Solutions: A Vision for Higher Education in Ontario by OUSA

A Vision for Higher Education in Ontario

ONTARIO UNDERGRADUATE STUDENT ALLIANCE

SOLUTIONS A VISION FOR HIGHER EDUCATION IN ONTARIO ONTARIO UNDERGRADUATE STUDENT ALLIANCE NOVEMBER 2007

EDITED BY: PETRA BOSMA, DIRECTOR, RESEARCH AND POLICY ANALYSIS ONTARIO UNDERGRADUATE STUDENT ALLIANCE

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, accountability, 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 130,000 professional and undergraduate, full and part-time university students across the province. OUR VISION AND MISSION OUSA strives to improve the accessibility, affordability, accountability, and quality of undergraduate education in Ontario by: • conducting research to identify issues affecting the accessibility, affordability, accountability, and quality of undergraduate education in Ontario; • developing credible and constructive policy to address these challenges; • lobbying the governments 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 Alma Mater Society, Queen’s University home office staff Executive Director: Chris Locke Director, Research & Policy Analysis: Petra Bosma Director, Communications & Stakeholder Relations: Howie Bender 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

TABLE OF CONTENTS About OUSA Table of Contents Message from the President

2 3 5

Restructuring the Second Pillar: Moving Beyond the Tuition Debate Executive summary Introduction Environmental Scan Principles Concerns Recommendations Conclusion Tuition Policy Statement

7 8 9 9 10 14 17 24 26

Building the Third Pillar: Reforming Ontarioâ&#x20AC;&#x2122;s Student Financial Aid System Executive Summary Introduction The Current System: An Environmental Scan OUSAâ&#x20AC;&#x2122;S System Vision for Student Financial Assistance Principles for the Student Financial Aid System Concerns about the Student Financial Aid System Recommendations Conclusion: An Action Plan for Student Financial Assistance Student Financial Assistance Policy Statement Financial Aid acronyms

29 30 31 32 46 49 55 88 112 113 118

Teaching Quality: A Reassessment of Priorities Executive Summary Introduction Principles Concerns Recommendations Conclusion Teaching Quality Policy Statement

121 122 123 124 128 132 135 137

Early Outreach Programs: Reaching Out Early to Reach Higher Executive Summary Introduction Principles Concerns Recommendations Conclusion Early Outreach Policy Statement Appendix: Early Outreach Programs in Other Jurisdictions

140 141 142 143 144 148 152 153 154

Non-Tuition Related Ancillary Fees Executive Summary Introduction Background: Compulsory, Non-Tuition Related Ancillary Fees, Past and Present Principles Concerns

157 158 159 159 162 165

Recommendations Conclusion Ancillary Fees Policy Statement

168 170 171

MESSAGE FROM THE PRESIDENT In From Access to Influence the Ontario Undergraduate Student Alliance (OUSA) was issued a call to action. As an organization, we were challenged to think and do differently to achieve a single goal: transform ourselves into an organization that goes beyond having good access to politicians at Queen’s Park into an organization that wields real influence over the direction of government’s post-secondary policy-making. We believe a central strategy of achieving this ambitious goal is to aggressively build our capacity to become a ‘thought leader’ in the post-secondary education sector. Being a thought leader will require us to build on our traditional strength of crafting pragmatic policy rooted in research, but it will also require us to do a better job of presenting focused policy recommendations that are actionable and relevant to decision makers at Queen’s Park. From Access to Influence identified that a key barrier to pursuing this strategy is a poor linkage between OUSA policy development and the lobbying agenda being advanced at Queen’s Park. While our lobbying efforts have been driven by a disciplined focus on achieving core priorities, our policy development has been unfocused, venturing into areas of little utility to our advocacy agenda. To overcome this barrier the current Steering Committee team believes that we must apply to our policy development the same winning strategy that has driven our advocacy agenda: a disciplined focus on core priorities. We believe the following policy book, composed of six priority policies, will provide OUSA with the focus it needs to amplify its influence in the government’s post-secondary policy setting in the years ahead. This collection should be viewed as a living and breathing document. While it is our intention for OUSA to pursue th

