graph Two: Aboriginal and Average Canadian University Participation and Completion in Canada, 1991 and 1996

Aboriginal and Average Canadian University Participation and Completion in Canada, 1991 and 1996 25.00%

23.00%

PERCENTAGE

20.80%

20.00% 15.00%

13.30% 11.40% 10.70%

10.00%

8.30%

7.50% 5.20%

5.00%

2.00%

3.00%

1.80%

1.10%

0.00% Registered Indians

Registered Indians on Reserve

Canadian Average

Registered Indians

Registered Indians on Reserve

POPULATION GROUP 1991

OUR BRIGHT FUTURE

1996

Canadian Average Unive rs ity P a rtic ipa tio n(%) With Unive rs ity De gre e (%)

75

ADVANCEMENT & OPPORTUNITY Graph Three: University Participation by Income Tier and Distance to School in Canada, 2002

PARTICIPATION RATE

University Participation By Income Tier and Distance to School in Canada, 2002 35.00%

31.40%

30.00% 25.00% 20.00%

17.60%

18.40%

20.40% 18.40%

15.00% 10.40%

10.00%

12.20% 5.00% 3.10%

5.00%

0 - 40 km 40 - 80 km 80 km +

0.00% TOP

MIDDLE

BOTTOM

INCOME TIER

Aboriginal Canadians referred to financial reasons, or the requirement to work, as a reason for not completing their postsecondary schooling.43 However, inadequate finances were not the only factor – family responsibilities were cited as another major reason for inability to complete post-secondary studies.44 Culture and cultural preservation may also play in important role in the ability of young Aboriginal Ontarians to move into and within higher education. It may be a challenge for youth to interact outside that environment and return and integrate back into the reserve or predominantly Aboriginal community. Consequently, this presents challenges for the communities in the retention of its youth, particularly those with greater skill sets that have been developed externally. This is a significant challenge for Aboriginal communities that are struggling to preserve cultural touchstones, including language, religion and even teaching practices through their children.

Unfortunately, these financial and structural barriers to access into higher education for Aboriginal students only build upon existing structural problems. Aboriginal Ontarians are less likely to be employed and earn less than other Ontarians or Canadians. The unemployment rate for Aboriginal Canadians is roughly three times as high as the total Canadian population.45 Median income for Aboriginal households is only 65 per cent of the overall Ontario population.46 It is clear that post-secondary education, however, is not the only factor in lower incomes or higher rates of unemployment among Aboriginals. In 1996, the total unemployment rate for Aboriginal women with university as the highest level of schooling was 12 per cent, compared to five per cent for non-Aboriginal women.47 The disparity was more pronounced in overall unemployment rates. The total unemployment rate for Aboriginal Canadians with post-secondary education was 23 per cent, compared to seven per cent for white Canadians with the same level of education.48 It has been argued that this demonstrates other barriers to employment, such as discrimination or availability of opportunities.49 76

RURAL ONTARIANS When examining the advancement of rural Ontarians into higher education, there are a number of mechanisms to determine their participation – distance to school and defined rural residency. When looking at participation rates and distance to school nationwide, the participation rate of students living beyond commuting distance from a university(80 kilometres or more) is 11 per cent.50 This rate is less than half of those students who live within 40 kilometres of an institution.51 Unfortunately, there is no known data or research available that would allow one to compare university participation and defined rural residency.

There is, however, existing data that examines defined residency and degree completion for rural Ontarians. Rural Ontarians are much less likely to have a university degree when compared to their urban counterparts. In 2001, 9.8 per cent of rural Ontarians held a university degree, whereas 18.9 per cent of their urban counterparts had one.52 Oddly, this difference is not seen in college certificate or diploma completion. In fact, rural Ontarians are more likely to have a college degree than urban Ontarians.53 There are a number of factors that may contribute to lower university participation and degree attainment rates for rural individuals in Ontario. Clearly, geographic distance from a university is a major factor, as demonstrated by the earlier data. This may also somewhat explain the difference between university degree and college certificate attainment, as rural areas are more likely to have colleges or trade schools, and less likely to have universities.

As with low-income and Aboriginal Ontarians, household earnings may be another factor driving lower participation rates. Students from families in the lowest income tier living beyond commuting distance from a university are six times less likely to attend when compared to their highest income counterparts.54 Moreover, rural Ontarians have a lower median income than the provincial average.

The combination of these two factors can be seen in OUR BRIGHT FUTURE

DISCUSSION PAPER graph three.55 Dollars and distance are not the only factors driving lower participation rates. Parental education may also play an important role among rural Ontarians. In areas beyond commuting distance from a university, students with parents who have a university degree are almost three times as likely to attend as those who do not.56 OTHER ONTARIANS Aside from low-income, Aboriginal and rural Ontarians, there are many other groups that are unable to advance into all pathways of higher education in Ontario.

One group that has consistently faced barriers to moving into higher education is single women with dependents.

Unfortunately, there is no research or data available on participation rates for female sole-support parents in Ontario.

There is, however, information available regarding their educational attainment. Single women with dependents in Ontario have roughly equivalent educational attainment to rural Ontarians. In 2001, only 12.5 per cent of women who were lone parents in Ontario had a university certificate, degree or more, compared to the Ontario average of 19.6 per cent.57 ,58 It should be noted that the proportion of single women with dependents who have a college certificate or diploma is unusually high in relation to the Ontario average. In 2001, approximately 24 per cent of this population group had college qualifications, whereas the Ontario average was approximately 16 per cent.59 There may be a number of factors contributing to lower educational attainment among single women with dependents. Clearly, their family status and parental responsibilities must place pressures on this group to follow educational pathways that can be completed more quickly.

Another factor that can affect the advancement of single women with dependents into university is income. In 2000, the total cost of a university education was over one-third of the median income of female lone parent families in Ontario

–– a proportion that has increased since 1995.60 ,61 Moreover, during their period of studies, it would be difficult, if not virtually impossible, to maintain full-time employment at this median amount. The financial costs of supporting children would place further burdens on women interested in advancing their educational and socio-economic status.

Middle-income Ontarians may also be emerging as a potential group facing barriers to advancing into and within higher education. According to research performed by Statistics Canada, the university participation rate for students from middle-income families in Canada decreased during the mid-nineties, until the final year of reported data.62 It is uncertain whether this represents a long-term trend that will continue into this decade.

However, there may be a number of factors that could explain emerging downward trends in participation for middle-income Ontarians. The total cost of education as a proportion of income has increased dramatically over the past ten years, and these costs have increased beyond median income growth. Between 1992-93 and 2001-02, the total cost of university as a percentage of Ontario median family income increased by five per cent, to almost one-fifth of all annual earnings.63 This trend can be seen in graph four.64 There may be a host of other factors that are causing changes in participation rates among middle-income individuals. One of those factors may be changes to eligibility requirements for financial aid in Ontario. Despite significant increases in enrolment, only 130,687 students received Ontario Student Loan assistance in 2002, compared to 212,189 in 1995.65 Unfortunately, no research exists that examines the effects of eligibility changes to participation rates, however, anecdotal evidence persists regarding its effects on students from middle-income families.

OTHER FACTORS PREVENTING ADVANCEMENT Among all groups, there are also factors preventing advancement other than cost, income, parental education, dis-

Graph Four: Total Cost of University as a Percentage of Ontario Median Family Income (OMFI)

Total Cost of University as a Percentage of Ontario Median Family Income(OMFI), 1993 to 2002

PERCENTAGE

20% 15%

17.70%

16.20%

18.80%

13.80%

10% 5% 0% 1992-93

1995-96

1998-99

2001-02

YEAR OUR BRIGHT FUTURE

77

ADVANCEMENT & OPPORTUNITY Graph Five: Educational Attainment in Ontario for Individuals Aged 15 and over, 2001

Educational Attainment in Ontario for Individuals Aged 15 and over, 2001 100%

2.08%

2.19%

90%

17.54%

18.93%

9.83%

PERCENTAGE

60%

0.58% 4.72% 14.25%

16.48%

80% 70%

1.43%

15.71%

11.58%

15.57% 12.62%

9.37%

8.79% University Certificate above Bachelor's University Degree

50% 40% 30%

68.28% 55.30%

54.53%

59.55%

20%

College Certificate or Diploma Trades Certificate or Diploma

10%

No postsecondary qualifications

0% Ontario Average

Urban Ontarians

Rural Ontarians

Aboriginal Ontarians

POPULATION GROUP

tance or family status. Among these, the barrier that has most recently emerged as a driving factor is debt aversion. Debt aversion causes individuals to opt out of pursuing higher education before they begin their studies for fear of high debt.

Unfortunately, there is no Canadian or Ontario specific research on this topic, but there is international evidence of its influence on participation rates for different pathways in higher education.

The international evidence for debt aversion spans the globe. A study in the mid-nineties in the United States concluded that debt impacted students ’ decisions to pursue certain pathways in medicine, specifically the decision to enter a primary care specialty.66 In Australia, a government inquiry discovered significant evidence of debt aversion to higher education among individuals of low socio-economic status.67 In the United Kingdom, which has recently undergone rigorous debate over top-up fees, research has come to similar conclusions. A study undertaken by Universities UK found that debt aversion deters participation in higher education of lower-income groups, and that concern over student debt is greatest among the poorest and lone parents.68 According to Dr. Diana Green, Vice-Chancellor of Sheffhield Hallam University and Chair of the Student Debt Project Steering Group in the UK, “ …current student funding policies, which are based on the accumulation of debt, deter participation among 78

those who are the focus of widening participation policies. ”69 It should be noted that the average student in the UK with a loan owes just over $17,000(CDN), whereas the average student in Ontario with a loan owes $22,700 upon graduation.70 ADVANCEMENT WITHIN HIGHER EDUCATION The ability of an individual to move freely into any level of higher education that they are qualified to attend is also vital for individual and societal advancement. This is particularly true when looking specifically at higher education beyond the Bachelor ’s degree.71 Graduate and professional studies amplify the economic and social effects of higher education. Generally, the more education one has, the more an individual will earn and contribute to the overall economy within a progressive tax regime. Moreover, those individuals who attend higher level studies are the leaders of tomorrow, driving innovation and societal change.

Advancement within higher education beyond the Bachelor ’s degree has become a more important issue as labour market demands have increased and costs have skyrocketed for graduate and professional degrees. The average tuition in Ontario for law is now $9,715, $17,087 for dentistry and $14,355 per year for medicine.72 When looking at the barriOUR BRIGHT FUTURE

DISCUSSION PAPER ers cited above for the selected target groups, the impact of these costs are also amplified.

Unfortunately, when examining the educational attainment of a number of target groups described above, it is clear that their ability to advance into higher education beyond the Bachelor ’s degree is as limited as their ability to participate or complete any studies at university. Rural Ontarians are roughly one and a half times less likely to have a university degree above a Bachelor ’s when compared to the Ontario average. The contrast is more severe when looking at educational attainment for Aboriginals in Ontario.73 Aboriginal Ontarians are roughly three and a half times less likely to have a university degree than the average Ontarian.74 A comprehensive examination of educational attainment in certain target populations can be seen in graph five.75 Clearly, there are a number of groups who face significant barriers to advancement into and within higher education, including low-income, Aboriginal, rural and middleincome Ontarians, as well as single women with dependants in the province. There are also a number of factors that prevent the advancement of these groups into higher education, particularly in university and beyond.

RETAINING INTELLECTUAL, SOCIAL AND ECONOMIC CAPACITY Higher education is a wise public investment with tremendous rates of economic and social return. Once the great individual and societal potential has been developed through higher education, it is important for a public system to retain the intellectual, social and economic capacity that is developed for the benefit of the particular jurisdiction. If Ontario could ensure and improve the retention of its graduates, as well as their ideas, innovations and future wealth, the province would also be able to improve its socio-economic status as a whole.

Unfortunately, there are challenges to our province ’s ability to retain the potential that has been developed through our colleges and universities. Arguably, one of the most important challenges for retention is the commodification of higher education.

Some would argue that this commodification has transformed higher education in our province into a good to be purchased only for individual monetary benefit. There are a number of possible examples that illustrate this problem. Although the majority of data available on international students in Ontario is anecdotal on this topic, significant price differentials and increases in their tuition fees may encourage students to consider their education a “purchased ” good to be obtained, then returned to their country of origin. Unfortunately, this represents lost social, economic and intellectual potential for the province.

Significant price differentials and tuition fees in professional and graduate programs that linked to employment income may also represent lost potential within the province. For example, significant increases in medical tuition fees in the past decade may make it more difficult for new doctors to select fields or areas where they are most needed, in favour of areas and positions that will allow them to pay for their education OUR BRIGHT FUTURE

more quickly. This may be one of the many contributing factors to doctor shortages in rural regions.

Beyond these challenges, there are some conceptual frameworks that may be examined that could help Ontario retain and even develop the economic, social and intellectual potential that is developed. First, both institutions and the system as a whole must offer a high quality-learning environment that is supportive of learners ’ educational objectives. If a clear connection is made regarding the public and institutional investment that is made, graduates may be more likely to contribute to their institution or their province in a meaningful way. Moreover, if students are engaged in personal or societal intellectual, economic or social development while they are attending a public institution, they may also be more likely to utilize or apply these concepts in the same jurisdiction as they were developed. This concept of development will also be further explained in the opportunity section of this paper.

recommendations: mechanisms to foster advancement

In order to foster advancement, the following recommendations have been developed. It should be noted that each of these recommendations is part of the same symphony of ideas. They must be performed in concert.

Recommendation One: The provincial government should regulate and restructure tuition in Ontario so that it is predictable, reflects cost of program delivery and there are no significant price differentials between programs.

There is a clear need to ensure that all costs for higher education are maintained at reasonable levels. Tuition fees are typically the greatest single expense and often a flashpoint for debate given the longstanding involvement of government in establishing their levels or rates of change. Restructuring tuition fees so that they are predictable would stem the tide of recent increases, which have resulted in a growth in the proportion of disadvantaged groups ’ median household income going towards higher education. Hopefully, this would also ensure affordability and battle issues such as debt aversion.

This re-regulation of currently de-regulated fees must be accompanied with a funding commitment from the government to re-balance the proportion of funding that is provided by the public. Arguably, this proportion should at least be in line with the other Canadian provinces, which would mean that the public contribution to the operating costs of universities would be approximately 70 per cent.76 It should be noted that this re-regulation should include all students attending university in Ontario, including international students. Controlling their costs could change the perception that the education they receive is a commodity to be obtained and returned to their country of origin. In turn, this could assist the province in retaining a higher proportion of international students.

79

ADVANCEMENT & OPPORTUNITY Recommendation Two: The provincial government should provide more robust and targeted student financial assistance for students going into higher education.

Unfortunately, the significant increases in the costs of education throughout the 1990 ’s and into this decade were not followed by increases in financial assistance or measures to limit or reduce debt upon completion. This has meant financial hardship for many students from all backgrounds.

For example, the amount of assistance available to sole-support parents has remained unchanged since 1993-94 at $500 per week.77 The maximum amount for most undergraduate students provided by the Ontario Student Assistance Program has also remained unchanged since that time.

Increasing the overall amount of funding provided by existing programs is not, however, the only means of ensuring all Ontarians the ability to advance into and within higher education. These programs have historically been unable to meet either the needs of those targeted, or the public policy goal of increasing their participation in the system. Additional targeted assistance provided to targeted groups could help meet their financial needs and increase their ability to attend. The distribution of these targeted resources could be dependent on income, geographic location, family background or other recognized factors. A number of jurisdictions, including Canada, have moved towards assistance models that also provide targeted assistance dependent on one or a combination of similar characteristics. Norway ’s Student Educational Loan Fund, for example, provides grants to students who have to travel great distances to attend the institution of their choice.78 It should be noted that any new funding provided should be distributed in the form of non-repayable assistance. It should also be noted that there should be special recognition of individuals that face multiple barriers to access. For example, an Aboriginal mother with dependents may receive additional assistance.

Recommendation Three: The provincial government should provide targeted pre-entry financial aid to qualified students in the early stages of secondary school.

Students decide their future educational pathways at an early age. In Ontario, approximately three-quarters of all students make the decision to attend university before age 15.79 Pre-entry financial assistance could make the choice to attend university or college in Ontario much easier. Essentially, preentry assistance is financial support provided by institutions or the appropriate level of government to students from targeted groups demonstrating intent to advance into higher education while in elementary or secondary school. These funds can be put in trust so that they may only be utilized for pathways of higher education in a particular institution or jurisdiction.

A number of different jurisdictions around the world provide financial assistance to students well before they move into college or university. In Canada, the federal government recently announced Canada Learning Bonds for children born 80

into low-income families.80 This program provides $500 for each child born after 2003 to every family with an income below $35,000, with $100 per year for up to fifteen years following the initial award.81 Some provincial governments have also awarded pre-entry financial assistance to students based on academic merit. In Alberta, the provincial government awards the Alexander Rutherford Scholarship for High School Achievement, “ …on the basis of achieving an 80 per cent average on five designated subjects in Grades 10, 11 and 12. ”82 Pre-entry financial assistance was even a policy plank during the recent Democratic nomination battle in the United States. Former Vermont Governor Howard Dean proposed a plan to expand college participation by providing substantial grants to students who agreed to prepare for and apply to college or a career-training program by the eighth grade.83 There are a number of issues to consider with preentry assistance. First, there is the allocation and use of these funds. One mechanism to ensure proper use would be some form of trust agreement between the government and parent/guardian of the prospective student, whereby the money would need to be used for higher education. If the funding was not used for that purpose, it could be remitted back to a general pool for financial assistance of current students. Another mechanism may be notification of qualification in a predetermined time in early secondary school for a certain amount of funds that would allow a student to attend college or university. Second, there is the timing of the distribution of these funds. Any program would have to ensure that it did not put too much pressure on students to excel or select their pathway at too early an age. Furthermore, these funds should not be a requirement for attending but rather a tool to provide a supportive environment of ensured advancement for all students. The availability and use of these funds should also not be a justification for increasing tuition fees.

It is also important to note that matched pre-entry assistance is not an effective means to ensure access and advancement into the system. Mechanisms such as contribution matching programs to Registered Education Savings Plans only provide assistance to those who can contribute, diverting funds from those who have greater need for financial resources. For example, the Canada Education Savings Grant provides matching funds of up to $400 per year for those who contribute to a Registered Education Savings Plan.84 Unfortunately, as mentioned earlier in this paper, there are many groups including lowincome families do not have financial resources to contribute to savings for the future education of their children.

Although there are clear challenges to overcome, preentry assistance may assist targeted groups in overcoming barriers such as debt aversion. Moreover, ensuring financial resources to students at a time when they are making decisions about their future educational pursuits removes another barrier for students to advance into and within any level of higher education. It should be noted that the provision of pre-entry financial assistance could also be provided to students from targeted groups, other than low-income families, who demonstrate an interest in further studies, but do not OUR BRIGHT FUTURE

DISCUSSION PAPER have the financial means to attend.

in appendix one of this paper.

Recommendation Four: The provincial government should implement early intervention programs to encourage future participation in all levels of higher education.

Reasonable tuition fee levels and effective financial aid are necessary, but not sufficient conditions for ensured access into higher education. Initiatives such as early intervention programs are therefore necessary to tackle non-financial factors that prevent advancement into higher education.

Early intervention programs also target students as they are making decisions about their future educational pathways.

Furthermore, these types of programs, “ …encourage educationally and economically disadvantaged students to gain the information and perform the steps necessary to enter the post-secondary education pipeline. ”85 These programs can have a number of deliverables depending on the target population and the needs of the jurisdiction, including counseling, academic and personal enrichment, social integration, mentoring and scholarships.86 These kinds of programs were first established in the mid-sixties in the U.S. by private organizations and philanthropists.87 These programs grew in the 1980 ’s and expanded in the early nineties, following the creation of the National Early Intervention Scholarship and Partnership program by the U.S. Congress in 1992.88,89 The legislative framework that established this program encouraged the provision of financial assistance, information and support services for low-income students to obtain high school diplomas and pursue higher education.90 Following success and increased demand, the number of these types of programs exploded in the 1990 ’s.91 Today, most early intervention programs are predominantly found in the U.S., and the largest are run by state or federal agencies.92 There are, however, still a number of locally administered programs funded by high schools, colleges and universities, community groups and businesses.93 There are a few pilot early intervention programs that have been established in Canada. In 1996, Career Trek was established in Winnipeg through a co-operative effort between the federal government, the University of Manitoba, the University of Winnipeg and Red River College.94 The project was designed to, “ …meet the specific needs of young people who have been defined as ‘having the potential to go on and successfully complete a post-secondary education but who, as a result of their personal circumstance, are not likely to do so. ’ ”95 If the province were considering implementation of these kinds of programs, they would need to establish measurable objectives for program effectiveness. Moreover, given experiences in the U.S., it is evident that these programs need to contain multiple components.96 This would mean that any proposed program would require more than one or two of the deliverables described earlier.

Examples of early intervention programs can be found

Recommendation Five: The provincial government should develop a province-wide awareness program about all the pathways and financial assistance available for higher education in co-operation with sector stakeholders.

In order to ensure advancement, all Ontarians must be aware of all the opportunities and resources available to them following secondary studies. These opportunities should not only include universities and colleges, but should also include trades and training. There are a number of initiatives across the province with this aim. However, there is a need for a clear and common message for those who face non-financial information barriers. This kind of program would need to be developed alongside the other recommended changes that intend on ensuring access to higher education.

OUR BRIGHT FUTURE

Recommendation Six: The provincial government should engage in transparent and co-operative data collection and research on participation rates and educational attainment.

Unfortunately, there are no comprehensive and easily accessible sources of data on participation rates and educational attainment for higher education in Ontario. This presents a problem for a jurisdiction interested in ensuring access for all individuals regardless of socio-economic status. Although the available data presented in this paper demonstrates certain visible trends, it is in no way a comprehensive review of the current environment. If Ontario truly wishes to ensure access and advancement for its citizens, it will need to establish a start point, and track progress towards a particular goal or aim. Moreover, additional data on topics such as the impact of tuition fee increases would inform the public, stakeholders and government as to the best future policy direction to pursue. If possible, the collection of any qualitative or quantitative data related to the retention of intellectual, social or economic potential would also be quite helpful for the system.

Recommendation Seven: The provincial government should establish measurable system-wide participation and educational attainment goals for all pathways of higher education.

It is the stated goal of the Canadian federal government ’s Innovation Strategy that, “One hundred percent of high school graduates have the opportunity to participate in some form of postsecondary education. ”97 Unfortunately, even though higher education is within provincial jurisdiction, there has been no objective set by the province of Ontario. If we are to truly ensure access and advancement, we must set objectives that are pursued with diligent effort by our government.

There are a number of methods by which these objectives could be set. First, there is the development of absolute targets. This is the method the federal government has imple81

ADVANCEMENT & OPPORTUNITY mented, which may be most appropriate within the context of the nation in comparison to others. Although university participation rates are growing, our country remains in the middle of the pack compared to other industrialized nations.

In 1999, Canada ’s university participation rate was eighth, behind countries like Korea, the United Kingdom, the United States and France.98 The other method would be to establish targets for improvement. For example, we may wish to improve the participation rates and educational attainment of low-income Ontarians by twofold over a determined time period. Either method could establish objectives for certain target groups and/or the province as a whole.

It should be noted that any established objectives should be developed in the context of other jurisdictions as well as the needs of Ontario ’s citizens and the province. They should be established not as a blunt push for increased participation for the sake of numerical achievement, or for the pursuit of university education as the ultimate educational achievement.

Objectives should be pursued so that we, as a province, are motivated to ensure equity of opportunity to access all postsecondary pathways.

Recommendation Eight: The provincial government should provide resources for institutional initiatives to develop programs that increase access for targeted groups, including, but not limited to, rural, Aboriginal, and low-income Ontarians, as well as students with dependents.

The achievement of system-wide participation and attainment objectives could be effectively assisted by individual institutions. This recommendation for a local approach was also made by the National Committee of Inquiry into Higher Education in the United Kingdom.99 Recommendation Nine: The provincial government should provide resources for institutions to develop language training and transitional support programs.

Language is one of the significant cultural barriers for Aboriginal Ontarians and youth from low-income families that have recently immigrated to Ontario. Moreover, there can be significant language for international students who have not been adequately prepared for their studies in the province. In order to ensure that these students are able to succeed during their time at university in Ontario, it would be necessary for institutions to provide adequate language training and transitional support programs. These programs should include, but not be limited to, English as a Second Language (ESL) programs, French as a Second Language (FSL) programs, counseling and culture shock workshops.

Recommendation Ten: The provincial government should create an open university of Ontario.

An open university offers a great deal of flexibility and opportunity for those who may find it difficult to enter into a traditional campus environment because of financial, geographic, cultural or other barriers. Generally, the courses and 82

programs that are provided at these institutions allow students to study in their homes or workplaces without a specified completion timeline. Teaching media may include textbooks, television and radio programs, audio and video tapes, computer software or other course-specific materials. Although they may have one or a limited number of central locations, the facilitation of in-person learning is provided through regional learning centres as well as locally-based tutors and teachers. The courses and programs provided are also “open ” to all individuals, regardless of their educational qualifications.100 The concept of an open university is not new. The idea of a “wireless university ” was first proposed in the United Kingdom in 1926 by educationalist and historian J.C. Stobart.101 The concept was first put into practice in France in 1939 with the development of Centre national d ’enseignement à distance (CNED).102 The idea finally found its footing in 1971 in Great Britain when the UK Open University (OU) started operations as one of the first “open ” institutions in the world.103 Today, the OU has more than 200,000 students enrolled in its courses.104 Open universities are a mainstay in countries around the globe, including the United States, Singapore, Italy, Romania and Hong Kong.105 China has a vast open university sector, with over 700,000 students tuning into the China TV University System.106 There are also a number of open universities across Canada, including the British Columbia Open University and Athabasca University. There are, however, no open universities headquartered in this province to meet the needs of Ontarians.

It should be clear that if this institution were developed in Ontario, it should have certain characteristics. First, it must be a public, non-profit institution that is regulated and provincially chartered according to similar governance structures at the other universities in Ontario. This would ensure that the institution can remain affordable for those who wish to attend, which would be quite unlike the many for-profit open institutions in the United States that charge significantly more than public universities. For example, fees for undergraduate programs at the University of Phoenix, a private open institution in the U.S., are 261 per cent greater than the fees at the University of New Mexico, a public institution.107 Second, learning centres should be available in communities or regions that are underserved by existing universities. This could allow the province to provide educational opportunities that reach out to underrepresented populations such as rural or Aboriginal Ontarians. Third, the teachers, tutors or facilitators associated with this institution should meet high academic and teaching standards. For example, teachers may be required to hold a Master ’s level degree or greater in their teaching subject. Finally, this institution would need to be accredited and evaluated according to the guidelines that govern other universities in Ontario. This may include assessment by the Postsecondary Education Quality Assessment Board, undergraduate program reviews and other similar requirements.

OUR BRIGHT FUTURE

DISCUSSION PAPER Ideally, the opportunities provided would also take pressure off traditional campuses in terms of space and course provision. This is not to say, however, that these kinds of institutions should replace our existing system, or that all new, mature or part-time students should pursue this type of study.

An open university could, however, supplement existing educational opportunities across the province.

OUR BRIGHT FUTURE

opportunity: higher education as a pathway for discovery and development

The concept of opportunity is slightly more complex than advancement, and requires some philosophical review before the development of overarching principles.

The philosopher of education, John Dewey, once said that for all forms of education, “Everything depends on the quality of the experience which is had. ”108 Furthermore, he believed that the quality of the experience was dependent on its influence upon future experiences.109 From this premise, Dewey was able to criticize the foundations of so-called ‘traditional education, ’ in favour of a more progressive form that was dependent upon both experience and formative education as opposed to the mere mastery or acquisition of content.

This theory underpins the importance of experiences in higher education that contain opportunities for discovery and development. Those experiences driven by discovery and development will have a positive impact on future experiences, to the benefit of the learner and their environment.

Conceptually, this may be more important today, when information and environment changes on a daily basis. Those individuals with transferable skills who are able to discover and analyze will be the leaders and innovators of the twenty-first century. Therefore, we cannot operate a system of higher education whose main purpose is the transmission of content and the acquisition of certificates. Consequently, it is evident that the quality of higher education in Ontario should be driven by at least two principles of opportunity.

First, a university is a place for learning and discovery, as well as the development of ideas. This does not diminish the need for the mastery of content, but discovery should grow beyond its current position in many institutions to be their primary goal. Students must have the opportunity to journey beyond the lecture hall, beyond regurgitation and beyond the A, B, Cs of multiple choice exams. Alfred North Whitehead wrote that, “ …the purpose of a university is to join the old and the young in imaginative methods of learning. ” This concept of co-discovery and frontier exploration of ideas should drive the development of both students and institutions in Ontario. Students will benefit from the application of concepts learned outside the classroom, and it can be argued that there is no greater joy than that obtained by discovery. The opportunity to discover will also build on future experiences, academic or otherwise. Moreover, institutions that pursue this principle will produce corollary benefits for society as a whole. Both the discoverers and discoveries are products of the system, and can be retained for the benefit of all.

Second, there should be meaningful opportunities for students in all levels of higher education that develop skills, enhance learning or provide experiences to allow them to move on to higher levels of education or the workforce. One cannot ignore the practical function of higher education as a developer of skills and experiences for future jobs or further 83

ADVANCEMENT & OPPORTUNITY studies – students, parents, government and employers demand it. However, one cannot also ignore the value that higher education can provide for moral and civic development, especially in the context of a province and a nation where youth are becoming less engaged in public life.

The utilization of these principles of higher education as a provider of opportunity for discovery and development is not new. One of the recommendations of the Boyer Commission, which was conducted in the mid-nineties in the United States, outlined the development of an Academic Bill of Rights for universities.110 Within this document, it stated that universities must commit themselves, “ …to provide maximal opportunities for intellectual and creative development. ”111 This was to include: 1. Opportunities to learn through inquiry rather than simple transmission of knowledge; 2. Training in the skills necessary for oral and written communication at a level that will serve the student both within the university and in postgraduate professional and personal life; 3. Appreciation of arts, humanities, sciences, and social sciences, and the opportunity to experience them at any intensity and depth the student can accommodate; and 4. Careful and comprehensive preparation for whatever may lie beyond graduation, whether it be graduate school, professional school or first professional position.112 It should be noted that the concept of opportunity is not merely driven by the need for skills related to employment. It is merely one among a host of outcomes that is sought in higher education. It should be further noted that these principles do not drive a system that removes the need for faculty. In institutions where the opportunity to discover and develop are seen as paramount, faculty must play an even more important and engaged role. They must act to impart the needed foundation of knowledge, and also become codiscoverers and developers of skills for their students.

BARRIERS TO OPPORTUNITY Unfortunately, there are a number of barriers that prevent the provision of opportunities for students in Ontario.

Funding for post-secondary education in Ontario is of primary concern. In 1996-97, the provincial government cut university operating grants by $280 million.113 This has represented a cumulative deficit of over $1 billion in the university system. It is well known that as a consequence, Ontario ’s universities have the lowest per student funding for Canadian jurisdictions - $6,018 in 2001-02, as compared to the national average of $8,279, and $9,569 per student in Newfoundland, the national leader.114 Ontario is also at the bottom when compared to all 50 U.S. states in per cent change in operating funding to universities in the past ten years.115 ,116 Without 84

adequate funding, institutions cannot provide the conditions for discovery or development.

Moreover, the ability for students to engage in co-discovery with faculty is also decreasing. Our student to faculty ratio is now the highest in the country, moving from 17:1 in 1988-89 to 22:1 in 1999-2000.117 It has been estimated that Ontario requires an additional 13,500 new faculty to meet increased enrolment capacity and retirements in this decade alone.118 These human resource constraints provide an environment of increased class sizes and limited teacher-learner interaction that cannot effectively support discovery, and limits faculty ’s ability to develop skills among their students.

Beyond finances and faculty, other barriers also exist within institutions to the pursuit of opportunity. Unfortunately, some students and employers demand certification and not outcomes from education. Moreover, some institutions are still imbued with a culture of traditional education that sees the mastery of content as their primary objective. Hopefully, if the benefits of these kinds of experiences are demonstrated, each of these barriers can be overcome.

recommendations: providing opportunities for students in higher education

In order to provide opportunities for students in higher education according to the outlined principles, the following recommendations have been developed. These recommendations should be driven by public investment and publicpublic partnerships between institutions, the provincial government and the non-profit sector. This does not, however, preclude the involvement of local businesses or communities.

Recommendation One: The provincial government should increase overall base funding to the national average to allow universities to hire more qualified faculty, ensure the sustainability of current programs and create high quality educational opportunities for students.

The impetus behind the recommendation to increase base funding to the national average is simple. Institutions need adequate public funding to provide opportunities for students. These much-needed funds would allow universities to hire faculty and develop new academic programming that fosters discovery and development.

Recommendation Two: The provincial government should provide financial incentives for universities to develop comprehensive undergraduate research opportunities programs.

There are few opportunities that can facilitate discovery and skills development as effectively as undergraduate research opportunities programs(UROPs). UROPs are an integral part of university life in many American universities, but these opportunities have never been fully explored in Ontario, or even Canada. Recently, McMaster University started a pilot project for undergraduate research that is believed to be the nation ’s first university-wide UROP. OUR BRIGHT FUTURE

DISCUSSION PAPER UROPs have the following characteristics: 1. undergraduates submit proposals outlining their research plan, subject area and faculty sponsor; 2. once approved, students work with faculty researchers on selected projects of shared interest, on projects they devise themselves, or on an ongoing research project from one of the academic departments, professional schools or research centres; 3. students work full-time for summer terms or part-time during the year within an academic department at the university; and 4. the research results are presented to the public or can appear in academic journals.

There is a clear mandate for self-discovery and codiscovery within UROPs, given the development of direction by the student or students, as well as the assistance provided in the learning process by faculty. Moreover, these kinds of programs allow students to develop highly transferable skills, including research, writing, analysis and communications skills. Clearly, these will be of benefit to students who wish to pursue further education or other opportunities outside the realm of academia.

These kinds of programs are also linked with objectives at various levels of government. The federal government ’s Innovation Strategy, “ …recognizes the need to consider knowledge as a strategic national asset. It focuses on how to strengthen our science and research capacity and on how to ensure that this knowledge contributes to building an innovative economy that benefits all Canadians. ”119 Moreover, the provincial government made a commitment in its election platform to, “Build a more innovative economy, one that encourages the growth of new ideas and businesses. ”120 Their economic plan also committed to support for research, as our province, “ …cannot afford to lose brilliant minds to competing jurisdictions. ”121 Undergraduate research opportunities programs also have countless benefits for students, the institution and province as a whole. First, UROPs can increase research capacity while maintaining quality. Many universities brand themselves “research intensive ” while also claiming to be focused on the individual student. Research and undergraduate learning are seen to be separate enterprises, each distinct from the other.

Institutions therefore feel they must decide between supporting their undergraduate teaching mission and supporting their research capacity. Undergraduate research aims to bridge this divide. Funding this type of initiative allows institutions to increase their research capacity without compromising their commitment to undergraduate education.

Second, these programs can increase the pool of potential graduate students. Ontario ’s universities are facing a significant faculty shortage in the coming years. Over 10,000 new faculty will be needed in the next decade to meet the rise in enrolment, and taking into account faculty replacement due to retirement. It should be noted that this number is approximately equal to the current population of university faculty.122 Moreover, the public and private sectors are also constantly OUR BRIGHT FUTURE

looking for qualified Canadian PhDs, yet our system does not adequately promote graduate education. Students who engage in undergraduate research consistently pursue graduate education, most often leading to a PhD. Funding undergraduate research increases the pool of potential graduate students, and initiates student research enterprises at a younger age, allowing students to better define their research pursuits.

Third, UROPs can provide employment opportunities for students. Resources allocated towards undergraduate research offer much needed summer employment for students already struggling to earn enough to cover the everrising costs of post-secondary education. Financial compensation for undergraduate students conducting research is lower than industry standards, allowing funds to be spent on employing greater numbers of students, while also funding high quality research environments.

Finally, undergraduate research opportunities programs can enhance the undergraduate experience. Undergraduate research contributes to the academic culture of an undergraduate education. Involved students feel a part of scholarly history, their work having been recorded and presented to current and future students. Groups of students work together, further defining new areas of study. This is the type of environment within which excellence flourishes, an environment of free, critical thinking, combined with independent research.

While not all undergraduate students will participate in such an initiative, undergraduate research will undoubtedly enhance the university experience for all students by raising the level of intellectual activity, and therefore providing additional opportunities for personal growth. Studies have shown that participation in undergraduate research, “ …made it more likely that students mastered complex scientific concepts and developed critical and independent thinking skills. ”123 Case studies of undergraduate research opportunities programs can be found in appendix two of this paper.

Recommendation Three: The provincial government should provide financial incentives for universities to develop campus business incubators, entrepreneurial challenges and broad-based idea accelerators.

There is a great deal of synergy with campus business incubators, entrepreneurial challenges and idea accelerators and the need to provide meaningful opportunities for university students that develop skills, enhance learning or provide experience to allow them to move on to higher levels of education or the workforce. These kinds of programs provide students with an opportunity to explore and develop a new idea or business concept with the help of faculty and local advisors.

A campus business incubator provides operational expertise, including the strategic mechanisms necessary to facilitate the establishment and growth of new business ideas developed by students, a concept which is also in line with the provincial government ’s commitment in its election platform to, “Build a more innovative economy, one that encourages the growth of new ideas and businesses. ”124 The expertise 85

ADVANCEMENT & OPPORTUNITY provided includes strategic advice when writing business plans and raising capital, as well as access to a network of professional advisors (ie. accounting, legal and personnel).

Most incubators offer working space to the start-up companies in a campus-style environment, which allows the occupants to network with each other and build on each others ’ expertise. These collections of ‘micro-businesses ’ form what is known in Japanese as keiretsu – a group whose members rely on each other for synergy.

The financial sponsors of an incubator invest in the future worth of resident members of the network through investment in-kind and recoup their investment in the long term from the increase in equity value of successful businesses.

The sponsors also accept a proportion might fail.

These start-up entrepreneurs in turn will in due course decide if they wish to remain within the supportive environment of the incubator or move out and live on their own, giving up the synergies of the group in return for corporate freedom. The concept of an incubator draws on the U.S. experience, where ideas generated by student entrepreneurs have lead to successful multi-billion dollar businesses such as Yahoo! The trend has reached the UK, where a number of firms have supported students setting up start-up businesses.

The development of campus incubators in Canada and Ontario has been quite limited, with a few successful initiatives and some that are in development stages.125 It should be noted that campus incubators focusing on the development of students ’ ideas are quite different from incubators focusing on the commercialization of research.

These incubators have become quite popular recently, particularly in the biotech sector. At McMaster, the new Centre for Learning and Discovery will have lab space for a Biotech Incubator.126 In London, the University of Western Ontario and the City ’s Economic Development Department have partnered on the London Biotechnology Incubation Centre.127 These models do not share the same goals and outcomes as student-focused campus incubators or entrepreneurial challenges.

Broad-based idea accelerators are similar to campus incubators, however, the objective is not usually entrepreneurial success. In 1854, Cardinal John Henry Newman wrote that, “ …a University is a place of concourse, ” of ideas.128 Idea accelerators or idea incubators, provide that concourse of discovery. These kinds of programs or facilities allow students to develop a concept that may have a positive social impact on a particular group or region. This may involve the development of community art, sustainable engineering projects or the establishment of a framework for human rights advocacy organization in developing countries. An example of an idea accelerator is the Artisan House Incubator in Bristol.

Case studies of campus incubators and idea accelerators can be found in appendix three of this paper.

86

Recommendation Four: The provincial government should provide financial incentives for universities to develop experiential education initiatives.

Experiential education, which has seen significant growth in popularity in the past decade, allows students to engage in discovery-based learning beyond the traditional classroom experience. There is a broad-range of opportunities under the experiential education umbrella that can involve programs from independent inquiry to internships to volunteering. In some cases, students have significant control over their educational experience through innovative project funds, which they apply for through the development of a proposal and obtain through a rigorous selection process. These projects can have the same intended outcome as those facilitated through idea accelerators, however, they are often intended to be short-term, independent initiatives.

Experiential education initiatives can even have a positive impact on the broader community. For example, service learning, which is a form of experiential education, provides students with opportunities to develop skills and use their academic background to assist a particular community or group in need. These kinds of programs also promote the civil and moral development that can have significant social benefits for the province as a whole.129 Recommendation Five: The provincial government should create a grant program for university students to engage in international exchange.

The opportunity to study in another country is one that involves simultaneous discovery and development. There are a number of programs that are offered at individual institutions that provide international exchange opportunities, however, the number of students involved in these initiatives is relatively small.

There are clear benefits to a system-wide program of financial assistance for international exchange. First, the province could significantly increase the number of students who are able to attend universities abroad. This would provide additional educational opportunities for students. Moreover, if existing international exchange programs were coordinated through an international exchange co-operative, or universities engaged in more collaborative efforts around international exchange, this might also increase the diversity of opportunities for students. Second, increased involvement in international exchange programs would allow the province to obtain knowledge from other jurisdictions to be brought back to Ontario. Conversely, if institutions engaged in more collaborative efforts through this program, the province may be able to track those students who attend Ontario ’s institutions and develop programs and initiatives to retain the best international and non-resident students. This would result in greater “brain circulation ” for Ontario, as well as increase the intellectual, social and economic potential of our province.

OUR BRIGHT FUTURE

DISCUSSION PAPER conclusion

The argument of advocates, academics and politicians in nations, provinces and regions across the globe certainly applies to our province. We must ensure unrestrained access to the highest quality education for Ontario’’s colleges and universities. We provide access for advancement and high quality education through valuable opportunities for students. Although advancement and opportunity are quite different in definition, aims and tools for support, these concepts do not conflict. They are like front and back covers of the same book, offering a rough description of some characteristics of purpose of universities and colleges. One of the external or output characteristics of higher education is the socio-economic advancement of individuals and an entire jurisdiction.

One of the internal or input characteristics of higher education is the opportunity for discovery or development of the individual. The developments and discoveries can also have positive results for both the individual and society as a whole.

Higher education framed in this manner has one clear aim: positive change and improvement for both individuals and society. The end goal is not mere certification or attendance.

Unfortunately, barriers exist for both advancement and opportunity in Ontario. A number of groups, including lowincome, rural, Aboriginal and middle income individuals, as well as single women with dependents are less likely to advance into and within all levels of higher education in the province. They are faced with financial barriers including cost, family income and debt aversion as well as structural barriers including parental education, distance or family status. Each of these factors limits their ability to attend.

The ability to provide high quality opportunities for students also faces significant challenges. Inadequate funding, increasing student-faculty ratios, outdated methods of learning and employer demand for certification limits the ability for colleges and universities to provide opportunities for discovery and development.

Fortunately, solutions do exist. Although there are significant barriers, there are many ways that Ontario can foster advancement and provide opportunities for students. Ensured advancement will require changes to tuition fee policies, investments in financial assistance and incentives for institutions to provide access to all, early intervention and awareness programs, co-operative data collection and system-wide targets for access. Providing opportunity will require a basefunding investment by the province, as well as the provision of financial incentives for initiatives such as undergraduate research opportunities programs, campus incubators, idea accelerators, experiential education and international exchange.

OUR BRIGHT FUTURE

If we do not act to implement effective solutions to meet the principles and overcome the barriers outlined in this paper, we are not just making students pay a few dollars more for their education or making some classes bigger. We are risking the future health, social and economic prospects of individuals from already disadvantaged groups. We are risking the ability of our graduates to be highly skilled and innovative participants in the democratic, social and economic fabric of Ontario and the nation. If we do not act, we are risking the very socio-economic viability and future of our province.

87

ADVANCEMENT & OPPORTUNITY summary of recommendations FOSTERING ADVANCEMENT Recommendation One: The provincial government should regulate and restructure tuition in Ontario so that it is predictable, reflects cost of program delivery and there are no significant price differentials between programs.

PROVIDING OPPORTUNITY Recommendation One: The provincial government should increase overall base funding to the national average to allow universities to hire more qualified faculty, ensure the sustainability of current programs and create high quality educational opportunities for students.

Recommendation Two: The provincial government should provide more robust and targeted student financial assistance for students going into higher education.

Recommendation Two: The provincial government should provide financial incentives for universities to develop comprehensive undergraduate research opportunities programs.

Recommendation Three: The provincial government should provide targeted pre-entry financial aid to qualified students in the early stages of secondary school.

Recommendation Three: The provincial government should provide financial incentives for universities to develop campus business incubators, entrepreneurial challenges and broad-based idea accelerators.

Recommendation Four: The provincial government should implement early intervention programs to encourage future participation in all levels of higher education.

Recommendation Four: The provincial government should provide financial incentives for universities to develop experiential education initiatives.

Recommendation Five: The provincial government should develop a province-wide awareness program about all the pathways and financial assistance available for higher education in co-operation with sector stakeholders.

Recommendation Five: The provincial government should create a grant program for university students to engage in international exchange.

Recommendation Six: The provincial government should engage in cooperative data collection and research on participation rates and educational attainment.

Recommendation Seven: The provincial government should establish measurable system-wide participation and educational attainment goals for all pathways of higher education.

Recommendation Eight: The provincial government should provide financial incentives to universities who increase and maintain higher proportions of targeted groups.

Recommendation Nine: The provincial government should provide resources for institutions to develop language training and transitional support programs.

Recommendation Ten: The provincial government should create an open university of Ontario.

88

OUR BRIGHT FUTURE

DISCUSSION PAPER appendix one: case studies of early intervention programs in selected u.s. states

There are numerous early intervention programs that have been implemented in the United States. A brief overview of a few of these programs, as collected from Investing Early: Intervention Programs in Selected U.S. States, is as follows:130 A. ADVANCEMENT VIA INDIVIDUAL DETERMINATION (AVID) state: California purpose: “ …to ensure that all students, especially disadvantaged students, will succeed in a rigorous curriculum and enroll in bachelor ’s degree-granting institutions. ” target: Targeted students in grades six to twelve. methods: This program provides college preparatory courses, academic support and tutoring, advisory services and parental education. funding: This program receives roughly $2 million annually from the state budget. Institutions contributed to start-up costs in the amount of $3.5 million. It is uncertain whether they will continue to fund the program. outcomes: Program graduates have higher retention rates and participation rates, and lower high school dropout rates. The outcomes are greatest for students of colour and low socio-economic status.

B. SCIENCE AND TECHNOLOGY ENTRY PROGRAM (STEP) state: New York purpose: “ …to increase the number of historically under-represented students entering college and improve their participation rates in math, science, technology and health-related fields. ” target: Targeted students in grades seven to twelve. methods: The state awards competitive grants to institutions which administer targeted projects in schools and regions. The services include academic instruction, admissions and career counseling, research training and entry exam preparation. funding: This program receives roughly $6 million annually from the state budget. It is entirely state funded. outcomes: In the last year of collected data, 89 per cent of grade 12 students in the program graduated, and 95 per cent of those students enrolled in college.

C. GEAR UP SCHOLARS PROJECT state: Washington State purpose: “ …to motivate and prepare students to enroll in post-secondary education. ” target: Targeted students in grades seven to twelve. methods: Selected students participate in 150 hours or more a year in activities including academic planning, advising and mentoring. A family member is also required to participate in activities for at least 40 hours per year. All successful Scholars receive scholarships for up to four years at a Washington State institution. funding: This program is funded from both federal and state budgets, at a rate of approximately $6 million per year in total. outcomes: This program is currently being evaluated.

OUR BRIGHT FUTURE

89

ADVANCEMENT & OPPORTUNITY appendix two: undergraduate research opportunities program case studies There are very few institutions in Ontario or Canada that have comprehensive undergraduate research opportunities programs. In fact, McMaster University may be the only institution in the country to have a comprehensive UROP initiative.

In 2002, McMaster ’s pilot project involved the faculties of science, engineering, humanities, business and social sciences.

Within a relatively short period of time, roughly 40 students were provided with summer opportunities in the Undergraduate Research Program across all of the faculties. There were, however, many more applicants than there were positions available.

The range of research that undergraduate students contributed to at McMaster during the summer of 2002 included: · work on artificial corneas; · earthquake simulation studies using computer models of bridges and buildings; · simulation of nuclear reactor power in collaborative work with Ontario Power Generation; · determining best practices for the treatment of waste water; and · translating and interpreting original historical texts.

The program at McMaster has since expanded to include over 100 students annually.

Examples of undergraduate research opportunities programs outside of Canada include: A. University of California, Irvine Undergraduate Research Opportunities Program(UROP) and Summer Undergraduate Research Program(SURP) No. of Students Involved: 99(summer of 2002) B. Massachusetts Institute of Technology(MIT) Undergraduate Research Opportunities Program(UROP) Approximately 80 per cent of undergraduates participate at least once in this program during their time at MIT. No. of Students Involved: 1,117(in the fall 2002 academic term) C. Stanford University Undergraduate Research Programs(URP) In 2000-01, $1.47 million was provided for this program.

No. of Students Involved: 795

90

OUR BRIGHT FUTURE

DISCUSSION PAPER appendix three: incubator and idea accelerator case studies The following are examples of campus incubators at universities in the United Kingdom and the United States: UNITED KINGDOM Campus Ventures131 Campus Ventures, a business incubator with facilities throughout the North West, was founded to encourage, nurture and support scientists, inventors and technologists with the initiative and potential to turn their innovations into commercial success. Recognising the specific needs of a high technology enterprise in its critical early years of development, this pioneering organisation brings together unrivalled resources. It combines the inventive genius of the North West ’s brightest technologists with the commercial vitality of the region ’s leading small business and finance specialists.

The mission statement of the company reflects the board and management ’s principal motivation of a desire for social and economic development in Manchester and the wider North West region, through the mobilisation of the knowledge base. Campus Ventures is a public/private partnership, a not-for-profit company with stakeholders representing a broad cross-section of organisations including academic institutions, local authorities, regeneration agencies, venture capital funds, banks and industry.

Its patrons (guarantors) are the University of Manchester and Manchester Airport Ventures, and it enjoys funding from the European Regional Development Fund, the North West Development Agency and the DTI, to supplement its trading revenues from successful graduates of its incubator programmes and from its commercial training activities.

Artisan House132 Artisan House was developed out of the need for opportunities specifically for graduates of creative subjects (film, drama, art and design). This facility offers an incubator unit focused on media industries in Bristol and the graduates of Bristol University ’s Drama Department and UWE ’s Faculty of Art, Media and Design. It is similar to the MIT and U.S. incubator model in as much as it offers both living and working accommodation under the same roof.

UNITED STATES Rensselaer Polytechnic Institute ’s Incubator133 George Low, Rensselaer ’s President when the incubator was conceived, said, “The educational process of an institution like RPI depends upon the ‘laboratory environment ’ that can only be found in growing, high technology companies. This type of laboratory cannot be duplicated in an exclusively academic situation. Newly spawned companies depend upon innovative ideas, and advice and counsel in science, engineering and management; they depend also on a continuing infusion of new people. Both the ideas and the people come from universities. Finally, RPI ’s actions help stimulate the economic growth of the region and the state by attracting, nurturing and keeping high technology companies. mission Since its inception, the Incubator Program ’s mission has been, “giving life to new ideas. ” It is rooted in the firm belief that ideas both come from the university and are drawn to it. It is the Incubator ’s goal to augment the university ’s special role of providing a fertile environment for the growth and development of new ideas, and additionally to create opportunities for the application and further evolution of those ideas into the greater community through the channels of commercial activity. This greater mission encompasses three core objectives: 1. ENRICHMENT OF THE ACADEMIC ENVIRONMENT A primary motivation of the Incubator Program is to enrich the academic environment by providing an enhanced experience on both the student and faculty level. The Incubator achieves this goal by adding to the academic environment and by bringing together already existent but otherwise disjoined resources within the university. For students and faculty, the Incubator acts as a “living laboratory, ” where ideas generated in the classrooms and research centres can be tested in a real-world environment. As interns, “consultants, ” part-time employees or entrepreneurial leaders of their own companies, students and faculty are faced head-on with the challenges of commerce and industry and so are educated in ways not often matched within the halls of academia. At the same time, the demands of enterprise encountered within the Incubator centres serve to generate further intellectual endeavors and spark new interests which can then be brought back into the classroom for additional research and experimentation.

The Incubator also helps to enrich the academic environment by coupling the various resources and strengths of the university. Business students with an eye for commercial opportunity can work with engineering students who unlock the secrets of technology and science. The wealth of Rensselaer ’s laboratories, equipment, IT networks and meeting rooms are more fully exploited as new groups, through the Incubator program, find unique applications OUR BRIGHT FUTURE

91

ADVANCEMENT & OPPORTUNITY ADVANCEMENT & OPPORTUNITY for resource utilization.

2. TECHNOLOGY TRANSFER The Incubator serves as a shelter within which new ideas can be nurtured and developed and as a gateway through which these ideas, as products, can pass safely into the commercial environment. With its experience in enterprise formation including business plan development and market research, along with its connections to the resources of the greater business community of IP attorneys, accountants and venture capitalists, the Incubator works to add value to university research, transforming classroom ideas into marketable products. As companies with roots in Rensselaer technology succeed, they also serve as examples and models to the University, stimulating additional experimentation and research with a renewed focus on commercial application.

The Incubator Program also serves to draw new enterprises and the technologies they incorporate from the greater community into the university. Approximately one-third of Incubator companies have been started by those beyond Rensselaer, who have come to the Incubator so as to access the visibility and prestige, networking potential and university resources that the Program offers. These outside ventures bring with them ideas and innovations that once coupled with the skills of Rensselaer faculty and students and often augmented with additional university technology can be re-exported back into the community as a successful product.

3. REGIONAL ECONOMIC DEVELOPMENT The Incubator Program has helped launch a revolution in the once novel concept that universities could or should have an economic development role. From the high visibility successes of MapInfo, ILINC, and Albany Molecular Research, Inc. to the hundreds of smaller companies and entrepreneurs it has served, the Incubator now has a 22 year track record of furthering regional economic growth which to this day remains a core program mission.

Regional economic growth benefits the university and its community in numerous and profound ways. Students are able to find part-time, summer, or, after graduation, full-time employment in the local community within fields which are dynamic and challenging and match the thirst for knowledge and innovation instilled at Rensselaer. The university ’s reputation within the local community is also advanced as it is recognized as an active partner in the common goal of regional development. This in turn opens “neighborhood ” resources from service providers to political support to both the Incubator Program and the University. Finally, an energized and thriving community provides a safe and exciting environment for our current and prospective students and faculty. successes since 1980 The following successes have been attributed to this incubator: · Greater than 80 per cent survival rate for participating companies; · Over 150 companies served since 1980. Most have remained in the capital region of New York State; · 28 current tenants and 230 jobs; · Occupancy in the Incubator typically exceeds 95 per cent; · Over 2,000 jobs created; · Annual sales of Incubator “graduates ” exceeds $200 million; · Approximately two-thirds of participating companies have evolved from research at Rensselaer or have been started by Rensselaer Alumni; · Hundreds of RPI students have been employed; · Recipient of NBIA ’s 1995 Randall M. Whaley Incubator of the Year Award; and · The Incubator has remained financially self-sustaining since its inception.

Clean Energy Alliance134 The National Alliance of Clean Energy Business Incubators, established in 2000 by the National Renewable Energy Laboratory (NREL), is an alliance of leading business incubators dedicated to providing business and financial services tailored to the needs of the clean energy community.

Developing and commercializing clean energy technology is a formidable task given the complexity and maturity of the energy market. Success requires more than a superior technology — it requires a solid business concept and plan, a seasoned management team, contacts and established relationships with suppliers and industry leaders, and access to capital.

Business incubators accelerate the growth and success of entrepreneurial companies through an array of business support resources. The Alliance incubators provide a wide array of services that give their companies a strong competitive advantage over other clean energy startups. Access to advice from leaders in the energy community, in-house consulting, strategy 92

OUR BRIGHT FUTURE

DISCUSSION PAPER reviews, financing referrals, introductions to potential partners and marketing and PR aid are only a few of these services.

Incubators may also give clients access to appropriate rental space and flexible leases, shared office services and equipment and the technology support services necessary for growth.

To assist clean energy entrepreneurs and support the Alliance, NREL has developed an impressive network of investors, energy experts and industry leaders who stand ready to provide mentoring, financing and introductions to the global energy community.

The Alliance is committed to strengthening its network and welcomes new energy companies, venture firms, angel investors, non-profits, government organizations and others committed to supporting the clean energy industry.

OUR BRIGHT FUTURE

93

ADVANCEMENT & OPPORTUNITY references 1 It should be noted that although this paper will make a fair attempt to include all levels of higher education, it is focused on undergraduate education. It should also be noted that all attempts have been made to utilize data specific to Ontario. Unfortunately, given budgetary and analytical constraints, it was sometimes only possible to obtain nationwide data.

2 Statistics Canada. “Household Income Groups (24) in Constant (2000) Dollars and Selected Demographic Educational, Cultural and Labour Force Characteristics of Primary Household Maintainer (87) for Private Households, for Canada, Provinces and Territories, 1995 and 2000 – 20% Sample Data. ” 2001 Census. Ottawa: Statistics Canada, April 2004.

3 Alexander, Craig and Eric Lascelles. Investing in a Post-Secondary Education Delivers a Stellar Rate of Return. TD Economics, January 2004.

4 Martin, Roger L. Investing for Prosperity: Second Annual Report of the Task Force on Competitiveness, Productivity and Economic Progress. November 2003.

5 Kubursi, A.A. The Economic Impact of University Expenditures. Toronto: Council of Ontario Universities, 1994.

6 Higher Education Funding Council for England. “Benefits for higher education reach far beyond the job market. ” April 2003.

7 Bynner, John, Peter Dolton, Leon Feinstein, Gerry Makepeace, Lars Malmberg and Laura Woods. Revisiting the benefits of higher education. Bedford Group for Lifecourse and Statistical Studies, Institute for Education, April 2003, 46, 53.

8 Corak, Miles, Garth Lipps and John Zhao. Family income and participation in post-secondary education. Ottawa: Statistics Canada Family and Labour Studies Division, October 2003, 11.

9 Ibid, 33.

10 Ibid, 2.

11 Ibid, 33.

12 Statistics Canada. “Survey of Approaches to Educational Planning, 1999. ” The Daily. Ottawa: Statistics Canada, April 2001.

13 Morisette, Rene and Garnett Picot. The Asset and Debt Position, and Human Capital Acquisition of Canadians, 1984 and 1999.

Statistics Canada Business and Labour Market Analysis Division, December 2003.

14 Ibid.

15 Statistics Canada. “Family Income Groups (22A) in Constant (2000) Dollars, Economic Family Structure (9) and Number of Earners (6A) for Economic Families in Private Households, for Canada, Provinces and Territories, 1995 and 2000 - 20% Sample Data. ” 2001 Census. Ottawa: Statistics Canada, February 2004.

16 Van Loon, Richard. Report from the COU Task Force on Student Assistance. Toronto: Council of Ontario Universities, October 2001, 10.

17 Calculations based on total cost of education for 2000-01 and median income for 2000. The precise number is based on 21.56% of families below the income threshold of $34 999. Total cost of education in 2000-01 would represent at least 30.94% of this income amount.

18 Low income cutoffs(LICOs) as determined by Statistics Canada. LICOs are set according to the proportion of annual family income spent on food, shelter and clothing. It is an income threshold below which a family will likely devote a larger share of its income to the necessities of food, shelter and clothing than an average family would.

19 Paquet, Bernard. Low Income Cutoffs from 1991 to 2000 and Low Income Measures from 1990 to 1999. Ottawa: Statistics Canada Income Statistics Division, November 2001, 32-4. Source data utilized corresponds to a four person family living in a large urban area with a population of between 100 000 to 499 999.

20 Van Loon, Richard. Report from the COU Task Force on Student Assistance. Toronto: Council of Ontario Universities, October 2001, 10.

21 Statistics Canada. “University tuition fees. ” The Daily. August 2003.

22 Ibid.

23 Cervenan, Amy and Alex Usher. The More Things Change …Undergraduate Student Living Standards After 40 years of the Canada Student Loans Program. Toronto: Educational Policy Institute, March 2004, 14.

24 Statistics Canada. “University tuition fees. ” The Daily. August 2003.

25 Cervenan, Amy and Alex Usher. The More Things Change …Undergraduate Student Living Standards After 40 years of the Canada Student Loans Program. Toronto: Educational Policy Institute, March 2004, 14.

26 Calculations made using similar method as Cervenan and Usher, 2004. Given that, according to the Bank of Canada Inflation Calculator, the cost of tuition in 1965(in 64$) would be $3 634.63 in 2003, that the average undergraduate tuition fee in Ontario in 2003 was $4 923, and that the average compulsory fee in Ontario in 2003 was $694. The Canadian average for tuition in 1965 was used as a proxy for the Ontario average. Bank of Canada Inflation Calculator can be found at http://www.bankofcanada.ca/en/inflation_calc.htm.

27 Government of Quebec, Ministry of Education. Student Financial Assistance and Tuition Fees. 2003. Calculations made using same method as above. Given the cost of tuition in 1980-81(in 80$) would be $1 830 in 2000, and the average tuition fees in Ontario in 2000 were $4 256.

28 Hemingway, Fred. Assessing Canada ’s Student Aid Need Assessment Policies. Montreal: Canada Millennium Scholarship Foundation, March 2003.

29 Runzheimer Canada. Student Cost of Living Study. Toronto: University of Toronto, June 2003.

30 Morisette, Rene and Garnett Picot. The Asset and Debt Position, and Human Capital Acquisition of Canadians, 1984 and 1999.

Statistics Canada Business and Labour Market Analysis Division, December 2003.

31 Barr-Telford, Lynn, Fernando Cartwright, Sandrine Prasil and Kristina Shimmons. Access, persistence and financing: First results from the Postsecondary Education Participation Survey(PEPS). Ottawa: Statistics Canada Culture, Tourism and the Centre for Education Statistics Division, September 2003, 17.

94

OUR BRIGHT FUTURE

DISCUSSION PAPER 32 Bushnik, Tracey and Joanna Tomkowicz. Who goes to post-secondary education and when: pathways chosen by 20 year-olds. Ottawa: Statistics Canada, July 2003, 15.

33 Corak, Miles. Are the Kids All Right? Intergenerational Mobility and Child Well-being in Canada. Ottawa: Statistics Canada Family and Labour Studies Division, October 2001, 5.

34 Ibid.

35 Department of Indian Affairs and Northern Development. “Section 3: Education. ” Basic Departmental Data – 2002. Ottawa: First Nations and Northern Statistics Section, March 2003, 38.

36 Ibid, 39.

37 Ibid, 37.

38 Indian and Northern Affairs Canada. “Education(15+ Years). ” Comparison of Social Conditions, 1991 and 1996. Ottawa: Ministry of Indian and Northern Affairs, 2000, 3.

39 Indian and Northern Affairs Canada. Statistics: Education. As found on http://ainc-inac.gc.ca/pr/sts/awp6_e.html.

40 Indian and Northern Affairs Canada. “Education(15+ Years). ” Comparison of Social Conditions, 1991 and 1996. Ottawa: Ministry of Indian and Northern Affairs, 2000, 3.

41 Statistics Canada. “Household Income Groups (24) in Constant (2000) Dollars and Selected Demographic, Educational, Cultural, Language and Labour Force Characteristics of Primary Household Maintainer (87) for Private Households, for Canada, Provinces and Territories, 1995 and 2000 - 20% Sample Data. ” 2001 Census. Ottawa: Statistics Canada, November 2003.

42 Van Loon, Richard. Report from the COU Task Force on Student Assistance. Toronto: Council of Ontario Universities, October 2001, 10.

43 Statistics Canada. “Commonly reported reasons for not completing post-secondary schooling by sex, Aboriginal identity non-reserve population aged 25 to 64, Canada, 2001. ” Sourced from: Aboriginal Peoples Survey. 2001.

44 Statistics Canada. “Commonly reported reasons for not completing post-secondary schooling by sex, Aboriginal identity non-reserve population aged 25 to 64, Canada, 2001. ” Sourced from: Aboriginal Peoples Survey. 2001.

45 Indian and Northern Affairs Canada. “Labour Force(15+ Years). ” Comparison of Social Conditions, 1991 and 1996. Ottawa: Ministry of Indian and Northern Affairs, 2000, 6.

46 Statistics Canada. “Household Income Groups (24) in Constant (2000) Dollars and Selected Demographic, Educational, Cultural, Language and Labour Force Characteristics of Primary Household Maintainer (87) for Private Households, for Canada, Provinces and Territories, 1995 and 2000 - 20% Sample Data. ” 2001 Census. Ottawa: Statistics Canada, November 2003.

47 Indian and Northern Affairs Canada. Statistics: Education. As found on http://ainc-inac.gc.ca/pr/sts/awp6_e.html.

48 Weiner, Nan. “Employment Barriers Still Block Aboriginals & Visible Minorities. ” CAUT Bulletin. April 2001.

49 Indian and Northern Affairs Canada. Statistics: Education. As found on http://ainc-inac.gc.ca/pr/sts/awp6_e.html.

50 Frenette, Marc. Too far to go on? Distance to school and university participation. Ottawa: Statistics Canada Business and Labour Market Division, June 2002, 13.

51 Ibid.

52 Statistics Canada. “Selected Educational Characteristics (29), Registered Indian Status (3), Age Groups (5A), Sex (3) and Area of Residence (7) for Population 15 Years and Over, for Canada, Provinces and Territories, 2001 Census - 20% Sample Data. ” 2001 Census.

Ottawa: Statistics Canada, March 2004. Urban and rural residency determined according to Statistics Canada definition.

53 Ibid.

54 Frenette, Marc. Too far to go on? Distance to school and university participation. Ottawa: Statistics Canada Business and Labour Market Division, June 2002, 13.

55 Ibid.

56 Ibid.

57 Statistics Canada. “Highest Level of Schooling of Parent (9), Age Groups of Children (5) and Family Structure (3A) for Children Under 18 Years of Age in Lone-parent Families, for Canada, Provinces, Territories, Census Metropolitan Areas 1 and Census Agglomerations, 2001 Census - 20% Sample Data. ” 2001 Census. Ottawa: Statistics Canada, May 2003.

58 Statistics Canada. “Selected Educational Characteristics (29), Registered Indian Status (3), Age Groups (5A), Sex (3) and Area of Residence (7) for Population 15 Years and Over, for Canada, Provinces and Territories, 2001 Census - 20% Sample Data. ” 2001 Census.

Ottawa: Statistics Canada, March 2004.

59 Ibid. Same sources as previous statistics.

60 Statistics Canada. “Family Income Groups (21A) in Constant (2000) Dollars, Age Group of Lone Parent or Reference Person (5), Historical Highest Level of Schooling of Lone Parent or Reference Person (6) and Economic Family Structure (4) for Lone-parent and Other Economic Families, for Canada, Provinces and Territories, 1995 and 2000 - 20% Sample Data. ” 2001 Census. Ottawa: Statistics Canada, February 2004.

61 Van Loon, Richard. Report from the COU Task Force on Student Assistance. Toronto: Council of Ontario Universities, October 2001, 10.

62 Corak, Miles, Garth Lipps and John Zhao. Family income and participation in post-secondary education. Ottawa: Statistics Canada Family and Labour Studies Division, October 2003, 33. Final year of reported data: 1997.

63 Van Loon, Richard. Report from the COU Task Force on Student Assistance. Toronto: Council of Ontario Universities, October 2001, 10.

64 Ibid.

65 Schwarz, Ruben. “Student loan use plunges. ” The newspaper, U of T ’s Independent Weekly. November 28, 2002.

OUR BRIGHT FUTURE

95

ADVANCEMENT & OPPORTUNITY

DISCUSSION PAPER

Colquitt, W.L., M.C. Zeh, C.D. Killian and J.M. Cultice. “Effect of Debt on U.S. Medical School Graduates ’ Preferences for Family Medicine, General Internal Medicine, and General Pediatrics. ” Acad. Med. 71(4): 399-411.

67 Senate of Australia. Hacking Australia ’s Future: Threats to institutional autonomy, academic freedom and student choice in Australian higher education. Canberra: Government of Australia, November 2003, 75.

68 Universities UK. “Fear of debt deterring would-be students, Universities UK survey reveals. ” Press Release. December 6, 2002.

69 Ibid.

70 BBC News World Edition. “Debt deterring would-be students. ” News Feature. December 6, 2002. Currency conversion performed using XE.com Universal Currency Convertor.

71 Author ’s Note: The issue of transferability between colleges and universities is also an important issue for college students and directly relates to the concept of advancement within higher education. However, as noted in the introduction, this paper will focus on issues facing undergraduates. Therefore, transferability will not be discussed in detail in this paper.

72 Ontario Undergraduate Student Alliance. Ontario Tuition Fee Survey. November 2003.

73 Statistics Canada. “Selected Educational Characteristics (29), Registered Indian Status (3), Age Groups (5A), Sex (3) and Area of Residence (7) for Population 15 Years and Over, for Canada, Provinces and Territories, 2001 Census - 20% Sample Data. ” 2001 Census.

Ottawa: Statistics Canada, March 2004. Urban and rural residency determined according to Statistics Canada definition.

74 Ibid.

75 Ibid.

76 Council of Ontario Universities. Ontario Universities – 2004 Resource Document. Toronto: Council of Ontario Universities, 2004, 16.

77 Source: Government of Ontario. Ministry of Training, Colleges and Universities.

78 Stein, Kristin. Student Welfare System of Norway. As found on National Student Union of Norway website at www.fzs-online.org.

79 Council of Ontario Universities. University Applicant Survey Highlights. November 2003.

80 Martin, Paul. Address by the Prime Minister in Reply to the Speech from the Throne. February 2004, 12.

81 Liberal Party of Canada. Moving Canada Forward: The Paul Martin Plan for Getting Things Done. June 2004, 9.

82 Government of Alberta. “Scholarships and Bursaries. ” Alberta Learning Information Service. As found on http:// www.alis.gov.ab.ca/scholarships/info.asp?EK=11.

83 Selingo, Jeffrey. “How the Democratic Candidates View Academe: Presidential contenders criticize colleges for rising costs and low graduation rates. ” The Chronicle of Higher Education. January 23, 2004.

84 Government of Canada. “Canada Education Savings Grant. ” Human Resources and Skills Development Canada Website. As found on http://www.hrsdc.gc.ca/en/gateways/nav/top_nav/program/cesg.shtml.

85 Cunningham, Alisa, Christina Redmond and Jamie Merisotis. Investing Early: Intervention Programs in Selected U.S. States. Montreal: Canada Millennium Scholarship Foundation, February 2003, 1.

86 Ibid.

87 Martin, Sherri Anna. “Early Intervention Program and College Partnerships. ” ERIC Digest. January 1999.

88 Fenske, Robert H., Christine A. Geranios, Jonathan E. Keller, and David E. Moore. “Early Intervention Programs: Opening the Door to Higher Education. ” ERIC Digest. January 1997.

89 Martin, Sherri Anna. “Early Intervention Program and College Partnerships. ” ERIC Digest. January 1999.

90 Ibid.

91 Cunningham, Alisa, Christina Redmond and Jamie Merisotis. Investing Early: Intervention Programs in Selected U.S. States. Montreal: Canada Millennium Scholarship Foundation, February 2003, 1.

92 Ibid.

93 Martin, Sherri Anna. “Early Intervention Program and College Partnerships. ” ERIC Digest. January 1999.

94 “Background Information. ” As found on Career Trek website: www.rrc.mb.ca/careertrek/background.shtml.

95 Ibid.

96 Cunningham, Alisa, Christina Redmond and Jamie Merisotis. Investing Early: Intervention Programs in Selected U.S. States. Montreal: Canada Millennium Scholarship Foundation, February 2003, 3.

97 Government of Canada. Knowledge Matters: Skills and Learning for Canadians. Hull: Human Resources Development Canada, 2002, 34.

98 Snowdon, Ken. The changing landscape of higher education in Canada. 2003.

99 Dearing, Ron. “Widening participation in higher education – Part Two. ” Report of the National Committee of Inquiry into Higher Education. July 1997.

100 The Open University. Background Information. Milton Keynes: The Open University, 2004.

101 The Open University. History of the Open University. Milton Keynes: The Open University, 2004.

102 Jones, Chris. “The world comes to Milton Keynes. ” New Statesman. November 13, 1998.

103 Shelton, Jennifer. U.K. Open University opens its doors. Toronto: Ontario Institute for Studies in Education, December 2001.

104 The Open University. Background Information. Milton Keynes: The Open University, 2004.

105 The Open University. The Open University Worldwide. Milton Keynes: The Open University, 2004.

106 Jones, Chris. “The world comes to Milton Keynes. ” New Statesman. November 13, 1998.

107 McGivern, Tim. “The phoenix raises not from the ashes but from need – University of Phoenix. ” New Mexico Business Journal.

April 1995.

108 Dewey, John. Experience and Education. New York: Simon and Schuster, 1938, 27.

109 Ibid.

66

96

OUR BRIGHT FUTURE

DISCUSSION PAPER 110 Kenny, Shirley Strum. Reinventing Undergraduate Education: A Blueprint for America ’s Research Universities. Carnegie Foundation for the Advancement of Teaching, 1995, 12.

111 Ibid.

112 Ibid.

113 Ontario Confederation of University Faculty Associations. Between the Numbers: Government Funding Support for Ontario Universities Fails to Redress Educational Deficit. 2000.

114 Council of Ontario Universities. Ontario Universities – 2004 Resource Document. July 2004.

115 Ibid.

116 Centre for Higher Education & Educational Finance. An Annual Compilation of Data on State Tax Appropriations for the General Operation of Higher Education. July 2004. As found on http://www.coe.ilstu.edu/grapevine/50state.htm.

117 Council of Ontario Universities. “Issue: Faculty Renewal. ” 2002 Briefing Notes. September 2002.

118 Ibid.

119 Ministry of Industry(Canadian Federal Government). Achieving Excellence: Investing in People, Knowledge and Opportunity.

Ottawa: Industry Canada, 2001.

120 Ontario Liberal Party. Achieving Our Potential: The Ontario Liberal Plan for Economic Growth. Toronto: Liberal Party of Ontario, 2003.

121 Ibid.

122 Ibid.

123 Nnadozie, Emmanuel, John Ishiyama and Jane Chon. Undergraduate Research Internships and Graduate School Success. Kirksville, MO: Truman State University, 2001.

124 Ontario Liberal Party. Achieving Our Potential: The Ontario Liberal Plan for Economic Growth. Toronto: Liberal Party of Ontario, 2003.

125 Examples in Ontario include the University of Toronto ’s Exceler@tor and McMaster University ’s Campus Incubator. These projects can be found at www.excelerator.ca and www.campusincubator.com respectively.

126 Easton, Shelly. “Ontario ’s newest funding investment benefits students, McMaster president says. ” McMaster Daily News. April 14, 2003.

127 Van Raay, Chantall. “Biotech incubator proposed for Research Park. ” Western News. October 14, 1999.

128 Newman, Cardinal John Henry. The Idea of a University. 1854.

129 Russo, Michael S. Serving to Learn, Learning to Serve: The Goals of Higher Education at the Dawn of a New Millennium. Molloy College, 2000.

130 Cunningham, Alisa, Christina Redmond and Jamie Merisotis. Investing Early: Intervention Programs in Selected U.S. States.

Montreal: Canada Millennium Scholarship Foundation, February 2003.

131 Information taken from text found on Campus Ventures website at http://www.campus-ventures.co.uk.

132 Information taken from text found on Artisan House website at http://www.artisanhouse.co.uk.

133 Information taken from text found on RPII website at http://www.rpi.edu/dept/incubator/homepage/index.html.

13 4 Information found on Clean Energy Alliance found at http://www.cleanenergyalliance.com. a Usher, Alex and Sean Junor. The Price of Knowledge 2004: Access and Student Finance in Canada. Montreal: Canada Millennium Scholarship Foundation, 2004, 323. b Ibid.

OUR BRIGHT FUTURE

97

98

OUR BRIGHT FUTURE

DISCUSSION PAPER GOVERNANCE, ACCOUNTABIILTY & ASSESSMENT IN HIGHER EDUCATION

by ADAM SPENCE OUR BRIGHT FUTURE

99

100

OUR BRIGHT FUTURE

EXECUTIVE SUMMARY SUMMARY This paper will analyze past, present and future mechanisms of governance, accountability and assessment of higher education in Ontario and other selected jurisdictions, provide theoretical options and establish principles to guide the development of a new framework. A series of specific recommendations will also be suggested that can be implemented in Ontario to ensure an effective system of higher education.

This paper will not focus on specific issues related to institutional governance, but will explore ideas related to an overarching framework of accountability, governance and assessment. This paper may, however, raise issues related to institutional autonomy and specialization. Moreover, there is a clear focus on issues related to universities and undergraduate education in particular.

KEY FINDINGS There are clear gaps in the information and data that supports the current governance, accountability and assessment framework: • There are problems with the availability, currency and consistency of data on higher education institutions. Although a great deal of data is published by institutions and government, there are gaps in areas of needed measurement at a system-wide and institutional level, such as participation rates, cost of education and student engagement.

Some data that is supposed to be available is not public, difficult to obtain or is significantly out of date. Even mandated reporting requirements are presented and available in different formats and locations.

• The current targets of measurement and funding are problematic. For example, the current Key Performance Indicator framework focuses greatly on one outcome of higher education – employment. The funding that is provided through this program also disproportionately benefits some institutions over others, despite the fact that there are only small differences in performance measures.

• There are no mechanisms in place for either institutional or system-wide data to be analyzed or utilized in order to ensure and improve the quality of higher education in the province.

There is limited student involvement in systemic, institutional or program-level improvement structures: • Students are underrepresented on university governing structures. Despite being an integral component of the university community and contributing over 40 per cent of operating revenue, the proportion of student representation is very low. A number of institutions have not even met the recommended level of representation recommended in 1993 – a minimum of two students on the governing board.

There is a clear gap in institutional-level assessment at Ontario ’s universities: • Not all of Ontario ’s universities have a mechanism for institutional-level assessment, such as institutional indicators, academic plans or comprehensive institutional improvement plans. There are even problems with those institutions who utilize mechanisms such as institutional indicators. First, they often focus solely on highly specific quantitative data, which measure only discrete characteristics and ignore important qualitative factors. Second, it is unclear whether the data collected is used for improvement. It would appear that the data collected is used for reporting only. Ideally, processes should be developed in a formative framework to track progress towards goals and develop response mechanisms to identified challenges or opportunities.

The provincial government has regulatory authority over the establishment of fees: • The government ’s authority over the establishment of fees is vested in legislation, policy and practice. Although university charter legislation often designates fee powers to institutional governing boards. However, provincial legislation vests that power in the Minister of Training, Colleges and Universities. Ministry policy also governs ancillary fees – stating that they must have student approval through a referendum or representative body. The government ’s ability to choose between regulation and de-regulation also implies that it has regulatory authority over the establishment of fees – no doubt due to the provision of significant amounts of public funding to institutions.

OUR BRIGHT FUTURE

101

EXECUTIVE SUMMARY There are clear lessons to be learned from jurisdictions with highly developed or developing governance frameworks: UNITED STATES (U.S.) • In the U.S., there is interest by government and institutions in the development and utilization of comprehensive assessment tools – driven by the highly competitive higher education environment and the desire for continual improvement. There is also demonstrated utility in the existence of an intermediary body between institutions and government, with research pointing to a decentralized model. Only two states do not have an intermediary governing board.

UNITED KINGDOM (U.K.) • In the U.K., it is clear that the demand and tools for accountability have become excessive, drawing funds away from institutions, and energies away from the institutions themselves. Accountability frameworks must be reasonable. The information and data framework, however, is extremely effective in the U.K., satisfying the public need for accountability, the interests of parents and students in the selection of institutions, as well as the need for information and data that will help institutions improve.

CHINA • China ’s higher education system is a national priority and is growing exponentially - faster than anywhere else in the world. By 2010, China expects 27 million students to be enrolled in its higher education institutions, a population twice the size of any other nation-wide system. By 2020, it expects its participation rate to reach 45 per cent, from 11.3 per cent in 2000 – an unheard of increase anywhere else in the world. Ontario, and indeed all of Canada, needs to recognize that higher education is integral to its future success or it will continue to fall behind those nations who do. China ’s ability to be responsive to systemic change is a policy principle that Ontario should adopt.

KEY RECOMMENDATIONS The provincial government should: • amend university charter legislation so that students hold at least 25 per cent of seats on governing bodies of each institution; • regulate all tuition fees; • create an intermediary coordinating board or agency between universities and the provincial government to ensure the accountability of higher education in the province, provide advice to government and institutions, and foster collaboration within the system; • ensure that the membership of the board of this intermediary body includes representatives from all stakeholder groups, including students, who are appointed by government from recommendations by each of the provincial stakeholder organizations in the sector; • mandate the proposed coordinating board or agency with the task of implementing a student engagement survey for current students; • mandate the proposed coordinating board or agency with the task of creating annual data reports of collaboratively approved system indicators and system information; • abolish the current key performance indicator (KPI) framework and reallocate the associated funding into operating grants; • require institutions to create an institutional quality improvement task force that is comprised of a representative group of on-campus stakeholders; • require institutions to produce quality improvement plans on a regularly scheduled basis that are developed by an institutional quality improvement task force and supported by an institutional-level assessment process; and • mandate institutions to produce an annual quality assessment report that is available on its website that includes a small set of mandatory indicators that are common province-wide, as well as a set of institutional indicators that have been developed by an institutional quality improvement task force.

102

OUR BRIGHT FUTURE

GOVERNANCE, ACCOUNTABILITY & ASSESSMENT introduction

Ontario ’s framework of governance, accountability and assessment for its system of higher education must play a balancing act between autonomy and accountability that would give a tightrope artist pause.

The following set of competing characteristics illustrates this balancing act. Universities and colleges are engines of growth and the socio-economic advancement of a jurisdiction and its citizens. As such, they must not be subject to partisan political priorities, but they must meet the needs and demands of all citizens through the recognized means of government – the provincial legislature. Ontario ’s higher education institutions also receive a significant amount of public funding. Ontario ’s colleges and universities received $2.85 billion for base operating grants from the provincial government in 2003-04, and are expected to receive $2.99 billion in 2004-05.1 Universities are also wards of the legislature, and as such are accountable to the public for their activities. However, this same legislation vests control of the governance and management of universities in their boards of governors. 2 Moreover, Ontario ’s universities have a strong record of institutional autonomy, but there are increasing demands for public accountability.

Given these competing factors, any framework for governance, accountability and assessment must balance institutional autonomy and public interest. Ideally, the mechanisms of governance, accountability and assessment for Ontario ’s universities should be designed for effective management of the system. Their end goal should be to ensure that the system is producing desired and demonstrable results for the public and students. Moreover, these mechanisms should foster a system committed to the improvement and maintenance of the quality of education that is provided at each institution.

They should not be used as tools for the collection of facts and statistics.

This paper will analyze past, present and future mechanisms of governance, accountability and assessment of higher education in Ontario and other selected jurisdictions, provide theoretical options and establish principles to guide the development of a new framework. A series of specific recommendations will also be suggested for Ontario to implement to ensure an effective system of higher education.3 overview: governance and accountability in ontario from the past to the future The framework for governance and accountability at Ontario ’s colleges and universities has changed significantly since the inception of the first institutions in the nineteenth century. This section will review and critically analyze the different bodies and mechanisms for governance, accountability and assessment in Ontario from the early twentieth century until today, with a focus on current conditions.

The foundations of governance at Ontario ’s institutions of higher education are rooted in the first years of the twentieth century. In 1906, the Flavelle Royal Commission of the University of Toronto outlined changes that formed the basis of governance at Ontario ’s universities, including biOUR BRIGHT FUTURE

cameral representation and the executive powers of university presidents.4 The bicameral representation generally led to the development of boards of governors, involving external representatives focusing on financial and administrative matters, and senates, involving internal representatives focusing on academic matters.

Aside from the development of new colleges and universities, the development of a college system and specific governance frameworks for those institutions, there were no significant changes in governance or accountability until the early sixties with the creation of a provincial advisory committee known as the Advisory Committee on University Affairs (ACUA) in 1961.5 Its original function was to act as government body for negotiating funding agreements. However, its composition changed to include members outside government in 1964.6 These changes coincided with the creation of the new Department of University Affairs and the formation of the new Committee on University Affairs (CUA) that was, “ …to study matters concerning the establishment, development, operation, expansion and financing of universities in Ontario and to make recommendations thereon to the Minister of University Affairs for the information and advice of the Government. ”7 ,8 The catalyst for the development of this new committee was the universities ’ demand for an intermediary body between themselves and government.9 Generally, it would appear that the government delegated a great deal of authority to CUA and subsequently to university representatives, particularly with respect to funding through its subcommittee on Finance/Operating Grants, which was composed almost entirely of members of the university community.10 ,11 In the early seventies, Ontario moved towards a system of coordinated governance, with an overarching structure that was relatively independent from both institutions and the provincial government. This change was a result of recommendations made by the Commission on Post-Secondary Education in Ontario in 1972, also known as the Wright Commission. One of its key recommendations was the creation of a permanent “Council on University Affairs ” that was to serve as a permanent intermediary between the government and universities. It was also to serve as a mechanism for systemic coordination and planning and was to have the following characteristics:12 This important body should have no executive or administrative responsibilities, and should not be part of any other body involved in post-secondary education in Ontario. What the Economic Council of Canada is to economic policy-making nationally, the committee should be to planning on all aspects of post-secondary education provincially. Hence it should be responsible for the uninterrupted scanning and monitoring of educational needs and resources in the province. Through studies, hearings and publications, it should generate a steady flow of reliable information; it should isolate problems, suggest criteria for a solution, forecast trends, and identify new chal103

GOVERNANCE, ACCOUNTABILITY & ASSESSMENT lenges. Above all, it should provide a valuable forum for participants in all areas of post-secondary education. Its membership should be small and drawn from government, various lay groups and institutions.13

education in Ontario seems to be moving from a system of self-regulation and reporting to a system of increased accountability, government intervention and targeted funding allocation. The system includes the following:

As a response to the recommendations of the Wright Commission, the provincial government created a permanent Ontario Council on University Affairs (OCUA) in 1974.14 Its objective was, “ …to advise primarily on matters of university funding and to consult, on an “arms-length ” basis, with the university community on matters of policy. ”15 Originally, it was conceived to be a statutory intermediary body with some executive authority, but following significant political opposition in the legislature as well as opposition from the university community, it was established as an independent advisory body with 20 government-appointed members.16 Although it was not granted its own powers to undertake system coordination or planning, it established a leading role in providing research and solutions to the government on system improvement, enrolment, funding, planning and coordination.17 Throughout the seventies and eighties, it produced reports on an annual basis, as well as topic papers on issues including financing and system rationalization.18 In the mid and late eighties, a number of government reports recommended a strengthened role for OCUA with a clarified mandate and increased resources and responsibilities.