these policy goals over the entire four-year sitting of the 39 Parliament of Ontario, we also recognize that the social, political and economic climates are always in flux. As such, future Steering Committees and General Assemblies must approach the policy book with a spirit of continuous improvement. It will be the responsibility of future leaders of OUSA to review, amend, and strengthen the document to ensure it continues to reflect political realties, economic conditions, emerging research, and the evolving needs of the students we represent. With this policy book we present our alliance’s common priorities, and we make a solid case for implementing them. Now begins the task of translating our ideas into action in the legislature. We have full confidence we can achieve our agenda, together. On behalf of the Steering Committee,

David Simmonds President, Ontario Undergraduate Student Alliance

policy paper Restructuring the Second Pillar: Moving Beyond the Tuition Debate

October 2007

prepared by: jeff henry, vice president education federation of students, university of waterloo paris meilleur, vice president education university studentsâ&#x20AC;&#x2122; council, university of western ontario edited by: arati sharma, vice president education mcmaster studentsâ&#x20AC;&#x2122; union, mcmaster university

EXECUTIVE SUMMARY This paper is a re-examination of Ontario’s tuition fee cost-recovery model. The Ontario Undergraduate Student Alliance (OUSA) believes that, due to the inadequacies of the current tuition framework, other cost-recovery models must be examined and re-visited by the provincial government. A review of the current system places recommendations for the future tuition framework into four broad categories: Tuition Regulation The Provincial government must remain in control of tuition fees in Ontario. This allows for: control and predictability of student costs, prevention of unfair distortions in fee levels, and stability and efficacy in the financial aid program. Furthermore, the provincial government must not allow tuition fee increases beyond the rate of inflation as measured by the Consumer Price Index (CPI). Accessibility The provincial government must account for all costs associated with education, including but not limited to full tuition and ancillary costs, textbooks and living expenses. Far too often, in calculating the cost of education, essential expenses such as living costs, food, and proximity of the institution are not adequately measured. It is the responsibility of the provincial government to create a comprehensive Student Access Guarantee, which accounts for all costs associated with being a student. Provincial and Federal Government Funding Ontario universities rank second to last in provincial funding; as a result, students in Ontario pay a significantly larger portion of the cost of their education than students in other provinces. To address the inequity between jurisdictions, the provincial government must increase university operating grants to the per student national average. In the event of unplanned enrolment anomalies, the provincial government must also be more responsive in providing operating grants to institutions. As well, the provincial government must annually increase per-student operating grants in a manner that funds the university rate of inflation. The federal government must eliminate the tuition tax credit and provide the additional revenue to the provinces in the form of up-front grant programs, especially for traditionally under-represented groups. Often times the benefits accrued from these tax credits are transferred to parents, guardians or spouses rather than the students themselves. The federal government of Canada must institute a dedicated higher education transfer to the provinces and must work with them to create a Pan-Canadian Accord on PostSecondary Education. Alternative Cost-Recovery Models The provincial government must investigate alternate cost-recovery models for funding post-secondary education. To investigate alternate post-secondary education (PSE) funding cost recovery models, the provincial government must research and consult with stakeholders to identify key elements of models used in other jurisdictions. As well, the government should identify key questions that must be posed to find models that could work in Ontario.

INTRODUCTION Traditionally, debate regarding cost-recovery models for the post-secondary education system in Ontario has focused on tuition fees. Regardless of the size of those fees in relation to provincial operating grants or more directly the total costs of education, the issue has been seen as one of fee levels. When one begins an education cost-recovery debate with tuition, numerous assumptions about what the system looks like have been made: cost-recovered is upfront, responsibility to pay for at least a portion of total costs is borne by an individual seeking a credential, administration of collection occurs at individual institutions, and some will be unwilling or unable to attend unless the fee is somehow ameliorated. The post-secondary system has reflected disturbing trends in recent years: tuition and debt have substantially increased, parents have larger assessed burdens than they can often afford, and institutions are perennially underfunded. Furthermore, faculty-student ratios are on the rise, the government is under constant budgetary pressure, and more jobs require credentials from the system; it is clear to OUSA that there has to be a better way. What is clear is that there is a tangible benefit to the individual from post-secondary education, but there is also a clear benefit to society at large. A more educated workforce provides for a stronger economy, which in turn allows governments to fund programs to promote equitable access to essential public services. Education, then, is a public good benefiting individuals, families, and corporations. This paper will seek to demonstrate how in an education system structured on three pillars of funding, tuition, and access, is out of balance and moving beyond the breaking point. In rebuilding the often-focal second pillar, tuition, it identifies that the provincial government must start envisioning a more fair and progressive system of cost-recovery in PSE. It acknowledges that small fixes to the crumbled pillar of tuition will not be sufficient, but seeks to minimize the damage until the undertaking of rebuilding a more equitable second pillar can be accomplished. ENVIRONMENTAL SCAN In Our Bright Future, OUSA articulated that 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. Aristotle once said, “All who have meditated on the art of governing mankind have been convinced that the fate of empires depends on the education of youth.” This being said, it is now time for the provincial and federal governments to make education a priority in this nation. While the initial recommendation outlined in this policy could entail a fundamental restructuring in the way that education is offered in Ontario, this type of change is not without precedent. Over the course of several decades in the mid- to late nineteenth century, elementary and secondary education in Ontario underwent a profound shift from voluntary and informal education, to a publicly-funded universal system that reached the majority of young people in the nascent province. Ontario played a pioneering role in North America with its creation of a publicly funded primary and secondary school system in the nineteenth century.1 Structural and legislative changes to the education system brought about a great increase in numbers of Ontario children attending school, and the length of time they spent in the education system.

For example, provincial l legislation in 1847 and 1850 encouraged Ontario municipalities to supplement provincial grants to schools with property taxes to eliminate school fees. By 1871 the School Act made the provision of free common schools by each municipality mandatory, and the common term for schools shifted from ‘common schools’ to ’public schools’, with the modern connotation that the schools were not only paid for from public funds, but also with publicly defined goals. Information retrieved from Susan E. Houston and Alison Prentice, Schooling and scholars in nineteenth-century Ontario (Toronto: University of Toronto Press, 1988), ix-x. 1

In 1846, about 50 per cent of children were registered in common schools. By 1876, just three decades later, that figure was 93 per cent.2 Of course, the example from the primary and secondary school system in Ontario does not suggest that a shift in the post-secondary field to a model with no up-front user fees would tread the same path. However, there may be useful lessons to be drawn from it. Ontario continues to see high levels of participation in elementary and secondary education. About 91 per cent of 25to-34 year-olds in Canada have obtained upper-secondary education.3 In 2004/05, the secondary school graduation rate in Ontario was 71 per cent.4 Looking towards the future, it is regularly heard from the provincial government that 70 per cent of all new jobs will require some form of post-secondary education.5 With such a strong numerical comparison between secondary education today and post-secondary education tomorrow, clearly it is time to start rethinking higher education in Ontario so that the system can build the human capital necessary for an economy that will eventually require 70 per cent of the population to acquire a post-secondary education credential. In the current system, the cost of providing a post-secondary education through an institution is done through provincial operating grants, tuition and ancillary fees, and other sources, such as private donations. Taken from a systems view, the province is primarily recovering the costs of education provision through individual and family contributions via tuition and ancillary fees, and from citizens through the progressive taxation system and other government revenue sources. This tuition fee cost-recovery model is but one of many models used around the world and conceiving the debate around cost-recovery as one of the size of tuition fee payments unnecessarily limits the range of options available to the provincial government in designing a post-secondary education system that can meet the economic and social needs of tomorrow. PRINCIPLES Principle One: All willing and qualified students in Ontario must be able to access and excel within Ontario’s system of post-secondary education. Underpinning all other principles related to post-secondary education, this one is of particular importance. Whether for reasons of greater social equality, a more engaged citizenry, or simply to allow individuals to pursue their dreams, all willing and qualified students must be able to access PSE. Given the ultimate goal of a 70 per cent participation rate, more than just getting into the system is important. Students, once accepted into university, must not be deterred or diverted from completing their degree due to financial reasons. Excelling through the system is fundamental to true access, and true access is essential to students in Ontario. For individual Ontarians and the province as a whole to reap the extensive benefits of university education, the doors of the system must be open to everyone with the will and academic preparation to attend. Unfortunately, Ontario faces serious accessibility challenges. Individuals from lower-income backgrounds, aboriginal communities, rural regions, and students with dependents continue to be drastically under-represented in the university system.6 The access statistics paint an unsettling picture of higher education participation for these groups. Alison Prentice, The school promoters: education and social class in mid-nineteenth century Upper Canada (Toronto: McClelland and Stewart, 1977), 19 3 Organization for Economic Co-operation and Development, Education at a Glance 2006 (Paris: OECD, 2006), 2; available from http://www.oecd.org/dataoecd/52/1/37392733.pdf. 4 Ontario Ministry of Education, “McGuinty Government helping more students graduate”, 12 December 2005 (Toronto: Ministry of Education, 2005); available from http://ogov.newswire.ca/ontario/GPOE/2006/12/12/c6405.html?lmatch=&lang=_e.html. 5 Louise Brown, “What will bring students to university?” Toronto Star, 8 February 2006; available from http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1139352619838 &call_pageid=968350130169&col=969483202845 6 Adam Spence and Graeme Stewart, Our Bright Future: A New Vision for Higher Education in Ontario (Toronto: Ontario Undergraduate Student Alliance, 2004), 73-77. 2