In 1984, the Bovey Commission recommended that OCUA take a significant role in the coordination and development of higher education by initiating regular reviews of institutional missions, conducting studies of the long-term development of the university system and forging links between business and industry, secondary institutions, community colleges and other governmental ministries.19 In 1988, a review of OCUA by the External Advisor to the Minister of Colleges and Universities recommended that OCUA play, “ …a larger, more formal but still advisory, role in system planning and coordination, achieved primarily through financial incentives and disincentives and not by imposed differentiation. ”20 OCUA did initiate some systemic changes to the university system in Ontario, including the introduction of enrolment triggered funding corridors in 1986.21 However, although it played a central role in discussions for the system, it would appear that its mandate remained limited to ministerial requests, annual reports and topic papers. Eventually, in May 1996, OCUA was disbanded by the provincial government as part of a general review of agencies, boards and commissions.22 The current framework of governance, accountability and assessment has changed significantly since OCUA was eliminated, stemming from recommendations of both the Smith Commission in 1996 and the Investing in Students Task Force in 2001, as well as the provincial government ’s demand for increased accountability and efficiency.

Today ’s system is quite complex, involving a web of internal and government mechanisms for improvement, development, reporting and even funding. Generally, higher

A. SELF-REGULATION & INSTITUTIONAL ACCOUNTABILITY MECHANISMS Historically, Ontario ’s universities in particular have functioned on the premise of self-regulation and institutional accountability. The following mechanisms have been developed for that purpose:

104

A. GOVERNING BOARDS Aside from Queen ’s University, each university in Ontario owes its existence to an act of the provincial legislature.23 According to these charters, each institution has a governing body that is ultimately responsible for its operation and accountability.24 As mentioned earlier, these bodies generally include a board of governors and a senate, which divides financial and academic powers between them.

Currently, the composition of each of these boards differs by institution. Generally, the ratio of student members to other members is quite low. The following list outlines a sample of student representation at boards of governors at Ontario institutions: York University – two of 30 members; University of Western Ontario – three of 23 members; Laurentian University – one of 25 members; McMaster University – two of 34 members; and Brock University – two of 29 members.25 ,26 ,27 ,28 ,29 Clearly, one of the issues that may be raised with respect to governing boards at Ontario ’s post-secondary institutions is the proportion of student representation. Students are an integral component of the university community, and as their share of contribution has increased substantially in the past decade alone to exceed 40 per cent of total operating revenue, it is clear that they are currently underrepresented.30 Unfortunately, a number of institutions have not even met the recommended level of representation outlined by the 1993 Broadhurst Panel on university accountability – a minimum of two students on the governing board.31 B. INFORMATION REQUESTS There was significant discussion during the development of Ontario ’s first freedom of information legislation in 1987 over the inclusion of universities as well as other government supported activities. During the debates over Bill 34, the Freedom of Information and Protection of Privacy Act of 1987, it was proposed by then New Democratic Party Critic for the Attorney General, Evelyn Gigantes, to include universities under the legislation.32 This amendment was defeated in favour of the creation of a system of self-regulation and internal freedom of information and privacy guidelines. The framework that was eventually developed and is currently in use is based on the Council of Ontario Universities Guidelines on Freedom of Information and Privacy Protection, as adopted in September 1994.33 OUR BRIGHT FUTURE

DISCUSSION PAPER These guidelines are not common to all universities, but set a framework for universities to adopt policies that are tailored to individual institutions. The Council of Ontario Universities (COU) then acts as a facilitator to, “ …assist the universities of Ontario to establish and administer through their own internal processes arrangements which will afford appropriate access to information and adequate protection of privacy for the members of each university community. ”34 There are clearly a number of concerns with the existing information request framework at Ontario ’s universities.

First, although there are guidelines established by the COU, institutions are not mandated to have their own freedom of information frameworks. This creates a number of problems, including the existence of different levels of information availability at institutions within the same jurisdiction, and the opportunity for institutions to withhold information. If universities in Ontario are public institutions funded by public dollars, they should be subject to reasonable regulations surrounding information requests.

C. INSTITUTIONAL INDICATORS The development of institutional indicators at Ontario ’s institutions was the result of one of the recommendations of the provincial government ’s report of the Task Force on University Accountability in 1993.35 ,36 These indicators often reflect the differences between universities accoding to mission, objectives and goals.37 Although this accountability mechanism is not mandated by the provincial government, most institutions in the province have developed their own indicators.

Carleton University has developed a comprehensive institutional indicator framework that assesses performance in areas including: student enrolment, retention, graduate programs, student satisfaction, equity and accessibility, classroom characteristics and co-operative education programs.38 Wilfrid Laurier University publishes a series of institutional indicators that includes: first-year admission averages, student/faculty ratio, graduation rates, average instructor evaluation marks, and average class size.39 In its recent long-term institutional plan, McMaster University identified a number of performance indicators including graduate student population, quality of student population and research indicators.40 Although these institutional indicators are important for accountability and potential quality maintenance and improvement at institutions, there are a number of concerns with their current usage. First, this accountability mechanism is not applied at all universities. There is no requirement for institutions to develop their own indicators or individual enhancement frameworks. If universities wish to develop strengths according to their own mission or mandate in a transparent, demonstrable and effective manner, institutional indicators may be an effective tool to achieve that aim. Second, it is clear that these institutional indicator frameworks are based solely on highly specific quantitative data. This data may be effective at measuring discrete characteristics, however, it is evident that quantitative data cannot fully illustrate the complexity of what OUR BRIGHT FUTURE

is being examined. Third, it is unclear whether the data collected is used for improvement. It would seem that the indicators are utilized in a summative fashion to determine and report past and current conditions. Ideally, the indicators would be used in a formative manner to track progress towards goals and develop response mechanisms to identified challenges or opportunities.

B. UNDERGRADUATE PROGRAM REVIEWS Undergraduate Program Review Audits were first established in 1996, as a result of recommendations put forth by the Task Force on University Accountability in 1993 and an OCUA report on academic audits.41 These audits are administered by the Ontario Council of Academic Vice-Presidents (OCAV) through a committee known as the Undergraduate Program Review Audit Committee (UPRAC) according to guidelines developed by the Council of Ontario Universities.42 Although they are conducted independently, these reviews are mandated by the provincial government.43 According to the guidelines established by the COU, the objectives of these reviews are the following: i) to establish policies and procedures for the approval and introduction of new programs; ii) to establish policies and procedures for the review process of existing programs; and iii) to have these policies and procedures audited on a regular basis.44 The schedule of audits mandates that these reviews are performed on a seven-year cycle for all programs at Ontario universities.45 The audit guidelines also require that institutions develop an undergraduate review policy that addresses issues including program compatibility with institutional goals, admission requirements, student progress evaluation, utilization of physical resources, student achievement, learning objectives and the definition of program based indicators.46 It should be noted that these types of reviews are not unique to undergraduate programs. Graduate programs are reviewed on a regular basis through the Ontario Council of Graduate Studies (OCGS), and most professional programs are subject to accreditation reviews.47 There are a number of valuable features of this accountability and assessment mechanism. First, it focuses on improvement and change at the program or department level.

This may be the most effective way to ensure the quality of the academic environment, particularly when those who are providing and engaging in the activities reviewed are involved in the development of policy solutions. Second, it is clear that the format these audits undertake is quite comprehensive. A more accurate picture of the quality of the undergraduate environment should be achieved through the recommended policy framework that takes into account institutional mandate, as well as qualitative and quantitative data.

Unfortunately, there are problems with these types of reviews. First, it would appear that student involvement is quite limited. According to the established guidelines, participation by students may be achieved merely through a student survey or attendance at meetings or retreats. Second, it is unclear how responsive these reviews or implemented review 105

GOVERNANCE, ACCOUNTABILITY & ASSESSMENT processes might be to encouraging improvement or facing unanticipated challenges such as enrolment increases. If they are performed on a seven-year cycle of review, significant change may occur within that timeframe. If the process developed is formative, it is more likely that the institution and program would be able to respond and ensure continual improvement. Third, it would appear that some audit reports are unavailable to the public or those in the university community. For the purposes of accountability, it would be invaluable for these reports to be made public. Publishing these reports would also fully meet the recommendation laid out by the Broadhurst Panel, which originally proposed this audit process.

C. POSTSECONDARY EDUCATION QUALITY ASSESSMENT BOARD(PEQAB) The legislative approval of the Post-secondary Education Choice and Excellence Act, 2000 established a framework for the creation of the Postsecondary Education Quality Assessment Board in Ontario.48 The overarching mandate of this board is to establish standards of assessment and make recommendations to the Minister of Training, Colleges and Universities (MTCU) regarding applications for new degreegranting programs in the province.49 More specifically, according to the approved legislation, the Board is responsible for: a. reviewing all applications for ministerial consent under the Act; b. determining the criteria and procedures for program quality assessments and organization reviews; c. undertaking such reviews; d. creating program quality assessment panels, organization review panels and advisory committees; e. undertaking research as appropriate; f. providing recommendations to the Minister on applications; and g. addressing any other matter referred to the Board by the Minister.50 Originally, the Board was composed of faculty, student, administrative, community and business representatives.51 Unfortunately, as of July 2004, there were no student representatives on the Board.52 D. MINISTRY REQUIREMENTS Ontario universities are subject to a number of reporting requirements mandated by the Ministry of Training, Colleges and Universities. These requirements include the submission of annual financial statements and enrolment reports, special purpose grant proposals, and compliance reports on tuition fees, student financial assistance and capital projects.53 Institutions also provide comprehensive financial data to the Ministry on a voluntary basis. For example, the Council of Financial Officers of Universities of Ontario (COFO-UO) produces a Financial Report of Ontario Universities and pre106

sents copies to the Minister and MTCU staff.54 E. KEY PERFORMANCE INDICATORS (KPIs) Performance indicators have been a matter of debate at Ontario ’s universities for many years. In 1993, the Council on University Planning and Analysis (CUPA) made a submission to the Ontario Task Force on University Accountability providing requested advice on benchmarks and indicators that could ensure that institutions were held more accountable.55 The Broadhurst Panel accepted this advice, and recommended the creation of “management indicators ” similar to those recommended by the CUPA Committee by the governing body at each institution to ensure accountability.56 As a precursor to eventual performance measures, the provincial government implemented significant changes to its OSAP Policy in 1998-99, requesting that institutions make available to students information regarding OSAP default rates, completion rates and employment rates in 1999.57 After the changes to OSAP policies, and following two or three years of discussion according to house debates in the Ontario legislature, performance measures were fully implemented in Ontario.58 In 2000, the provincial government approved a performance indicator framework and associated funding that would be allocated to institutions based on three outcome indicators: graduation rates and graduate employment rates(six months and two years after graduation).59 This funding amounted to $16.5 million in the first year, and was increased to $23.2 million in the second year to account for concerns over equity raised by stakeholders and universities.60 Although universities are required to post this current key performance indicator data, it appears in an inconsistent format from institution to institution and it is often unavailable or difficult to find. As of July 18th, 2004, the following five institutions did not have key performance indicator data publicly available on their websites for the most recent year, 2002-03: Trent University, University of Windsor, Carleton University, Ontario College of Art and Design(OCAD), and Guelph University.61 Moreover, even basic comparative data between institutions is difficult to find on the website for the Ministry of Training, Colleges and Universities. The most recent public comparative data is at least two years out of date, from 2001-02.62 There are a number of concerns with the current key performance indicator framework. First, it is evident that the program does not reward improvement, but the attainment of benchmarks relative to other institutions. Ideally, improvement would be achieved in the context of a fund that targets performance. Second, there is not a great deal of variance among institutions, particularly when examining employment rates.63 For example, aside from one or two outliers, the vast majority of institutions have between 92 and 98 per cent employment rates two years following graduation.64 This becomes particularly problematic in the distribution of funding to institutions. For example, Queen ’s University receives roughly three times the level of per student funding as York University, as seen in graph one. However, the OUR BRIGHT FUTURE

DISCUSSION PAPER Graph One: Key Performance Indicator Funding for Universities in Ontario Per Student, 2002

$178.45 Queen's

AVERAGE

Toronto

$87.32

$119.98 McMaster

$155.65

$117.53

$103.41 Waterloo

Guelph

$102.31 Western

$116.27

$99.87 Laurier

Nipissing

$98.20

$84.82 Lakehead

Ottawa

$83.36 Brock

$76.06

$72.84 Windsor

Ryerson

$66.88 Hearst

$57.86 Laurentian

$66.19

$56.94 York

Trent

$55.26 Carleton

$22.62 Algoma

$11.86

$200.00 $180.00 $160.00 $140.00 $120.00 $100.00 $80.00 $60.00 $40.00 $20.00 $0.00

OCAD

FUNDING PER STUDENT

KEY PERFORMANCE INDICATOR FUNDING IN ONTARIO, 2002

INSTITUTION

difference between employment rates is quite limited, at an average of 2.2 per cent difference for both indicators.65 The difference between graduation rates is greater, at 23.1 per cent in favour of Queen ’s.66 However, it is clear that these differences should not translate into an allocation of almost three times as much funding. The provincial government did attempt to address the issue of disproportionate funding by introducing benchmark thresholds and enrolment into the calculation. However, it would appear that the disparity remains.67 Third, the efficacy of these indicators to gauge quality or performance is limited in scope. These indicators focus greatly on one outcome of higher education – employment.

This is clearly a limited view that excludes other factors including skill acquisition, engagement and student satisfaction.

Finally, there was limited stakeholder involvement in the development and review of the key performance indicators.

This is particularly true for students and student organizations.

Students are, however, notably involved in their development and review in the college sector in Ontario through the College KPI Steering Committee.

F. OTHER MANDATE OR OUTCOME-FOCUSED GRANTS Aside from performance-based funding, the provincial government also provides grants to institutions based on their priorities, or the priorities of government. These mandate or outcome-focused grants include: A. DIFFERENTIATION GRANTS The Differentiation Grant was instituted in the early 1980 ’s by OCUA in recognition of the differences among institutions in size and mandate.68 Institutions like Trent UniOUR BRIGHT FUTURE

versity were provided additional funding through this grant because of their limited enrolment and focus on undergraduate education.69 In 2003-04, this fund was allocated to two institutions, amounting to approximately $1.9 million in total.70 Differentiation grants are an example of the provincial government ’s mission-related grants, which also include Northern Ontario Grants and Bilingualism Grants.71 B. ACCESS TO OPPORTUNITIES PROGRAM (ATOP) The Access to Opportunities Program (ATOP) was initiated by the provincial government in the 1998 Budget, committing $150 million for the development of computer sciences and high-demand engineering spaces in Ontario ’s colleges and universities.72 This funding was to be matched with private sector contributions for start-up costs at a maximum public matching amount per space.73 Interest in the first year of the program led to an increased funding commitment, bringing the total up to $228 million over the first three years of the program.74 This program has continued beyond its first three-year mandate, and in 2003-04, ATOP funding equaled $60.6 million per year.75 There are a number of issues with ATOP funding. First, it could be argued that the fund directs funding and opportunity away from the liberal arts in favour of disciplines that have a greater perceived value for the labour market, such as computer sciences and engineering. However, many employers recognize that there is an equal, if not greater, demand for liberal arts graduates and the skills set that these programs provide, including the synthesis and analysis of information.76 These skills will be critically important in achieving the stated goal of developing a knowledge-based economy in the province.

Second, there is the concern that although this fund 107

GOVERNANCE, ACCOUNTABILITY & ASSESSMENT may produce graduates that meet current demands, those demands may change by the time the program produces results.

Unfortunately, the high-tech sector across North America has faced significant challenges in the recent past, including the bursting of the dot-com bubble, offshoring to countries like India, and consequently, volatile demand. Although opportunities are expected to increase in this sector, it is expected that demand will increase most significantly in the service sector, particularly in health care and education.77 It is clear, however, that this speculation should not drive future supply.

C. ACCESSIBILITY FUND The Accessibility Fund was first announced in the 2000 provincial budget.78 In order to receive funding, institutions were required to increase total enrolment or increase their first year enrolment.79 Only nine universities received funding in the first year of the program, causing many institutions to question the utility of the program in favour of a fund that provided full- funding to all Basic Income Unit (BIU) growth above the established corridors.80 In 2003-04, the fund grew from the original $16.5 million to $215 million, possibly in response to the government ’s commitment to full growth funding for all double cohort students.81 It is difficult to offer a critical analysis of the effectiveness of the Accessibility Fund, particularly as it would appear it has been utilized as a budget envelope for ensuring fullfunding for students during the double cohort years. However, it is evident that it is a blunt instrument for improving accessibility to higher education, as it rewards increases in total and first-year enrolment at institutions, which may not necessarily increase access to education for students across the board, or for particular groups who are less likely to attend, such as individuals from low-income families. Successful funding in years preceding and following the double cohort commitment may be a function of recruitment strategies and competition among institutions, as opposed to actual increases in participation or improved accessibility.

G. QUALITY IMPROVEMENT PLANS(QIPs) Discussions on the issue of quality improvement plans coincided with those surrounding the development of key performance indicators in 1999.82 According to Hansard records, former Minister of Education and Training, David Johnson, announced the development of the first quality improvement plans by universities in early 1999.83 Originally, they were intended to ensure that any tuition increases were accompanied with initiatives that improved quality at institutions. 84 For example, the Quality Improvement Plan at Lakehead University for 2000-01 was based on an estimated increase of $727 000 from tuition revenues.85 It is uncertain whether QIPs were required on an annual basis. However, given a general lack of availability of these plans on university websites, it could be concluded that it was a one-year phenomenon.

In 2000, all Ontario universities also provided comprehensive institutional plans to the provincial government that 108

included a quality improvement component, along with issues related to enrolment, faculty renewal, university-college collaboration and specialization.86 It should be noted that a number of institutions are still developing public QIPs on an annual basis, including Lakehead University and the University of Ottawa.87 ,88 Moreover, the government has moved towards mandated quality plans with institutions through the Quality Assurance Fund.

H. QUALITY ASSURANCE FUND(QAF) In their 2003 budget, the provincial government announced the creation of a Quality Assurance Fund, which was designed to address the decline of quality at Ontario ’s universities. This fund was to start at $75 million in 2003-04, and was to grow to $200 million in the two years following.

Current funding for the QAF is based on enrolment and the existing funding framework, as well as the submission of Quality Plans.89 However, it is believed that future funding will be based solely on the development of quality improvement plans from each institution.90 According to provincial government guidelines, expenditures for the QAF may be allocated by enrolment, but they are currently limited to: faculty, staff and graduate teaching assistants; educational resources; student services and student retention; and new or existing program development.91 It was also mandated that institutions demonstrate the outcomes generated by these investments and illustrate how their investments related to student concerns with the educational experience on campus.92 THE FUTURE It is clear that Ontario is moving towards a system of increased accountability for higher education. In the 2004 Ontario Budget, the provincial government committed to the creation of, “ …accountability and funding agreements with post-secondary education institutions beginning in 2005-06. ”93 These agreements will link funding with government objectives, and will include multi-year funding and enrolment targets. 94 Moreover, a number of independent government agencies have targeted higher education in the recent past, recommending a series of future accountability requirements for universities in the province. Both the Provincial Auditor of Ontario and the Information and Privacy Commissioner have recently made such recommendations.95 ,96 It is uncertain whether these proposed changes will improve the accountability or quality of higher education in the province.

A NOTE ON THE GOVERNANCE OF TUITION FEES Although tuition fees are not generally considered within the governance or accountability framework, they can be considered an issue within this realm. The responsibility and governance of tuition fees is a complex issue in Ontario.

Between at least the late-sixties and the mid-nineties, it would appear that the provincial government regulated all tuition fees at Ontario ’s universities.97 This did not necessarily OUR BRIGHT FUTURE

DISCUSSION PAPER mean that they set tuition fee levels for all programs at all institutions. Rather, they set the maximum rate of increase and each institution could set their fees up to that amount.

For example, between 1995-96 and 1997-98, all programs were able to increase by 10 per cent per year.98 On December 15th, 1997, it was announced that the government would no longer regulate tuition fees, aside from undergraduate arts and science programs.99 It should be noted that there were loose requirements for some of the newly deregulated programs. For example, institutions that wished to deregulate engineering programs needed to demonstrate that they were meeting broad employment needs and increasing spaces with the additional funds.100 Following that announcement, some deregulated fees skyrocketed while regulated fees followed the same path as they had since 1995-96.

In 1998-99 and 1999-2000, undergraduate arts and sciences programs were able to increase by up to 10 per cent per year.101 Also included with the announcement of deregulation was the requirement for a proportion of the increase to be set-aside for financial aid. Institutions were required to setaside 30 per cent of any increase to institutional student aid programs, such as work-study or bursaries.102 This system remained in place until the official tuition freeze announcement in the 2003 Throne Speech, when all programs, aside from international student fees, were essentially regulated so that they could not increase over a two-year period.103 There is some disagreement on the provincial government ’s powers to regulate tuition fees. Ontario ’s universities have often advocated that, “ …the responsibility for setting tuition fees should rest with the universities ’ boards of governors. ”104 Support for this point of view can be found in the provincial legislation that governs Ontario ’s universities.

According to the University of Western Ontario Act, the Board of Governors has the power to: fix the fees to be paid for instruction under the control of the University, for all ancillary activities and for examinations, degrees, diplomas and certificates, and of any fee, charge or fine the payment of which is made mandatory by the Board upon a student to register or to remain registered in the University;105 There are similar powers outlined at other universities.

For example, the Board of Governors at McMaster University has the power to: establish and collect fees and charges for tuition and for services of any kind offered by the University and collect fees and charges on behalf of any entity or organization of the University;106 However, this legislation is in conflict with the Act governing the system as a whole. According to the Ministry of Training, Colleges and Universities Act, OUR BRIGHT FUTURE

The Minister may establish and charge fees in respect of anything done in connection with this Act or any other Act to which subsection 2 (2) applies. 2000, c. 36, s. 3 (5).107 Arguably, this legislation supersedes that which governs individual institutions as it provides direction for the entire system. The legislation that provides powers to individual institutions and grants them status as degree-granting postsecondary institutions in the province is also enacted by the Legislative Assembly of the Province of Ontario.108 If they are chartered by the legislature, then their powers, including the establishment of fees, should be subject to the approval or determination of the government.109 Moreover, in terms of policy and practice, the government ’s ability to choose between regulation or deregulation implies that it has regulatory authority over tuition fees as well as other fees administered by universities. For example, ancillary fees must have student approval through a referendum or representative body. According to the Ontario Operating Funds Distribution Manual, Compulsory non-tuition-related ancillary fees (except as exempted in Section 5.2.8) which were in effect during the 1993-94 academic year can neither be increased above 1993-94 levels, nor expanded to include new fees, except through the implementation of a protocol which has been agreed to by representatives of the institution ’s administration and student government representatives.110 The ability to regulate fees does not merely rest in legislation, policy or practice. It is evident that the provision of significant amounts of public funding provides the government with powers over the non-academic functions of institutions, including the establishment of tuition fees. More information on the governance of tuition fees in other jurisdictions can be found in appendix one.

SUMMARY OF CONCERNS Even with these changes, a number of systemic problems with the governance, accountability and assessment framework will exist. The greatest area for concern is the information and data that supports the governance, accountability and assessment framework. First, it is clear that there are problems with the availability and currency of data on higher education institutions. Although a great deal of data is reported by institutions and government, there are gaps in areas of needed measurement at a system and institutional level. Even some data and information that is supposed to be available is not public, difficult to obtain, or is significantly out of date.

Second, it is evident that there are problems of consistency with the information and data that is available, and the methods that are applied to collect or report information. Unfortunately, this is an issue at universities across the country, as demonstrated by research performed by Morton, Fisher and 109

GOVERNANCE, ACCOUNTABILITY & ASSESSMENT Banks (1997).111 Moreover, even mandated reporting requirements are presented and available in different formats and locations. Third, there are problems with the major source of data and information that is available. The major source of information and data on institutions is the Council of Ontario Universities, which is an advocacy organization for the universities in the province. This represents a clear conflict of interest in the provision of information, particularly if any data or information might contradict priorities of the organization or its members. Fourth, the targets of measurement and funding are also questionable. As mentioned above, the KPI framework and ATOP priorities are highly problematic.

Finally, there are clear concerns with the analysis and utilization of information and data collected. There are no clear mechanisms in place for either institutional or system-wide data to be analyzed or utilized in order to ensure and improve the quality of higher education in the province.

Beyond issues with information and data collection, presentation and analysis, there are other gaps in the governance, accountability and assessment framework for higher education in Ontario. First, there is limited student involvement in systemic, institutional or program level improvement structures. Given their important role and unique perspective in higher education institutions, it is unclear why their involvement in program-level assessments, institutional governing bodies, and government bodies or initiatives is so limited.

Second, there is a clear gap in institutional-level assessment.

Although a number of institutions engage in these kinds of activities, there is no best-practice model or mandated requirement to ensure improvement at the institution-level. Finally, it is clear that there is no mechanism or incentive for collaboration among institutions.

Although many institutions have developed joint programming initiatives, particularly between colleges and universities, these initiatives have met either institutional or local student demand – perceived and actual. Unfortunately, these initiatives do not address systemic demand and are driven by the fiscal restraints and desires of individual institutions.

With respect to the governance of tuition fees, there are a number of problems with the current policy of deregulation. First, there is an issue of representation. If deregulation continues, the establishment of fees will rest with boards of governors at universities where, as mentioned earlier, students have limited representation. Second, there is the problem of predictability of cost. A deregulated tuition environment is inherently unpredictable, which makes it difficult, if not impossible, for students and families to save for their future. If one does not know the future cost of their education, they may be less likely to attend. There is also the connected problem of overall cost increase. In Ontario, tuition in deregulated programs rose 261 per cent, from $2,076 in 1993 to an average of over $7,500 in 2003.112 ,113 Fourth, universities cannot predict the impact of their fee increases on the overall population. Moreover, they are not directly responsible for ensuring access to their institutions. That responsibility rests with the province of Ontario, which, although 110

currently limited in its resources to assess the impact of any future tuition fee policy, is arguably best positioned to do so.

governance, accountability and assessment in other jurisdictions

There is a great diversity of governance, accountability and assessment frameworks in nations across the globe which can be examined for best practices and their potential influence on the future development of higher education in Ontario and beyond. This section will outline the relative importance of selected jurisdictions, then review and critically analyze the governance, accountability and assessment frameworks of their higher education systems. Three jurisdictions were chosen for examination including: the United States, the United Kingdom and China.

UNITED STATES There are a variety of reasons to examine the governance, accountability and assessment frameworks of higher education in the United States (U.S.). First, there is the recognition that the United States is a global leader in the provision of higher education with respect to both size and quality. Total enrolment in the U.S. is roughly ten times that of Canada, and there is a vast array of preeminent public and private institutions, including the University of California – Berkeley, the University of Michigan, Georgia Tech, the Massachusetts Institute of Technology (MIT), Harvard, Princeton and Yale.

Second, public institutions in the United States have a similar level of public investment and responsibility as universities in Ontario. In 1999-2000, provincial government funding represented 37.5 per cent of total revenue for universities in Ontario, while state funding represented 42 per cent of total revenue for public institutions in the U.S.114 Finally, the United States represents an example of a mixed governance framework, where there is a variety of mechanisms ranging from central control by state governments to non-mandatory or non-governmental accountability tools designed for a highly competitive higher education system.

There are at least three mechanisms for state governance in higher education in the United States – consolidated governing boards, coordinating boards and state planning agencies. According to Knott and Payne (2001), consolidated governing boards: represent the most centralized governance structure, (and) have the authority to govern institutions, establish salaries for chief executives, set faculty personnel policies, develop and implement policies, and allocate resources among the institutions under their jurisdiction.115 In 2003, 22 states plus the District of Columbia utilized consolidated governing boards.116 These boards have authority over degree-granting institutions, and, in practice, these states do not have an intermediary coordinating agency between the governing board and government.117 Coordinating boards, which is the most common govOUR BRIGHT FUTURE

DISCUSSION PAPER ernance framework, are quite different. According to Knott and Payne (2001), coordinating boards: do not govern institutions and usually do not have independent corporate status. Coordinating boards have either regulatory or advisory authority over academic programs and budgets. Some coordinating boards have regulatory authority over both academic programs and budgets, while other boards have regulatory authority over only one of these areas and advisory authority over the other area. A few coordinating boards have only advisory authority over both areas.118 In 2003, 26 states operated statewide coordinating boards.119 The existence of coordinating boards does not, however, preclude the usage of governing boards. Some states, including New York and California, have subsystem governing boards under a coordinating board framework.120 The remaining states operate state planning agencies, which, according to Knott and Payne (2001): represent the least centralized structure, (and) typically do not have regulatory or governance authority over the higher education institutions in their states.121 Only two states have planning agencies and no intermediary between governing boards for each institution and state governments – Delaware and Michigan.122 In Delaware, the lack of a coordinating or governing board has been attributed to the relatively small number of universities and colleges.123 In Michigan, the lack of state involvement has been attributed to a historical tradition of institutional autonomy that has made it politically impossible to create a central coordinating or governing board.124 There is a great deal of debate between the relative benefits and drawbacks of both governing boards and coordinating boards. The clear advantages of a governing board are its direct line of accountability as well as its ability to effectively coordinate programming and engage in responsive and strategic planning.125 There are also drawbacks of this form of governance, including potential tensions between statewide planning priorities and the distinct needs of institutions, as well as its dependence on personalities, political relationships, an external information base and board characteristics.126 The benefits of coordinating boards are also easily identifiable. They tend to build upon consensus, are responsive to student and market needs, and the separation of powers allows the governance structures an ability to focus – coordinating boards on coordination, and institutional boards on governance.127 These benefits do, however, have their own inherent drawbacks. Multiple layers of governance structures can create inefficiencies and difficulties in coordination, especially if institutional governing boards are focused on their own priorities and have no interest in statewide priorities.128 A comprehensive listing of strengths and concerns regarding governing and coordinating boards can be found in appenOUR BRIGHT FUTURE

dix two. A considerable amount of research has been dedicated to examining these structures, and it is evident that no structure is ideal for all states, and that the benefits and drawbacks must be weighed with the political environment and history of the jurisdiction.

In general, research has shown that the degree of centralization influences a system ’s responsiveness to statewide political priorities.129 The more centralized a system, the greater its ability to respond to government demands. The method of appointment to these boards has a similar impact – the more external the appointment of members, the more statewide priorities have an impact on the development of institutions.130 Centralization may also have an impact on state appropriations to higher education institutions. Research has shown that resources are greater in less centralized systems.131 Generally, the level of centralization also has an impact on individual institutional characteristics. Decentralized structures lend themselves to private-style institutions that rely more on tuition revenue and research dollars than state funding.132 Although the level of centralization may have an impact on resources and responsiveness, there is no clear impact of these structures on institutional quality. It would seem that quality is generally a function of institutional and state size and wealth.133 Governance, accountability and assessment mechanisms for higher education in the United States are not, however, limited to state governments. There are a diverse range of institution-specific tools as well as non-mandatory tools that have been effectively utilized nationwide.

For many years, institutions have engaged in outcomes assessment processes, developed internally or externally through a service provider. Although these assessment processes are often linked to mandatory accreditation reviews, it would seem that a number of institutions have modified or adopted these mechanisms for their own improvement needs.134 The University of Colorado at Boulder has been developing an institutional outcomes assessment process since the mid-eighties.135 The goal of this process is for individual academic units at the institution to, “evaluate their criteria, plan improvements where necessary, and evaluate the effects of the changes. ”136 Since implementation in 1989, academic units at the university have implemented plans, modified programs, goals and assessment processes, and created regular reports on results.137 In general, these reports describe processes and results that demonstrate a key characteristic of a high quality educational experience – the ability of an institution to change or improve students by providing him or her with new or more developed skills. For example, in the general education program, a representative sample of students ’ initial and final essays is selected for review by internal and external experts according to characteristics such as position clarity and argument structure.138 The University of Colorado at Boulder is among many institutions that engage in outcomes assessment.

Other institutions engaged in this form of evaluation include: the State University of New York, Texas A&M and the University of Massachusetts.139 ,140 ,141 A number of external agencies also provide tools and 111

GOVERNANCE, ACCOUNTABILITY & ASSESSMENT expertise for assessment processes. One example of an external service provider is the Educational Testing Service, through their Higher Education Assessment Department.

Their goal is, “ …to serve higher education with an array of tests, surveys and services useful for outcomes assessment, institutional evaluation, and self-study. ”142 Essentially, they provide institutions with a comprehensive system of tools and processes to engage in effective undergraduate or graduate program reviews, or develop a specific overarching outcomes assessment framework.

Outside of the realm of institutional assessment, there are a number of other non-mandatory tools that have been developed nationwide that assist institutions in improving the quality of educational experience on campus. Two examples of the many assessment mechanisms that have been developed include the National Survey of Student Engagement (NSSE) and the Baldrige National Quality Program – Education Criteria for Performance Excellence.

NSSE was created out of a recognized need for a reputable source of information about institutional quality and the educational experience of undergraduates, given the great deal of attention that had been placed on college ranking systems in the United States that focused primarily on reputation.143 It was originally piloted in 1999 at 70 institutions, and now over 400 colleges and universities participate in the project.144 The information is published on an annual basis, and results reflect how students spend their time and what they gain from their education, as well as institutional and student behaviours that are associated with desired outcomes.145 According to the NSSE website, there are three major uses for the data collected: usage by institutions for the improvement of undergraduate education; usage by external stakeholders including accrediting bodies and oversight agencies potentially as a part of existing assessment processes; and usage by the media for public distribution and general issue awareness.146 It should be noted that there is a similar tool that has been developed in Canada, through the Canadian Undergraduate Survey Consortium. It was a project first developed at the University of Manitoba in 1994, and by 2001, 26 universities across Canada participated in the project, including many Ontario institutions.147 The Baldrige National Quality Program – Education Criteria for Performance Excellence is a much more comprehensive, non-mandatory assessment mechanism. The program is funded by the U.S. Department of Commerce and is managed by the National Institute of Standards and Technology (NIST).148 The purpose of the self-assessment process is: …to help organizations use an integrated approach to organizational performance management that results in: delivery of ever-improving value to students and stakeholders, contributing to education quality; improvement of overall organizational effectiveness and capabilities; and organizational and personal learning.149

112

The extensive process that is outlined involves the examination of processes according to four factors including approach, deployment, learning and integration.150 The resulting outputs and outcomes are also examined in reference to six categories that include: leadership; strategic planning; student, stakeholder and market focus; measurement, analysis and knowledge management; faculty and staff focus; and process management.151 Beyond the institutional utility of this mechanism, institutions may also apply for performance awards that are granted by NIST.152 Given the diversity of mechanisms and tools that are utilized in different jurisdictions in the United States, it is difficult to form general conclusions about the efficacy of its governance, accountability and assessment framework. However, a few conclusions can be drawn that can assist the development of Ontario ’s higher education system. First, it is clear that there is an interest by both government and institutions themselves in the development and utilization of comprehensive assessment tools. This interest appears to be driven by the competitive higher education environment, as well as the desire for continual improvement. A number of the tools and concepts from the U.S. could easily be applied in Ontario, either at a system or institutional level. Second, it is clear that there is a great deal of utility in the existence of an intermediary between institutions and government. It is less certain how this intermediary body should be ideally structured, although research points to a relatively decentralized model.

Finally, it would appear that the effectiveness and structure of tools and mechanisms is dependent on the characteristics of the jurisdiction. Certain characteristics or tools may be utilized, but no model can be wholly applied to higher education in Ontario.

UNITED KINGDOM It is important to review and analyze higher education governance, accountability and assessment frameworks in the United Kingdom (U.K.) for a number of reasons.153 First, similar to the U.S., the U.K. has a powerful influence on the development of higher education worldwide, given the quality of its institutions and its international reputation. Many of the most world-renowned universities are in the United Kingdom, including the University of Oxford, the University of Cambridge and the London School of Economics. Second, the higher education system in the United Kingdom is roughly the same size as Canada. Total enrolment in the United Kingdom for 2000-01 was approximately 1.6 million students, which is only slightly larger than total Canadian enrolment.154 Third, there are also similarities in types of institutions. Both the Ontario and U.K. models are almost solely public systems of higher education. Moreover, it could be argued that the origins and early development of universities in Ontario was significantly influenced by the United Kingdom. Finally, the United Kingdom presents an example of governance, accountability and assessment framework that is highly centralized, with authority generally residing at one level of government. It should be noted, however, that some authority over OUR BRIGHT FUTURE

DISCUSSION PAPER higher education has been devolved to the nations within the U.K.155 There are four major bodies within the governance, accountability and assessment framework of higher education in the United Kingdom: the Department for Education and Skills (DfES), the Quality Assurance Agency for Higher Education (QAA), the Higher Education Funding Council for England (HEFCE) and the Higher Education Statistics Agency (HESA).

In general, the system of governance and accountability in the United Kingdom has been described as a three-level hierarchy.156 The upper tier, comprised of the government, establishes parameters, broad goals and governing legislation for the system.157 The second level, comprised of funding councils and quality assurance frameworks, manages the system and establishes specific means of achieving government goals.158 Decisions made at both tiers one and two are supported by information provided by the government ’s statistical agency. The third tier, comprised of individual institutions, has autonomy to meet their institutional mandate within the boundaries established by the upper levels.159 A more detailed description of the activities of each of the bodies within these tiers follows.

The federal government ministry, the Department for Education and Skills (DfES), is ultimately responsible for universities.160 As required, this department commissions and produces independent reports on aspects of the education system, as well as statistical information on all levels of education from primary school to higher education.161 DfES is also responsible for central planning and monitoring of the entire education system in England.162 The Quality Assurance Agency (QAA) is the product of the Further and Higher Education Act of 1992, which required funding councils across the U.K. to ensure the quality of their academic programs met an appropriate standard.163 Originally, this body was known as the Higher Education Quality Council, but following confusion over its role in assessment and academic audits, the QAA was established by the government to conduct quality assessments on behalf of the funding councils.164 The mission of the QAA is, “ …to safeguard the public interest in sound standards of higher education qualifications and to encourage continuous improvement in the management and quality of higher education. ”165 In order to achieve its mission, the QAA performs two major functions: reviewing standards and quality; and defining clear and explicit standards for public information and review activities for higher education institutions in the U.K.166 Reviewing standards and quality involves activities such as institutional audits and subject level academic reviews.167 Defining clear and explicit standards involves activities such as developing higher education qualification frameworks, guidelines for codes of practice and programme specifications, as well as helping establish expectations about degree standards in a range of subject areas.168 Aside from these activities, its broad objectives are as follows: 1. to contribute, in conjunction with other mechanisms, OUR BRIGHT FUTURE

to the promotion and enhancement of high quality in teaching and learning; 2. to ensure that students, employers and others can have ready access to easily understood, reliable and meaningful public information about the extent to which institutions are individually offering programs of study, awards and qualifications that meet general national expectations in respect of academic standards and quality; 3. to ensure that if the quality of higher education programmes or the standards of awards are found to be weak or seriously deficient, the process forms a basis for ensuring rapid action to improve them; and 4. to provide a means of securing accountability for the use of public funds received by institutions.169 The QAA is not, however, the only agency that conducts reviews. Distance learning courses are also reviewed by the Open and Distance Learning Quality Council (ODLQC), an independent body established in 1968 as an accreditation body for correspondence courses in the U.K.170 There are four funding councils in the United Kingdom, including: The Higher Education Funding Council for England (HEFCE); the Funding Council for Wales (HEFCW); the Northern Ireland Education Council (NIEC); and the Scottish Higher Education Funding Council (SHEFC).171 Each of these councils has three major functions: advising the government on institutional needs; distributing funds to institutions; and ensuring institutions are financially healthy and providing high quality education.172 Each individual funding council also has specific missions and aims. For example, HEFCE ’s stated mission is, “working in partnership, we promote and fund high-quality, cost-effective teaching and research, meeting the diverse needs of students, the economy and society. ”173 In order to achieve its mission, HEFCE has four strategic aims, including: widening participation and fair access; enhancing excellence in learning and teaching; enhancing excellence in research; and enhancing the contribution of higher education to the economy and society.174 Another important body within the governance, accountability and assessment framework in higher education in the United Kingdom is the Higher Education Statistics Agency (HESA). This agency was created as a result of a federal government white paper in 1993, which recommended more coherence in statistics regarding higher education.175 According to its website, HESA is, “ …now the central source for higher education statistics and has standardized and streamlined the data collection and publication process to become a respected point of reference. ”176 The main activity of HESA is the production of regular data reports on a variety of areas including: higher education resources(income and expenditures); student achievement and course of study; graduate destination and employment; accessibility(applications, participation, student loans); and enrolment.177 Although each of these mechanisms, including HESA, 113

GOVERNANCE, ACCOUNTABILITY & ASSESSMENT the funding councils, the QAA and DfES comprise the official framework of higher education governance, accountability and assessment, the influence of other external bodies on system development should also be noted. There is a vibrant group of stakeholders in the United Kingdom that impact the three-tier hierarchy mentioned earlier, including UniversitiesUK, representing the university administrations, and the National Union of Students, representing students in the U.K. It is clear from both the opinions of stakeholders and observers that the system of governance for higher education in the U.K. has a number of advantages and disadvantages. First, it would seem that there are clear lines of responsibility and authority over higher education that theoretically ensures clear lines of accountability to the public. This is evident in the three-tier hierarchy of the system, and is invaluable for central planning and coordination. Second, there is an abundance of current and comprehensible information and data available through the government and related agencies that can be utilized to demonstrate results and ensure improvement. Both the QAA and HESA provide this information at a system-wide, institutional and program-level for use by government, parents, students and general citizens.

Although its system is effective in achieving many aims, there are a number of drawbacks in the U.K.-model of higher education governance. First, there is the issue of cost and government intervention, particularly with respect to the QAA. Many see the reviews performed by the QAA as too costly and intrusive in relation to their benefit.178 Second, it would seem that there is a substantive amount of bureaucracy between government and jurisdictions. This may create onerous reporting and planning requirements for higher education institutions in the U.K. Given the structure of governance, accountability and assessment in the U.K., as well as its advantages and disadvantages, some additional conclusions can be drawn that could be important to consider in the Ontario context. First, the demands and tools for accountability should not be too excessive. A cumbersome and expensive framework can draw needed funds away from institutions, and energies away from the mandate of the institutions themselves. Second, there is a clear need for a jurisdiction to have an independent source of information and data on institutions that is current, relevant and publicly available. This satisfies the public need for accountability, the interests of parents and students in the selection of institutions, as well as the need for information and data that will help institutions improve. This data and information can also be utilized in independent reports or recommendations papers that are published by governments or their respective agencies.