Low-Income Ontarians: 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.7 Other statistics note that, by age 19, approximately 50.2 per cent of students from the highest income distribution quartile attend university. In contrast, less than one third of students from the lowest income quartile, 33 per cent, attend university.8 Participation rates for low-income groups increased from the late 1970s to the 1990s, but the percentage difference in participation between the highest income and lowest income quartiles has remained roughly the same. Currently, 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 2000.9 Aboriginal Ontarians: From 1996 to 2001, the post-secondary enrolment rate for Registered Indians aged 17 to 34 averaged 9.5 per cent, while total Canadian enrolment stood at 14.5 per cent.10 Moreover, participation and total enrolment for this group 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 2000/01.11 Total enrolment for Registered Indians and Inuit individuals has also decreased, from 27,172 in 1997/98 to 25,825 in 2001/02 despite an increase of enrolment for the general population over the same period.12 Rural Ontarians: When looking at participation rates and distance to school nationwide, Frenette has noted that 1 in 5 high-school students live more than 80 km from university and are only 58 per cent as likely to attend university.13 In addition, 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.14 Distance and lower family income associated with rural residency are preventing many individuals from advancing into the university system. Students with Dependents: According to recent research by the Canada Millennium Scholarship Foundation, approximately 19 per cent of women between the ages of 20 and 24 have dependent children. However, only four per cent of 20-year-old women attending university reported having a child.15 In 2001, only 12.5 per cent of women who were lone parents in Ontario had a university certificate, degree or other qualifications, compared to the Ontario average of 19.6 per cent.16 Middle-Income Students: There is also growing evidence that rising tuition fees, both concretely and as a percentage of household income, may be squeezing middle-income students out of the university system. According Miles Corak, Garth Lipps and John Zhao, Family income and participation in post-secondary education (Ottawa: Statistics Canada, 2003), 11. 8Mark Frennette, Why Are Youth from Lower-income Families Less Likely to Attend University? Evidence from Academic Abilities, Parental Influences, and Financial Constraints, (Ottawa: Statistics Canada, 2007); accessed online at http://www.statcan.ca.proxy1.lib.uwo.ca:2048/english/research/11F0019MIE/11F0019MIE2007295.pdf 9 Miles Corak, Garth Lipps and John Zhao, Family income and participation in post-secondary education (Ottawa: Statistics Canada, 2003), 2. 10 Department of Indian Affairs and Northern Development, “Section 3: Education,” Basic Departmental Data – 2002 (Ottawa: First Nations and Northern Statistics Section, 2003), 38. 11 Ibid.; 39. 12 Ibid.; 37. 13 Mark Frennette, Access to College and University: Does Distance Matter? (Ottawa: Statistics Canada, 2003), 1. 14 Marc Frenette, Too far to go on? Distance to school and university participation (Ottawa: Statistics Canada Business and Labour Market Division, 2002), 13. 15 David Holmes, Embracing Differences: Post-Secondary Education among Aboriginal Students, Students with Children and Students with Disabilities (Ottawa: Canada Millennium Scholarship Foundation, 2005), 23. 16 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 and Census Agglomerations, 2001 Census - 20% Sample Data,” 2001 Census (Ottawa: Statistics Canada, 2003); 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, 2004). 7

to research conducted 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.17 It is uncertain whether this represents a long-term trend that will continue into this decade. Principle Two: Every Ontarian benefits from post-secondary education, therefore every Ontarian must contribute to its funding. This principle is not an argument for a cost-sharing arrangement wherein students bear the majority of the operating costs through fees. Rather, this principle establishes a broad social responsibility for the maintenance of the university system, from individuals and their families to the provincial and federal governments to the corporate sector that benefits from post-secondary graduates. The challenge for modern educational policy makers is to ensure students never pay a disproportionately high or unsustainable price to attain a university education. Principle Three: The costs of a post-secondary education credential must be recovered by the provincial government in a fair and progressive manner. If the goal of the system is to provide equitable access to post-secondary education to a high percentage of the public, any model of recovering the cost of that system must not simply incorporate a plethora of uncoordinated progressive elements. Instead, it must be designed with fairness and equity as its foundation. The current system, unfortunately, has progressive elements grafted onto it to address unprogressive elements that exist up-front, in-study, and at the back end for students. As just one example, inequity in the current system still exists after graduation for systemically disadvantaged individuals. For example, women systemically earn 32.5 per cent less than their male counterparts.18 As a result, debt repayment can take longer and, with interest, causes the principle cost of education to effectively be higher for women than for men. A fair and progressive system would strive to ensure equality of access and the belief that post-secondary education is an option for all Ontarians regardless of individual circumstances. Principle Four: Public education is a continuum that extends from early learning through to post-secondary education. Public education generates considerable social benefits. In fact, according to Dr. Bruce Johnstone of the International Comparative Higher Education Finance and Accessibility Project, â&#x20AC;?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.â&#x20AC;?19 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.20 They are also more tolerant of people from other ethnic backgrounds and more likely to vote in elections.21 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, â&#x20AC;&#x153;higher education creates benefits beyond those to the individual -- benefits in terms of growth, the transmission of values

Miles Corak, Garth Lipps and John Zhao, Family income and participation in post-secondary education (Ottawa: Statistics Canada, 2003), 33. Final year of reported data is 1997. 18 Government of Canada, Pay Equity Review, (Ottawa: Department of Justice, 2004); available from http://canada.justice.gc.ca/en/payeqsal/6005.html. 19 Bruce Johnstone, 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. 20 TD Economics, Investing in Higher Education Delivers a Stellar Rate of Return, 22 January 2004 (Toronto: TD Economics, 2004), 2. 21 Higher Education Funding Council for England, Benefits for Higher Education Reach Far Beyond the Job Market, (England: Higher Education Funding Council for England, 2003). 17