CHINA The governance, accountability and assessment frameworks of higher education in China are important to examine for a number of reasons. First, it has one of the largest and fastest growing university populations in the world. Ac114

cording to government sources, total enrolment in post-secondary institutions was over 16 million in 2002.179 This university population is roughly equal to the United States, where total enrolment was 15.7 million students in 2000-01.180 [It should be noted that enrolment in Canadian higher education institutions is relatively small, at 1.25 million students enrolled in 2000.181 ,182] By 2010, China expects 27 million students enrolled in higher education across the country.183 The gross enrolment rate is expected to increase from 11.3 per cent in 2000 to 45 per cent in 2020 – an unheard of increase anywhere else in the world.184 This growth would vault the nation into the position of higher education leader across the globe, which could in turn influence the development of systems elsewhere.

Second, China is poised not only to be a leader in system size, but also institutional significance and quality. Project 211, one of the Chinese government ’s national priorities, is an initiative aimed at creating 100 world-class institutions and building key disciplinary areas in the 21st century.185 It will be important to monitor these developments, in order to ensure the education provided at Ontario ’s universities is globally competitive. Close examination of their system will also be important for Ontario ’s future economic prospects given China ’s interest in utilizing higher education as a pillar of economic and social development. China ’s GDP has grown by almost 10 per cent per year for the past 25 years, and it expects to quadruple its GDP by 2020 through investment and focus on areas including higher education.186 Third, China ’s current environment of rapid increases in enrolment and capacity are similar to those in Ontario – albeit on a smaller scale. According to the OECD, “ …the dramatic increase in student numbers may exert a negative influence on the quality of education and may, in turn, hinder the stated goal of improving the human capital resource base of China. ”187 Ontario may be able to learn lessons from their development, and adopt similar policy solutions.

The governance of China ’s post-secondary institutions has changed over the past decade and has adopted many characteristics of Western nations. In the nineties, China engaged in substantial reforms, moving towards a model of mass higher education that has decentralized the responsibility and authority over institutions from Central to Provincial and Municipal governments.188 Only 10 per cent of higher education institutions are under the direct authority of the Central Government.189 These reforms also included the introduction of private sector initiatives and cost-sharing between student and state.190 By 2003, almost 10 per cent of the country ’s 1 300 higher education institutions were private.191 Prior to 1990, these types of institutions were illegal in China.192 Authority over higher education has also been streamlined. Prior to 1998, different levels of government and even ministries within governments supervised and administered their own institutions which offered degree programs.193 Regulatory control now resides with the Central Government ’s Ministry of Education.194 Although it has regulatory powers, it functions as a monitoring body that facilitates the developOUR BRIGHT FUTURE

DISCUSSION PAPER ment of institutions.195 The framework for reform is also quite flexible. Policy changes are reviewed on a continual basis and are designed to encourage analysis and adaptation so that activities may be accelerated, slowed or redirected depending on existing conditions.196 The overarching governance and assessment framework is similar to Canadian or British models. The Academic Degrees Committee of the State Council is responsible for establishing and maintaining standards for all degree levels, while a Committee for Accreditation, supported by the Ministry of Education, monitors and assesses the educational capacities for institutions on a five-year cycle.197 The three types of assessments performed vary according to the past performance of the institution – Qualification Assessment, Excellence Assessment and Random Assessment.198 Institutions are ranked via public data according to a broad range of characteristics, including items such as percentage of out-ofprovince students, which has, according to the OECD, created competition among them.199 However, these assessment mechanisms and indicators are not limited to the Central Government alone. Many provinces and local governments have implemented local assessment mechanisms, and even institutions themselves have engaged in self-assessment.200 Generally, the current assessment mechanisms focus on output measurements, as well as knowledge acquisition and related performance.201 It is also quite common for the Central and Provincial governments to publish assessment data, such as employment rates, as indicators of the quality of institutions.202 The successes of China ’s system of governance, accountability and assessment for higher education are clear. First, there is its capacity to foster and manage tremendous growth within a responsive policy framework. Enrolment has increased tremendously in the past decade, and it is expected to double its higher education population by 2010. Second, there is its ability to establish long-term goals and a vision for the system within a continuous framework of governance. Although this is undoubtedly a function of the overarching national political system, it is not an unattainable characteristic for other jurisdictions.

There are, however, drawbacks to China ’s current system of governance for its higher education institutions. First, given the tremendous growth and increased dependence on private institutions, there is a risk that the system will focus on one outcome – the production of degrees. This could clearly have negative impacts on the quality of education that students receive, and the quality of graduates produced, which could have negative impacts on the socio-economic development of the country. This concern was echoed by the OECD research team that studied higher education institutions in China, who recommended that their assessment regime focus on additional learning outcome measures, such as emotional intelligence, creativity, ability to deal with stress and critical thinking.203 Ideally, this would ensure and improve quality, if the information was readily available and utilized by the system OUR BRIGHT FUTURE

or institutions in planning for improvement. Second, there is a gap in China ’s ability to obtain, manage and utilize comprehensive information on its higher education institutions. This concern was also raised by the OECD research team, who, in turn, recommended the implementation of a Higher Education Management Information System. More information on this type of system can be found in appendix four.

Given this system of governance, as well as its relevant advantages and disadvantages, there are a few general conclusions that should be considered when examining the future of higher education in Ontario. First, higher education has important public benefits and it is integral to the future success of any jurisdiction. China has placed higher education among its key priorities, explicitly recognizing that higher education has a direct impact on the socio-economic development of a jurisdiction and its citizens. Although this has limited value with respect to any specific changes suggested to the framework of governance, this conclusion should underscore the importance of any changes that are made in the province. Second, it can be concluded that the overarching framework needs to be responsive for a higher education system and individual institutions to effectively develop – particularly during periods of significant change. In China, this ability to respond, as well as the appropriate policy response, is administered through the relevant level of government or its agent. optional mechanisms and frameworks Given Ontario ’s past and current conditions, as well as the experiences of other jurisdictions, there is a myriad of options that Ontario could implement, and infinite combinations or variations of mechanisms and frameworks for governance, accountability and assessment. This section will offer a number of optional mechanisms and frameworks, outline their characteristics, and offer a brief analysis of their efficacy in an Ontario context.

The optional mechanisms and frameworks are as follows: an intermediary governing body; an intermediary coordinating board or agency; a more robust performance indicator and performance funding framework; a centralized quality assurance agency; and a decentralized quality assurance framework. 204 A. GOVERNING BODY One of the potential options that could be applied to the current system of governance would be to form an intermediary between government and institutions in the form of a governing body. There are a number of general characteristics that this option could possess. First, it could have some executive authority over institutions which would allow it to establish funding priorities and direct the development of certain areas of institutions, such as faculty renewal. Second, it would need to be separate from government, although its members could be appointed by either the Premier or the Minister of Training, Colleges and Universities. Third, this body could develop long-term strategic plans for the system 115

GOVERNANCE, ACCOUNTABILITY & ASSESSMENT and establish mechanisms for collaboration, such as guidelines for university-college credit transfer. Fourth, this body could have a small staff responsible for the collection and public distribution of facts and reporting requirements for institutions.

A governing body could potentially meet a number of systemic needs. It could provide a mechanism for collaboration, which has been an identified priority of the provincial government.205 This collaboration could, however, appear to be imposed upon institutions, which would be a contradiction in terms, and could meet with significant resistance among institutions. It could also provide an impartial intermediary between government and institutions that could make relatively unbiased recommendations for improvement, and act as a neutral source for information and data on the system. It is unlikely, however, that such a body would be created in Ontario. It would be extremely difficult to establish a governing board with any direct authority over institutions, given historical precedent and the tradition of institutional autonomy in the province.

B. COORDINATING BOARD OR AGENCY A coordinating board or agency would be a much more decentralized body compared to a governing board. Ideally, it would play the role of independent facilitator for the system, as an intermediary between government and institutions.

A coordinating board would have three major roles: provide advice to government and institutions; foster collaboration among institutions; and provide information about the system to the government and public. Its structure would be similar to a governing board, in that it would have appointed members and a small staff, but it would have no executive power over institutions. This type of board could also coordinate or act as a resource for program reviews and, like the QAA in the United Kingdom, could conduct institutional audits without systems of grading or ranking. This could make these reviews more acceptable to the university community.206 This mechanism could fill the same gaps as the governing board in collaboration, as well as the need for an impartial intermediary and a neutral source of information. Its role as facilitator would make it more palatable to universities, and as such the likelihood of its success is greater than a governing body. However, it is evident that many institutions would oppose its creation.

C. PERFORMANCE INDICATORS & PERFORMANCE FUNDING Aside from the development of an intermediary body, another option would be a more robust performance indicator and performance funding framework. This system of governance would have much different characteristics. First, this framework would be established directly by government, in collaboration with universities and sector stakeholders. Second, the existing indicators could be continued, but additional province-wide indicators would be developed that were more detailed and complex. Third, a greater proportion of fund116

ing would be tied to success or improvement according to these indicators.

Moreover, this framework could utilize the commonly formulated input-process-outcome model.207 Input variables indicate what universities start with, which may include teachers, students and facilities.208 Process variables indicate what universities do with the inputs, such as faculty workload, curricula or student/faculty ratios.209 Outcome variables are the cognitive and non-cognitive effects of the university experience on students, such as incomes, skills and behaviours.210 Moreover, within this model, each of these variables is influenced by the environment and surrounding context, which can also be measured or examined.211 Although this option could provide a needed mechanism for accountability, there are significant problems with a more robust performance indicator and funding framework.

Many critics in the United States point out that an unnecessary amount of time and resources are spent gathering and reporting data, some of which is seen as irrelevant.212 A more robust performance indicator framework could also increase the actual and perceived disparities among institutions. Indicators often create winners and losers, thereby increasing stratification among universities, as rankings differentiate between the best, worst and adequate institutions.213 There is also a significant concern that government-imposed performance indicators and performance funding have political ends, instead of aiming for improvement. In Alberta, a number of academics have opposed their performance based funding system for this reason. One analyst stated that the system, “ …has been more about regulation and control than performance. The agenda is political, not educational – and not even to do with performance. ”214 Beyond the framework or ends of a substantial performance indicator framework, there are also problems with the development of the actual indicators themselves. It is inherently difficult to attach quantitative indicators to many programs. One research report on performance indicators raised the question, “How are we to attach meaningful indicators to works of art, performance, or literature; to longterm historical study; or to the refinement over a lifetime, of a body of philosophical thought? ”215 Quality indicators often carry the risk of excessive attempts to quantify at the expense of qualitative analysis. 216 Moreover, institutions themselves find it difficult to determine the quality of their own programs and departments, even within the context of their own mandate or mission. For example, in a report prepared for the institutional plan at McMaster, it was noted that, …it looks to be nearly impossible to come up with a single set of indicators that can be used to assess the quality of every department given the ethos that exists in different parts of the campus. For example, research in some parts of the campus is driven by grants, and publications are plentiful, while in other parts significant research can be carried out without the need for external funding and the publication rate is much lower.217 OUR BRIGHT FUTURE

DISCUSSION PAPER Given these significant drawbacks, it would be difficult to justify the establishment of a more robust performance indicator and performance funding framework.

D. CENTRALIZED QUALITY ASSURANCE AGENCY A centralized quality agency would be an arms-length body of the provincial government. It could work with an intermediary body, either governing or coordinating, to develop an overarching quality assurance framework for all institutions in the province. This framework could take the shape of a comprehensive Total Quality Management (TQM) system, similar to the input-process-outcome framework mentioned earlier. A sample framework for TQM can be found in appendix five. In this framework, the government, ideally in coordination with institutions and sector stakeholders, would develop a concept of quality at an institutional and/or program-based level. For either funding purposes, or as a matter of requirement, institutions would need to meet the government objectives or priorities established by this agency.

There are clear benefits to this option. First, there is the comprehensive and inclusive nature of quality assurance.

Quality assurance takes into account both qualitative and quantitative measures, which is invaluable for the liberal arts, as these disciplines are often difficult to assess through quantitative performance indicators.218 This type of reporting framework would also fill the information and data gap, and could potentially identify areas of needed collaboration. Unfortunately, there are significant problems with this type of central quality assurance system. As mentioned earlier, the major drawback of centralized quality assurance is the high cost for administration and the level of intrusion.

Given the potential costs of the system, as well as the likelihood of opposition by institutions, it is unlikely that a centralized quality assurance framework could be put into place.

E. DECENTRALIZED QUALITY ASSURANCE FRAMEWORK A decentralized quality assurance framework would be similar to a central agency, but it would focus on the coordination of existing structures and the development of new tools that could form a more comprehensive framework.

Ideally, this type of framework would be managed by an intermediary coordinating body to ensure that an effective system is in place. Institutions would have completion requirements, including planning documents, the use of data produced and the publication of annual reports, however, the establishment of direction would rest with each individual institution. The tools within this framework would include: existing assessment tools; new tools funded by government; and best-practice models. Existing assessment tools would include the undergraduate reviews conducted by OCAV or even the current KPI framework. New tools might include the development of a student engagement survey similar to OUR BRIGHT FUTURE

NSSE, or the implementation of institution-level reviews. Best practice models could be administered through a committee or subgroup of a coordinating agency. One example of a best practice model might be the development of a benchmarking or assessment manual for use at universities in order to undertake institutional level assessments. This type of project was initiated in Australia, with the development of a benchmarking manual through a collaborative effort between government and universities.219 Overall institutional-level quality audits, and the monitoring of quality assessment reports produced by universities, could also be facilitated through a decentralized quality assurance framework. Moreover, all the information produced by the assessment and accountability tools within this model, including those funded by government, and those already existing at institutions, could be compiled into a Higher Education Information Management framework by staff at the coordinating board or agency.

A decentralized quality assurance framework has a number of significant advantages. First, this model could be an effective means of balancing institutional autonomy and public accountability. Universities would be required to supply mandatory information and reports, however, they would retain their means of self-assessment and ability to set academic direction. This model could also fill the significant information and data gap that exist through the systematic collection and publication of information. A decentralized quality assurance agency would also fill the gap of institutional-level assessment through a mechanism that might be acceptable to individual institutions. The construction of a framework using existing tools and structures could also be less costly than the development of an entirely new central quality assurance agency and associated tools.

There are, however, a number of challenges that would need to be overcome before this model could be implemented. A decentralized quality assurance framework would require significant collaboration between institutions and the government to establish and maintain. There could also be a number of institutions who are not comfortable with additional reporting requirements. Finally, this framework would require independent resources for management. Ideally, management would be facilitated through a coordinating board or agency.

Given the significant advantages that this decentralized system offers, it is likely that this model could be applied in Ontario.

117

GOVERNANCE, ACCOUNTABILITY & ASSESSMENT principles

Given the historical and current framework in Ontario, as well as the characteristics of other jurisdictions and potential options available, the following principles should guide the development of any future system of governance, accountability and assessment for higher education in Ontario: Principle One: Universities should be accountable to students as well as the public through a systemic, sustainable and effective governance, accountability and assessment framework.

The argument for the public accountability of universities is quite clear. The province invests billions in public dollars to universities every year, and universities should be accountable for those funds. However, universities should also be accountable to students for their significant financial and academic contributions. For example, in 2002, tuition fees represented a substantial share of revenue for universities, at roughly 44 per cent of the total operating funding for institutions in Ontario.220 In order for the governance, accountability and assessment framework to be effective, it must be systemic and sustainable. In order to be systemic, all institutions must be encompassed within the framework and its philosophy. This does not necessarily mean uniform measures or benchmarks to which all institutions must meet a common goal for funding. It may, however, mean common tools for or approaches to assessment. It would also mean that there would be systemic data that was available to students and the public. In order to be sustainable, the framework must be able to demonstrate value to government, universities, stakeholders and the public within a reasonable budget.

Principle Two: All stakeholders, including students, must be intimately involved in the improvement and maintenance of quality at institutions through all pathways of governance, accountability and assessment.

The involvement of all stakeholders, including students, faculty, administrators, staff and even the general public, are integral to the improvement and maintenance of quality at Ontario ’s universities. If all stakeholders are involved in these pathways of governance, they will develop an effective understanding of the challenges faced by institutions, which may help to make them better advocates. Moreover, those individuals who are most affected by changes to the quality of the learning experience at Ontario ’s universities may be best equipped to assist in the system ’s improvement.

Principle Three: All tools of governance, accountability and assessment must ensure a culture of improvement through continuous, formative evaluation.

In order to ensure that higher education in Ontario is at the leading edge when compared with other provinces and countries, the system must function within a framework that strives to continually improve. This would be best conducted through a process of formative evaluation, which offers observers information that is useful for improvement. This is 118

different from summative evaluation, which only measures outcomes. Summative evaluation can reward stagnation and ensure those who are successful remain at the top, and those who are unsuccessful remain at the bottom. In a dynamic environment where knowledge and methods change rapidly, we must pursue improvement.

Principle Four: Governance, accountability and assessment mechanisms must recognize the balance between institutional autonomy and public interest.

As mentioned earlier, there is a fine balance between institutional autonomy and public interest. Universities are socio-economic development drivers for the province, and, as such, they should not be subject to partisan political priorities. However, they must meet the needs and demands of all citizens through the government. Universities also receive a significant amount of funding from the government and are essentially wards of the legislature. However, the government also vests financial responsibility in the board of governors at each institution. Clearly, there is also a need to ensure that institutions are able to set their own academic direction and priorities separately from government or corporate intervention. But there are also increasing demands for the public accountability of higher education institutions from the public and within government.

Principle Five: Governance, accountability and assessment mechanisms must not create an onerous environment of reporting for institutions.

It is important to ensure that the task of reporting does not interfere with those activities which are being reported.

As mentioned earlier, many feel that this is the case with the significant bureaucracy surrounding the Quality Assurance framework in the United Kingdom.

Principle Six: Accountability and assessment mechanisms must be able to balance both qualitative and quantitative data.

Albert Einstein once said that, “Everything that can be counted does not necessarily count; everything that counts cannot necessarily be counted. ” A system of governance, accountability and assessment for higher education in Ontario cannot rest wholly on numerical indicators. There must be room to recognize the importance of those successes and improvements that cannot be described by numbers. For example, it is difficult to measure the value of a liberal arts degree numerically, but its impact and importance are justifiably touted.

Moreover, according to this principle, institutions should not be funded based solely on quantitative performance measures.

Principle Seven: Accountability and assessment mechanisms must recognize differing institutional mandates.

Ontario ’s higher education system is not like the public-state model in the United States. Universities in Ontario have their own unique strengths and characteristics, with difOUR BRIGHT FUTURE

DISCUSSION PAPER ferent departments, missions and overall institutional priorities. As such, any accountability and assessment mechanisms developed must be flexible enough to recognize these differences. This does not mean, however, that different programs should not be assessed. In the context of a formative evaluation framework, this can be easily and effectively done.

It should be noted that the recognition of differing institutional mandates does not imply a tacit acceptance of program-based specialization according to each institution, or exclusivity of course offerings at selected institutions. All qualified students should be able to attend an institution in Ontario at a program of their choice.

Principle Eight: Accountability and assessment mechanisms should focus on a broad range of input, outcome and process indicators.

A broad range of indicators or measures must be utilized in order to effectively assess and improve quality at institutions in Ontario. This is important to note because each of these variables can affect others. For example, the input indicator of entering grades can have an affect on graduation rates. In measuring the range of indicators and understanding the connection, it is easier to foster effective change. Unfortunately, the current system of indicators is quite narrow, and focuses on a dull assessment of employment following graduation.

Principle Nine: Any governance, accountability or assessment framework should not dictate curriculum at higher education institutions.

As a matter of institutional autonomy, the province should not be directly involved in setting academic direction for universities in the province. Universities should serve as a mainstay of intellectual criticism of government, and intervention into the academic direction of an institution would violate that responsibility. Moreover, governments have proven ineffective at predicting or directing specific labour trends. This is evident, as mentioned earlier, in the ATOP program.

Principle Ten: Institutional and system-wide information about higher education in the province should be publicly available, easily accessible and have the following characteristics: relevant, timely, accurate, understandable and cost-effective.

For planning purposes at a system and institutional level, as well as for public accountability, it is important to have data that is readily available, relevant, timely, accurate and understandable. This data can also be used to assist in student choice or to compare Ontario’’s universities with institutions in other provinces and nations.

OUR BRIGHT FUTURE

recommendations

In order to create an effective system of governance, accountability and assessment for higher education in Ontario, the following recommendations are offered: GENERAL RECOMMENDATIONS Recommendation One: The provincial government should amend university charter legislation so that students hold at least 25 per cent of seats on governing bodies of each institution.

Students make a major financial contribution to postsecondary institutions in Ontario, and yet they have extremely limited representation on governing bodies such as senates or boards of governors. Moreover, students comprise one of the four most important stakeholder groups for institutions, which also include faculty, staff, administrators and the general public. Given their financial contribution, and the importance of students to the university community, the level of representation for students on campuses across Ontario should increase to 25 per cent of the total.

Recommendation Two: The provincial government should ensure that all post-secondary institutions in Ontario are subject to freedom of information legislation.221 As mentioned earlier, it is clear that the current best practice guidelines governing information requests for universities in Ontario are ineffective, allowing different levels of information availability and providing an opportunity to withhold information without recourse. If universities in Ontario are provided with significant public funds, they should be subject to reasonable systemic regulations surrounding information requests. There should, however, be limitations on these requests, particularly with respect to individual student information such as academic standing or financial status.

Recommendation Three: Tuition fees in Ontario should be regulated by the provincial government.

Legislation surrounding tuition fees in Ontario is quite clear. The establishment of fees is within the powers of the provincial government and the Ministry of Training, Colleges and Universities. Moreover, the provincial government has a responsibility to ensure the predictability and affordability of tuition fees as a matter of public interest. The provincial government also has the ability and responsibility to assess the impact of tuition fee policy for the province as a whole. Tuition fees in Ontario must be regulated by the provincial government.

119

GOVERNANCE, ACCOUNTABILITY & ASSESSMENT COORDINATING BOARD RECOMMENDATIONS Recommendation Four: The provincial government should create an intermediary coordinating board or agency between universities and the provincial government to ensure the accountability of higher education in the province, provide advice to government and institutions, and foster collaboration within the system.

There is a clear gap in the governance, accountability and assessment framework for higher education in Ontario.

It is evident that this gap of information and data collection, presentation and analysis, institutional-level assessment and coordination can be effectively filled by an intermediary coordinating board or agency between universities and the provincial government.

The body should have the following characteristics: a. Responsive. This new body must ensure that the government is able to respond to the rapidly changing public policy environment of higher education. b. Independent. An intermediary body must be independent from government in order to ensure that its data and reports are as unbiased as possible.

Moreover, because it is independent from government, executive authority over funding would rightly remain with the province. c. Decentralized. This body would allow institutions to implement their own accountability and assessment frameworks, within the requirements of government and reporting. d. A facilitator. The new coordinating board would focus on facilitating the improvement of institutions, as well as the sharing of information and best practices. e. An information source. It is clear that there is a substantial gap in system and institutional level data on higher education in Ontario. This body could fill that gap.

Clearly, there would be a number of challenges to the creation of such a body. For example, there is the integration of colleges into the body. Although there are similarities in the issues faced by colleges and universities, it is clear that there are many issues that are unique to each type of institution. This problem could be ameliorated through the creation of subcommittees and staff working groups, as well as specific data collection requirements for each type of institution.

A full description of the proposed body and associated governance framework can be found in appendix seven.

Additional characteristics and activities of this new framework can be found in the following recommendations.

Recommendation Five: The membership of the board must include representatives from all stakeholder groups, including students, who are appointed by government from recommendations by each of the provincial stake120

holder organizations in the sector.

Students, faculty, staff, administrators and the public all have an important stake in the future of higher education in the province. Consequently, they should be represented on the advisory board that oversees the higher education system in the province.

Recommendation Six: The provincial government should mandate the proposed coordinating board or agency with the task of implementing a student engagement survey for current students.

The data provided by a student engagement survey can be extremely invaluable in institutional planning, as well as determining academic activities and perceptions about quality for Ontario’’s universities. A number of universities in Ontario engage in this kind of survey, however, this data is not generally public, and not all universities participate. Publicly available data would be helpful in advocacy efforts, as well as for comparison among institutions and between other jurisdictions and Ontario.

It would also be important that this kind of survey not merely measure satisfaction, but opportunity as well. For example, it would not only ask satisfaction with the quality of the educational experience, but also the level of opportunity for critical analysis, presentation delivery or other activities deemed important.

In order to ensure this kind of survey was kept at low cost, it should be done on a rotating basis, similar to the survey conducted by the Canadian Undergraduate Survey Consortium. Furthermore, this survey tool should be developed with input from students, faculty, staff and administrators.

This survey tool could be complemented with other student assessment tools, including benchmarking exercises.

Benchmarking exercises measure the development of specific skills, such as writing or critical analysis, from entry to graduation.

Recommendation Seven: The provincial government should mandate the proposed coordinating board or agency with the task of developing an institutional-level assessment tool that can be used at all Ontario universities.

The development of an institutional-level assessment tool that could be used at all universities would help fill a gap in assessment, and ensure that there was no direct government intervention in academic direction-setting. This tool might also help with the process of best-practice sharing among institutions, which could help improve the system as a whole.

Recommendation Eight: The provincial government should mandate the proposed coordinating board or agency with the task of creating annual data reports of collaboratively approved system indicators and system information.

In order to ensure transparency and demonstrate value OUR BRIGHT FUTURE

DISCUSSION PAPER to the public given its substantial investment in colleges and universities, annual reports for the higher education system must be generated. These reports could also help identify trends or areas requiring specific attention for improvement.

Ideally, the indicators and information reported would be developed through cooperation of all stakeholders in the system, according to their data needs.

Recommendation Nine: The provincial government should mandate the staff of the proposed coordinating board or agency with the task of creating regular recommendation papers and reports on, but not exclusive to, the following topics: tuition fees, resource allocation, system quality and accessibility, student financial assistance and collaboration.

Staff in an independent and unbiased body with access to substantial, historical information about Ontario’’s universities and colleges would be well-placed to generate recommendation papers and reports on the issues that matter most to students and the system as a whole. These reports would be non-binding, but a part of the advisory capacity that the coordinating body would serve for the provincial government.

Recommendation Ten: The provincial government should mandate the proposed coordinating board or agency with the task of facilitating the development of a resource outlining best practices of undergraduate and graduate education.

Universities in Ontario are inherently competitive and do not have any recognizable mechanism for sharing best practices of education. The proposed intermediary body could provide an opportunity for sharing the best methods of teaching and learning from institutions across the province so that all students may have the opportunity to benefit from these practices. An example of this kind of process was the Boyer Commission in the United States, which was undertaken to develop best practices in undergraduate education at research universities, and stimulate debate that would ideally lead to significant reform.222 Recommendation Eleven: The provincial government should mandate the proposed coordinating board or agency with the task of conducting periodic institutionallevel reviews as well as special assessments when deemed necessary by institutions.

There is a clear gap in institutional level assessment that can be filled by the proposed advisory body. Moreover, institutions may wish to conduct special assessments of specific programs or areas of interest to students, faculty or administrators on campus. It should be noted that the recommendations of the reviews and assessments would not be binding, but should be made publicly available. Moreover, the institutional-level assessments should produce data that is comparable from institution to institution.

OUR BRIGHT FUTURE

Recommendation Twelve: All of the information that is collected by the coordinating board or agency and individual institutions within the new framework of governance, accountability and assessment should be organized along the lines of a Higher Education Management Information System (HEMIS).

A HEMIS framework is extremely effective and ensures that data is relevant, timely, accurate, understandable and cost-effective. Each of these characteristics is integral for the public accountability of universities in Ontario. Moreover, a HEMIS framework follows a clear path of data usage for systemic improvement, from needs identification and data collection to information utilization.

Recommendation Thirteen: The provincial government should abolish the current key performance indicator (KPI) framework and reallocate the associated funding into operating grants.

It is clear from the arguments raised earlier in this paper that the current KPI framework is ineffective and must be replaced.

INSTITUTIONAL-LEVEL RECOMMENDATIONS Recommendation Fourteen: The provincial government should require institutions to create an institutional quality improvement task force that is comprised of a representative group of on-campus stakeholders.

Change occurs most effectively at the local level in an environment where all stakeholders can play a role in setting direction. An institutional quality improvement task force that is comprised of students, faculty, administrators and staff could help facilitate improvements in the quality of educational experience in universities across the province.

Recommendation Fifteen: The provincial government should require institutions to produce quality improvement plans on a regularly scheduled basis that are developed by an institutional quality improvement task force and supported by an institutional-level assessment process.

In order to ensure an institutional commitment to improving quality, the government should require institutions to develop quality improvement plans on a regular basis that establish targets and demonstrate improvement. These plans should be developed by the quality improvement task force, and incorporate findings from the institutional-level assessment process, as well as other available data from sources like the proposed student engagement survey.

Recommendation Sixteen: The provincial government should mandate institutions to produce an annual quality assessment report that is available on its website that includes a small set of mandatory indicators that are common province-wide, as well as a set of institutional indicators that have been developed by an institutional 121

GOVERNANCE, ACCOUNTABILITY & ASSESSMENT quality improvement task force.

An annual quality assessment report that was made available online on an annual basis would serve an important accountability function for individual institutions. Mandatory indicators that were collaboratively approved and common province-wide would be made available in these reports.

However, these reports would also recognize the different strengths of institutions by making unique institutional indicators publicly available.

Recommendation Seventeen: The provincial government should ensure that the results of all undergraduate program audits are made publicly available and easily accessible on the websites of individual institutions and publicly available upon request.

Unfortunately, as with the data related to KPIs at individual institutions, undergraduate program audits are either unavailable or difficult to find on university websites. For the purposes of public accountability, these reports should be available and accessible on institutional websites.

Recommendation Eighteen: The provincial government should ensure that all reporting requirements are completed within a reasonable and defined timeline.

There are limits to the capacity of an institution to collect and report data. However, it is clear that all information reported must be relevant to students, government, universities and the general public for the purposes of planning and accountability.

Recommendation Nineteen: The provincial government should provide full-funding for the proposed coordinating board or agency, as well as for the development and implementation of individual assessment tools and processes at institutions.

Although it will have significant benefits for the government, students, universities and the public, the proposed coordinating board will require a significant investment from government in order to establish its operation. Moreover, as universities are already limited in their financial resources due to underfunding, it is recommended that the government provide funding for the development and implementation of assessment tools and processes at individual institutions.

Recommendation Twenty: Universities should develop a statement of institutional responsibility in partnership with students on their campuses.

An institutional responsibility statement would outline the university’’s commitment to its students, in a similar manner to an academic bill of rights. Ideally, this statement would solidify the unwritten agreement between students and their institution and guarantee certain educational characteristics and principles that should guide learning on campus. Although it may have no binding power, it would be a demonstrable commitment to quality and students on behalf of the institution. An example of such a statement from the previously 122

mentioned Boyer Commission can be found in appendix six.

conclusion

There is a significant challenge to the governance of higher education in the province which must be addressed through the Postsecondary Review and beyond. Sizable gaps exist in the current governance, accountability and assessment framework for higher education in Ontario. There are issues with the availability, currency, source, coverage and targets of information and data on the system, as well as student involvement and ability of institutions to coordinate and improve. The government must be able to effectively understand its system of higher education in order to appropriately respond with policy changes and adequate resources. It must also ensure public accountability, while meeting the need for institutional autonomy.

These challenges are not unique to Ontario. The province can learn a number of significant lessons from other jurisdictions that have faced similar challenges of governance.

It is clear there is great utility to an intermediary body that can provide both an independent buffer and unbiased information that can be utilized for institutional or systemic improvement. Moreover, it is important that demands for accountability are not too excessive and that the framework for governance and assessment is responsive to changes that are necessary for the continuous improvement of the system.

Ontario can move forward with a clear understanding of its own issues and adopt the best practices of other jurisdictions. These changes should be guided by the principles of accountability to students, stakeholder involvement, continuous improvement, a balance of accountability and autonomy, information utility and availability, and the recognition of differing institutional mandates.

A new framework of governance, accountability and assessment guided by a coordinating body or agency within a higher education information management system framework that is equipped with the proper tools and supported by student involvement can have substantial benefits for universities and the province as a whole.

It is vital that we make changes to our system of governance, accountability and assessment for the future quality, affordability and accessibility of higher education in our province. If we do not make these changes, Ontario will not know where we stand relative to other provinces and countries. We will also remain in the dark on our own system.

OUR BRIGHT FUTURE

DISCUSSION PAPER summary of principles Principle One: Universities should be accountable to students as well as the public through a systemic, sustainable and effective governance, accountability and assessment framework.

Principle Two: All stakeholders, including students, must be intimately involved in the improvement and maintenance of quality at institutions through all pathways of governance, accountability and assessment.

Principle Three: All tools of governance, accountability and assessment must ensure a culture of improvement through continuous, formative evaluation.

Principle Four: Governance, accountability and assessment mechanisms must recognize the balance between institutional autonomy and public interest.

Principle Five: Governance, accountability and assessment mechanisms must not create an onerous environment of reporting for institutions.

Principle Six: Accountability and assessment mechanisms must be able to balance both qualitative and quantitative data.

Principle Seven: Accountability and assessment mechanisms must recognize differing institutional mandates.

Principle Eight: Accountability and assessment mechanisms should focus on a broad range of input, outcome and process indicators.

Principle Nine: Any governance, accountability or assessment framework should not dictate curriculum at higher education institutions.

Principle Ten: Institutional and system-wide information about higher education in the province should be publicly available, easily accessible and have the following characteristics: relevant, timely, accurate, understandable and cost-effective.

summary of recommendations

Recommendation One: The provincial government should amend university charter legislation so that students hold at least 25 per cent of seats on governing bodies of each institution.

Recommendation Two: The provincial government should ensure that all post-secondary institutions in Ontario are subject to freedom of information legislation.

Recommendation Three: Tuition fees in Ontario should be regulated by the provincial government.

COORDINATING BOARD RECOMMENDATIONS Recommendation Four: The provincial government should create an intermediary coordinating board or agency between universities and the provincial government to ensure the accountability of higher education in the province, provide advice to government and institutions, and foster collaboration within the system.

OUR BRIGHT FUTURE

Recommendation Five: The membership of the board must include representatives from all stakeholder groups, including students, who are appointed by government from recommendations by each of the provincial stakeholder organizations in the sector.

Recommendation Six: The provincial government should mandate the proposed coordinating board or agency with the task of implementing a student engagement survey for current students.

Recommendation Seven: The provincial government should mandate the proposed coordinating board or agency with the task of developing an institutional-level assessment tool that can be used at all Ontario universities.

Recommendation Eight: The provincial government should mandate the proposed coordinating board or agency with the task of creating annual data reports of collaboratively approved system indicators and system information.

Recommendation Nine: The provincial government should mandate the staff of the proposed coordinating board or agency with the task of creating regular recommendation papers and reports on, but not exclusive to, the following topics: tuition fees, resource allocation, system quality and accessibility, student financial assistance and collaboration.

Recommendation Ten: The provincial government should mandate the proposed coordinating board or agency with the task of facilitating the development of a resource outlining best practices of undergraduate and graduate education.

Recommendation Eleven: The provincial government should mandate the proposed coordinating board or agency with the task of conducting periodic institutional-level reviews as well as special assessments when deemed necessary by institutions.

Recommendation Twelve: All of the information that is collected by the coordinating board or agency and individual institutions within the new framework of governance, accountability and assessment should be organized along the lines of a Higher Education Management Information System (HEMIS).

Recommendation Thirteen: The provincial government should abolish the current key performance indicator (KPI) framework and reallocate the associated funding into operating grants.

INSTITUTIONAL-LEVEL RECOMMENDATIONS Recommendation Fourteen: The provincial government should require institutions to create an institutional quality improvement task force that is comprised of a representative group of on-campus stakeholders.

Recommendation Fifteen: The provincial government should require institutions to produce quality improvement plans on a regularly scheduled basis that are developed by an institutional quality improvement task force and supported by an institutional-level assessment process.

123

GOVERNANCE, ACCOUNTABILITY & ASSESSMENT Recommendation Sixteen: The provincial government should mandate institutions to produce an annual quality assessment report that is available on its website that includes a small set of mandatory indicators that are common province-wide, as well as a set of institutional indicators that have been developed by an institutional quality improvement task force.

Recommendation Seventeen: The provincial government should ensure that the results of all undergraduate program audits are made publicly available and easily accessible on the websites of individual institutions and publicly available upon request.

Recommendation Eighteen: The provincial government should ensure that all reporting requirements are completed within a reasonable and defined timeline.

Recommendation Nineteen: The provincial government should provide full-funding for the proposed coordinating board or agency, as well as for the development and implementation of individual assessment tools and processes at institutions.

Recommendation Twenty: Universities should develop a statement of institutional responsibility in partnership with students on their campuses.

124

OUR BRIGHT FUTURE

DISCUSSION PAPER appendix one: the governance of tuition fees in selected jurisdictions UNITED STATES Tuition for public universities in the vast majority of U.S. states is regulated by their respective legislatures. There are, however, a few states that have recently deregulated fees. For example, tuition fees for public universities in Texas are now deregulated.223 According to Texas Senator John Carona, the deregulation of tuition in that state was narrowly passed into law during the 2003 Regular Session after intense debate. ”224 According to available research, the only other state that has deregulated tuition for its public universities is Oklahoma.225 UNITED KINGDOM All tuition fees for universities in the United Kingdom are regulated within a range of fees that are capped at £ 3,000.226 There has been some talk from the larger and older institutions of complete deregulation of fees. However, even the architect of the new top-up fee scheme, Dr. Nicholas Barr, is an advocate of regulated fees.227 AUSTRALIA Tuition fees in Australia follow a similar pattern to the U.K. model in that institutions are able to set fees within a range established by government. This has, however, been referred to as partial fee deregulation, as institutions are able to set fees between zero and 125 per cent of the previous year ’s tuition fee levels.228

OUR BRIGHT FUTURE

125

GOVERNANCE, ACCOUNTABILITY & ASSESSMENT appendix two: strengths and weaknesses of governing and coordinating boards in the united states229 GOVERNING BOARD POTENTIAL STRENGTHS • engaged in statewide strategic planning • responsive to state priorities • can appoint, set compensation for, and evaluate both system and institutional chief executives • guards against duplication • ensures program quality through program approval methods • armed to address articulation and transfer issues • statutory authority can be powerful POTENTIAL CONCERNS • central planning can go against emphasis on market needs/slow to respond to market needs • often becomes weighed down with internal concerns and collective bargaining efforts at the subsystem level • can evolve into large, ineffective bureaucracies • cooperation with the private sector can be nonexistent • heavy political influence on micro issues at the university level • often lacks necessary data to assess institutional performance • tense relationships can develop between professional leaders and state government COORDINATING BOARD POTENTIAL STRENGTHS • quick to respond to market forces/needs • engaged in statewide strategic planning • generally responsive to state priorities • often leads in designing and implementing articulation initiatives • private sector usually a direct partner • sensitive to consumer needs • builds consensus to make change, particularly with budgeting, program review and articulation POTENTIAL CONCERNS • state priorities can take a “back seat ” to local lobbying efforts • sometimes perceived as powerless or “toothless ” if consensus building is stalled • statewide initiatives can be hindered without the voluntary cooperation of all institutions • difficult to reverse enacted policies • can be difficult to create policy change • institutional decisions at the local level can be in direct conflict with views held at state level, creating tension between policy makers and institutions • statutory authority can be considered weak

126

OUR BRIGHT FUTURE

DISCUSSION PAPER appendix three: nine principles of good practice for assessing student learning230 1. The assessment of student learning begins with educational values. Assessment is not an end in itself but a vehicle for educational improvement. Its effective practice, then, begins with and enacts a vision of the kinds of learning we most value for students and strive to help them achieve. Educational values should drive not only what we choose to assess but also how we do so. Where questions about educational mission and values are skipped over, assessment threatens to be an exercise in measuring what ’s easy, rather than a process of improving what we really care about.

2. Assessment is most effective when it reflects an understanding of learning as multidimensional, integrated, and revealed in performance over time. Learning is a complex process. It entails not only what students know but what they can do with what they know; it involves not only knowledge and abilities but values, attitudes, and habits of mind that affect both academic success and performance beyond the classroom. Assessment should reflect these understandings by employing a diverse array of methods, including those that call for actual performance, using them over time so as to reveal change, growth, and increasing degrees of integration. Such an approach aims for a more complete and accurate picture of learning, and therefore firmer bases for improving our students ’ educational experience.

3. Assessment works best when the programs it seeks to improve have clear, explicitly stated purposes. Assessment is a goal-oriented process. It entails comparing educational performance with educational purposes and expectations — those derived from the institution ’s mission, from faculty intentions in program and course design, and from knowledge of students ’ own goals. Where program purposes lack specificity or agreement, assessment as a process pushes a campus toward clarity about where to aim and what standards to apply; assessment also prompts attention to where and how program goals will be taught and learned. Clear, shared, implementable goals are the cornerstone for assessment that is focused and useful.

4. Assessment requires attention to outcomes but also and equally to the experiences that lead to those outcomes. Information about outcomes is of high importance; where students “end up ” matters greatly. But to improve outcomes, we need to know about student experience along the way — about the curricula, teaching, and kind of student effort that lead to particular outcomes. Assessment can help us understand which students learn best under what conditions; with such knowledge comes the capacity to improve the whole of their learning.

5. Assessment works best when it is ongoing not episodic. Assessment is a process whose power is cumulative.

Though isolated, “one-shot ” assessment can be better than none, improvement is best fostered when assessment entails a linked series of activities undertaken over time. This may mean tracking the process of individual students, or of cohorts of students; it may mean collecting the same examples of student performance or using the same instrument semester after semester. The point is to monitor progress toward intended goals in a spirit of continous improvement.

Along the way, the assessment process itself should be evaluated and refined in light of emerging insights.

6. Assessment fosters wider improvement when representatives from across the educational community are involved. Student learning is a campus-wide responsibility, and assessment is a way of enacting that responsibility. Thus, while assessment efforts may start small, the aim over time is to involve people from across the educational community.

Faculty play an especially important role, but assessment ’s questions can ’t be fully addressed without participation by student-affairs educators, librarians, administrators, and students. Assessment may also involve individuals from beyond the campus (alumni/ae, trustees, employers) whose experience can enrich the sense of appropriate aims and standards for learning. Thus understood, assessment is not a task for small groups of experts but a collaborative activity; its aim is wider, better-informed attention to student learning by all parties with a stake in its improvement.

7. Assessment makes a difference when it begins with issues of use and illuminates questions that people really care about. Assessment recognizes the value of information in the process of improvement. But to be useful, information must be connected to issues or questions that people really care about. This implies assessment approaches that produce evidence that relevant parties will find credible, suggestive, and applicable to decisions that need to be made. It means thinking in advance about how the information will be used, and by whom. The point of assessment is not to gather data and return “results ”; it is a process that starts with the questions of decision-makers, that involves them in the gathering and interpreting of data, and that informs and helps guide continous improvement.