and the development of knowledge for its own sake… thus, taxpayer subsidies should remain a permanent part of the landscape.”22 In Ontario, responsibility over the instilling of values, the fostering of skills and the building of cultural capital and knowledge in young people falls on at least three different ministries of government, on their parents, and on their communities. To ensure that all children in Ontario are ready to succeed in the knowledge economy of tomorrow, the system of public education must move beyond distinct and separate stages and become integrated, with clear pathways to education. Principle Five: Student control through democratic mechanisms is necessary to ensure accountability of compulsory non-tuition related ancillary fees. According to the Ministry of Training, Colleges and Universities, a compulsory, non-tuition related ancillary (CoNTRA) fee is any fee that “is levied in order to cover the costs of items which are not normally paid for out of operating or capital revenue”.23 In other words, these fees are charged for services and non-academic infrastructure not covered by provincial operating grants or student tuition fees. As university funding began to stagnate in the 1980s and early 1990s, institutions increasingly turned to ancillary fees to cover budget deficits. This led to a marked increase in the level of these charges. After a period of intense lobbying by student groups, new rules governing compulsory, nontuition related ancillary fees were introduced in 1994.24 Essentially, the new regulations empowered student unions to control the level of existing fees and the implementation of new fees through student referenda, student council ratification and a variety of other democratic mechanisms.25 In OUSA’s opinion, this policy has been largely successful. Institutions have not been able to levy irresponsible or otherwise unacceptable ancillary fees on their students, while genuinely useful fees have not been capriciously blocked by student governments. The principles that brought these changes into effect are still factors today. University administration should not have free reign to increase ancillary fees to side-step tuition regulations imposed by government. The control of CoNTRA fees must lie with students as they stand to bear both the costs and the benefits of these fees. Principle Six: The federal government has a responsibility to help fund the university system in Canada. Much like citizens and students, the federal government also has a responsibility and a role in the benefits derived from the university system. Increased tax revenues, economic benefits, and prosperity derived from an educated population are just a few of the key benefits the citizens of Canada as a whole derive from a well-funded, broadly accessible university system. Although Article 91and 92 of the Canadian Constitution limits the ability of the federal government to directly fund institutions, the Canada Social Transfer (CST), research and innovation funding, the Canada Student Loan Program (CSLP), various student-directed granting programs, and the Canada Millennium Scholarship Foundation (CMSF) all provide essential support to the success of the provinces university system.

Nicholas Barr, “Financing Education: Lessons from the UK Debate and Elsewhere,” The Political Quarterly 70, no.3 (2003): 372. Ministry of Training, Colleges and Universities, The Ontario Operating Funds Distribution Manual, (Toronto: Queen’s Printer, 2002), 55. 24 Ontario Undergraduate Student Alliance, Our New Responsibility: Meeting The Guidelines for the New Ministry of Education and Training Policy on Compulsory Tuition Fees (Toronto: Ontario Undergraduate Student Alliance, 1994), 1. 25 Ministry of Training, Colleges and Universities, The Ontario Operating Funds Distribution Manual, (Toronto, Queen’s Printer, 2002), 55-57. 22 23