8. Assessment is most likely to lead to improvement when it is part of a larger set of conditions that promote change. Assessment alone changes little. Its greatest contribution comes on campuses where the quality of teaching and learning is visibly valued and worked at. On such campuses, the push to improve educational performance is a visible and primary goal of leadership; improving the quality of undergraduate education is central to the institution ’s planning, budgeting, and personnel decisions. On such campuses, information about learning outcomes is seen as an integral part of decision making, and avidly sought.

OUR BRIGHT FUTURE

127

GOVERNANCE, ACCOUNTABILITY & ASSESSMENT 9. Through assessment, educators meet responsibilities to students and to the public. There is a compelling public stake in education. As educators, we have a responsibility to the publics that support or depend on us to provide information about the ways in which our students meet goals and expectations. But that responsibility goes beyond the reporting of such information; our deeper obligation — to ourselves, our students, and society — is to improve. Those to whom educators are accountable have a corresponding obligation to support such attempts at improvement.

128

OUR BRIGHT FUTURE

DISCUSSION PAPER appendix four: higher education information management system231 SYSTEM CHARACTERISTICS A higher education information management system supplies data that is: A. Relevant. Relevance refers to the data being of actual use to decision makers. For example, there are three main users of a higher education management information system(HEMIS): central administrators, institutional administrators and consumers of higher education(including students, their families and employers.)

B. Timely. Timeliness is another critical concern for management information systems for higher education. Even if the data collected and assimilated is relevant, it may lose that relevancy if it is not disseminated in a timely fashion. To learn two years later of a surge in secondary school graduates will not help the higher education system or its component institutions prepare for the consequent increase in demand for higher education.

C. Accurate. Accuracy would appear to be an obvious value in educational data but one should recognize that it is not an absolute at higher levels. If dealing with an individual or even a group of individuals at a single institution, one requires a very high degree of accuracy. When dealing with province or national level data, the degree of accuracy may not need to be as precise. Fortunately, modern information technology has made it easier to aggregate national or provincial data from institutional and individual data without any sacrifice of accuracy.

D. Understandable. Understandability is a dissemination issue. Rarely will understandability be a concern among the data specialists. However, when presenting higher education data to administrators, staff or students, one must be concerned with their ability to understand what the data means. For example, as more individuals take an achievement examination, average success levels may fall. That does not necessarily signify that learning is declining. If only the top half of secondary school graduates take an examination, the scores will be higher on average than if all students take the examination. To “understand ” the data one must understand the context of the data. This is particularly important in a context where conditions are diverse and change is rapid.

E. Cost-effective. Cost-effectiveness of data is a critical concern. If data is effective (meaning that it embodies the characteristics of relevance, timeliness, accuracy and understandability), it still must be affordable. Some very useful data may be too expensive to collect every year. Traditionally, most HEMIS ’s have been census based and have under-utilized the sample approach. To link location and employability, for example, a sample population will be much more cost-effective than to try to collect the required data from all participants in the higher education system.

COMPONENT ACTIVITIES There are at least five component activities of a HEMIS including: A. Needs identification. There are two predominant means for conducting needs identification. The first involves a survey of decision makers to determine what data they currently use and the additional data they would like to have.

The second means of data needs identification involves an analysis of a HEMIS conceptual framework (the ideal specification of the key higher education data components and relationships) to determine the most critical aspects of the higher education management decision-making process. Once identified, all proposed data for the HEMIS, including specific higher educational indicators, must be judged in terms of the aforementioned criteria of relevance, accuracy, timeliness of collection, understandability for decision-makers and affordability.

B. Data collection. The data from a HEMIS originates from three major data collection sources. First, there are the day-to-day records of the operation of a higher educational system or institution, which may include substantial data on personnel, clients and operations. Second, a common form of data collection for a HEMIS is for a “census ” to be conducted covering all parts of a higher educational system ’s or organization ’s structure. This may include personnel and pupil characteristics, facilities conditions, the availability of educational materials and other information deemed necessary for managers. The third major source is special data collection exercises to deal with issues of policy or practice when inadequate information exists from ongoing data collection activities. These activities are often sample based, and offer greater detail on the given topic(s).

OUR BRIGHT FUTURE

129

GOVERNANCE, ACCOUNTABILITY & ASSESSMENT C. Data processing and analysis. Data will rarely be made more accurate after collection, but can often be made less accurate through human or technical error. The ability to access and interpret the data collected must be ensured through effective processing, or there is a great risk of misinterpretation. Data analysis within the HEMIS basically should parallel the conceptual framework upon which the data collection was based. For example, if the framework asserts that gender, urban-rural location, age or other characteristics are important to higher educational operations and impacts, then the data results may be analyzed in terms of these dimensions to determine if the assumed relationships can be confirmed.

D. Information provision. The general rule for the provision of HEMIS results is that the information provided must meet a recognized need of the potential users and be understandable to the users within an “interpretive context ” (involving decision maker ’s goal priorities, organizational responsibilities and their understanding and acceptance of the HEMIS ’ conceptual framework) with which the users are familiar. Generally, the data users ’ interpretive context is a key determinant of what indicator information actually will be valued and used.

E. Information utilization. There are three alternative examples of information utilization that may result from a HEMIS. First, the information provided may be extensively used to evaluate existing policies and practices and to compare alternatives for future implementation. This is the ideal form for a HEMIS, and the main benefit of HEMIS activities. Second, the information may be selectively applied to support those policies or practices that already have been determined bureaucratically or politically. In this case, a HEMIS is not used for decision-making, but for decision-justification. The third possibility would be indifference to the results of a HEMIS framework, regardless of the resulting data ’s support or contradiction of approved activities.

130

OUR BRIGHT FUTURE

DISCUSSION PAPER appendix five: total quality management in higher education232

• accreditation • standardized curriculum and textbooks • qualification of faculty • teaching facilitities and budget • teacher-student ratio • etc.

INPUTS

OUR BRIGHT FUTURE

• fit • course design • pedagogical process

THROUGHPUT

• no. of graduates per year • no. of theses & published student papers • tuition received • etc.

OUTPUTS

• no. of graduates per year • no. of theses & published student papers • tuition received • etc.

OUTCOME

131

GOVERNANCE, ACCOUNTABILITY & ASSESSMENT appendix six: an academic bill of rights233 When a university accepts an undergraduate student for admission and the student then enrolls, implicit commitments constitute an unwritten contract between them. Each assumes obligations and responsibilities, and each receives benefits.

The student commits to a course of study intended to lead to a degree, agrees to follow such rules of civil behavior as the university prescribes, accepts the challenge of making an appropriate contribution to the community of scholars, and pledges to cultivate her or his mind, abilities, and talents with a view to becoming a productive and responsible citizen. The student at a research university, in addition, must come with appropriate preparation for the opportunities that will be provided, must commit to the strenuous burdens of active participation in the educational process, and must be prepared to live in a diverse and heterogeneous environment.

By admitting a student, any college or university commits itself to provide maximal opportunities for intellectual and creative development. These should include: 1. Opportunities to learn through inquiry rather than simple transmission of knowledge.

2. Training in the skills necessary for oral and written communication at a level that will serve the student both within the university and in postgraduate professional and personal life.

3. Appreciation of arts, humanities, sciences, and social sciences, and the opportunity to experience them at any intensity and depth the student can accommodate.

4. Careful and comprehensive preparation for whatever may lie beyond graduation, whether it be graduate school, professional school, or first professional position.

The student in a research university, however, has these additional rights: 1. Expectation of and opportunity for work with talented senior researchers to help and guide the student ’s efforts.

2. Access to first-class facilities in which to pursue research —laboratories, libraries, studios, computer systems, and concert halls.

3. Many options among fields of study and directions to move within those fields, including areas and choices not found in other kinds of institutions.

4. Opportunities to interact with people of backgrounds, cultures, and experiences different from the student ’s own and with pursuers of knowledge at every level of accomplishment, from freshmen students to senior research faculty.

The research university must facilitate inquiry in such contexts as the library, the laboratory, the computer, and the studio, with the expectation that senior learners, that is, professors, will be students ’ companions and guides. The research university owes every student an integrated educational experience in which the totality is deeper and more comprehensive than can be measured by earned credits.

The research university ’s ability to create such an integrated education will produce a particular kind of individual, one equipped with a spirit of inquiry and a zest for problem solving; one possessed of the skill in communication that is the hallmark of clear thinking as well as mastery of language; one informed by a rich and diverse experience. It is that kind of individual that will provide the scientific, technological, academic, political, and creative leadership for the next century.

132

OUR BRIGHT FUTURE

DISCUSSION PAPER appendix seven: theoretical governance framework for higher education in Ontario

OUR BRIGHT FUTURE

133

GOVERNANCE, ACCOUNTABILITY & ASSESSMENT references Sorbara, Hon. Greg. 2004 Ontario Budget: Budget Papers. Toronto: Queen ’s Printer for Ontario, 2004, 24.

Allen, Richard. Terms of Reference – Task Force on University Accountability. September 25, 1991, 1.

3 It should be noted that this paper will not focus on specific issues related to institutional governance, but will explore ideas related to an overarching framework of accountability, governance and assessment. This paper may, however, raise issues related to institutional autonomy and specialization. Moreover, there is a clear focus on issues related to universities and undergraduate education in particular.

4 Cameron, David M. and Diana M. Royce. Prologue to Change: An Abbreviated History of Public Policy and Postsecondary Education in Ontario. Toronto: Ministry of Education and Training, 1996.

5 OCUA Task Force on Resource Allocation. University-Government Relations in Ontario 1945-1995: A Summary of Selected Initiatives and Recommendations Related to System Coordination and Planning. Toronto: Ontario Council on University Affairs, March 1995, 14.

6 Ibid.

7 Ibid, 19.

8 Committee on University Affairs. Report of the Committee on University Affairs. Toronto: Queen ’s Printer, December 1967, 5.

9 Cameron, David. More than an Academic Question: Universities, Government and Public Policy in Canada. Halifax: The Institute for Research on Public Policy, 1991, 44.

10 OCUA Task Force on Resource Allocation. University-Government Relations in Ontario 1945-1995: A Summary of Selected Initiatives and Recommendations Related to System Coordination and Planning. Toronto: Ontario Council on University Affairs, March 1995, 34.

11 Stenton, J. Paul. The Ontario University Operating Grants Formula: Its Development to 1986 (thesis). Toronto: University of Toronto, 1992, 53.

12 OCUA Task Force on Resource Allocation. University-Government Relations in Ontario 1945-1995: A Summary of Selected Initiatives and Recommendations Related to System Coordination and Planning. Toronto: Ontario Council on University Affairs, March 1995, 36.

13 Commission on Post-Secondary Education in Ontario. The Learning Society: Report of the Commission on Post-Secondary Education in Ontario. Toronto: Queen ’s Printer, 1972, 111.

14 Cameron, David M. and Diana M. Royce. Prologue to Change: An Abbreviated History of Public Policy and Postsecondary Education in Ontario. Toronto: Ministry of Education and Training, 1996.

15 Ibid.

16 OCUA Task Force on Resource Allocation. University-Government Relations in Ontario 1945-1995: A Summary of Selected Initiatives and Recommendations Related to System Coordination and Planning. Toronto: Ontario Council on University Affairs, March 1995, 37-8.

17 Ibid, 38-40.

18 Ibid, 40-1.

19 Ibid, 58.

20 Ibid, 62.

21 Ontario Council on University Affairs. “Advisory Memorandum 86-VII, Modification of the Operating Grants Formula. ” Thirteenth Annual Report. 1987, 151.

22 Davenport, Paul. “Deregulation and Restructuring in Ontario ’s University System. ” Canadian Business Economics. Summer 1996, 36.

23 Broadhurst, William. Report of the Task Force on University Accountability. Toronto: Ministry of Education and Training, May 1993, 12. It should be noted that Queen ’s University was created by Royal Charter of Queen Victoria in 1841. Changes to the charter must be made by legislation of the Government of Canada. A full copy of the Consolidated Royal Charter of Queen ’s University can be found at http://www.queensu.ca/secretariat/RCharter.html.

24 Ibid.

25 York University. General By-Laws of the Board of Governors of York University. As found on http://www.yorku.ca/secretariat/ board/documents/bylaws.htm.

26 Legislative Assembly of Ontario. An Act Respecting the University of Western Ontario, 1988. As found on http://www.uwo.ca/ univsec/uwoact/uwoact.html.

27 Laurentian University. General Bylaws of the Board of Governors of Laurentian University. As found on http://www.laurentian.ca/ president/governors/laws_e.php.

28 Legislative Assembly of Ontario. An Act Respecting McMaster University, 1976. As found on http://www.mcmaster.ca/bog/policies/ macact.htm.

29 Brock University. “Section I: University Government. ” Brock University Faculty Handbook. As found on http://www.brocku.ca/ secretariat/handbook/fhb1/1-1.4.html.

30 “University Finances, 2001-2002. ” CAUT Education Review. 5(2), 2002.

31 Broadhurst, William. Report of the Task Force on University Accountability. Toronto: Ministry of Education and Training, May 1993, 5.

32 Legislative Assembly of Ontario. “House Debate – Freedom of Information and Protection of Privacy Act. ” Hansard. June 8, 1987.

33 Council of Ontario Universities. Guidelines on Freedom of Information and Privacy Protection. September 1994, i.

34 Ibid, 4.

35 Broadhurst, William. Report of the Task Force on University Accountability. Toronto: Ministry of Education and Training, May 1993, 8.

36 Council of Ontario Universities. Briefing Notes – Issue: University Accountability. August 2000.

37 Ibid.

38 Office of Institutional Research and Planning. Institutional Statistics. Ottawa: Carleton University. As found on http:// www.carleton.ca/oir.

1 2

134

OUR BRIGHT FUTURE

DISCUSSION PAPER Wilfrid Laurier University. Performance Indicators 2002-03. As found on http://www.wlu.ca/~wwwir/Performance_Indicators-20022003.pdf.

40 George, Peter. Refining Directions: Inspiring Innovation and Discovery. Hamilton: McMaster University, 2003.

41 Council of Ontario Universities. Undergraduate Program Review Audits. As found on http://www.cou.on.ca/affiliates/affiliates/ UPRAC/UPRACHomePage.htm.

42 Ibid.

43 York University. York University Undergraduate Program Review Policy. June 2001.

44 Ontario Council of Academic Vice-Presidents. UPRAC Review and Audit Guidelines. October 2003.

45 Council of Ontario Universities. Undergraduate Program Review Audits. As found on http://www.cou.on.ca/affiliates/affiliates/ UPRAC/UPRACHomePage.htm.

46 Ontario Council of Academic Vice-Presidents. UPRAC Review and Audit Guidelines. October 2003.

47 Council of Ontario Universities. Briefing Notes – Issue: University Accountability. August 2000.

48 Legislative Assembly of Ontario. “House Debate – Ministry of Training, Colleges and Universities Statute Law Amendment Act, 2000. ” Hansard. December 20, 2000.

49 The Postsecondary Education Quality Assessment Board. Annual Report – 2002/2003. Toronto: Ministry of Training, Colleges and Universities, 2003, 1.

50 Postsecondary Education Quality Assessment Board. “The Board ’s Mandate. ” PEQAB Website. As found at http:// peqab.edu.gov.on.ca/board.html.

51 The Postsecondary Education Quality Assessment Board. Annual Report – 2002/2003. Toronto: Ministry of Training, Colleges and Universities, 2003, 12.

52 Postsecondary Education Quality Assessment Board. “Board Members. ” PEQAB Website. As found at http://peqab.edu.gov.on.ca/ bdmember.html.

53 Council of Ontario Universities. Briefing Notes – Issue: University Accountability. August 2000.

54 Ibid.

55 Council on University Planning and Analysis. Report of the Committee on Accountability, Performance Indicators and Outcomes Assessment to the Minister ’s Task Force on University Accountability. March 12, 1993, 1.

56 Broadhurst, William H. University Accountability: A Strengthened Framework. Report of the Task Force on University Accountability.

May 1993, 55.

57 Council of Ontario Universities. “Issue: Performance Indicators. ” Council of Ontario Universities Briefing Notes. November 2000.

58 Legislative Assembly of Ontario. “Oral Questions – University and College Funding. ” Hansard. April 17, 2000.

59 Office of the Provincial Auditor of Ontario. “4.13 – Accountability Framework for University Funding. ” 2001 Annual Report of the Provincial Auditor of Ontario. Toronto: Government of Ontario, 2001.

60 Ibid.

61 Given a search performed on each of the university ’s websites, first using the Ministry of Training, Colleges and Universities portal Key Performance Indicator site at http://www.edu.gov.on.ca/eng/general/postsec/uindicator.html.

62 Ministry of Training, Colleges and Universities. Backgrounder: Universities receive $23.2 million in performance based funding. February 8, 2002.

63 Ibid.

64 Ibid.

65 Ibid.

66 Ibid.

67 Paul, Ross. “III. Revenues. ” Operating Budget 2001-2002. Windsor: University of Windsor, 2001. According to this report, the provincial government introduced changes that involved the creation of a benchmark of 10% per cent below the system average for any indicator. Any institution at or above the benchmark would be eligible for funding based on its performance and size.

68 Legislative Assembly of Ontario. “Minutes of the Standing Committee on Public Accounts. ” Hansard. February 6, 1991.

69 Ibid.

70 Ministry of Training, Colleges and Universities. Total Consolidated Operating Grants for 2003-04 – Final Allocations. June 25, 2004.

71 Ibid.

72 Ministry of Training, Colleges and Universities. Backgrounder: Access to Opportunities Program. July 1999.

73 Ibid.

74 Ibid.

75 Ministry of Training, Colleges and Universities. Total Consolidated Operating Grants for 2003-04 – Final Allocations. June 25, 2004.

76 Ontario Confederation of University Faculty Associations. Building Ontario Universities with the Wrong Blueprint. 2000.

77 Svennson, Peter. “Career planners see offshoring as new obstacle. ” STLtoday.com. July 2, 2004.

78 Ministry of Training, Colleges and Universities. “Ontario Government provides $16.5 million to nine universities for expanded student enrolment. ” News Release. February 16, 2001.

79 Garred, Laurie. “Academic Colleague ’s Report. ” Lakehead University - Senate Minutes. February 27, 2001.

80 Ibid.

81 Ministry of Training, Colleges and Universities. Total Consolidated Operating Grants for 2003-04 – Final Allocations. June 25, 2004.

82 Rendon, Paul-Mark. “Future of Ontario ’s universities indicated. ” The Gazette. March 16, 1999.

83 Legislative Assembly of Ontario. “Oral Questions – Tuition Fees. ” Hansard. April 29, 1999.

39

OUR BRIGHT FUTURE

135

GOVERNANCE, ACCOUNTABILITY & ASSESSMENT Rendon, Paul-Mark. “Future of Ontario ’s universities indicated. ” The Gazette. March 16, 1999.

Lakehead University. Quality Improvement Plan for 2000-01. As found on http://www.lakeheadu.ca/~lusec/qip.htm.

86 Office of the Provincial Auditor of Ontario. “4.13 – Accountability Framework for University Funding. ” 2001 Annual Report of the Provincial Auditor of Ontario. Toronto: Government of Ontario, 2001.

87 Lakehead University. Report of the Board of Governors. March 4, 2004.

88 University of Ottawa, Institutional Research and Planning. Quality Improvement Plan, 2002-03. As found on http:// www.uottawa.ca/services/irp/eng/quality_improvement2002-2003.html.

89 Ministry of Training, Colleges and Universities. Guidelines – Quality Assurance Funds for Colleges and Universities 2003-04. Toronto: Ministry of Training, Colleges and Universities – Postsecondary Education Division, July 2003, 3.

90 McKay, Linda. “Report of the Academic Colleague, Council of Ontario Universities – Highlights of COU Meetings October 16 and 17, 2003. ” Minutes of University of Windsor Senate Meeting. November 11, 2003.

91 Ministry of Training, Colleges and Universities. Guidelines – Quality Assurance Funds for Colleges and Universities 2003-04. Toronto: Ministry of Training, Colleges and Universities – Postsecondary Education Division, July 2003, 4.

92 Ibid, 9.

93 Sorbara, Hon. Gregory. 2004 Ontario Budget: Budget Papers. Toronto: Queen ’s Printer for Ontario, 2004, 25.

94 Ibid.

95 Cavoukian, Ann. Privacy and Access: A Blueprint for Change. Toronto: Information and Privacy Commissioner, 2004, 1.

96 Office of the Provincial Auditor of Ontario. 2003 Annual Report. Toronto: Government of Ontario, 2003.

97 Royal Commission on Post-Secondary Education in Ontario. The Learning Society: Report of the Commission on Post-Secondary Education in Ontario. Toronto: Queen ’s Printer, 1972.

98 Legislative Assembly of Ontario. “Statements by the Ministry and Responses – Economic Statement. ” Hansard. December 15, 1997.

99 Legislative Assembly of Ontario. “Statements by the Ministry and Responses – Economic Statement. ” Hansard. December 15, 1997.

100 Ibid.

101 Ontario Confederation of University Faculty Associations. 1998 Ontario Budget: Summary & Analysis. May 1998.

102 Legislative Assembly of Ontario. “Statements by the Ministry and Responses – Economic Statement. ” Hansard. December 15, 1997.

103 Bartleman, James K. “Strengthening the Foundation for Change. ” Speech from the Throne. November 20, 2003.

104 “Tuition fees. ” University of Waterloo Gazette. May 13, 1998. As found on http://www.information.uwaterloo.ca/Gazette/1998/ may13/tuitionfees.doc.

105 Government of Ontario. An act respecting the University of Western Ontario. Toronto: Queen ’s Printer for Ontario, 1982 and 1988.

106 Government of Ontario. An act respecting McMaster University. Toronto: Queen ’s Printer for Ontario, 1976.

107 Government of Ontario. Ministry of Training, Colleges and Universities Act, 1990. Toronto: Queen ’s Printer for Ontario, 2002, Section 7.

108 As seen in the acts respecting each of the universities in Ontario. The most common preface to these acts is as follows: “Therefore, Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enact as follows … ” 109 It should be noted that the powers over post-secondary institutions in the province are derived from the Constitution Act, 1867.

Essentially, universities are wards of the province, which similar to the position that cities hold. [Source: Government of Canada. The Constitution Act, 1867. Section 91-93.]

110 Government of Ontario. The Ontario Operating Funds Distribution Manual, 2001-02 Fiscal Year. Toronto: Ministry of Training, Colleges and Universities, Universities Branch, July 2002, 56. [NOTE: Exempted fees include those established by student governments or referenda, university-system wide fees, work placement fees and fees for field trips, materials or certain services.]

111 Nelson, Morton, James Fisher and William Banks. Public Accountability Inadequacy in Canadian Universities: 1990-1996. Waterloo, ON: Wilfrid Laurier University, 1997.

112 Statistics Canada. “University tuition fees. ” The Daily. August 2003.

113 Average tuition levels based on a 2003-2004 fee survey conducted by the Council of Ontario Universities.

114 Council of Ontario Universities. “Revenues and Expenditures Per FTE Enrolment, Public Universities Ontario and Selected American States, 1999-2000. ” Resource Document – Council of Ontario Universities 2002. September 2002, 30.

115 Knott, Jack H. and A. Abigail Payne. The Impact of State Governance Structures on Higher Education Resources and Research Activity.

July 2001, 4.

116 Gavlik, Deborah. “Higher Education Governance Structures: Coordinating Boards vs. Governing Boards. ” The Issue. Ohio Board of Regents, September 2003.

117 Ibid.

118 Knott, Jack H. and A. Abigail Payne. The Impact of State Governance Structures on Higher Education Resources and Research Activity.

July 2001, 5.

119 Gavlik, Deborah. “Higher Education Governance Structures: Coordinating Boards vs. Governing Boards. ” The Issue. Ohio Board of Regents, September 2003.

120 Ibid.

121 Knott, Jack H. and A. Abigail Payne. The Impact of State Governance Structures on Higher Education Resources and Research Activity.

July 2001, 5.

122 Ibid.

123 Ibid.

124 Ibid, 6.

84 85

136

OUR BRIGHT FUTURE

DISCUSSION PAPER Gavlik, Deborah. “Higher Education Governance Structures: Coordinating Boards vs. Governing Boards. ” The Issue. Ohio Board of Regents, September 2003.

126 Knott, Jack H. and A. Abigail Payne. The Impact of State Governance Structures on Higher Education Resources and Research Activity.

July 2001, 4.

127 Ibid, 5.

128 Ibid.

129 Knott, Jack H. and A. Abigail Payne. The Impact of State Governance Structures on Higher Education Resources and Research Activity.

July 2001, 26.

130 Ibid.

131 Ibid, 21.

132 Ibid, 26.

133 Ibid, 8.

134 Maki, Peggy. “Moving from Paperwork to Pedagogy: Channeling Intellectual Curiosity into a Commitment to Assessment. ” AAHE Bulletin. May 2002.

135 University of Colorado at Boulder, Office of Planning, Budget and Analysis. Outcomes Assessment. “What We ’ve Learned About Doing Outcomes Assessment. ” As found on http://www.colorado.edu/pba/outcomes/ovview/lporcess.htm.

136 University of Colorado at Boulder, Office of Planning, Budget and Analysis. Outcomes Assessment. “Overview. ” As found on http://www.colorado.edu/pba/outcomes/ovview/lporcess.htm.

137 Ibid.

138 Ibid.

139 State University of New York. SUNY General Assessment Review Group. As found on http://www.cortland.edu/gear/index.html.

140 Texas A&M Measurement and Research Services. Assessment and Evaluation Center. As found on http://www.tamu.edu/ marshome/assess/index.htm.

141 University of Massachusetts Amherst, Office of the Provost. Academic Initiatives: Assessment. As found on http:// www.umass.edu/provost/initiatives/assessment.html.

142 Educational Testing Service. Higher Education Assessment. As found on http://www.ets.org/hea.

143 National Survey of Student Engagement. Our Origins and Potential. As found on http://www.iub.edu/~nsse/html/concept.shtml.

144 National Survey of Student Engagement. Quick Facts. As found on http://www.iub.edu/~nsse/html/facts.shtml.

145 Ibid.

146 National Survey of Student Engagement. Our Origins and Potential. As found on http://www.iub.edu/~nsse/html/concept.shtml.

147 edudata Canada. “Canadian Undergraduate Survey Consortium. ” Transition: Grade 12 to PSE. As found on http:// www.edudata.educ.ubc.ca/Data_Pages/12-PSE/Undergrad.htm.

148 Baldrige National Quality Program. Education Criteria for Performance Excellence. Gaithersburg, MD: National Institute of Standards and Technology, 2001.

149 Ibid, 1.

150 Ibid, 59.

151 Ibid, 6.

152 Ibid, 67.

153 It should be noted that although this is a review of governance, accountability and assessment frameworks in the United Kingdom, it is generally focused on England.

154 Higher Education Statistics Agency. Student Enrolments on Higher Education Courses at Publicly Funded Higher Education Institutions in the United Kingdom for the Academic Year 2000/2001. April 2001.

155 Theisens, Henno. Higher Education in the United Kingdom. Center for Higher Education Policy Studies, May 2003, 41.

156 Ibid, 42.

157 Ibid.

158 Ibid.

159 Ibid.

160 UK Naric. United Kingdom. 2002. As found on www.euroeducation.net/prof1/ukco.htm.

161 Theisens, Henno. Higher Education in the United Kingdom. Center for Higher Education Policy Studies, May 2003, 44.

162 Ibid.

163 Ibid, 47.

164 Ibid.

165 Quality Assurance Agency for Higher Education. About the Quality Assurance Agency for Higher Education. As found on http:// www.qaa.ac.uk/aboutqaa/aboutQAA.htm.

166 Quality Assurance Agency for Higher Education. The Quality Assurance Agency for Higher Education: An Introduction. As found on http://www.qaa.ac.uk/aboutqaa/qaaintro/intro.htm.

167 Ibid.

168 Ibid.

169 Theisens, Henno. Higher Education in the United Kingdom. Center for Higher Education Policy Studies, May 2003, 48.

170 Open and Distance Learning Quality Council. About ODLQC. As found on http://www.odlqc.org.uk/odlqc.htm.

171 Theisens, Henno. Higher Education in the United Kingdom. Center for Higher Education Policy Studies, May 2003, 43.

125

OUR BRIGHT FUTURE

137

GOVERNANCE, ACCOUNTABILITY & ASSESSMENT Ibid.

Higher Education Funding Council for England. Mission. As found on http://www.hefce.ac.uk/AboutUs/mission.htm.

174 Ibid.

175 Higher Education Statistics Agency. About HESA. As found on http://www.hesa.ac.uk/about/home.htm.

176 Ibid.

177 Higher Education Statistics Agency. Publications. As found on http://www.hesa.ac.uk/products/pubs/homee_middle.htm.

178 Smith, David C. “How will I know if there is quality? ” Report on Quality Indicators and Quality Enhancement in Universities: Issues and Experiences. Toronto: Council of Ontario Universities, March 2000, 24.

179 “China ’s higher education accessible to the masses: minister. ” People ’s Daily. October 20, 2003.

180 Knapp, Laura G., Janice E. Kelly, Roy W. Whitmore, Shiying Wu, Lorraine M. Gallego and Susan G. Broyles. Enrollment in Postsecondary Institutions, Fall 2000 and Financial Statistics, Fiscal Year 2000. Washington: U.S. Department of Education, National Center for Education Statistics, July 2002, 2.

181 Statistics Canada. “University enrolment by field of study. ” The Daily. March 31, 2003.

182 Statistics Canada. “Community colleges and related institutions: Postsecondary enrolments and graduates. ” The Daily. September 24, 2002.

183 “China ’s higher education accessible to the masses: minister. ” People ’s Daily. October 20, 2003.

184 Organization for Economic Co-operation and Development. OECD Review of Financing and Quality Assurance Reforms in Higher Education in The People ’s Republic of China. OECD Centre for Co-operation with Non-members - Directorate for Education, October 2003, 9.

185 China Education and Research Network. Project 211: A Brief Introduction. As found on http://www.edu.cn/20010101/ 21851.shtml.

186 Boehmer, Jay. “Amex, Citibank Vie To Be First U.S. Card Providers In China. ” NTNonline.com. June 21, 2004.

187 Organization for Economic Co-operation and Development. OECD Review of Financing and Quality Assurance Reforms in Higher Education in The People ’s Republic of China. OECD Centre for Co-operation with Non-members - Directorate for Education, October 2003, 9.

188 Ibid, 8.

189 Ibid, 9.

190 Ibid.

191 Ibid, 13.

192 Ibid, 13.

193 Ibid, 19.

194 Ibid.

195 Ibid, 20.

196 Ibid, 15.

197 Ibid, 24-5.

198 Ibid, 25.

199 Ibid, 26.

200 Ibid, 26.

201 Ibid, 27.

202 Ibid.

203 Ibid.

204 It should be noted that each of these options are not discrete, and there are potential combinations or variations of each. It should also be noted that another option would be to continue with the existing framework.

205 Ministry of Training, Colleges and Universities. “Postsecondary review to improve quality and expand access. ” Press Release. June 8, 2004.

206 Smith, David C. “How will I know if there is quality? ” Report on Quality Indicators and Quality Enhancement in Universities: Issues and Experiences. Toronto: Council of Ontario Universities, March 2000, 23.

207 Association of Universities and Colleges of Canada. “A primer on performance indicators. ” Research File. 1(2): June 1995.

208 Ibid.

209 Ibid.

210 Ibid.

211 Ibid.

212 Smith, David C. “How will I know if there is quality? ” Report on Quality Indicators and Quality Enhancement in Universities: Issues and Experiences. Toronto: Council of Ontario Universities, March 2000, 15.

213 Hart, Doug, Dan Lang, Nancy Watson and Margaret Oldfield. Performance Indicators in the Humanities and Social Sciences: Report to the Humanities and Social Sciences Federation of Canada. Toronto: Ontario Institute for Studies in Education, August 1999.

214 Shale, Doug. Alberta ’s Performance Based Funding Mechanism and the Alberta Universities. Calgary: University of Calgary Office of Institutional Analysis, October 1999, 10.

215 Fisher, D., K. Rubenson, Kathryn Rockwell, Garnet Grosjean and Janet Atkinson-Grosjean. Performance Indicators: A Summary.

University of British Columbia, Centre for Policy Studies in Higher Education and Training, November 2000.

216 Smith, David C. “How will I know if there is quality? ” Report on Quality Indicators and Quality Enhancement in Universities: Issues 172 173

138

OUR BRIGHT FUTURE

DISCUSSION PAPER and Experiences. Toronto: Council of Ontario Universities, March 2000, 3.

217 Wood, P.E. Report of the Task Force on Academic Quality, Performance Indicators and Outcome Measures. Hamilton: McMaster University, November 1996, 5.

218 Hart, Doug, Dan Lang, Nancy Watson and Margaret Oldfield. Performance Indicators in the Humanities and Social Sciences: Report to the Humanities and Social Sciences Federation of Canada. Toronto: Ontario Institute for Studies in Education, August 1999.

219 McKinnon, K.R., S.H. Walker and D. Davis. Benchmarking: A manual for Australian Universities. Canberra: Department of Education, Training and Youth Affairs, Higher Education Division, February 2000, ix.

220 “University Finances, 2001-2002. ” CAUT Education Review. 5(2), 2002.

221 It should be noted that there are potential modifications that would be necessary for universities, including the protection of individual student information, including academic records or financial information.

222 Kenny, Shirley Strum. Reinventing Undergraduate Education: A Blueprint for America ’s Research Universities. Carnegie Foundation for the Advancement of Teaching, 1995, 2.

223 Wolfson, Monica. “More college students depend on themselves to fund their education as lawmakers search for ways to better distribute money. ” Corpus Christi Caller Times. August 20, 2004.

224 Carona, John. E-mail Update. December 18, 2003. As found on http://www.senate.state.tx.us/75r/senate/members/dist16/pr03/ e121803a.htm.

225 American Council on Education. Shifting Ground: Autonomy, Accountability and Privatization in Public Higher Education. Washington: ACE, May 2004, 5.

226 “Top-up fees ‘will damage science. ’ ” BBC News – UK Edition. December 19, 2003.

227 Barr, Nicholas. “Paying for Higher Education. ” Educated Solutions. 2004, 24.

228 Hastings, Graham. From the Crossroads to the Final Act. National Union of Students, January 2004, 19.

229 Gavlik, Deborah. “Higher Education Governance Structures: Coordinating Boards vs. Governing Boards. ” The Issue. Ohio Board of Regents, September 2003. Characteristics taken directly from source.

230 American Association for Higher Education. 9 Principles of Good Practices for Assessing Student Learning. As found on http:// www.aahe.org/assessment/principl.htm. Authors: Alexander W. Astin; Trudy W. Banta; K. Patricia Cross; Elaine El-Khawas; Peter T. Ewell; Pat Hutchings; Theodore J. Marchese; Kay M. McClenney; Marcia Mentkowski; Margaret A. Miller; E. Thomas Moran; Barbara D. Wright.

231 Organization for Economic Co-operation and Development. OECD Review of Financing and Quality Assurance Reforms in Higher Education in The People ’s Republic of China. OECD Centre for Co-operation with Non-members - Directorate for Education, October 2003, 55-61. Excerpts have been taken directly from the source with only minor changes.

232 Organization for Economic Co-operation and Development. OECD Review of Financing and Quality Assurance Reforms in Higher Education in The People ’s Republic of China. OECD Centre for Co-operation with Non-members - Directorate for Education, October 2003, 47. Figure taken directly from source.

233 Kenny, Shirley Strum. Reinventing Undergraduate Education: A Blueprint for America ’s Research Universities. Carnegie Foundation for the Advancement of Teaching, 1995, 12-3.

OUR BRIGHT FUTURE

139

140

OUR BRIGHT FUTURE

A P P E N D I C E S

OUR BRIGHT FUTURE

141

142

OUR BRIGHT FUTURE

APPENDIX ONE

RESPONSE TO THE POSTSECONDARY REVIEW WORKBOOK

by ADAM SPENCE OUR BRIGHT FUTURE

143

144

OUR BRIGHT FUTURE

introduction A new dialogue about universities in Ontario began in October 2004 with the release of the discussion paper from Ontario ’s Postsecondary Review, outlining five questions and a series of options for the future of higher education in the province. The fundamental questions covered a comprehensive range of concepts including accessibility, quality, system design, funding and accountability. The options were limited, and it should be understood that they only are among the many potential directions that could be followed with the questions posed.

This paper will address the questions posed in the Postsecondary Review discussion paper, and critically analyze the options presented. But this is not a complete answer to the questions that have been asked. The discussion papers that have preceded this response outline our organization ’s comprehensive plan for improving higher education in Ontario. accessibility: how can we increase participation and success in higher education?

A critical analysis of the possible approaches to improving access and success as outlined in the Postsecondary Review discussion paper are as follows:

A. GOOD INFORMATION FOR GOOD CHOICES. Put in place an information clearinghouse – through government or a third-party – to make sure individuals have comprehensive information available to them on: • Where the jobs are and what preparation and qualifications are required to fill them.

• Where the right programs are being offered and their quality.

• How much they cost and how it can be financed – what it takes in terms of money and effort.

• For the internationally-trained, how to have their training and experience recognized.

There is a need for a central information resource that provides details on all opportunities and pathways available to students, from the skilled trades to graduate education. Potential students, parents and even career counselors are often overwhelmed by the choices available, or are unaware that alternative pathways exist. It can also be difficult to navigate through the maze of glossy brochures, websites and other promotional materials to find the program or pathway that matches one ’s particular interest, how much it might cost and what qualifications are required. A single, central resource makes sense.

There are, however, a number of significant challenges to the development of such a resource. Given that program offerings, costs, employment trends and qualifications change rapidly, this resource would need to be extremely dynamic and resource intensive in order to be effective. Undoubtedly, this would mean that the potential cost of such a resource could be quite high and that the ideal medium would be the internet. The cost of the initiative could arguably be justified by the potential this resource could provide toOntarians. However, it would be difficult to ensure access to an online resource for those who need it most. Many Ontarians, especially those from lower income or rural backgrounds, do not have household access to the Internet, and, therefore, use would also have to be facilitated and promoted through public institutions such as elementary and secondary schools, as well as libraries.

There is also the challenge of data availability and accuracy. Beyond issues of access, there is not currently a great deal of information available on employment trends and program quality. There may also be significant subjectivity in the data that is already available, which may negatively impact career choice for those who use the resource. This clearinghouse would require a significant data collection infrastructure integrated with Statistics Canada and current program reviews, as well as currently undeveloped evaluation and collection tools.

It should also be noted that there are already existing resources that provide a similar public service, such as www.skilledtrades.ca or www.myfuture.ca. It is possible that these resources could be a segment of a larger portal site that also includes the detailed information outlined above.

This approach may be valuable and should be explored further. However, financial resources for the operation of these programs should not unduly impact operating funding for post-secondary institutions.

B. HELPING HIGH SCHOOL STUDENTS MAKE MORE INFORMED CHOICES. Earlier and more intensive career guidance and counseling that: • Provides better information about the full range of choices available and the right high school course requirements/choices.

• Supports more exposure to the workplace (e.g. pathways to apprenticeship and co-op placements).

It is crucial that high school students make more informed choices. Students decide their future educational pathways at a very young age. In Ontario, approximately three-quarters of all students make the decision to attend university before age 15.1 It is also important that students are able to make the right course choices, as there is less time for students to make a decision on their future path and fewer classes to choose from with the elimination of grade thirteen. Students need to be aware of all of the opportunities available, particularly with many parents pushing their sons and daughters relentlessly OUR BRIGHT FUTURE

145

towards university, while ignoring other pathways including apprenticeship opportunities or applied studies. Arguably, these choices are best facilitated through career guidance, counseling and student work experience opportunities.

There must also be a focused approach to help certain groups of high school students in the province. In order to improve access for those who are currently under-represented in higher education, targeted initiatives are required to facilitate their advancement into the system. This would require the development of early intervention programs and more substantial supports in communities with a lower educational attainment or participation rate in higher education than the provincial average. This concept is discussed in more detail in the previous paper on advancement and opportunity in higher education.

This approach may be valuable and should be explored further. As with the previous approach, financial resources for the operation of these programs should not unduly impact operating funding for post-secondary institutions.

C. FOCUS ON RETENTION. Encourage institutions to pay more attention to the supports that students need to succeed, especially for under-represented groups. This could include: • More flexible part-time and distance learning options.

• Strengthening counseling supports.

• Stronger credit equivalency and transfer recognition.

• Higher level of language training and supports.

Access is important, but unless students are able to complete their studies, they will not be able to gain the full benefit of their educational experience. This makes retention an important aim. Each of the retention supports presented could have a tangible impact on students ’ ability to remain in school. Higher levels of language training and supports could particularly assist struggling international students, or individuals from low-income families who have recently immigrated to the province.

It is uncertain how credit equivalency and transfer recognition is an issue of retention at an institutional level, although it could be related to students ’ ability to remain within the system of higher education as a whole. It should be noted that any efforts to increase transferability must recognize the need for compensatory funding for universities who take on students transferring from college.

However, beyond the issue of transferability there is a clear need to examine the relationship between the financial resources available to students and retention. Unfortunately, financial supports were not examined as an option to ensure retention, despite the fact that a lack of financial resources is often cited as a student ’s major reason for leaving school.

Statistics Canada reported that 36 per cent of higher education “leavers ” cited their financial situation as the number one barrier to continued studies.2 This approach may be valuable and should be explored further. The provincial government should, however, also implement solutions that battle the financial barriers to retention.

The options presented could be effective measures within a larger framework that ensures that all those who are qualified are able to attend and complete their studies. There is, however, much more to the issue of access and retention than these proposed information and non-financial supports. Finances also play a significant, if not paramount, role in access and success. Policy solutions to address the issue of financial barriers must be implemented in order to address this issue, including reforms to the student financial aid system and measures to control student costs. A more thorough discussion of these kinds of solutions can be found in the discussion paper on advancement and opportunity as well as the discussion paper on funding, tuition and student financial assistance.

OUR RECOMMENDATIONS The provincial government should: a. regulate and restructure tuition in Ontario so that it is predictable, reflects cost of program delivery and there are no significant price differentials between programs; b. reform the student financial aid system; c. provide more robust and targeted student financial assistance for students going into higher education; d. provide targeted pre-entry financial aid to qualified students in the early stages of secondary school; e. implement early intervention programs to encourage future participation in all levels of higher education; f. develop a province-wide awareness program about all the pathways and financial assistance available for higher education in co-operation with sector stakeholders; g. engage in transparent and co-operative data collection and research on participation rates and educational attainment; h. establish measurable system-wide participation and educational attainment goals for all pathways of higher

146

OUR BRIGHT FUTURE

education; provide resources for institutional initiatives to develop programs that increase access for targeted groups including, but not limited to, rural, Aboriginal, low-income Ontarians as well as students with dependents; j. provide resources for institutions to develop language training and transitional support programs; k. create an open university of Ontario; l. remove unfair categorical ineligibilities from the financial aid system; m. create an up-front, merit-based grant program similar to the Alexander Rutherford Scholarship program in Alberta; and n. provide tuition waivers to students from low-income groups. i.

quality: how should we improve the quality of higher education?

A critical analysis of the possible approaches to improving the quality of higher education in Ontario as outlined in the Postsecondary Review discussion paper is as follows:

A. FOCUS ON THE STUDENT EXPERIENCE. Develop a common system-wide approach – for all institutions and in conjunction with students – for assessing and publicly reporting on student satisfaction and actions that improve the student experience.

A focus on the student experience guided by a system-wide approach to assessment and reporting could definitely have a positive impact on the quality of higher education in Ontario. Ideally, it could help facilitate better program choices, encourage improvement at an institutional and departmental level and engage students in the academic agenda of universities.

The concept of using the data collected to encourage change or action that improved the student experience would be a step forward towards a responsive and formative evaluation framework that could ensure that higher education in Ontario continues to be among the best in the world.

However, there are challenges to the implementation of this particular idea. Although it could be invaluable to have a system-wide approach for assessment and reporting, care would have to be taken to ensure that this approach does not favour certain methods, or lead to a single system-wide approach to teaching and learning. Different students learn in different ways, and there is a great deal of value in having diversity in the methods of teaching and learning. Moreover, the role of satisfaction as a measure of quality, or as a tool to improve the educational experience, must not be paramount – it would need to be coupled with additional measures. Arguably, one may not be satisfied with the experience that they receive, and yet it may have a positive impact on their future development. For example, one may dislike a particular course, and not realize its utility until many years after.

This approach may be valuable and should be explored further.

B. FOCUS ON TEACHING EXCELLENCE. Create a Centre of Higher Education Teaching Excellence that could: • Develop best practices for teaching, for both applied and academic subjects, and including use of new technology.

• Offer training and/or resource material, preparation and ongoing support for the teaching role.

• Assess and report on the state of teaching practice in Ontario.

In Ontario ’s universities, research is king. Teaching does not play the vital role that it should within higher education institutions. It is clear that there is a need to focus on teaching excellence. A Centre of Higher Education Teaching Excellence is one of the potential mechanisms to provide this focus. This type of centralized body has been developed in countries including the United Kingdom (UK). In the UK this body has two main aims: “to reward excellent teaching practice, and to further invest in that practice so that the funding delivers substantial benefits to students, teachers and institutions. ”3 Essentially, it functions as a body that institutions can apply to for funding new initiatives or initiatives aimed at the improvement of existing learning processes.

This mechanism would not be suited to Ontario. There are already a diverse group of centres for teaching and learning that flourish on campuses across Ontario – often called instructional development centres or centres for leadership in learning.

These departments offer training and resource material and ongoing support for teaching on campus and facilitate the development of best practices in teaching. Some institutions also have departments developed specifically for the support of learning technologies, such as the Learning Technologies Resource Centre at McMaster University.

However, these groups are not always as effectively resourced as possible, and may not exist at some institutions. It is possible that the provincial government could provide targeted funding to these departments in order to ensure their continued or future success. The provincial government could also facilitate collaboration among these groups through an intermediary body, which might result in the development of a collection of best practices in teaching and learning or a broad assessment of teaching practices in the province.

OUR BRIGHT FUTURE

147

These bodies can ensure that change is effected at a more local level. The development of an overarching Centre of Higher Education Teaching Excellence might be perceived as a means of government intervention in the academic direction of institutions.

There is also no substitute for additional broad public financial support of higher education institutions to enhance teaching and learning. Additional funding would allow universities to hire additional faculty that could decrease class sizes and limit the number of sessional, part-time or non PhD faculty.

This approach is not necessary or practical for Ontario. The improvement of teaching is best facilitated through institutional centres and the provision of public funding to hire additional qualified faculty.

C. FOCUSED APPROACH TO RESEARCH AND GRADUATE EDUCATION. Use a more strategic/focused approach to expand and fund research and graduate studies only at institutions that can offer a high level of academic supervision, research opportunities and financial support.

The province will need to expand graduate enrolment over the next decade to meet the need for new faculty. There is also a need to maximize the impact of a limited pool of public resources available for graduate spaces and research. This might lead one to conclude that the most effective means to ensure adequate research dollars and funding for graduate studies are allocated wisely would be to focus on a smaller range of institutions.

However, there are clear risks to the focused funding of research and graduate studies at particular institutions. One such risk is the tiering of institutions. Those institutions that were classified as research institutions would undoubtedly be considered a stronger group of universities. Another associated risk may be the decline in quality of educational experience at those institutions that are not research institutions. It can be effectively argued that the ideal educational experience is one that combines research and teaching. This potential for teaching disparity is particularly problematic when there are very few institutions in Ontario with a strong liberal arts college tradition – an institution that does not focus on research but is particularly successful in teaching. The resulting specialization may also be problematic for those students who wish to change their academic discipline while in-study if their institution does not have a comprehensive array of program choices. They may have to opt out altogether, or assume unknown financial, social and academic burdens by transferring between institutions.

Focused funding of research and graduate studies would also limit the breadth of programs offered at individual institutions. Although this may strengthen certain programs, it could also limit the academic perspective of graduates from Ontario. It is widely known that departments often have a dominant ideology or school of thought. If the diversity of academic departments were limited, the diversity of opinion may also be stifled.

This is not, however, an either/or question or a zero-sum game. Research-intensive may be given priority over other institutions which may be asked to de-emphasize certain research or graduate study priorities. Funding should not, however, be exclusively available to research-intensive institutions.

This approach is not necessary or practical for Ontario.

D. MEASURE OUR PERFORMANCE AND COMPARE OURSELVES TO THE BEST IN THE WORLD. Develop a system-wide quality assurance process as the basis of institutional improvement. This would involve both core measures common to all institutions as well as mission-specific measures, and regular public reporting of results. Meaningful measures could include student satisfaction, teaching excellence, and research performance.

Performance measurement and international comparisons could be an effective means of improving the quality of higher education in Ontario. Any improvements, however, would be dependent on the means of measurement, the comparisons made and the use of the data collected.

There are significant risks in the development of an overarching system-wide quality assurance process. Highly centralized quality assurance frameworks, like those in place in the United Kingdom, can have a significant cost that can draw financial resources away from operating funding. If there are a more significant proportion of core measures as compared to institutional measures, this would also raise the question of government intervention in the academic direction of institutions. Moreover, there are also significant risks if measures are tied to funding, as is suggested in section four of the discussion paper.

As mentioned above, it is difficult to argue that student satisfaction alone is a meaningful measure to gauge the quality of educational experience. It is also difficult to identify clear measures of teaching excellence and research performance.

There are differing opinions among academics and students on teaching quality. There is also a great deal of disagreement among faculty, institutions and the government on research performance. Some argue that research performance is gauged by an institution ’s capacity to obtain research grants, while others argue that it is the level of commercialization of research.

Many faculty will argue that one cannot discretely measure research performance, as it is a deliberative process that has untold 148

OUR BRIGHT FUTURE

benefits for society.

Moreover, measurement of research performance tied to funding would favour not research itself, but that which is measured. For example, if research performance was measured by its financial success, institutions would be forced to pursue studies that were financially lucrative in the short term. This does not mean that teaching quality or research performance is impossible to measure, but that they are extremely complex topics to examine. There may be clear value in reporting, but measurement becomes extremely problematic if it is tied to funding. Meaningful measures are those which result in data that will ensure improvement, not reward continued success.

The use of comparisons, as well as common system-wide and institutional-specific measures that are publicly reported, could be an ideal method to encourage improvement, as long as institutions utilize the data in their academic or institutional planning exercises. If the data was publicly available, it would also facilitate choice and ensure that students are knowledgeable about the education provided in the program that they are pursuing.

This approach may be valuable and should be explored further.

E. INTERNATIONALIZE THE EXPERIENCE. Pursue more strategically and systematically increased enrolments from international students. Ensure that all institutions actively promote and have the necessary arrangements in place so that students who wish to can gain international experience by taking part of their program in another country.

Ontario and students attending the province ’s universities could benefit from a more global perspective. International students add to the diversity of any campus, which can have a positive impact on the quality of education at any university.

The province should not, however, pursue increased enrolment from international students if the aim is revenue generation.

There are clear benefits for Ontario ’s students who gain international experience by taking part of their program in another country. International exchange provides the opportunity to engage in a truly exploratory experience in another country and the prospect of examining an area of interest from a different cultural or national perspective. It may also make those students who participate more attractive to future employers or institutions where they wish to pursue future studies.

There are also clear benefits for Ontario. International exchange programs would allow the province to obtain knowledge from other jurisdictions brought back to the province. Conversely, if institutions engaged in more collaborative efforts through this program, the province may be able to track those students who attend Ontario ’s institutions and develop programs and initiatives to retain the best international and non-resident students. This would result in greater “brain circulation ” for Ontario, as well as increase the intellectual, social and economic potential of our province.

This approach would address an important gap and should be pursued.

The options above offer only moderate means of improving the quality of higher education in Ontario. There is a focus on evaluation and measurement, which can be a means to achieve improvements if implemented properly. The options also seemed to recognize the importance of the student experience and teaching quality. There was no consideration, however, of the potential for additional public resources that could be utilized to hire faculty, decrease class sizes and provide institutions with the means to encourage educational developments inside and outside the classroom. Money was not an option. Moreover, the options only presented a cursory examination of characteristics of a high quality experience, and there was no recognition of the importance of the relationship between teacher and learner – a hallmark of a university experience.

OUR RECOMMENDATIONS The provincial government should: a. institute a 50 per cent increase in operating funding by 2011 to allow universities to hire more qualified faculty, ensure the sustainability of current programs and create high quality educational opportunities for students; b. provide financial incentives for universities to develop comprehensive undergraduate research opportunities programs; c. provide financial incentives for universities to develop campus business incubators, entrepreneurial challenges and broad-based idea accelerators; d. provide financial incentives for universities to develop experiential education initiatives; e. create a grant program for university students to engage in international exchange; f. mandate an intermediary coordinating board or agency with the task of facilitating the development of a resource outlining the best practices of undergraduate and graduate education; g. mandate the proposed coordinating board or agency with the task of implementing a student engagement survey for current students; h. require institutions to create an institutional quality improvement task force that is comprised of a representative group of on-campus stakeholders; i. require institutions to produce quality improvement plans on a regularly scheduled basis that are developed by an OUR BRIGHT FUTURE

149

institutional quality improvement task force and supported by an institutional level assessment process;

j. mandate institutions to produce an annual quality assessment report that is available on its website and includes a

small set of mandatory indicators that are common province-wide, as well as a set of institutional indicators that have been developed by an institutional quality improvement task force; k. ensure that all reporting requirements are completed within a reasonable and defined timeline; and l. encourage institutions to develop a statement of institutional responsibility in partnership with students on their campuses. system design: how can we make sure that our institutions constitute a coherent, coordinated system to meet Ontario ’s goals for higher education?

A critical analysis of the possible approaches to improving the system design of higher education in Ontario as outlined in the Postsecondary Review discussion paper is as follows:

A. ENCOURAGE SPECIALIZATION AND COLLABORATION. Develop a plan for higher education in Ontario that encourages institutions to develop more specialized and distinctive missions as long as – when taken as a whole – the institutions continue to meet the full needs of individuals and the economy, from skilled professionals to tradespeople. This could include expanding the number of specialized joint or transfer college-university programs and allowing selected colleges to deliver the first two years of some university programs, like junior colleges do in other jurisdictions; and creating institutions dedicated to serving under-represented groups.

There is some merit to the principle of encouraging specialization and collaboration amongst higher education institutions in Ontario. Once again, however, the broad aim is sound, but the specific means outlined in the discussion paper have a number of risks and challenges.

Institutions already have the ability to develop specialized and distinctive missions. Despite the government ’s commitment, these institutions cannot meet the full needs of some individuals as they remain inaccessible to many Ontarians. The province must ensure that, in a context of increased specialization or similar academic mandates, all individuals are able to advance into the program of their choice. Institutions are also already engaging in specialized college-university programs according to student demand – perceived or actual. There is certainly room for the government to encourage the development of additional joint programs, encourage collaborative efforts or conduct research to identify the actual need or demand for these programs. The provincial government cannot, however, force the development of such initiatives, given that universities have control over their own academic direction.

There are also substantial challenges to allowing selected colleges to deliver the first two years of some university programs. The most significant challenge is the funding gap that can result from students moving from colleges to universities, given the disparity in tuition fee levels. Universities would need to be provided with compensatory funding for accepting college-transfer students. These ‘junior college ’-style transfer programs would also need to meet rigorous academic standards, as per the existing guidelines established by the Ontario Council of Academic Vice-Presidents (OCAV). Moreover, even if these programs were able to meet the OCAV standards, there are questions regarding the kind of education provided through these transfer programs. The transfer students would not have the benefit of the experience that can be provided in Ontario ’s universities in their first two years of study. Ideally, these challenges could be overcome if institutions were provided adequate compensation to drive these developments themselves and ensure that these programs were properly implemented to provide the highest quality education possible.

Institutions should not be developed to only serve under-represented groups. A hallmark of a high quality experience is one that has a diverse group of learners from a variety of cultural and socio-economic backgrounds. This principle must be ensured. There can, however, be institutions that have characteristics that are more acccessible to under-represented groups, such as open universities. There are also financial and other means to encourage their participation in higher education.

This approach is not necessary or practical for Ontario.

B. CLARIFY COLLEGE ROLE IN SKILLS TRAINING. Ensure that as colleges evolve in advanced learning, they continue to provide programs and credentials in skills and apprenticeship training that directly serve labour market and student needs. This could include new strategies for developing apprenticeships, and ensuring their transferability to college diploma programs, as well as new approaches to the administration of apprenticeship programming.

Ontario ’s universities are crucial to its future, but the province must also recognize that apprenticeship training is a key component to the higher education agenda. It would, however, be inappropriate to comment on the best methods to achieve this aim, as it is felt that recommendations regarding the skilled trades should be left to the relevant stakeholders.

This approach may be valuable and should be explored further.

150

OUR BRIGHT FUTURE

C. RECOGNIZE LEARNING AND QUALIFICATIONS. Establish a body that would support guaranteed recognition of achievement earned in institutions or the workforce, facilitating transferability into and out of institutions by: setting out standard levels of achievement for courses and programs; and evaluating and giving credit on a consistent basis for learning previously achieved, including international training. For example, Ireland ’s National Qualifications Authority sets out standardized levels of achievement for courses and programs, allowing for easy movement between institutions and the workforce. Internationally-trained students too, could use the system for recognition of their education achievements.

Arguably, there is need for more effective mechanisms of transfer within and between institutions for those students who wish to change program or university. However, transferability has not been identified as a priority for university students in Ontario.

Ireland may be a successful example of a jurisdiction that has effectively facilitated transfer, but it is quite different from Ontario. Ireland has a highly centralized higher education system whereby the Higher Education Authority has decisionmaking power over universities within the country. This provides them with the power to establish standard levels of achievement and facilitate easy movement between institutions and the workforce. Ontario, however, has a relatively decentralized higher education system that makes it difficult for the province to impose standards and facilitate transferability.

This issue could be addressed through the proposed intermediary body, whereby institutions are encouraged to collaborate on facilitating transfer. Individual institutions should, however, retain control over admissions and acceptance standards and compensatory funding would need to be provided for college students who transfer into universities, given the disparity in tuition fee levels.

This approach may be valuable and should be explored further.

It is difficult for the province to develop a coherent, coordinated higher education system in order to meet the government ’s goals, given the autonomy that universities enjoy. The options presented offer a vision of higher education that creates an upper tier of specialized institutions, while allowing all students to move seamlessly between colleges and universities. Clearly, these ideas will come into conflict, as increasingly specialized institutions would be more likely to resist increased transferability given the increased difference in academic offerings. This could, however, recreate a larger middle tier of higher education institutions in Ontario that includes some universities and many colleges.

OUR RECOMMENDATIONS The provincial government should: a. create an intermediary coordinating board or agency between universities and the government to ensure the accountability of higher education in the province, provide advice to government and institutions and foster collaboration within the system; and b. mandate the staff of the proposed coordinating board or agency with the task of creating regular recommendation papers and reports on, but not exclusive to, the following topics: tuition fees, resource allocation, system quality and accessibility, student financial assistance and collaboration. funding: how do we pay for higher education to ensure opportunity and excellence?

A critical analysis of the possible approaches to funding higher education in Ontario as outlined in the Postsecondary Review discussion paper is as follows:

A. MORE PROGRESSIVE STUDENT ASSISTANCE. Make sure all student assistance, whether grants, loans or tax breaks, is aimed at all students facing financial barriers to higher education. This could include changing certain tax measures that primarily benefit higherincome families, and providing some form of loan assistance to middle-income families.

Student aid in Ontario is broken. If the purpose is facilitating access, the current qualification requirements are far too restrictive. The combination of assistance measures, including grants, loans and tax credits, are not properly targeted at those students facing financial barriers to higher education. Federal and provincial policies should be changed so that higher income families do not disproportionately benefit from tax credits. Restrictive qualification requirements have also squeezed out middle-income families and forced more middle and low-income students into private forms of assistance. Between 1995 and 2002, the number of students qualifying for OSAP was almost cut in half. Now, almost one-third of all Ontario ’s students have some form of private debt, and there is data showing a slight decrease in the university participation rates of students from certain middle-income backgrounds.

There are also major problems with student assistance beyond qualifications. The quantity of public student assistance

OUR BRIGHT FUTURE

151

available is inadequate. The amount of assistance available through the Ontario Student Assistance Program has remained unchanged since the early nineties, while the cost of education has more than doubled. This has created a tremendous gap between the resources provided and the resources needed by Ontario ’s university students.

Ontario desperately needs to fix its student financial aid system. More detailed solutions on proposed improvements can be found in the preceding discussion paper on funding, tuition and student financial assistance.

This approach would address and important gap and should be pursued.

B. GIVE STUDENTS THE MONEY. Redirect additional public funding from institutions to students and their families in order to make the institutions more responsive to student needs.

It would not be a wise decision for the provincial government to redirect additional public funding from institutions to students and their families. It is difficult, if not impossible, for institutions to respond to student needs in a system where funding would be even less predictable over the long-term. Universities require a fairly long timeline to hire faculty and prepare facilities, as well as develop new courses and programs. This unpredictability in funding could also affect institutions ’ ability to provide resources for existing programs or departments. A voucher-style system could also create marketing wars over potential students, which would draw needed resources away from operating funding. This might cause the provincial government to intervene to re-establish enrolment caps or corridors, which would render the voucher-system useless.

This approach is not necessary or practical for Ontario.

C. GO NOW, PAY LATER. Students would not be required to pay tuition until after graduation. Student loans would be available to students from lower-income families to help with living costs while in school. Tuition fees may be discounted or subsidized for needy students and repaid based on an affordable share of the student ’s income.

A post-pay tuition scheme would also not be an effective solution for Ontario. The major problem with this system is cost. This type of program would require a tremendous up-front investment by the provincial government that would remain an ongoing fiscal liability in the budget. Moreover, there would be tremendous back-end costs to this scheme, particularly if it were linked with an across-the-board income-contingent loan repayment program. In order to make the program student-friendly, the provincial government would have to provide grants and remission in order to overcome disparities in debt repayment caused by wage inequities and career choice. This additional funding, channeled towards the up-front and back-end costs of such a program would take operating funding away from universities.

There are also significant problems in the other jurisdictions that have implemented these types of programs. For example, the Higher Education Contribution Scheme in Australia provides a 25 per cent discount to those students who pay for their fees up-front. This essentially means that those who can afford it, which tend to be individuals from higher income families, pay less. This is a highly regressive payment program, despite the supposed progressive nature of the system.

It is unclear why this type of payment scheme should be implemented. Clearly, it is one mechanism for facilitating payment, but it only seems to delay the inevitable. Students would still have to pay. Without proper controls, those with lower incomes would have to pay more.

If the intent is to present the cost of education as free at the point of use in order to increase access, one should note that cost is not the sole factor in one ’s decision to attend. There are also many other ways to target the issue of cost and access, such as pre-entry financial assistance and early intervention programs, as outlined in the previous discussion paper on advancement and opportunity.

Additional background on income-contingent loan repayment programs and post-pay tuition can be found in the preceding discussion paper on funding, tuition and student financial assistance, as well as the subsequent policy paper on income-contingent loan repayment programs.

This approach is not necessary or practical for Ontario.

D. FLEXIBILITY ON TUITION FEES. Allow colleges and universities to set tuition to reflect the costs of delivery or market demand, as long as measures are in place so that higher education remains affordable for all. This could include a scenario where institutions who choose to set higher tuition also assume full responsibility for student loans and bursaries/scholarships related to tuition. Government would continue to be responsible for student assistance related to living costs.

Ontario ’s universities should not be given flexibility on tuition fees. Let us be clear on the word flexibility – it means complete deregulation. There are many risks for tuition fee deregulation to Ontario.

There is the clear problem of precedent. Ontario ’s institutions were allowed flexibility on tuition fees by the previous government, with the promise that measures would be in place to ensure these programs remained affordable and accessible.

Unfortunately, the financial aid system remained virtually unchanged despite unprecedented increases in tuition fees and overall 152

OUR BRIGHT FUTURE

costs.

There is no evidence to demonstrate that a newly deregulated environment would be any different.

Even if there were substantial changes to the financial aid system, a deregulated environment could cause instability in the system because of a need to keep up with spiraling costs. This problem is soundly demonstrated by the American example. In private institutions with deregulated fees, student loan default rates are a staggering 45.5 per cent, as compared to 29.6 per cent for public institutions with regulated fees.4 Moreover, the provision of flexibility does not necessarily mean that institutions would set fees in order to reflect either cost of delivery or market demand. Many institutions have, and would continue to, set fees in order to bolster the financial situation of other programs, out of a need to build reputation or a need to appear that the fees levied were congruent with the quality provided by programs at other institutions.

There is also the problem of predictability of cost. A deregulated tuition environment is inherently unpredictable, which makes it difficult, if not impossible, for students and their families to save for their future. If students do not know the future cost of their education, they may be less likely to attend. There is also the connected problem of overall cost increase.

In Ontario, average tuition in deregulated programs rose 261 per cent from 1993 to 2003, from $2,076 to $7,500.5 Although many institutions will argue otherwise, there is no data that shows that tuition increases are linked with increases in quality.

There is also a problem of assessing the impact of tuition fee increases in a deregulated environment. Individual institutions cannot predict the impact of their fee increases on the overall population of the province. Moreover, they are not responsible for ensuring access to their institutions. That responsibility rests with the province of Ontario, which although currently limited in its resources to assess the impact of any future tuition fee policy, is arguably best positioned to do so.

There is also a fundamental opposition to the policy of deregulation by those in the current government. It should be noted that when the deregulation of professional and graduate programs was announced by the provincial government in 1997, Dalton McGuinty, then leader of the Official Opposition, stated that: The first thing I would remind the Deputy Premier and all members of the government is that an economic statement is more than just a financial statement; it ’s a statement of values … Furthermore, if my understanding of this statement is correct, this government is going to give an unfettered discretion to our universities to raise tuition fees for graduate level programs in an unlimited way. There will be no limit whatsoever on that … I want to make it clear that their values are not my values …6 Moreover, despite arguments to the contrary, the provincial government has authority over the establishment of fees in both policy and practice. The Ministry of Training, Colleges and Universities Act provides Ministerial power over the establishment of all fees. The Operating Funds Distribution Manual from the Ministry of Training, Colleges and Universities provides regulatory controls over ancillary fees on campuses. It can also be inferred that if the government retains an ability to choose between regulation and deregulation, then it has regulatory authority over tuition fees as well as others administered by universities.

It would be also extremely difficult for institutions to assume full responsibility for loans related to tuition. There would be a vast financial responsibility that would have to be absorbed by institutions, which would require a substantial resource and endowment base. Many institutions are already financially bound to outstanding investments such as bond issues, and additional financial responsibilities would add to their financial risks. There would also be no guarantee that the qualifications for institutional financial assistance would facilitate or ensure access. This kind of system might also foster the development of an upper tier of institutions with higher tuition and perceived reputation.

Additional background on tuition fees can be found in the previous papers on funding, tuition and student financial assistance and governance, accountability and assessment.

This approach is not necessary or practical for Ontario.

E. PAY FOR DELIVERY OF KEY RESULTS. Provide predictable, multi-year government funding to institutions to support the delivery of key results (for example, meeting access and quality targets or meeting graduation targets for teaching and health care professionals). The purpose and use of the funding would be transparent to all.

Ontario should not create a more sizable performance funding framework. There are already significant problems with the existing key performance indicator (KPI) framework. The current KPI framework does not reward improvement, but the attainment of benchmarks relative to institutions within the province, which only highlights existing disparities. The government did introduce benchmark thresholds and enrolment into the funding allocation, but the disparities remain. There is also a problem with the indicators themselves. They focus on two outcomes of education – employment and completion – a very narrow view of the characteristics of a quality experience. There are clearly other factors that should be examined, including skill acquisition, engagement and student satisfaction.

OUR BRIGHT FUTURE

153

There would be even more significant problems with a more robust performance funding framework. A larger system could increase the actual and perceived disparities among institutions. There are also questions regarding the aims of performance-based funding. Many argue that a system of performance-based funding has political ends, instead of aiming for improvement. It should be noted that the provincial government can still demonstrate the success of its institutions by requiring regular reporting on results without tying those results to funding. There are also risks with the development of new and more specific indicators. Arguably, new indicators would be solely quantitative. But it is inherently difficult to attach quantitative indicators to many programs, and the relentless attempt to quantify ignores the importance of qualitative analysis.

To be fair, there is tremendous value in gathering and reporting data, as it can be used for public accountability and institutional improvement initiatives. However, it is unnecessary to tie funding to the data collected. Additional background on performance funding can be found in the subsequent discussion paper on governance, accountability and assessment.

This approach is not necessary or practical for Ontario.

There are significant problems with most of the options proposed above. It is clear that Ontario needs to fix financial aid so that students are able to pay for their education without resorting to private assistance or leaving school indefinitely due to lack of funds. It is also clear that Ontario must invest additional public resources into its higher education system. This option was notably absent from the list included in the discussion paper.

These options also seem to present a theme of financial management. A number of the ideas offered in the discussion paper seem to suggest a transfer of financial authority away from the institutions themselves – through vouchers or performance based funding. Moreover, the options for a post-pay tuition scheme and flexibility on tuition fees also seem to suggest that the trend of a growing burden of cost-transfer onto students can continue. These are certainly not groundbreaking ideas – it would appear they are merely an evolution of those public policies implemented in the past decade – policies that were not in the best interests of students.

OUR RECOMMENDATIONS The provincial government should: a. regulate and restructure tuition in Ontario so that it is predictable, reflects cost of program delivery and is free from significant price differentials between programs; b. implement a 50 per cent increase in 2003/04 university operating funding by 2011; c. provide enough funding to cover no less than 70 per cent of the operating cost of university education in Ontario by 2011; d. guarantee the proportional funding commitment by an act of legislation; e. implement a small profit tax on businesses and industry that are dependent on higher education graduates; f. change the operating grant formula so that it uses a student-based multiplier mechanism; g. fully fund all currently unfunded students in the university system; h. implement a more flexible system for determining institutional enrolment targets and corridors; i. ensure that students in Ontario must never pay for more than 30 per cent of the operating cost of university education in Ontario by 2011; j. protect the 30 per cent tuition cap by an act of legislation; k. separate tuition fees into variable bands without distorted price differentials to better reflect cost of program delivery; l. abolish the current key performance indicator (KPI) framework and reallocate the associated funding to operating grants; m. ensure that the financial aid package is composed of two separate loan programs —one to cover the cost of tuition and associated fees, and one to cover all reasonable cost of living expenses; n. ensure that there is no needs-testing on the tuition loan; o. apply a reasonable and progressive needs-testing framework to the cost of living loan; p. develop an accurate assessment of total student educational cost in Ontario; q. build geographic sensitivity into the cost of living loan assessment process; r. ensure that the tuition fee and cost of living loan is large enough to completely account for actual tuition and cost of living expenses; s. cease using the Canada Millennium Scholarship program to displace the Ontario Student Opportunity Grant (OSOG) contribution; t. provide a robust series of effective grants to reduce the financial burden of student loans; u. lobby the federal government to eliminate tuition tax credits and allocate that funding to a dedicated postsecondary education transfer for non-repayable assistance; v. allow graduates to choose a repayment term which works for their unique financial situation when consolidating 154

OUR BRIGHT FUTURE

their loans; not require graduates to begin repayment until their income exceeds an acceptable income-to-debt ratio; not implement an income-contingent loan repayment plan in Ontario; make provision for greater income sensitivity in graduate debt repayment; remain committed to providing effective and accessible system of interest-relief; allow for graduates in financial difficulty to make partial payments on their loans, calculated on an incomecontingent basis and for a fixed period of time; bb. implement a more accessible and effective system of income-based debt remission; cc. continue to regulate and fund the financial aid system, but ensure administration is performed primarily by individual institutions; dd. ensure the system is proactive in communicating with students and provides them with information in a timely manner; ee. invest in an effective on-line presence which allows students to access all the information they need on the financial aid system, provides powerful tools to help students plan their finances and allows for online applications; ff. provide needs-assessment summaries to foster transparency and clarity in the application process; and gg. offer student financial management programs for recipients of student aid.

w. x. y. z. aa.

accountability: do we have the right structures in place to know our system is achieving the results we want?

A critical analysis of the possible approaches to ensuring the accountability of higher education in Ontario as outlined in the Postsecondary Review discussion paper is as follows:

A. COORDINATED BY GOVERNMENT. Government works with institutions directly to design and implement a framework to promote accountability through coordination and system development.

This option is not much different from the system that is currently in place in Ontario. Unfortunately, the Ministry of Training, Colleges and Universities does not currently have the existing resources required to design, implement and manage a new and effective framework.

They are simply understaffed and under-resourced. Moreover, the system that is currently in place for accountability does not have a designated role for students or student representatives in the process. Institutions may also be concerned about increased direct government intervention if they have a substantial influence in its design. Ideally, an independent body with a designated mandate and the resource capacity would develop, implement and manage such a framework.

This approach is not necessary or practical for Ontario.

B. AN INDEPENDENT BODY, OR BODIES, WITH RESPONSIBILITY FOR PLANNING, MONITORING AND ADVISING GOVERNMENT. A central advisory and monitoring body would work with all the institutions to design and implement an accountability framework. It could look at the system as a whole, and provide advice and recommendations to government and institutions on system design, performance and accessibility, develop and disseminate best practices related to broad issues such as quality and financial health of the higher education system, and report to the public on progress.

An independent body with responsibility for planning, monitoring and advising government would be a valuable initiative for the province to undertake as it would meet a number of systemic needs. First, it could fill a clear gap as a neutral source of system-specific information and data. There are currently significant problems with the availability, currency, consistency and source(s) of data on higher education in Ontario. This data could also be easily packaged and reported to the general public, thereby meeting a clear need for public accountability. This body, or bodies, could also address the issue of inappropriate targets of measurement by developing new and more meaningful measures.

The proposed function of advisor would also meet the need for independent analysis of the system from a provincial perspective. This could be achieved through the regular production of recommendation papers and reports on system indicators and information as well as pre-determined issue areas such as resource allocation, student financial assistance and system quality.

Its role as independent facilitator might be the best approach to system collaboration. It could also bring stakeholders and institutions together to create common benchmarking or assessment tools, share best practices of teaching and learning and discuss issues such as transferability. In doing this, it would be able to facilitate the improvement of quality and access province-wide in a co-operative, but still competitive, system.

There are challenges to the development of such a body. The provincial government would have to ensure that its OUR BRIGHT FUTURE

155

operations were cost-effective, and did not draw resources away from operating funding. The relationship between the provincial government and the intermediary body would also have to be clear. It would be important for the intermediary body to be independent to ensure that it would not be subject to partisan priorities. The government would also have to recognize the utility of the work performed by the body.

A more detailed examination of this type of system can be found in theprevious paper on governance, accountability and assessment.

This approach would address an important gap and should be pursued.

C. AN INDEPENDENT BODY, OR BODIES, WITH ADDITIONAL RESPONSIBILITY FOR OPERATIONAL MATTERS. A body would have responsibilities outlined in (B) above with additional responsibilities for operational matters like allocating funding to individual institutions.

The province should not develop an independent, intermediary body that has any form of executive authority over institutions – through funding allocation or academic planning. There must be a direct line of responsibility over the public funding that goes to institutions. An independent intermediary body would not have such a line of responsibility. There would be no line of accountability to the public, because it would take control out of the hands of their elected government.

It would also take control out of the hands of institutions that have been provided the privilege of relative autonomy.

Institutions should also be able to retain autonomy over their academic direction – a body with additional responsibilities for operational matters would violate that principle. It should be noted that the likelihood of such a body being implemented is extremely unlikely given historical precedent and the tradition of institutional autonomy in the province.

This approach is not necessary or practical for Ontario.

The options offered above are all effective measures that could ensure that the system achieves the results the province wants. The most reasonable option would be an independent intermediary body as outlined in option B. Additional background on how the proposed system should be organized can be found in the preceding paper on governance, accountability and assessment.

OUR RECOMMENDATIONS The provincial government should: a. ensure that all post-secondary institutions in Ontario are subject to freedom of information legislation in order to make all institutional information available and accessible; b. create an intermediary coordinating board or agency between universities and the government to ensure the accountability of higher education in the province, provide advice to government and institutions and foster collaboration within the system; c. ensure that the membership of the board includes representatives from all stakeholder groups, including students, which are appointed by the government from recommendations by each of the provincial stakeholder organizations in the sector; d. mandate the proposed coordinating board or agency with the task of implementing a student engagement survey for current students; e. mandate the proposed coordinating board or agency with the task of developing an institutional-level assessment tool that can be used at all Ontario universities; f. mandate the proposed coordinating board or agency with the task of creating annual data reports of collaboratively approved system indicators and system information; g. mandate the staff of the proposed coordinating board or agency with the task of creating regular recommendation papers and reports on, but not exclusive to, the following topics: tuition fees, resource allocation, system quality and accessibility, student financial assistance and collaboration; h. ensure that all of the information that is collected by the coordinating board or agency and individual institutions within the new framework of governance, accountability and assessment should be organized along the lines of a Higher Education Management Information System (HEMIS); i. ensure that the results of all undergraduate program audits are made publicly available and easily accessible on the websites of individual institutions, and publicly available upon request; and j. amend university charter legislation so that students hold at least 25 per cent of seats on governing bodies of each institution.

156

OUR BRIGHT FUTURE

conclusion

Bob Rae is right. Higher education in Ontario is on the edge of a choice between steady decline and great improvement. This makes the questions raised by the Postsecondary Review ’s discussion paper extremely important for the future of our universities, and for our province as a whole.

There are many answers to these questions with different consequences for the province, universities and students. A few of the options presented in this paper would be excellent steps forward. Some of the ideas have merit and deserve further exploration. However, it is clear that many of the approaches are impractical, or focus disproportionately on issues such as information provision, measurement, fiscal management and system-wide standards. The options also seem to disregard the issue that has defined higher education for the past decade – the need for increased public financing of higher education. This approach is the most effective means to improve access and quality and pay for the system as a whole.

Finances are also ignored at an individual level, even though they play a significant role in access and success.

However, these are not the only areas of concern for students, and there are many solutions that need to be implemented in order to improve the accessibility, quality, design, accountability and affordability of higher education in Ontario.

There is no one silver bullet idea that will solve the challenges that our provinces faces. There must, however, be a focus on the priorities that matter most and a long-term commitment to ensure that our universities are able to achieve their own mandates, as well as the aims of students and the general public. Ontario ’s students are committed to continued dialogue on this public endeavour that will have a powerful impact on the future of our province.

references Council of Ontario Universities. University Applicant Survey Highlights. November 2003.

Junor, Sean and Alexander Usher. The Price of Knowledge: Access and Student Finance in Canada. Montreal: Canada Millennium Scholarship Foundation, 2002, 14.

3 Higher Education Funding Council of England. “Centres for Excellence in Teaching and Learning. ” As found on http:// www.hefce.ac.uk/learning/TInits/cetl/. November 1, 2004.

4 United States Government Accountability Office. Student Consolidation Loans. As found on: http://www.gao.gov/highlights/ d04843high.pdf. August 2004.

5 Statistics Canada. “University tuition fees. ” The Daily. August 2003. Data also used from a 2003-04 tuition fee survey by the Council of Ontario Universities.

6 Legislative Assembly of Ontario. “Statements by the Ministry and Responses – Economic Statement. ” Hansard. December 15, 1997.

1 2

OUR BRIGHT FUTURE

157

158

OUR BRIGHT FUTURE

APPENDIX TWO

OUSA POLICY PAPER INCOME-CONTINGENT LOAN REPAYMENT

by GRAEME STEWART OUR BRIGHT FUTURE

159

160

OUR BRIGHT FUTURE

PREFACE

The Ontario Undergraduate Student Alliance (OUSA) has always prided itself on its pragmatism. In other words, the organization fundamentally believes no policy provision is, in concept, inherently good or bad. Rather, the design and implementation of programs is all-important in the university sector in order to ensure the best result for our members and students.

As part of this philosophy, it is sometimes necessary to release pre-emptive policies. These documents deal with a proposal on the policy horizon, and attempt to lay out the parameters by which the issue would be acceptable to Ontario ’s students. One example of such pre-emptive policy work is OUSA ’s 2003 policy on pre-paid tuition. Another is the paper you are about to read.

The Postsecondary Review instituted by the Liberal government in 2004 has put the post-secondary sector into a profound state of flux. The time is ripe for putting forward bold new ideas, for shaking up old paradigms and advocating a new system that works for students. If OUSA puts itself on the sidelines during this process by not fully exploring all policy options, the long-term political viability of the organization will suffer. Only by remaining open and proactive will OUSA be able to truly provide educated solutions.

INTRODUCTION: The Hot Potato In 1955, noted free-market economist Milton Friedman had an idea: what if students paid back their loans on an income-contingent basis? In other words, would a system that calculated loan repayment as a proportion of individual graduate income help solve the problem of university finance and student access? Friedman could hardly have predicted the firestorm of controversy this relatively simple question would provoke.

Fifty years later, few post-secondary issues are so hotly contested as income-contingent repayment schemes. Far from a simple policy provision, the question of incorporating income-contingency into student aid programs is deeply embedded in ideological perspectives and political agendas. In Ontario, income-contingent loan proposals have deeply divided students, faculty, university administrators and government officials against one another, and even against themselves. The concept is an undeniable political hot potato; few ideas have generated as much debate, acrimony and protest in the university sector.

This policy seeks to answer two basic questions. First, can a system of income-contingent loan repayment be studentfriendly? In other words, is it possible to create an income-contingent repayment plan (ICRP) that facilitates access, protects graduates and does not generate any harmful, inequitable results? Second, even if such a program could be designed, would the parameters of such a program fit into the unique political and economic realities of Ontario?

To answer these questions, this policy will examine income-contingent repayment programs as a concept; how they have been discussed and manifested over time; how they have been implemented in other jurisdictions and the various arguments for and against such programs. Finally, this policy will explore how a student-friendly program might look in Ontario. three pillars The Ontario Undergraduate Student Alliance has undertaken the development of an ICRP policy in the context of its “Three Pillars ” Program. This series of discussion papers and policy documents is aimed at critically analyzing the basic components of university finance in Ontario —government funding, tuition and student financial aid. This policy is part of OUSA ’s effort to develop a financial aid system that works for Ontario students. Of all three pillars, financial assistance is one of the most complicated and politically charged areas of university policy. As Bruce Johnstone of the International Comparative Higher Education Finance and Accessibility Project notes, “student loan programs are among the most complex, controversial, frequently misunderstood and potentially important elements in the financing of higher education. ”1 It is OUSA ’s hope that this policy will help shed some light on the essential issues and debates within student financial aid.

PRINCIPLES OUSA has examined the issue of income-contingent loan repayment programs and developed recommendations in accordance with the following principles:

The provincial government has a clear responsibility to fund university education.

Public investment in the university system is well justified for both economic and social reasons. In 1998, Ontario ’s provincial government provided $2.1 billion dollars to the university system. However, it received nearly $3.2 billion in revenue linked to universities —a 58 per cent return on investment annually.2 An earlier study by A. A. Kubursi found that for every dollar spent on universities, four dollars are generated in the local economy.3 By these two indicators alone, Ontario is profiting enormously from its public university system.

Although harder to gauge, university education also generates considerable social benefits. A TD Economics topic OUR BRIGHT FUTURE

161

paper published in 2004 notes that graduates have better health, longer life, better communication skills, greater self-confidence and are less likely to participate in crime.4 They are also more tolerant of other races and more likely to vote in elections.5 In other words, investment in higher education is an investment in a healthy, dynamic and politically engaged citizenry. As noted by Nicholas Barr, architect of the new university system in England, “higher education creates benefits beyond those to the individual —benefits in terms of growth, the transmission of values and the development of knowledge for its own sake …thus, taxpayer subsidies should remain a permanent part of the landscape. ”6 The discoveries and ideas developed at universities also have significant benefits for the social vitality and economic competitiveness of a jurisdiction. University research has battled previously incurable diseases, introduced innovative technology and generated ideas that have shaped the fortunes of entire nations. In order to remain competitive, Ontario must have a world-class system of higher education. Unfortunately, the continued under-funding of universities now accounts for 25 per cent of the province ’s productivity gap when compared to other peer jurisdictions.7 All university tuition in Ontario must be regulated.

From a financial aid perspective, there are two very compelling reasons to regulate tuition. First, by controlling costs, students will borrow less money and graduate debt will be reduced. Second, by regulating tuition fees, governments make an investment in the long-term sustainability of their financial aid systems. In order to remain student-friendly, financial aid programs must make provisions for accompanying grant assistance, interest rate control, interest relief, debt reduction and ultimate debt forgiveness. These programs cost money. As fees rise, more students will need to borrow more money from the aid program. As a result, the cost of all the above debt control measures begins to increase. In relatively short order, deregulated fees will drive the expense beyond the government ’s ability to pay. The programs must then be rolled back or eliminated altogether, with correspondingly negative graduate impacts. Debt, already enlarged by inflated fees, will constitute a huge burden in the absence of any debt control programs.

Moreover, if fees are deregulated the cost of education may end up outstripping the ability of the aid program to effectively cover student costs. Indeed, the Ontario example demonstrates the grim possibilities of this scenario. Since 1994, average undergraduate tuition has increased by 139 per cent. Tuition in deregulated programs has literally exploded, rising 261 per cent from $2,076 in 1993 to an average of over $7,500 in 2003.8,9 Students in programs like law, medicine and dentistry pay even more — $10,483, $14,355 and $17,087 respectively.10 Conversely, the maximum Ontario Student Assistance Program (OSAP) package —$9,350 —has not increased since the same year. In fact, due to inflation, the maximum aid amount is actually worth less now than in the early 1990 ’s. Clearly, deregulation in Ontario has severely undermined the effectiveness of the OSAP system in meeting student needs.

The difficulty in maintaining a sound financial aid system in the context of deregulated fees is evocatively demonstrated by the American example. At private institutions with deregulated fees, student loan default rates are a staggering 45.5 per cent, as compared to 29.6 per cent for public institutions with much lower fees.11 For a more thorough explanation of the need for total tuition regulation, please refer to OUSA ’s discussion paper , Funding, Tuition and Student Financial Assistance.

Every model of university education requires a high-quality, student-friendly financial aid program.

Regardless of the funding and tuition model used by a particular jurisdiction, students will still need to access additional financial resources to pay for their studies. Even in countries with no tuition fees, students must cope with the associated costs of going to school. This basic truth is exemplified by Sweden, a country with a long-standing tradition of zero tuition that operates a large income-contingent loan program. From books to rent to food to transportation, there are myriad costs associated with accessing higher education. In Canada, tuition accounts for between 25 and 33 per cent of actual student costs.

The International Higher Comparative Education Finance and Accessibility Project estimates total Canadian student cost at $20,590, while tuition in Ontario hovers under $5,000 —less than one quarter of the total expense.12 Clearly, even in an environment of low or zero tuition, the provincial government has a clear responsibility to provide financial aid which covers reasonable student cost without burdening graduates with excessive debt.

Intelligent, comprehensive and student-friendly financial aid program design is vital to the success of the university system in Ontario.

When it comes to university finance, and particularly to student financial aid, it is important to understand that policy concepts —like income-contingent loan repayments, post-paid tuition and variable fees —are essentially neutral. In other words, their positive or negative impact on students is largely based on the actual design of the program. As the old saying goes, the devil is in the details.

In Australia, a supposedly progressive financial aid scheme is seriously hampered by deeply regressive elements. Similarly, despite lower costs relative to jurisdictions like the United States, Ontario has a surprisingly high level of graduate debt.

This suggests the design of the OSAP system may be negatively impacting people who must access the program.

162

OUR BRIGHT FUTURE

It is important for the Postsecondary Review, and the university system at large, to not only select and implement ‘concepts ’ for reform, but also design programs that actually work. The alternative is another decade of well-meaning measures that do not work with, or are able to accommodate, a dynamic reality.

Reform of any aspect of Ontario ’s university system must be holistic with clearly defined goals.

Just as program design is essential to a successful and meaningful process of reform, the design of the reform process itself must also be intelligent. This requires two separate commitments. First, the Review must examine the system in its entirety, with a proper understanding of how the three financial pillars are interconnected. Changes cannot be made meaningfully to one area without corresponding reforms in the remaining two. The system must function as a unified whole, and should be designed as such.

The United Kingdom is an excellent example of a jurisdiction that has attempted systemic reform of their university system. The UK previously suffered the effects of ill-conceived and improperly designed reforms. The introduction of tuition fees and income-contingent loans in 1998 was largely unsuccessful because the two measures did not mutually support one another, and were not accompanied by corresponding changes in how the government funded institutions. Although it will be several years before the success of the new UK system can be assessed, the design of the new arrangement is to be applauded. Each pillar is tailored to support the seamless operation of the system. Indeed, if the UK system proves unsuccessful, it will be because it was not properly implemented or undermined by a lack of political support.

Perhaps most importantly, the review and reform process must have a clear conception of what it is trying to accomplish. Almost since its inception, Ontario ’s university system has been dogged by fuzzy mandates and ad hoc reforms without any clear sense of what the system should do and what it should look like. To be effective, the Postsecondary Review must strive to build a system that serves clearly defined goals. For the Ontario Undergraduate Student Alliance, this goal is obvious: the Ontario university system must provide an accessible, affordable and high-quality education for students.

Students are the primary consumers and benefactors of the system. Indeed, without students there would be little reason for the system to exist. Therefore, it is essential the system be designed with their needs, interests and welfare in mind. Commitment to this principle will ensure the success of the Postsecondary Review and the Ontario university system as a whole.

The student financial aid system in Ontario must seek to maximize access while minimizing graduate debt.

There are two primary goals of any effective student financial aid program. The first is to facilitate access into the university system for all students regardless of individual financial resources, while the second is to ensure that students leaving the system are not crippled by excessive indebtedness.

The first goal is achieved by ensuring that: • The financial aid system is broadly available to all students who require support; and • The financial aid system provides adequate assistance which properly accounts for all educational costs.

The second goal is achieved by: • Structuring the repayment of loan-based assistance in the most fair, progressive manner possible; • Ensuring that non-repayable forms of assistance are a major component of the financial aid system; and • Protecting graduates through interest relief and debt management/reduction programs.

These five policy planks for guaranteeing program success are so important, they will be dealt with as system principles in their own right.

To ensure equitable university access for all Ontarians, financial aid must be available to all students in need.

In order for a financial aid system to be effective, students who require assistance must be able to access the program.

This means that needs-testing in the system must be flexible enough to account for a wide variety of student financial realities.

Moreover, unduly strict parental support requirements and student income thresholds must not be allowed to prevent students from acquiring the resources they need to attend university.

Ontario has suffered from excessively restricted student aid in the past. In 1995, 212,189 students received OSAP support; in 2002, only 130,687 students received government money.13 This decrease occurred despite a significant increase in enrollment over the same period. Clearly, needs-testing provisions can have an extremely harmful effect on a financial system.

To protect against this problem, in the case of essential student costs that cannot be reduced through personal choice —such as tuition —it may be necessary to eliminate needs-testing altogether to ensure unrestricted financial access to university.

To be effective, a financial aid package must provide enough funding to assist students with all reasonable education costs.

To facilitate financial access to university, a financial aid program must account for not only all of a student ’s educational OUR BRIGHT FUTURE

163

costs (tuition, additional fees, books and equipment) but also their living costs. These expenses include rent, utilities, transportation, food and a variety of miscellaneous costs. Based on the actual expenses included, different organizations arrive at very different assessments of the true cost of attending higher education. Consider the following table: Table One: Yearly Student Cost Estimates from Sample Assessment Organizations, 2004

Organization Ontario Student Assistance Program

Estimate of Total Student Cost $13,162

Canada Millennium Scholarship Foundation

$14,512

International Comparative Higher Education Finance and Accessibility Project

$20,590

To further complicate matters, student cost tends to vary by region. While a student studying in North Bay may expect to spend $14,941 on their education, a student from Toronto will pay $18,507.14 From OUSA ’s perspective, an accurate assessment of student cost will include all of the following: • Tuition • Additional (ancillary) fees • Books • Educational equipment • Amortized cost of a personal computer • Food (adjusted by region) • Rent (adjusted by region) • Household maintenance (utilities, phone, internet, adjusted by region) • Transportation (adjusted by region) • Dependent Spouse/Children • Additional costs incurred by students who must travel over 80km to attend university.

Once an accurate measure of student cost has been achieved, the financial aid program must make all of this funding available to students as a combination of grants and loans.

Non-repayable forms of financial assistance must compose a significant portion of the student financial aid package.

Since debt is an undesirable outcome of any student financial aid program, a loan program must be accompanied by a robust series of grants. Whether distributed on the basis of need, merit, or as back-end debt remission, grants are an integral component of debt control. Non-repayable assistance also works to facilitate access to university by providing additional financial resources to students, reducing the problem of debt aversion and creating an environment of government support and encouragement.

Another benefit of grants is their ability to be targeted. This, “targeting, or selective subsidization, may be towards certain classes of students (e.g. low-income or ethnic minority or high achievers), or toward the pursuit of other public purposes (e.g. encouraging more students to study education or medicine, or to practice in certain venues such as inner cities or remote villages). ”15 Thus grants are a highly effective means to help disadvantaged groups access higher education, or to achieve desired changes in the workforce to benefit all Ontarians.

Repayment of graduate debt must be structured in a fair and progressive manner.

Given the necessity of offering both grants and loans in a student aid system, debt is an inevitable outcome. Alongside various debt control mechanisms, the manner in which a borrower repays his or her loan should be structured to minimize the financial burden. Generally speaking, repayment should be structured to ensure that monthly payments do not exceed an individual ’s ability to pay. If the repayment exceeds 10 per cent of monthly income, then payments will likely represent an undue burden.

Under the current OSAP system, there is insufficient flexibility in repayment to protect students from burdensome monthly repayments. As a conventional loan program, monthly payments are calculated against a fixed repayment period.

Thus, a $28,000 loan paid back over ten years will generate monthly payments of $350 dollars. 16 If an individual earned over $80,000 a year, this amount would not be a problem. However, if a graduate were only making $26,000 a year, then this level 164

OUR BRIGHT FUTURE

of repayment could well prove unbearable. The individual would likely default on their loan and incur the full range of financial penalties. Obviously, this is an unacceptable outcome for everyone involved.

There are four essential means to control the amount of repayment, which can be applied alone or in concert: 1. Control education costs, which reduces overall debt and leads to smaller monthly payments.

2. Reduce overall debt through debt remission.

3. If the loan is of a conventional type, then the repayment period could be lengthened to reduce monthly payments, as done in the United States.

4. Repayment could be made as a proportion of income, as discussed at length below.

The financial aid system must protect graduates.

Insofar as a student aid system results in graduate debt, it must also make every effort to protect graduates from the negative impacts of indebtedness. A high debt burden may lead many individuals to default on their loans, resulting in damaged credit, garnished salaries and even the seizure of personal property. Moreover, the prospect of high debt may deter many lower income individuals from pursuing higher education.

Therefore, it is vitally important that student aid programs have robust measures in place to help students who fall into financial difficulty. These measures would include, but not be limited to: 1. Interest Relief: the loans of students in financial difficulty would not collect interest while under relief.

2. Partial Payments: if unable to make the full monthly payment of their loan, students in financial difficulty would be able to make partial payments without penalty.

3. Debt Reduction: before a student loan is consolidated, a portion of the total debt should be eliminated through the provision of an effective grant to the borrower. Under the OSAP system, this is accomplished through the Ontario Student Opportunity Grant.

4. Income-Based Remission: Based on an acceptable debt-to-income ratio, portions of the overall loan in excess of this ratio will be forgiven.

All graduate debt must be forgiven after a reasonable period of time.

Through personal career or life choices, or circumstances beyond individual control, many graduates will simply not receive a financial benefit from their university degree and earn relatively low salaries. Since all loan programs will carry at least some interest, these life-time low-earners could potentially end up paying much more for their education than those with higher graduate incomes, or those who were not forced to borrow any money to access higher education. For example, under the OSAP system, a $28,000 loan paid back over ten years will cost a student $42,563 in total payments, with monthly payments of over $350 dollars.17 Although paying the same loan back in five years reduces the total cost to $34,874, the monthly payments for such a plan are a punishing $581 dollars a month.

To prevent students from paying excessive amounts of interest on their student loans, a truly effective aid program must contain a generous debt forgiveness provision, where both the remaining principle and interest are written off after a fixed period of time.

The financial aid system is a public —and therefore a government —responsibility.

The past decade has seen a dramatic increase in student borrowing from private sector sources to finance their education. This assistance typically takes the form of loans or personal lines of credit. Canada-wide, some 30 per cent of students access private aid, owing an average of $7,500.18 It is reasonable to expect a similar, or indeed greater, proportion of Ontario students to access private aid, as tuition in the province is the second-highest in Canada —$4,960.19 OUSA has identified private student assistance as a highly negative trend in student assistance. There are four major problems with private support: 1. Administered for profit, not for public good: For a bank, student assistance is just another form of consumer loan distributed as a money-making instrument. As such, private lending institutions are focused on their own bottom lines, not the personal well-being of the student borrower. As a result, these loans are not administered in a particularly student-friendly manner. Government assistance is more appropriately viewed as an investment in the development of the individual, and can thus be structured in accordance with the principle of maximizing university access while minimizing the negative impacts of graduate debt.

2. Repayment in study: Under almost every publicly-administered student aid program, such as OSAP, a student makes no payment on their government loan until six months after graduation. There is no such provision with private loans. The average student with a bank loan or line of credit pays $108 a month, or $1,296 a year, to service their debt. 20 This represents the addition of a considerable financial burden to students who are already OUR BRIGHT FUTURE

165

struggling to finance their studies.

3. No provision for debt reduction: Under most public student aid systems, students are eligible for a variety of programs aimed at easing the burden of loan repayment and reducing overall debt. For example, students who receive OSAP benefit from debt-remission offered through the Ontario Student Opportunity Grant, interest relief at both the federal and provincial level and an additional debt reduction programs offered on the Canada Student Loan portion of their debt. Private loans do not offer any of these programs. Such provisions are essentially subsidies; a business concerned with the bottom line has no interest in reducing their profit margins to protect graduates. Thus, it is far easier for a student with private loans to fall into default and suffer the full range of penalties for failing to pay —damaged credit, garnished salaries and even the seizure of personal property.

4. Higher Interest: Students invariably end up paying higher interest rates under privately-administered aid programs. The primary reason for this is the low certainty of repayment found in student lending. In 2003 alone, there were 17,800 defaulted OSAP loans in Ontario, which cost the province $96 million —nearly 27 per cent of all expenditures on the program.21 These numbers do not inspire much confidence in the financial sector. As Johnstone notes, “the borrowing and lending of money …depends so fundamentally on the certainty of repayment. Without this certainty, the lender will either not part with his claims at all, or will do so only at a very high price (i.e. very high interest rate) so that the premiums from those who do repay can cover the inevitable losses from those who don ’t. ”22 In other words, high default rates mean that banks will be unwilling to lend money to students unless they are able to protect their investment with premium interest rates. To make matters worse, students typically do not have established credit, nor are they able to offer any substantial collateral. This makes students even greater financial risks to a lending institution and drives interest rates even higher.

Since government-funded student aid is not aimed at producing a profit, this problem is largely eliminated.

Defaults are absorbed as costs of the program, and student debt is not subsequently magnified as the result of punitive interest rates.

INCOME-CONTINGENT REPAYMENT IN CONCEPT: A COMPLEX PROPOSAL On the surface, income-contingent repayment programs (ICRPs) appear deceptively simple. Indeed, the basic mechanism of income-contingent repayment —graduate repayment of debt is calculated as a proportion of individual income — is very easy to grasp. As the Canadian Federation of Students (CFS) noted, “the enduring appeal of ICRP ’s seems to lie in their apparent simplicity. ”23 In fact, few things in university finance are more complicated.

To understand income-contingent repayment plans, it is necessary to separate the economic principles of ICRP from their political context. This is no easy task, as Johnstone notes, since, “the first thing to remember is that the economics and politics of ICRP are hopelessly entangled. ”24 There are essentially two kinds of loan programs currently applied to student financial aid. The first is the conventional loan type, which carries three contractual elements:25 1. A rate of interest expressed as an annual percentage of the amount borrowed or still to be repaid; 2. A repayment period, or the amount of time a borrower has to repay their loan; and 3. A repayment mode, such as whether the payments are to be equal monthly installments, installments that start small and increase over time or some other arrangement.

The Ontario Student Assistance Program and the Canada Student Loans Program (CSLP) are both examples of conventional style loan assistance. These programs are often criticized for not being sensitive to the specific financial circumstances of graduates. Monthly repayments are calculated against time, regardless of income or other expenses. This can lead to both high default rates and heavy financial burdens for recent graduates.

Conversely, income-contingent repayment schemes are often lauded for being more sensitive to individual financial situations. Loans of this type also carry three basic contractual elements:26 1. The percentage of income or earnings that must go to loan repayment. This can be either a fixed flat rate for all income levels, or a progressive rate where the proportion of income paid increases with higher salaries; 2. The stipulation of what precisely is to be counted as income; and 3. The provision for release from further payments. This might include full repayment with interest or debt forgiveness after a maximum period or maximum age.

166

OUR BRIGHT FUTURE

There is much more variation under this system than with a conventional loan program, with monthly repayment, length of repayment and ultimate repayment, “expressed as an overall effective interest rate on the original amount borrowed, ” all varying according to individual income.27 Thus, compared to conventional loan programs, “for the overwhelming number of student borrowers, the income-contingent loan may be more convenient —but it will not be cheaper. ”28 In other words, monthly payments will be easier to manage under ICRP, but overall cost of the loan will not be any less than one offered under a conventional program. In fact, depending on the level of interest subsidization and provision for debt forgiveness, the loan might even cost more for a student to repay.

Despite the relative attractiveness of income-contingent repayment from a monthly payment perspective, the appeal of programs of this type has been greatly diminished due to another rising trend in university finance —cost-sharing. It is here where the economics of ICRP become bound up in, “the byzantine political agendas of higher education. ”29 Broadly speaking, cost-sharing refers to a system of university funding where both private student contributions and public tax dollars finance the operation of the system. Around the globe, “governments are supporting the view that as there is a high rate of return to higher education over time, then it is only fair to expect that recipients of university education should share the costs associated with that education. ”30 Over the past twenty years, increasing enrolment and sophistication in the university sector have made the system more expensive to operate. As Johnstone notes, “higher and other forms of post-secondary education are costly …the per-student costs of education are pressed upward at rates typically greater than the average rate of increase of prices generally —that is, greater than the prevailing rate of inflation. ”31 Rather than injecting more public dollars to account for this greater system cost, most international jurisdictions have downloaded the cost onto students in the form of new or higher tuition fees. This shift has occurred for two reasons: 1. The Equity Argument. It is increasingly difficult for governments to justify tax increases to pay for the operation of the university system. This is primarily a question of equity. In other words, citizenries are unwilling to completely subsidize through tax dollars systems that do not benefit all contributors. Under this construction, students must bear at least a portion of the costs of their education as matter of societal fairness. Since they derive a direct and undeniable benefit, they must financially contribute to the operation of the system.

The benefits are difficult to deny. In 2001, the median household income in families in which the primary earner had a university degree was 51 per cent greater than households where the primary earner had a high school diploma.32 A recent TD Economics Paper further underlined the economic benefit, suggesting that university graduates receive a 12 to 20 per cent return on their investment in university education.33 Studies suggest that university graduates also tend to live longer and be healthier, possess greater communication skills and have greater self-confidence.34 Some individuals, like University of Toronto Professor David Stager, have even suggested that free or low tuition systems actually generate, “regressive re-distributive effects. ”35 In other words, cost-sharing is a more equitable proposition since:36 • •

•

Higher educational participation is not universal, and tends to include only the most interested and best prepared; The children of the wealthy disproportionately benefit from free or highly-subsidized higher education, since they typically have greater access to academic role models, good schools and other forms of cultural capital; and, The taxes used to support high tuition subsidies are proportional, or even regressive (such as sales taxes).

The upshot of these various political arguments is that it is not politically expedient to raise taxes in support of higher education, which would almost certainly be necessary in Ontario in order to increase the province ’s funding commitment. As the CFS notes, “post-secondary education subsidies may always involve some transfer of income from the less to the more educated. ”37 In a modern context, the essential political difficulty in total public funding of the education system seems to be that the ‘less educated ’ are generally opposed to subsidizing the ‘more educated ’.

2. Sheer Need for an Alternative Source of Revenue: The rise of cost-sharing over the past 20 years can also be attributed to a general scarcity of public funds attempting to cope with the cost of many different spending priorities. In Canada, K-12 education and public health care usually take precedence over higher education spending. Moreover, the vagaries of the global economy are eroding government ’s ability to generate more revenue. As Johnstone notes, “globalization …increases the predilection, as well as the ability, of taxable individuals and enterprises to OUR BRIGHT FUTURE

167

escape to lower tax venues. ”38 As such, there is gradual economic and social pressure towards lower taxes. This is by no means an endorsement of this process. Rather, it is an important recognition that in the absence of systemic economic change, the push towards lower public revenues will pose a serious problem for public university finance.

This pressure has already been felt in Ontario. Tuition in the province has more than doubled over the past decade, and institutions still remain chronically under-funded.

Almost every attempt, successful or otherwise, to increase cost-sharing by shifting greater expense onto students and their families has been accompanied by a proposal for some form of an ICRP. However, it is important to remember that there is no necessary connection between higher tuition fees and income-contingent student assistance. They are not conceptually linked; rather, they have become practically intertwined through years of policy debate, and in many cases, confusion.

GRADUATE TAX Graduate Taxes represent a variant of income-contingent student education contribution programs that have nothing to do with the increase of tuition fees. In fact, a true system of graduate taxation would likely see the abolition of up-front tuition fees altogether.

Although still revolving around the basic mechanism of income-contingent contribution, graduate taxes essentially take the ‘re ’ out of ‘repayment ’. Essentially, students pay no up-front fees to access university. Upon graduation, an additional surtax would be applied to their income and this revenue would account for the private contributions to higher education.

Like traditional ICRPs, a graduate tax could carry a flat rate applied to all income levels, or be structured as a progressive tax with higher rates accompanying higher income levels.

The attractive element of a graduate tax is that it facilitates greater cost-sharing without, “the keeping of individual borrower accounts or ‘balances owed ’. ”39 Thus, it is essentially a debt-free means of shifting costs on to students. Otherwise, “the mathematics and practical effect on participating students …are practically indistinguishable. ”40 Graduate taxes are criticized on the basis that they are unfair, as the graduate contribution has no connection to the actual cost of their degree. Moreover, the implementation of such a program would require a massive, and quite likely unfeasible, up-front government investment.

To date, no true system of graduate taxation has been implemented world-wide, nor has it been seriously considered in Ontario. As such, it will not be dealt with in this policy.

INCOME-CONTINGENT REPAYMENT IN HISTORY: A STRANGE GENESIS In his 1955 essay, The Role of Government in Education, Milton Friedman first described the characteristics of what would later become known as income-contingent loans. According to Friedman, government subsidization of higher education institutions is inappropriate. Rather, the government should be in the business of subsidizing people through advancing, “the funds needed to finance [the borrower ’s] training on condition that [the borrower] agree to pay the lender a specified fraction of his future earnings. ”41 As well as articulating this primary mechanical principle of income-contingent loans, Friedman also specified some of the key characteristics of income-contingent loans, including minimum income thresholds below which no repayments are made and time limits beyond which the loan is written off.

As the brain-child of one of the most conservative economic theorists of the past century, income-contingent programs immediately sound alarm bells for stakeholders who define themselves as ‘left ’ or ‘progressive ’. Indeed, Friedman ’s agenda in higher education finance was clear. Through the income-contingent mechanism, public subsidization of universities could be reduced or eliminated, and greater free-market logic would be introduced into the higher education sector. The unique income-contingent repayment option rose out of Friedman ’s fear that imperfect capital markets would prevent students from accessing the resources needed to attend university in a marketized environment.42 Nevertheless, ICRP as a concept has been endorsed by groups and governments across the political spectrum. Indeed, as noted above, the program is a compelling solution to theoretically separate, but practically entangled, goals: injecting more financial resources into universities without raising government expenditures, and facilitating student access by providing a fair method of loan repayment.

To date, six international jurisdictions have adopted some form of income-contingent loan repayment programs: Sweden and Australia, adopted in 1989; New Zealand in 1992; the United States in 1993; South Africa in 1996; and the United Kingdom in 1998. While the idea of ICRP has been around since 1955, all of these programs were implemented three decades after Friedman first articulated the concept, and within ten years of each other. This observation speaks volumes.

First, international jurisdictions are all facing the same pressures in their university sectors: students lack the financial resources to access university, university systems are increasingly expensive to operate and governments are either unable or unwilling to inject needed funding. Second, in the eyes of many policy makers, income-contingent loan programs are an idea whose time has come.

Income-contingent loan programs have been a policy issue in Canada since 1969, when the Council of Ministers of Education, Canada (CMEC) advocated for their adoption. This organization, composed of provincial education ministers, 168

OUR BRIGHT FUTURE

“envisioned ICRPs replacing the existing Canada Student Loans Program …the new loan plan would make money available to cover educational costs and included an increase in tuition fees, which the council also deemed necessary. ”43 For the Council, the primary benefits of the ICRP plan would be to allow students greater flexibility in repaying financial assistance, since the CSLP calculated monthly payments against a rigid repayment period regardless of income or employment. CMEC also highlighted ICRP as a means to, “reduce some of the financial costs borne by government ” while recognizing that, “it is not anticipated this program scheme will provide a solution to the problem of accessibility to postsecondary education. ”44 Despite the strong CMEC endorsement, ICRP did not reappear on the national stage until 1985 in the MacDonald Commission report. This body recommended an increase in tuition fees and reduced financial contributions by provincial governments. To account for this shift, borrowing limits under the CSLP would have to rise, or a contingent loan program would need to be implemented.

National interest in ICRP continued to mount in the early 1990 ’s with the publication of the Smith Report in 1991.

Commissioned by the Association of Universities and Colleges of Canada, the report also advocated an ICRP program. In 1993, Lloyd Axworthy published his controversial ‘Green Book ’ for remaking social assistance in Canada. One of its chief provisions was the abolition of the Canada Student Loans Program and the creation of an income-contingent loan program to account for a withdrawal of federal transfer money for post-secondary education. A combination of financial factors and political opposition from students and stakeholders effectively killed this recommendation.

The Canadian Federation of Students correctly identifies interest in ICRPs in Canada as a question of financial expediency. The “unexpected enrolment increases ” of the late-eighties, coupled with deep federal cuts in 1993, and, “the slower growth of provincial government funding strained the budgets of institutions and probably fuelled the drive for an ICRP. ”45 Ontario, of course, was far from immune to these factors. In fact, and in many ways, the province ’s university sector exemplified the trends of rising enrolment and declining public funds.

Still, it was not until 1984 that ICRP was seriously considered in an Ontario-specific context. The Bovey Commission report, released that year, advocated ICRPs as a replacement for the Ontario Student Assistance Program (OSAP) because: From a student viewpoint, the repayments are geared to an ability to pay, so that unlike a fixed repayment loan they do not impose a burden on earnings when the graduate is least able to pay.

From the general public ’s viewpoint, such a plan reduces the taxation burden for those persons who do not participate directly in the university system. From government ’s viewpoint, the plan can be set up so that it does not add to government indebtedness.46 Interest in ICRPs peaked in Ontario in 1992, when the Council of Ontario Universities (COU) released their discussion paper, Contingent Repayment Student Assistance Plans. Written by University of Toronto professor David Stager, the paper outlined the possible features and benefits of income-contingent loan programs. This paper, “sparked the debate and brought [ICRP ’s] into the public arena. ”47 The NDP government of Bob Rae favored adoption of an ICRP program, as did the COU and the Ontario Undergraduate Student Alliance. However, substantial political opposition, and the decision of New Brunswick not to implement such a program, convinced the Ministry of Education and Training that more research and consultation was required. In 1994, a national symposium was held in Toronto to discuss ICRPs. This Ontario-based discussion was also occurring in context of Lloyd Axworthy ’s recommendation to axe federal dollars for universities and create a new national ICRP loan. It is alleged that the “unprecedented student mobilization ” around the issue, and lingering concerns about the costliness of the program combined to block the adoption of ICRP in Ontario.48 In 1995, the Progressive Conservative government of Mike Harris massively cut funds to Ontario universities, and was apparently content to let the OSAP program languish at 1994 levels while tuition rose an astonishing 139 per cent, from $2,076 in 1993 to $4,960 in 2004.49 In 2004, the new Liberal government of Dalton McGuinty initiated a review of post-secondary education in Ontario.

Headed by Bob Rae, the former premier whose government had supported the implementation of ICRPs, the Review is likely to once again seriously examine the efficacy of income-contingent loan programs.

There has never been a serious policy discussion in Ontario or Canada about so-called graduate tax programs. It is likely the expense of implementing such a program, and its politically unpopular ‘tax ’ language, has kept such a program off the public ’s radar.

OUR BRIGHT FUTURE

169

INCOME-CONTINGENT REPAYMENT IN PRACTICE: Same concept, different contexts and very diverse programs Australia Not only was Australia one of the first nations to introduce an income-contingent loan program, they also coupled their ICRP with an overhaul of their funding and fee structure. The Higher Education Contribution Scheme (HECS), introduced in 1989, is still touted as an innovation in university finance. While recent years have cast some doubt on the progressiveness of the HECS framework, the program is still notable for the boldness of its reforms.

The HECS system emerged out of the 1988 Wran Commission, which affirmed the principle of cost-sharing to finance the Australian university system. Moreover, Wran recommended, “students should contribute about one-third of the cost of their [program], but this contribution should be deferrable and repaid as a levy on students ’ income when they earned better than average incomes. ”50 As a result of this report, the Australian government introduced HECS with the following goals:51 • • •

to enable the government to finance an expanding system with the assistance of the direct beneficiaries; to re-distribute income in a lifetime sense from those considered to be advantaged (university graduates); and to have a charge instituted that did not restrict the access of the poor to the economic advantages of higher education.

Like many international jurisdictions, Australia was struggling with its university finances in the late 1980 ’s. The system was becoming increasingly expensive, and the Australian government was unwilling to increase operating funding as such a move would require a politically unpopular tax increase. As Bruce Chapman, Director for the Centre of Economic Policy Research, Australian National University, describes it, “it seemed inappropriate to have the direct costs [of university] underwritten by the average taxpayer who was generally less advantaged than the direct beneficiaries. ”52 As such, the government opted to introduce a deferred payment scheme structured around an income-contingent mechanism to shift costs onto those same beneficiaries —graduates.

HECS is structured around a collection of central features: 1. No needs-testing. HECS funding completely covers the cost of up-front tuition fees for all students who wish to access the program regardless of parental income or personal assets.

2. Income-contingent repayment. HECS structures repayment as a proportion of a graduate ’s income. The income proportion a graduate is expected to pay is also dependent on general income level, laid out on a progressive scale:53 Table Two: HECS Repayment Income Proportions

Income Below $25,348 $25,349-$26,731 $26,732-$28,805 $28,806-$33,414 $33,415-$40,328 $40,329-$42,447 $42,448-$45,628 $45,629 and above

Percentage Rate Applied to HECS Repayment Income 0.00% 3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 6.00%

3. Minimum income threshold. As shown by the above chart, graduates do not begin to pay back their HECS loan until their income reaches a certain level. In 2004, this level was set at $25,438 (AUD).

4. Interest subsidization. In Australia, the cost of borrowing under HECS is covered by the government. However, the debt amount is indexed to the consumer price index (CPI) to maintain the value of the loan against inflation.

5. No debt forgiveness. Unlike many income-contingent programs, there is no debt forgiveness under the HECS system.

Graduates continue servicing their debt until the loan is paid off.

Due to the exclusive tuition focus and heavy interest subsidization, many have described HECS as a kind of post-paid tuition program with an exclusive focus on fee deferment. Nevertheless, it is important to note that HECS is, at its core, an income-contingent loan program that shares functional characteristics with other international ICRP programs.

170

OUR BRIGHT FUTURE

On the surface, HECS appears to be a highly successful income-contingent loan program. Indeed, the evidence is difficult to dispute. On average, tuition in Australia is still considerably cheaper than in Ontario, particularly for students in law, medicine and dentistry. The graduate debt problem is also better controlled in Australia, with average indebtedness of $8,116.69 CDN and a debt repayment period of only 6.5 years, as opposed to $22,700 and ten years respectively in Ontario.54,55 Moreover, according to the proponents of the system, “so long as there is an interest rate subsidy, income-contingent repayment mechanisms are progressive within the (personal) lifetime income distribution of those affected. ”56 Unfortunately, the effectiveness of HECS for students has been undermined by the subsequent administration of the program since 1989. First, the Australian government is increasingly unwilling to fund universities, shifting greater responsibility onto student shoulders. Although the original HECS system affirmed the Wran Commission ’s conclusion that students should only pay for 30 per cent of their education, this commitment has not persisted. In 1997, the proportion of education cost paid by students was increased to 50 per cent. Despite this, Australia ’s institutions remain chronically under-funded, largely due to insufficient public dollars being invested in the system. In fact, the proportion of public dollars in Australian universities has fallen from 57.2 per cent in 1995, to 43.8 per cent in 2001.57 However, rather than increasing their contribution, the government has introduced the deregulation of fees within the HECS framework. Institutions will be permitted to charge 0 to 125 per cent of the current regulated fee levels.58 This will have corresponding effects on student debt levels, pushing them to perhaps unsustainable levels. It may also undermine the stability of the HECS system, as the corresponding increase in student borrowing increases the expense of the interest-free loan scheme.

The income-contingent nature of HECS repayment is structured like a progressive income tax system: higher income graduates pay more, while lower income students are spared a potentially onerous repayment amount. However, there are aspects of the HECS system that undermine the progressive nature of the program. Most significant of these, HECS is not compulsory. This, in itself, is not a negative feature of the program. However, if a student decides to opt out of HECS and pay their fees up-front, they receive a 25 per cent discount on their tuition.59 Therefore, those who are able to pay up-front end up paying less, while those who lack adequate resources are forced to bare the full cost of their education, indexed to inflation. This is highly regressive.

Australian students also have trouble meeting their cost of living. Since HECS only covers tuition fees, students in Australia must access supplementary loan programs. Previous to 2003, the Student Financial Supplement Scheme (SFSS) provided a loan of $7,000 ($6,720 CDN) to eligible students to assist with living costs. This program is now defunct, and students must rely on three loan programs: Youth Allowance, for students under 25; Austudy, for students over 25; and ABSTUDY for indigenous students. The National Union of Students has shown these programs to be woefully inadequate to meet student needs. Youth Allowance is difficult to access due to highly stringent parental income and support requirements. Even if a student is able to access money through this program, the maximum award places them 17.5 per cent below the poverty line.60 Although easier to qualify for, Austudy leaves recipients 36.8 per cent below the poverty line.61 A chief reason for this funding shortfall is that Austudy does not provide any kind of rent assistance. Aboriginal students who receive ABSTUDY fare slightly better, falling between 23.9 per cent and 2.3 per cent below the poverty line, depending on their accommodations. However, recent changes to the eligibility requirements have made ABSTUDY so difficult to access that it has caused a “crisis in indigenous participation ” in university.62 Between 1999 and 2001, Aboriginal enrolment dropped 8.3 per cent.63 The Australian case demonstrates several key characteristics of a progressively structured income-contingent loan: no needs-testing, repayment proportional to income, minimum income thresholds and some form of debt control, manifested as interest subsidization. Australia is also a cautionary tale for policy-makers in Ontario: to be effective, ICRPs must not regressively benefit students who are able to pay for their education; the program must operate in context of regulated tuition and guaranteed levels of government and student contribution; and they must make meaningful provisions to cover student cost of living. Most importantly, any ICRP must be guided by a government committed to the welfare of students and prepared to make the necessary investments to ensure positive outcomes.

Sweden Currently, students in Sweden do not pay any tuition fees to access university education. However, like most Scandinavian countries, the high cost of living has necessitated a loan program to help students meet these costs. Until 2001, the Swedish model used a flat, non-progressive repayment rate of four per cent of graduate income. These loans, “carry a nominal rate of interest that mirrors the rising cost of education —that is, a zero real rate of interest. ”64 This is similar to the CPI indexing of the Australian HECS model. Also like Australia, Sweden ’s income-contingent loans are generally available to all students regardless of parental income. Only student earnings will reduce the ultimate loan award. Debt forgiveness is at age 66 or death. This plan has proved relatively successful from a cost recovery standpoint, with, “most students ultimately repaying at the effective rate of inflation, with very low defaults. ”65 However, in 2001 Sweden signaled a move away from income-contingent modes of repayment with the introduction of a new loan program. The new program is described as a ‘modified annuity loan ’, featuring annual repayments determined OUR BRIGHT FUTURE

171

through the size of the debt, the remaining time in a 25 year repayment period, interest and a two per cent yearly indexed increase. The interest rate is set yearly by the government and broadly reflects the cost of borrowing. Students who previously borrowed money under the ICRP plan will continue making their payments on an income-contingent basis.

The reasons for the abandonment of the income-contingent plan in Sweden are not entirely clear. However, there are two likely explanations. First, the interest subsidization of the loan proved too expensive for the Swedish welfare state, which has already endured deep cuts. Second, the relative lack of a forgiveness provision may have resulted in negative graduate financial impacts.

New Zealand During the 1990 ’s, New Zealand moved aggressively to introduce university tuition fees. Not surprisingly, this move was accompanied by the introduction of an ICRP, the Student Loan Scheme (SLS), in 1992. The SLS loan is not needs-tested, and provides enough funding to cover all tuition fees, up to $1,000 NZD in related course costs and $150 NZD per week the student is in study.66 Monthly repayments are calculated at a flat, non-progressive rate of 10 per cent of income, although repayment does not begin until a student earns over $15,964 NZD.67 There is no provision for loan forgiveness under this program.

The most unusual thing about the SLS is the administration of interest. There are actually two separate interest rates applied to the SLS loan —a base rate, currently set at 4.2 per cent, and an inflation component set at 2.8 per cent.68 This means that the effective rate of interest is seven per cent, a surprisingly high amount considering the mandatory nature of this form of repayment. This rate is exceeded only by the American ICRP, although this system does not compel individuals to repay on an income-contingent basis. Another oddity in the SLS is the fact that interest begins accruing on loans as soon as students receive them. However, students earning less than $25,909 NZD while in-study have all their interest charges written off at the end of their academic year. Graduates who earn less than the repayment threshold ($15,964 NZD) have only interest charges equal to inflation added to their loan. These provisions mean that approximately $198 million NZD in interest charges are written off by the government every year.

Nevertheless, the New Zealand University Student Association is extremely unhappy with SLS. Their complaints point to serious problems within the loan program:69 • • • •

Nearly 400,000 New Zealanders have student loans —nearly 10 per cent of the population.

The average debt for a bachelor ’s degree —$21,000 NZD ($17,672 CAD).

87,000 borrowers (about 22 per cent of the total) owe more than $20,000 NZD The highest recorded debt level in New Zealand is nearly $180,000.

Moreover, according to the New Zealand Ministry of Education ’s own numbers, SLS has actually made university education more expensive for historically disadvantaged groups. Given the high SLS interest rate, taking longer to pay back loan assistance invariably means a borrower will end up paying more for their education than individuals who take less time to repay. Unfortunately, “the labour market is full of entrenched wage inequities among different segments of society. ”70 In other words, groups such as women or ethnic minorities consistently earn less for the same work across western nations. New Zealand is no exception, and this has corresponding impacts on the income-contingent loan repayment. Consider these following repayment periods: Table Three: Average Student Loan Repayment Times, New Zealand71

Ethnic Origin European Maori Other

All Groups

Males 6.8 years 7.4 years 9.0 years 7.4 years

Females 10.6 years 10.8 years 13.0 years 11.1 years

Overall 8.9 years 9.4 years 11.2 years 9.5 years

This data reveals an ICRP system that is deeply regressive, where, “women would take ‘significantly longer ’ to repay their loans than men and non-Europeans would take longer than Europeans. ”72 This result is primarily due to the high interest rate on the SLS loan, coupled with no debt reduction mechanisms or provisions for debt forgiveness.

United States Befitting the de-centralized structure of American higher education, there are literally dozens of state and federal financial aid programs. However, the federal government is by far the largest provider of student assistance, distributing $33 172

OUR BRIGHT FUTURE

billion in loan assistance through its Federal Student Aid (FSA) umbrella program.73 While there are several different loan programs offered through the FSA, all recipients must make repayment through one of the following four options:74 1. Standard Repayment Plan: This is a conventional loan type, with monthly repayment calculated through the size of the loan against a fixed repayment period. Graduates must make a minimum monthly payment of $50 (USD) for ten years.

2. Extended Repayment Plan: Similar to the Standard Repayment Plan but with 12 to 30 year repayment period. Reduces monthly payments, but the debt will also accrue more interest.

3. Graduated Repayment Plan: Under this plan, monthly repayments start low but will increase every two years.

With a ten year repayment period, monthly payments are lower than the Standard Repayment Plan to start, but finish much higher than those under the Standard Plan.

4. Income Contingent Repayment Plan: The income-contingent option was introduced in 1993, after economic reforms, political support and budgetary expediency facilitated the adoption of a national ICRP plan.75 In practice, it exemplifies what Bruce Johnstone describes as a ‘mutualized plan ’, one that recovers, “some premium from those who are able to pay. ”76 Interest rates are set yearly by the federal government, although they are capped at 8.25 per cent. Any interest in excess of this amount would be covered by the government in an effective subsidy.

So far, the Federal Student Aid income-contingent loan has not become a major feature of the American student aid system, as “relatively few have elected this repayment option. ”77 The reasons for this low participation rate are not difficult to divine. As Johnstone notes, “the U.S. income-contingent loan option has been purposely constructed to maximize the recovery of repayments and minimize the need for governmental subsidization, ” and therefore, “features mainly convenience [of repayment] and little ultimate low-earnings protection. ”78,79 The structure of the American ICRP also makes it a more expensive option. To illustrate its various repayment options, Federal Student Aid has constructed three ‘typical ’ student aid recipients: • • •

debt:

Jack, who borrows $5,000 (USD). After graduation, he obtains employment as a mechanic earning $17,000 (USD) a year.

Darrell, who borrows $10,000 (USD). After graduation he obtains a teaching job in a high school earning $23,000 (USD) a year.

Latitia, who borrows $20,000 (USD). After graduation, she begins working for the State at $27,000 (USD) a year.

According to the FSA ’s projection model, each individual will end up making the following total repayments on their

Table Four: Total Federal Student Aid Repayment with Percentage Over Principle80 Individual

Initial Loan Standard Plan Payment

Jack

$5,000

$7,359 (47 per cent) 10 year repayment period

Darrell

$10,000

$14,718 $17,464 $19,176 (47 per cent) (75 per cent) (92 per cent) 10 year 15 year repayment 15 year repayment period period repayment period

$19,576 (96 per cent) 17 year, 7 month repayment period

Latitia

$20,000

$29,437 $40,898 $44,426 (47 per cent) (104 per cent) (122 per cent) 10 year 20 year repayment 20 year repayment period period repayment period

$35,975 (80 per cent) 15 years, 3 month repayment period

OUR BRIGHT FUTURE

Extended Plan Payment

Graduated Plan IncomePayment contingent Plan Repayment** $7,893 $8,649 $12,051 (58 per cent) (73 per cent) (141 per cent) 12 year repayment 12 year 25 year repayment period repayment period period

173

**The Income Contingent Repayment Plan projection assumes a five per cent increase in salary per year. If income were to increase at a greater rate, the repayment period would be shorter.

As seen in the above graph, the lack of effective interest subsidies and debt forgiveness in the Federal Student Aid ICRP option translates into low-earners paying proportionally more than their high-earning counterparts for the same education.

This is a serious deterrent for many potential candidates for the ICRP program.

In addition, many of the attractive flexibility and low-income protection of ICRPs have been incorporated into the American conventional loan program. The standard, extended and graduated plans, “provide such easy and automatic …relief and refinancing in the event of unemployment or other occasions of genuine financial hardship that the flexibility and manageability once thought to be the special property of income-contingent loans seems now to have been built into US conventional loans programs. ”81 It is therefore no surprise students are unwilling to utilize the ICRP to repay their student debt.

The United States is a powerful example of a jurisdiction where an ICRP designed to recover costs rather than serve student needs has proven unpopular and even financially punitive for those who choose to access the program.

South Africa While the introduction or increase of tuition fees through income-contingent loan programs occurred in Australia, New Zealand and the United Kingdom as the result of political expediency, ICRPs exist in South Africa out of sheer necessity. South Africa is increasingly unable to fund post-secondary education as it struggles to come to grips with poverty, crime and an HIV/AIDS crisis.82 As a result of these pressures, and the associated rise in tuition fees, the South African government launched the National Student Financial Aid Scheme (NSFAS). In 2002, the maximum award was 17,600 rands, or about $3,500 Canadian dollars.83 In 2000, the program assisted some 72,000 students with 83,251 awards totaling R510.8 million ($101.5 million CAD).84 This translates into an average award of $1,220 CAD. Program loan assistance is repayable as a flat, non-progressive proportion on individual income, and repayment only begins once a graduate earns R26,300. The loans carry an interest rate of interest plus two percentage points, which contributes towards, “the administration costs of the program and also make up for the shortfalls resulting from death or long-term non-repayment. ”85 There is currently no provision for debt forgiveness under NSFAS. However, based on academic performance for the year, students are eligible for up to 40 per cent debt remission per year.86 This is a very high rate of debt remission, compared to OSAP ’s 25 per cent available debt remission through the Ontario Student Opportunity Grant. South Africa is also the only nation to offer debt control through active instudy debt remission in an ICRP program, rather than providing a large income subsidy or debt forgiveness after a certain period.

The biggest political priority behind the NSFAS is that the program be largely self-financing, as “African governments cannot afford to allocate all the necessary capital to a loan scheme programs. ”87 As such, NSFAS is structured to minimize default and maximize repayment. NSFAS has also been successful in controlling administrative costs at two per cent per year, through an efficient technological infrastructure and cost-sharing with individual institutions.88 However, the lack of available government capital may make the 40 per cent debt remission provision financially untenable, and may eventually undermine the sustainability of the entire program.

In South Africa, serious competing public spending priorities makes ICRP-facilitated cost-sharing a financial necessity.

However, these same pressures also make it difficult for NSFAS to balance the need to provide student-friendly assistance with the need to operate a self-financing aid system.

United Kingdom The United Kingdom is currently in the process of designing a new income-contingent loan program, loosely based on the Australian HECS model. The UK actually implemented an ICRP in 1998 alongside a new, national tuition fee of £1,125 (approximately $2,812.50 CDN). Despite these reforms, the system continued to suffer from the following problems: institutions were chronically under-funded, students were poor and the proportion of students from lower income backgrounds had not significantly increased for decades.89 As a subset of these larger issues, the ICRP program was largely unsuccessful in the UK, as the loans were too small to adequately account for student needs and the program was enormously expensive to administer. In response to these challenges, the UK government undertook to redesign the ICRP program, with the dual aim of increasing fees and ensuring broad access to university. Nicholas Barr and Iain Crawford were primarily responsible for the design of the new loan scheme and their recommendations were released in the government ’s white paper, The Future of Higher Education. The new ICRP system will be implemented in September 2006, alongside a new ‘variable fee ’ system where institutions are empowered to charge any fee they wish to a maximum of £3,000.90,91 Like Australia, the new UK ICRP is essentially a deferred payment program. If they choose, students can pay their fees with a loan distributed through the government-owned Student Loans Company. These loans are not means tested, cover the 174

OUR BRIGHT FUTURE

cost of education and reasonable living expenses. Repayment does not begin until a student crosses a £15,000 minimum income threshold, and the monthly installments are calculated at nine per cent of income.92 Unlike Australia, the UK model moves away from the interest rate subsidy. Nicholas Barr decided against such measures, as: • •

Interest subsidies are too expensive (in England, they cost nearly £800 million a year). This pulls funds from university operating grants.93 Zero-interest loans actually impede access, as they make loans more expensive for the government. They will therefore limit the size and number of the loans awarded.94

Instead, the UK ICRP offers complete debt forgiveness after 25 years. It is hoped that this measure will protect lifetime low-earners, while allowing the program to remain relatively cost-neutral for the government to administer. However, given the lack of interest subsidy, this long forgiveness period may result in low-earners paying much more for their education.

It will likely be many years before the efficacy of the UK ICRP can be evaluated. However, the UK example, as the Australian one before it, is a good illustration of the importance of designing a financial aid program with the entire university system in mind. It will also be a test of the UK government ’s political commitment to operating a student friendly system.

INCOME-CONTINGENT REPAYMENT IN ANALYSIS After reviewing the theory, history and international application of income-contingent repayment plans, it is now possible to evaluate the various claims both advocates and detractors make about ICRPs.

Arguments for Income-Contingent Loan Repayment Programs It is generally argued that income-contingent repayment programs generate the following benefits for students and government: Income-contingent repayment programs generate easier monthly payments, reducing defaults and protecting low-income graduates Outside of being a mechanism to increase fees, the primary argument for ICRP has to do with the supposed financial benefits delivered to borrowers while they are in repayment. As monthly payments are sensitive to income, it is assumed that the monthly amount will never exceed a graduate ’s ability to pay.

A graduate earning $30,000 a year with a $28,000 debt under the OSAP conventional loan program will make monthly payments of $350 a month, 14 per cent of their annual income. Conversely, the same graduate under an ICRP with a proportional repayment rate of 6 per cent will only pay $150 a month. Clearly, on a monthly basis this is a much more manageable means of repaying debt.

The financial consequences of default are serious, and graduates should be protected from this outcome wherever possible. ICRP is an effective means to ensure this result. However, graduate protection from default is far from being the exclusive purview of income-contingent repayment programs. Protection of graduates could be achieved in a conventional loan program through targeted debt remission and an easily accessible interest relief program.

Moreover, an ICRP is not any cheaper for students, simply because of the built-in income sensitivity. As Johnstone notes, “the cheapness or expensiveness of a loan —not to be confused with the manageability of its repayments —is measured by the ‘true ’ simple annual interest rate. ”95 Depending on the terms of the ICRP, the loan may actually end up costing a relatively low-earning graduate considerably more to pay back their debt.

Income-contingent repayment plans are self-financing.

By minimizing default and maximizing repayment, ICRP is said to be a self-financing program. In other words, the program will require little government investment to operate. This is an attractive proposition for jurisdictions struggling with competing public funding priorities, as it provides a cost-neutral mechanism to ensure access to cost-shared university systems.

The ability of ICRP to reduce defaults alone would prove a huge financial boon to the Ontario government. In 2004, defaults cost the province $96 million.96 By eliminating this expense, money could be re-invested in a university system critically short of funds.

Unfortunately, the self-financing aspect of ICRP is largely illusory. To be effective, a consistently high level of government investment will be required for the following reasons: 1. Some students will never pay back their loans. Through borrower death or lifetime low earnings, it is likely that the system will have to financially account for a significant proportion of loans that are never repaid. To compensate for these lost funds, governments would need to invest public dollars or, “higher interest rates or a OUR BRIGHT FUTURE

175

risk fee would have to be charged. ”97 2. Will not reduce all defaults. There are a variety of non-financial reasons for defaulting on student loans that cannot be eliminated through any repayment mechanism. Moreover, extraneous financial factors such as dependent children or illness may make even income-contingent monthly repayments unaffordable.

3. Need for heavy subsidization. In order to maintain the student-friendliness of the ICRP system, the government must offer a series of effective grants, including interest subsidies, debt forgiveness and additional targeted assistance aimed at students from low income backgrounds and low-earning graduates. All of these programs are expensive.

4. Lack of private capital. Due to the high risk of non-repayment in ICRPs, “loans of the income-contingent variety are less likely than conventional guaranteed loans to find any private buyers —and therefore to continue their dependence on government/taxpayer for loan capital. ”98 In other words, an income-contingent repayment program would require a much greater up-front government investment than a conventional loan program.

The high cost of an ICRP has previously sunk the program in Ontario. The NDP government of Bob Rae seriously considered implementing an income-contingent assistance plan in the early nineties, but abandoned it after realizing the true cost of the program.99 Income-contingent repayment plans are simpler to administer.

Due to the apparent simplicity of the income-sensitive mechanism of ICRP, it is thought that these programs would be simple to implement and administer. In addition, proponents of this program argue that repayments could be taken through the existing income tax system, therefore adding to the attractiveness of the program.

Both these arguments are highly dubious. Designing and implementing a student friendly ICRP is an immensely difficult proposition. This is due to the need to, “stipulate precisely, and to be able to verify, the amount of income that is effectively to be ‘taxed ’ in order to arrive at the proper repayment amount. ”100 In addition, the development and implementation of effective graduate protection mechanism would be extremely complicated.

Furthermore, the ability of income-contingent repayments to be collected through the existing income tax system is by no means exclusive. Utilization of the income tax machinery, “could in theory be applied as well to the collection of conventional loans. ”101 It is clear any government attempting to develop an effective ICRP has a mammoth policy task on its hands.

Arguments Against Income-Contingent Loan Repayment Income-contingent repayment is an integral part of a strategy for shifting greater cost onto students It is difficult to deny the introduction of income-contingent loan programs are almost always accompanied by higher fees and a greater proportion of educational cost borne by students. In fact, with the exception of Sweden and the United States, every national program of ICRP has been introduced alongside new or increased up-front fees.

Income-contingent financial assistance works well with higher fees and greater cost-sharing because monthly repayments are inherently easier to manage. Since the payment amount is sensitive to income, the overall debt load has no bearing on the calculation of discrete payments. Therefore, on a monthly basis, ICRPs are a more convenient way of repaying debt.

Policymakers have seized upon this truth to use ICRPs as a mechanism to ease the blow of new or higher tuition fees consistently over the past decade.

Despite this historical association, there is no conceptual reason why the two programs should be linked. Incomecontingent programs have existed without the presence of tuition fees, as in Sweden. Conversely, average tuition has ballooned 139 per cent in Ontario without the aid of an ICRP. As David Stager, one of the chief proponents of greater cost sharing and ICRPs in Ontario, notes, “contingent repayment programs have usually been proposed as a method for financing an increase in tuition fees, but there is no logical necessity for this association of ideas. ”102 There is therefore no reason to automatically assume that ICRPs must always be accompanied by tuition hikes. There is also no reason to assume that the financially convenient ICRP mechanism cannot be built into a high public funding, lowtuition model of higher education.

Income-contingent repayment programs amplify debt to the detriment of students from low-income backgrounds and low income graduates.

This argument contains several elements. First, students from lower-income backgrounds will need to borrow more money to pay for their university education. Due to the larger debt, these individuals will likely have a longer repayment period. Due to the cumulative effects of interest, these students will end up paying more to service their loan. In addition, even a student from a middle-income background who borrowed relatively little but earns a comparatively low graduate 176

OUR BRIGHT FUTURE

income could end up being penalized through the accumulation of interest on top of his or her debt.

Asking certain individuals to effectively pay more for their education as a result of debt is patently unfair, particularly if it affects low-income students and graduates the most. However, there are a variety of policy mechanisms available to off-set these potential inequitable results. By subsidizing interest rates, the long-term cost of the loan is reduced for all borrowers.

Debt forgiveness after a fixed period would also help low-earners by writing off remaining debt principle and interest charges.

Of course, the upshot of this is that any student-friendly ICRP must contain all of the above provisions. As interest subsidization, debt forgiveness and targeted assistance are all essentially spending programs, they will inevitably increase the cost of the program.

Income-contingent repayment plans exacerbate existing wage inequities One of the primary arguments against ICRP put forward by the Canadian Federation of Students is that there are, “entrenched wage inequities among different segments of society. ”103 In other words, certain demographic groups like women and visible minorities consistently earn less than their male or white counterparts. Under an ICRP, this workplace bias would translate into longer repayment periods. Add interest into the mix, and individuals from affected groups would end up paying considerably more to service their loan than those not disadvantaged by wage inequities. According to the CFS projection model, a woman with a $25,000 debt, at a 6.5 per cent interest rate, will end up paying $55,000, while a man with the same loan will only pay $42,000.104 This is a valid criticism, since wage inequities have persisted in Canadian society since the CFS released its projection model in 1997. Indeed, the problem seems to have gotten worse. In 1995, the average income of a woman with a university degree was 70 per cent of a male counterpart. In 2000, the average income of a university educated woman had declined to only 67.5 per cent of a man ’s average salary.105 The New Zealand case study also provides an evocative demonstration of the dangers of income-contingent repayment. On average, women take almost three years longer to repay their debt than men, and individuals of non-European origin take over two years longer to pay off their loan than European graduates.

In this context of wage inequity, ICRPs are problematic. However, there are still policy tools to help ameliorate the effect of wage inequities on income-contingent assistance programs. By subsidizing interest rates, the financial penalties associated with longer repayment could be largely removed depending on the overall amount of the subsidy. Moreover, a debt forgiveness provision would assist those with systemically lower salaries by not allowing interest to accumulate on unpaid principle for an unreasonable period of time. A final measure would be to offer proportionally greater post-study debt remission for disadvantaged groups. However, these programs are expensive, and would erode the cost-recovery potential of an ICRP program. Moreover, it is likely impossible to remove all the deleterious effects of wage inequities from an ICRP system.

Conversely, a conventional loan program also poses problems within a system rife with wage inequalities. Instead of leading to larger overall repayments, loan repayment calculated against time will saddle systemically disadvantaged groups with monthly payments they not are able to afford. However, it is possible under conventional loan programs to correct for this problem relatively cheaply through interest relief and partial payment provisions. Provided there are appropriate debt management measures in effect to ameliorate short-term financial difficulties, wage inequities will tend not to magnify debt under a conventional loan program. Since repayment is fixed, lower average salaries will not extend repayment and increase the total amount of interest paid.

Although a compelling argument, the CFS seems to suggest that wage inequities are entrenched in Canadian society, and cannot be removed. In fact, wage inequities are not a forgone conclusion, and could be removed through the application of corrective policy. The federal government of Canada has identified wage inequities as a serious problem and are currently developing measures to address the imbalance. If these measures are effective, then wage inequities will begin to decline and will become less of a factor in the ICRP debate.

Even if a student-friendly system were to be implemented, what is to stop a successive government from introducing damaging reforms?

This argument, otherwise called the ‘slippery slope ’ critique, is politically valid. There is no real way to ensure that governments of certain ideological leanings would not hijack an existing ICRP model and use it to increase fees while removing aspects of the loan program that protect students. The only recourse is to make such an eventuality politically difficult. This can be done in two ways: 1. Pass legislation which lays out the maximum student contribution towards education and the structure of the income-contingent repayment program. Repealing legislation is considerably more difficult than simply changing policy.

OUR BRIGHT FUTURE

177

2. Student organizations must be prepared to fight aggressive campaigns for a student-friendly system. It may sound hackneyed, but student vigilance goes far to ensure satisfactory policy outcomes.

Nevertheless, the introduction of an ICRP is a political risk and student groups must be ready to face the consequences of advocating such a program.

INCOME-CONTINGENT REPAYMENT IN ONTARIO: RECOMMENDATIONS FOR A STUDENT-FRIENDLY SYSTEM The essential question is: can income-contingent repayment plans work for students? OUSA believes the answer is yes, provided the potentially negative aspects of the program are carefully controlled and eliminated through intelligent program design.

The following recommendations are designed to lay out the parameters of an ICRP system theoretically beneficial to Ontario students. It should also be noted that the following is not an explicit endorsement of ICRP. Rather, it is a policy exploration of how such programs could best be designed with student interests in mind.

The provincial government must not use an income-contingent loan program to shift a greater proportion of educational cost onto students.

This is an absolutely essential element of any student-friendly ICRP program. OUSA affirms that income-contingent debt repayment, coupled with effective interest control and debt forgiveness, represents a fair means of debt repayment.

However, this discrete economic benefit is severely undermined when used as a means to increase fees. Students are already paying for 44.1 per cent of the cost of their education, well above the OECD and Canadian average for student contribution, at 21.4 per cent and 30.5 per cent respectively.106,107,108 An increase in proportion beyond the current level would only result in higher debt, strain the financial aid system and ultimately impair access to higher education for many students.

In other words, if a government introduces ICRP with the goal of benefiting students through a fairer mechanism of repayment, then OUSA broadly supports the initiative. If, however, the provincial government implements an ICRP with the goal of reducing public investment and increasing student share of cost, OUSA will be categorically opposed.

Any income-contingent loan program must be accompanied by a legislative guarantee that students will never pay for more than 30 per cent of the cost of their education.

Pursuant to the requirement that an ICRP program not be used to increase fees and download cost onto students, OUSA would require a student contribution of no more than 30 per cent of education cost guaranteed by an act of legislature before accepting any income-contingent loan plan.

This level of student contribution puts Ontario closer in-line with both the OECD and Canadian average, and represents what OUSA considers a responsible cost-sharing arrangement for students.

The provincial government has a clear responsibility to educate potential students and parents on any reforms to the student financial aid system.

It is difficult to deny that the prospect of graduate debt as a concept can deter many potential students from accessing university, regardless of the funding, tuition and financial aid embraced by a particular jurisdiction. Even in a free-tuition jurisdiction, students will still need to access assistance. Therefore, debt aversion is a problem in every model of higher education. However, depending on how well the financial aid system is structured, the negative impacts of graduate debt can be greatly ameliorated. If the provincial government is serious about ensuring access through effective financial aid, then they must be prepared to allocate funding towards aggressive multimedia education campaigns directed at high school students and their parents. These campaigns should seek to educate students on the following: 1. How the financial aid system will provide the necessary resources to access university; 2. How the financial aid system will support students during their studies; and 3. How the financial aid system will help students with the repayment of any debt incurred during their studies.

With proper information in the hands of potential students, debt aversion can be eased, and greater access facilitated.

The income-contingent loan program(s) should be funded by the provincial government, but primarily administered through individual institutions.

This measure, similar to South Africa’’s method of loan management, is a means to reduce the overall administrative costs of the ICRP program. By rolling needs-testing and loan disbursement into existing institutional financial aid infrastructure, the need for a centralized administrative structure is largely eliminated. The guiding policy of the program, including such things as student cost assessments and the mechanics of needs-testing, would still be set by a central authority.

An initial investment in high-quality technological infrastructure would also likely be required to ensure an overall low 178

OUR BRIGHT FUTURE

administrative cost of the program. If properly implemented, such an investment would likely pay for itself in program savings in relatively short order.

By reducing administrative costs, money is freed to better subsidize the loan program for student benefit, and to target additional aid at particularly disadvantaged groups of students.

There must be two separate loan programs, one to cover tuition and education expenses, one to cover cost of living, and both supplemented by grants.

Providing adequate financial assistance to students is a complicated undertaking. In order to better cope with this reality, OUSA proposes that the loan program be divided into two separate entities.

The first program would be designed to cover the cost of a student ’s up-front tuition fees. It would be heavily subsidized, with an effective zero interest rate. Like the Australian HECS model, the loan would be indexed to the consumer price index to ensure the maintenance of real value against inflation. There would be no needs-testing on this loan; the money would be available to all students regardless of parental income or personal financial resources.

Participation in this program would not be mandatory. If a student were able to pay up-front, they would be permitted to do so. Likewise, if a student were able to make a partial tuition payment, their loan award would make up the difference.

If a student opted for the income repayment option, the loan would be totally forgiven after 15 years.

The second program would cover student cost of living expenses. Although still subsidized by the provincial government, it would have an interest rate similar to the current OSAP system —prime +1 per cent.109 This loan would be needstested, with the amount of money distributed would be based on an accurate assessment of student cost weighed against the personal income of the student and a reasonable level of parental contribution.

If a student opted for the income repayment option, the loan would be totally forgiven after 25 years.

Both of these programs would be enhanced by a three-tiered system of grants, and additional non-repayable assistance to social groups with low university participation rate. These grants are described below.

Both the education cost and living- ost income-contingent loans must be large enough to provide sufficient funding to cover all reasonable expenses.

In order to be effective, both the tuition and cost of living loans must be large enough to cover student costs.

In the case of the tuition program, this would be relatively easy to calculate. The total cost of tuition would be completely covered by the loan, regardless of program or tuition level.

For the student cost of living program, the appropriate amount of funding would be determined by a student cost assessment that accounted for all reasonable student expenses, as detailed in the Principles section of this paper.

The full amount of the education-cost income-contingent loan should be available to all students regardless of parental income, employment income or any other form of needs-test.

In the present context, tuition is the one cost that cannot be avoided or reduced by students through personal choice.

Therefore, the tuition loan program should not be needs-tested, and should be generally available to all students who wish to access the program.

It is unacceptable that parental or student income requirements prevent an individual from accessing support to pay for the basic cost of university education in Ontario.

Needs-testing must remain a component of the cost of living income-contingent loan.

The ultimate amount of assistance disbursed through this program would be determined by further assessing an individual student ’s level of expected parental support and their personal income and assets against a reasonable assessment of student cost.

This is done to ensure that students do not borrow too much money under the system. Overpayments strain the resources of the system, and may lead to irresponsible student spending while in-study. This frivolousness will become a huge financial liability when a graduate enters repayment.

Students who do not receive the expected level of parental support will be protected by an easily accessible appeals process.

The income-contingent loan programs must be accompanied by a comprehensive, three-tiered system of grants.

In order to control graduate debt and eliminate some of the potential regressive impacts of income-contingent repayment, both loans must operate in concert with a comprehensive system of non-repayable system. This system would include, but not necessarily be limited to, the following: 1. Up-Front Merit-Based Grants. This grant would follow the model of the Alexander Rutherford Scholarship Foundation in Alberta, which provides up to $2,500 in grant money for students who have achieved 80 per cent or above.110 OUR BRIGHT FUTURE

179

2. Debt Remission Grants. The existing Ontario Student Opportunity Grant (OSOG) award should be expanded and applied to both the tuition and cost of living loan programs. Upon completion of their studies and consolidation of their loan, students will be eligible to have a proportion of their loan principle forgiven.

3. Effective Grants. The application of interest subsidization and fixed-term debt forgiveness to income-contingent loan programs results in the provision of effective grants. In other words, they are spending programs aimed at assisting graduates while they are repaying their financial assistance.

However, grants are expensive. Therefore, if one of the goals of the financial aid system is to reach as many students as possible, grants cannot be the only form of financial assistance provided by a student aid program. The money required to provide a given volume of grants should be able to purchase a much greater volume of loans.111 For this reason, a sustainable and broadly accessible financial aid program must be composed of both repayable and non-repayable forms of assistance.

The income-contingent loan program must include specialized grant assistance targeted at vulnerable demographic groups.

Lower income, rural/northern and Aboriginal students typically have a much lower participation rate than other groups in Ontario. In 1997, the last year of known reported data, the participation rate for 18 to 24 year olds from families with incomes of $100,000 or more was double that of individuals from families with incomes of $25,000 or less.112 Total participation for the Registered Indian population has gone from 6.5 per cent in 1996-97 to 5.9 per cent in 2000-01, while the Canadian participation rate is at 11.5 per cent.113,114 The participation rate of rural students living beyond commuting distance from a university (80 kilometres or more) is 11 per cent, less than half of those students who live within 40 kilometres of an institution.115 The reasons for these low participation rates are complicated. However, a key factor limiting university access is the lack of financial resources. While the two loan programs could provide enough funding to attend classes, the prospect of high debt may hamper access. Targeted non-repayable financial assistance towards these groups would help reduce graduate debt by off-setting borrowing. Moreover, up-front grants would also help solve the problem of wage inequities compounding graduate debt. Graduates from groups who, on average, earn less income in the workforce could receive additional debt forgiveness, removing the imbalance between these systemically disadvantaged individuals and their relatively higher-earning counterparts.

Targeted back-end grants could also be applied to help solve the problem of unfair effects stemming from systemic wage inequities. For example, say 15 per cent of all debt is forgiven upon graduation for all students. If women systemically earn 32.5 per cent less than their male counterparts, then their rate of debt remission could be adjusted accordingly.116 Instead of only 15 per cent remission, the female graduate would receive 20 per cent total debt remission.

Students must be able to select from a variety of options the repayment program that works best for them and their unique financial situation.

Students should not be forced into one kind of repayment option. Rather, like the American model, they should be allowed to choose the repayment mechanism that best conforms to their unique financial needs. Therefore, both the tuition and cost of living loan programs should provide several repayment modes including, but not limited to, the following: 1. Conventional loan repayment; 2. Extended conventional loan repayment; and 3. Income-contingent loan repayment.

Further, students would not be compelled to choose their preferred repayment option until they consolidate their loans six months after graduation. By this time, they should have a clearer idea of their financial situation and what repayment option is most attractive.

Any income-contingent loan program must calculate repayments using a progressive scale.

Like the Australian HECS model, repayment of any ICRP loan should be structured like a progressive income tax. In other words, relatively low-earners pay proportionally less of their income than relatively high-earners. This system affords even more protection to graduates with low incomes and adds another level of income-contingency to the program. Such a system may look as follows:

180

OUR BRIGHT FUTURE

Table Five: Sample Progressive Income-Contingent Repayment Scale

INCOME Under $26,000 26,000-$29,000 $29,001-32,000 $32,001-$35,000 $35,001-$38,000 $38,001-$41,000 $41,001-$44,000 $44,001 and above

Proportion of Income for Repayment 0% 2% 3% 4% 5% 6% 7% 8%

A progressive scale would also ensure a higher financial return to the financial aid system, as high earners would be paying back their loan at an accelerated rate with larger monthly payments. This would increase the resources of the assistance program on a yearly basis.

Any income-contingent loan program must have a minimum income threshold of $26,000.

Minimum income thresholds are an important protection for low-earning graduates. By not requiring debt repayment until a certain level, individuals are spared an onerous financial burden until their income rises to a point where monthly payment is more manageable. A $26,000 threshold would place the Ontario ICRP in-line with the proposed British threshold of $34,395 CAD and the Australian level of $22,456 CAD.117 The Ontario ICRP option must also add an additional protection to the minimum income threshold. Under the $26,000 income level, a graduate ’s loan would not accrue any interest charges for a maximum of five years after graduation.

Since income thresholds can result in extended repayment periods for low-earners, it is important to ensure their debt does not grow while they are not in repayment. The five-year cap is intended to prevent abuse of this provision.

Graduates in financial difficulty must be able to apply for partial or no repayment status accompanied by interest relief.

On paper, a graduate may be making sufficient income to repay their loan. However, extraneous financial circumstances such as illness or dependent children may make it impossible for a graduate to make their monthly payments. To avoid default, the individual must be able to apply to make partial or zero payments. While under such a provision, the graduate ’s debt would also not accumulate any interest charges.

At any point, graduates must be able to pay off their entire loan principle without penalty.

If an individual has the financial resources available, they should be allowed to pay off their entire debt without incurring any form of financial penalty. This will allow graduates to extricate themselves from debt immediately if they find themselves in a favourable financial situation.

Any income-contingent loan program must forgive all debt after a fixed period, 15 years for the tuition portion of the assistance package, and 25 years for the student cost of living loan.

It is entirely reasonable that either by circumstance or choice, a graduate will have a relatively low lifetime income. This will lengthen the loan repayment period under an ICRP. Due to interest, this longer repayment term will cost much more in total repayments. Thus, as a primary protection to low-earners, debt under both the tuition and student living cost loan programs must make provision for total debt forgiveness. The tuition portion will carry a maximum repayment term of 15 years, while the student cost of living loan will be forgiven after 25 years.

CONCLUSION In the final analysis, it is possible to design an income-contingent repayment program that actually works for students. As Johnstone notes, “the principle of income contingency makes sense, if only to provide some guaranteed protection to the student borrower who has trouble making loan payments because of low earnings and who does not want to default and incur damage to his or her credit rating. ”118 However, just because it is possible to design a student-friendly program, does ICRP make sense for Ontario ’s students? To answer this question it is important to consider both the discreet benefits of ICRP and the overall political and financial context of Ontario ’s university system. Unquestionably, ICRP makes monthly loan repayments more convenient for students. Further, almost all of the potentially negative aspects are controllable through carefully applied policy measures.

ICRP becomes considerably more problematic when placed within the broader economic and political realities of OUR BRIGHT FUTURE

181

Ontario. In particular, OUSA is concerned about the following: 1. The expense of the program. In order to create a system that ensures the best results for students, a massive up-front investment and additional back-end funding would be required. As private capital is both conceptually undesirable and practically difficult to ensure, this funding would have to come from the public purse. Unfortunately, Ontario is currently experiencing a kind of creeping austerity in the university sector, “occasioned by a natural underlying higher educational cost trajectory, driven by rising unit cost pressures and magnified …by enrolment increases, tending consistently to outrun the likely increase in public revenues. ”119 In an environment of fiscal austerity and a large provincial deficit, OUSA is concerned this investment would pull money away from the funding of institutions already critically short of operating funds. Moreover, the lack of public dollars may lead to the implementation of an ICRP without proper graduate protection and corresponding negative individual impacts, or the rationing of the program leading to overly stringent eligibility requirements and insufficient financial support packages.

2. The persistent problem of wage inequity. As long as entrenched wage inequities continue in Canadian society, it will cause problems in the equity of any income-contingent repayment program. While there are policy measures available to salve this unfortunate circumstance, it is unlikely that the problem will ever be fully eliminated. It is OUSA ’s opinion that current wage inequities are better and more cheaply managed within a conventional loans program.

3. The political problem. Even if the system is introduced within the context of controlled tuition and legislative guarantees, there is still a risk the ICRP will be hijacked by a subsequent government to help shift more cost onto students.

In OUSA ’s opinion, this is an unacceptable risk to bear.

For these reasons, the Ontario Undergraduate Student Alliance has no choice but to recommend against the development and implementation of an income-contingent repayment scheme in Ontario at this time.

Instead, to minimize the negative impacts of debt, OUSA instead proposes a regimen of tuition control, a re-design of the current OSAP conventional loan system and expanded targeted grant assistance for vulnerable demographic groups.

Still, income-contingency may have a place in Ontario ’s financial aid system. In our program for financial aid reform, Funding, Tuition and Student Financial Assistance, OUSA recommends that students be able to make partial repayments on their conventional loans as a form of graduate protection between full repayment and total interest relief. These partial payments could be determined on an income-contingent basis.

Ultimately, income-contingent loan repayment is a controversial and ambitious answer to the problems of university and student finance. However, at this time, it is not the best answer for Ontario students.

182

OUR BRIGHT FUTURE

references 1 Bruce Johnstone. Student Loans in International Perspective: Promises and Failures, Myths and Partial Truths. 2000: http:// www.gse.buffalo.edu/org/inthigheredfinance/publicationsLoans1.html Pg. 1 2 Council of Ontario Universities, The Economic Impact of Ontario ’s Universities. January, 2001. Pg. 4. This amount includes graduates ’ incremental contribution to Ontario ’s tax base, commercialization/transfer of university research, personal expenditures of out-of-province students, institutional expenditures and graduate ’s incremental contribution to charities.

3 A. A. Kubursi, The Economic Impact of University Expenditures. Toronto: Council of Ontario Universities, 1994.

4 TD Economics, Investing in Post Secondary Education Delivers a Stellar Rate of Return. 2004. Pg. 2 5 Higher Education Funding Council for England, Benefits for Higher Education Reach Far Beyond the Job Market. April 2003 6 Nicholas Barr, Financing Education: Lessons from the UK Debate and Elsewhere The Political Quarterly 2003., Pg. 372 7 Martin, Roger L. Investing for Prosperity: Second Annual Report of the Task Force on Productivity, Competitiveness and Economic Progress. November, 2003.

8 Statistics Canada, University Tuition Fees. The Daily August 12, 2003 http://www.statcan.ca/Daily/English/030812/d030812a.htm 9 Based on Council of Ontario Universities Survey of Fees 2003.

10 Stewart, Graeme. Back to School: A System Under Stress. 2003: Ontario Undergraduate Student Alliance.

11 United States Government Accountability Office. Student Consolidation Loans. http://www.gao.gov/highlights/d04843high.pdf.

August 2004 12 International Comparative Higher Education Finance and Accessibility Project, Higher Education Costs Borne by Parents and Students. http://gse.buffalo.edu/org/inthigheredfinance/canada_table.htm.

13 Sarah Schmidt, Fewer Ontario Students getting Provincial Loans, The National Post, Nov. 27, 2002, Pg A4 14 Runzheimer Canada, Student Cost of Living Study. 2003: University of Toronto, Pg. 3.

15 Dr. Bruce Johnstone, Non-Repayable Financial Assistance: The Variety and Cost-Effectiveness of Grants 2004: International Comparative Higher Education Finance and Accessibility Project. http://www.gse.buffalo.edu/org/inthigheredfinance/ publication_Grants%20f%5B1%5D.%20Quebec%20for%20pub%204.04.pdf 16 Ontario Student Assistance Program, Repaying Your Loan http://osap.gov.on.ca/eng/not_secure/repay.htm 17 Ontario Student Assistance Program, Repaying Your Loan http://osap.gov.on.ca/eng/not_secure/repay.htm 18 Canada Millennium Scholarship Foundation, Making Ends Meet: The 2001-2002 Financial Survey. March 2003, Pg. 103 19 Statistics Canada, University Tuition Fees. The Daily September 2, 2004 http://www.statcan.ca/Daily/English/040902/d040902a.htm 20 Ibid.; Pg. 86 21 Office of the Provincial Auditor of Ontario, The Ontario Student Assistance Program. 2003 Annual Report. 2004. http:// www.auditor.on.ca/english/reports/en03/310en03.pdf Pg. 260 22 Johnstone, Pg. 2 23 Canadian Federation of Students, Compromising Access: A Critical Analysis of Income-contingent Loan Repayment Schemes. 2nd Edition. November 1997. Pg. 1.

24 Dr. Bruce Johnstone, The Economics and Politics of Income-contingent Repayment Plans.2001: International Comparative Higher Education Finance and Accessibility Project. http://www.gse.buffalo.edu/org/inthigheredfinance/publications_InCntgntln.html. Pg. 7.

25 Dr. Bruce Johnstone, Cost-Sharing and Equity in Higher Education: Implications of Income-contingent Loans. 2003: International Comparative Higher Education Finance and Accessibility Project. http://www.gse.buffalo.edu/org/inthigheredfinance/ publications_HiEdFiDBJ.html. Pg. 9 26 Ibid,; Pg. 9 27 Ibid.; Pg.10 28 The Economics and Politics of Income-contingent Repayment Plans. Pg. 5 29 Ibid.; Pg. 4 30 Meagan Van Harte, Can Student Loan Schemes Ensure Access to Higher Education? 2002 International Comparative Higher Education Finance and Accessibility Project. http://www.gse.buffalo.edu/org/inthigheredfinance/publications_SASLoans.html. Pg. 1 31 Non-Repayable Financial Assistance: The Variety and Cost-Effectiveness of Grants. Pg. 9 32 Statistics Canada. “Household Income Groups (24) in Constant (2000) Dollars and Selected Demographic Educational, Cultural and Labour Force Characteristics of Primary Household Maintainer (87) for Private Households, for Canada, Provinces and Territories, 1995 and 2000 – 20% Sample Data. ” 2001 Census. Ottawa: Statistics Canada, April 2004.

33 TD Economics, Investing in Higher Education Delivers a Stellar Rate of Return. January 22, 2004. Pg. 1 34 Ibid.; Pg 2.

35 David A. A. Stager, Focus on Fees. 1989: Council of Ontario Universities. Pg. 125 36 Cost-Sharing and Equity in Higher Education: Implications of Income-contingent Loans. Pg. 7 37 Canadian Federation of Students, Compromising Access: A Critical Analysis of Income-contingent Loan Repayment Schemes. 2nd Edition. November 1997. Pg. 42 38 Cost-Sharing and Equity in Higher Education: Implications of Income-contingent Loans. Pg. 4 39 Ibid.; Pg. 10 40 Ibid.; Pg. 10 41 Milton Friedman, “The Role of Government in Education ”. Economics and the Public Interest. Ed. Robert A. Solo. Rutgers University Press: 1955.

OUR BRIGHT FUTURE

183

42 Canadian Federation of Students, Compromising Access: A Critical Analysis of Income-contingent Loan Repayment Schemes. 2nd Edition. November 1997. Pg. 3 43 Ibid.; Pg. 15 44 Ibid. Pg. 16 45 Ibid. Pg. 17 46 The Commission of the Future Development of the Universities of Ontario, Ontario Universities: Options and Futures. 1984: Government of Ontario. Pg. 53 47 Report of the Income Repayment Plan Symposium. 1995. Pg. 3 48 Canadian Federation of Students, Compromising Access: A Critical Analysis of Income-contingent Loan Repayment Schemes. 2nd Edition. November 1997. Pg. 1 49 Statistics Canada, University Tuition Fees. The Daily September 2, 2004 http://www.statcan.ca/Daily/English/040902/d040902a.htm 50 Griffith University, Higher Education Contribution Scheme. http://www.gu.edu.au/vc/ate/content_he_hecs.html 51 Dr. Bruce Chapman, The Australian Perspective. Final Report of the Income Repayment Plan Symposium. 1995. Pg. 14 52 Ibid.; Pg. 14 53 Higher Education Contribution Scheme, Going to Uni: Support for Students —HECS Information 2004. http://www.hecs.gov.au/ pubs/hecs2004/1.html 54 New Zealand Ministry of Education, Student Support in New Zealand. September 2003. Pg. 26 55 Alexander Usher and Sean Junor, The Price of Knowledge: Access and Student Finance in Canada. 2002: Canada Millennium Scholarship Foundation. Pg. 186 56 Chapman, Pg. 13 57 Graham Hastings, From the Crossroads to the Final Act, National Union of Students, January 2004. Pg. 19 58 Ibid.; Pg. 3 59 Higher Education Contribution Scheme, Going to Uni: Support for Students —HECS Information 2004. http://www.hecs.gov.au/ pubs/hecs2004/4.html 60 National Union of Students, Inquiry Into Higher Education Funding and Regulatory Costs of Living. June 2004, pg. 9 61 Ibid.; pg. 9 62 Ibid.; pg. 13 63 Ibid.; pg. 13 64 Dr. Bruce Johnstone, Student Loans in International Perspective: Promises and Failures, Myths and Partial Truths. 2000: International Comparative Higher Education Finance and Accessibility Project. http://www.gse.buffalo.edu/org/inthigheredfinance/publications.html.

Pg. 7 65 Ibid.; Pg. 7 66 New Zealand Ministry of Education, Student Support in New Zealand. September 2003. Pg 14 67 Ibid.; Pg. 14 68 Ibid.; Pg. 14 69 The New Zealand University Students ’ Association, Student Support in New Zealand: The Real Story. 2003. Pg. 4 70 Canadian Federation of Students, Compromising Access: A Critical Analysis of Income-contingent Loan Repayment Schemes. 2nd Edition. November 1997.Pg. 35 71 New Zealand Ministry of Education, Student Support in New Zealand. September 2003. Pg. 18 72 Canadian Federation of Students, Pg. 34.

73 Federal Student Aid. Federal Student Aid Programs. http://www.fafsa.ed.gov/what010.htm 74 Federal Student Aid. Repaying Your Student Loans. http://studentaid.ed.gov/students/publications/repaying_loans/2003_2004/ english/repayment-plans-available.htm 75 Maureen McClaughlin, The United States Perspective. Report of the Income Repayment Plan Symposium. 1995.

76 Dr. Bruce Johnstone, The Economics and Politics of Income-contingent Repayment Plans. 2001: International Comparative Higher Education Finance and Accessibility Project. http://www.gse.buffalo.edu/org/inthigheredfinance/publications_InCntgntln.html. Pg. 1 77 Dr. Bruce Johnstone, Student Loans in International Perspective: Promises and Failures, Myths and Partial Truths. 2000: International Comparative Higher Education Finance and Accessibility Project. http://www.gse.buffalo.edu/org/inthigheredfinance/publications.html.

Pg.7 78 Dr. Bruce Johnstine, Cost-sharing and Equity in Higher Education: Implications of Income-contingent Loans. 2003: International Comparative Higher Education Finance and Accessibility Project. http://www.gse.buffalo.edu/org/inthigheredfinance/publications.html.

Pg. 19 79 Student Loans in International Perspective: Promises and Failures, Myths and Partial Truths. Pg. 7 80 Federal Student Aid, Repaying Your Student Loan: Repayment Plans. http://studentaid.ed.gov/students/publications/ repaying_loans/2003_2004/english/repayment-plans.htm 81 Cost-sharing and Equity in Higher Education: Implications of Income-contingent Loans. Pg. 19.

82 Meagan Van Harte, Can Student Loan Schemes Ensure Access to Higher Education? 2002 International Comparative Higher Education Finance and Accessibility Project. http://www.gse.buffalo.edu/org/inthigheredfinance/publications_SASLoans.html. Pg. 1 83 Ibid.; Pg. 6 84 Ibid.; Pg. 6 85 Ibid.; Pg. 6

184

OUR BRIGHT FUTURE

Ibid.; Pg. 6 Ibid.; Pg. 8 88 Ibid.; Pg. 8 89 Barr, Pg. 371 90 The new system only applies to England and Wales. Scotland and Ireland are exempt, as they administer their own university systems.

91 Department for Education and Skills, Student Finance —New Arrangements. http://www.dfes.gov.uk/studentsupport/students/ new_2006_finance_ar.shtml 92 Ibid.

93 Barr, Pg. 373 94 Ibid.; Pg. 373 95 Cost-Sharing and Equity in Higher Education, Pg. 12.

96 Office of the Provincial Auditor of Ontario, The Ontario Student Assistance Program. 2003 Annual Report. 2004. http:// www.auditor.on.ca/english/reports/en03/310en03.pdf Pg. 260 97 Canadian Federation of Students, Pg. 39 98 Cost Sharing and Equity in Higher Education, Pg. 15 99 Canadian Federation of Students, Pg. 1.

100 Cost Sharing and Equity in Higher Education, Pg. 13 101 Ibid. Pg. 13 102 David A. A. Stager, Contingent Repayment Student Assistance Plans. 1991: Council of Ontario Universities. Pg. 1 103 Canadian Federation of Students, Pg. 34 104 Ibid.; Pg. 35 105 Department of Justice, Pay Equity Review. 2004 http://canada.justice.gc.ca/en/payeqsal/6005.html 106 Council of Ontario Universities, Ontario Universities – 2004 Resource Document. July 2004. Pg. 16 107 The Organization for Economic Co-Operating and Development, Relative Proportions of Public and Private Expenditure on Educational Institutions (1995, 2000). http://www.oecd.org/dataoecd/0/14/14483672.xls 108 COU, Pg. 16 109 Ontario Student Assistance Program, Student Assistance in Ontario: An Overview. April 2003.

110 Alberta Learning Information Service, Scholarships and Bursaries. 2004. http://www.alis.gov.ab.ca/scholarships/info.asp?EK=11 111 Ibid.

112 Corak, Miles, Garth Lipps and John Zhao. Family income and participation in post-secondary education. Ottawa: Statistics Canada Family and Labour Studies Division, October 2003, 11.

113 Ibid, 39.

114 Department of Indian Affairs and Northern Development. “Section 3: Education. ” Basic Departmental Data – 2002. Ottawa: First Nations and Northern Statistics Section, March 2003, 38.

115 Frenette, Marc. Too far to go on? Distance to school and university participation. Ottawa: Statistics Canada Business and Labour Market Division, June 2002, 13.

116 Pay Equity Review.

117 Currency conversions from www.xe.com. September 8th, 2004 118 The Economics and Politics of Income-contingent Loans, Pg. 3 119 Dr. Bruce Johnstone. Responses to Austerity: The Imperatives and Limitations of Revenue Diversification in Higher Education.

2001:International Comparative Higher Education Finance and Accessibility Project. http://www.gse.buffalo.edu/org/inthigheredfinance/ publications.html. Pg. 5.

86 87

OUR BRIGHT FUTURE

185