CONCERNS Concern One: Deregulation of tuition has resulted in significant tuition increases over the last decade, putting at risk the affordability and accessibility of post-secondary education in Ontario. In December 1997, the Ontario government deregulated tuition fees in professional and graduate programs, allowing individual institutions to set the fee levels for the following year. All institutions chose to raise fees substantially, so tuition levels skyrocketed for these programs, particularly high-demand professional programs such as law, medicine, and dentistry. Average tuition rates nearly quadrupled in medical programs, and almost tripled for law degrees.26 Several years onwards, we are beginning to witness the effects of these dramatic tuition hikes. A recent Statistics Canada study of access to professional programs found that enrolment patterns in law, medicine and dentistry had shifted. The proportion of students from high-income families increased, and the proportion from low-income families also increased slightly. However, the proportion of students from middle-income families declined. The report concludes that the rapid and unpredictable tuition hikes incurred through deregulation had the effect of reducing the accessibility of professional programs to students from middle-income backgrounds, which had neither access to sufficient funds nor financial aid.27 As this and other studies demonstrate, deregulation of tuition fees results in rapid and dramatic rises in tuition fees, which have a direct effect on the accessibility of the deregulated programs. One study by Christine Neill has noted that a $1,000 increase in tuition fees results in a two-percentage point decline in university enrolment. 28 To create a higher education system open to all willing and qualified students, tuition fees in any program must be regulated. Concern Two: Ontario universities rank second to last in provincial funding; as a result, students in Ontario pay a significantly larger portion of the cost of their education than students in other provinces. OUSA’s analysis of current tuition fee levels shows that students at Ontario universities pay a much higher proportion of the costs of their education compared to their Canadian peers.29 As of 2004/05, Ontario tuition constituted approximately 45 per cent of the total operating costs of the province’s universities, compared to a 29.6 per cent average for other Canadian provinces.30 Ontario also has one of the highest levels of student contribution in the Organization for Economic Co-operation and Development (OECD), and is well above the OECD average contribution level of 21.4 per cent.31 Over the course of the 1990s and into the 21st century, students have been asked to bear an increasing share of the cost of the university system. Since 1990, the student share of operating revenue has more than doubled, increasing from 21.2 per cent in 1990 to 44.7 per cent in 2004.32 Taken another way, students have already made a huge investment in the university system and should not be expected to continue to contribute even higher financial contributions to the system. Marc Frenette, “Access to professional programs amid the deregulation of tuition fees,” The Daily, 25 September 2005 (Ottawa: Statistics Canada, 2005); available from http://www.statcan.ca/english/research/11F0019MIE/11F0019MIE2005263.pdf 27 Mark Frenette, The Impact of Tuition Fees on University Access: Evidence from a Large-Scale Price Deregulation of Professional Programs (Ottawa: Statistics Canada, 2005).. 28 Christine Neill, “Tuition Fees and the Demand for University Places,” Unpublished memo (Waterloo, Ont.: Wilfrid Laurier University, 2006). 29 In 2001/02, Ontario tuition constituted 44.7 per cent of the total operating costs of the province’s universities, compared to a 30.5 per cent average for other Canadian provinces. Council of Ontario Universities, Compendium of Statistical and Financial Information (Toronto: COU, 2006), 35; available from http://www.cou.on.ca/content/objects/Compendium%202004-051.pdf. 30 Ontario Universities Resource Document-2007, “Percent University Operating Income by Source of Income- Provincial Comparison,” (Toronto: COU, 2007), 15. 31 Organization for Economic Co-operation and Development, Relative Proportions of Public and Private Expenditure on Educational Institutions (1995, 2000) (Paris: OECD, 2003); available from http://www.oecd.org/dataoecd/0/14/14483672.xls. 32 Council of Ontario Universities, Ontario Universities - 2004 Resource Document (Toronto: COU, 2004), 16. 26

While the Ontario government has made significant funding commitments to higher education, the proportion of student contribution to universities’ operating budgets remain out of line with other provinces and many other countries. Given rising student-faculty ratios, this disproportionate contribution has also failed to deliver a higher quality education. Concern Three: The system of upfront payment of education costs through an overly complex structure of family and personal contributions, tax credits, loans, and grants is confusing, inefficient, and leaves those without the ability to pay up front with sizeable debt loads. While the financial aid system offers assistance to many students with monetary need and works to reduce the barriers to accessing post-secondary education, it is not achieving these goals in the most successful or efficient way. The current system is a mix of tax credits, loan programs, and grants that are not effectively or efficiently meeting the needs of students. There are serious failings in the student assistance system, which often fails to accurately assess financial need, does not provide sufficient amounts of aid, and leaves graduates with huge debt burdens. The biggest expenditure on “student financial aid” in Canada is not loans or grants, but untargeted initiatives such as tax credits and savings programs that are available to anyone regardless of income or need, and cost taxpayers over $2.5 billion per year.33 The most recent data reflects that $26 million in Ontario was targeted and needs based. However, $245 million was untargeted needs based and $115 million was non-need based. Increasingly, aid is untargeted and non-need based.34 Governments spend over $1.7 billion on education-related tax credits for students, and new tax credits were announced by the federal government and several provinces over the past year. Yet this money does not go to students in need – only 31 per cent of tax credits are used by students while they are studying. Instead of loans or tax credits, OUSA believes that grants are the most effective way of reducing student debt and increasing access for students from under-represented groups. For OUSA’s comprehensive review of Student Financial Aid, please see Building the Third Pillar: Reforming Ontario’s Student Financial Aid System. Concern Four: Differentiated program tuition fees adversely affects student enrolment and future career choices. At present, tuition fee levels for different programs are in part based upon the expected job prospects and income of graduates in each program. When the provincial government announced in 1997 that tuition fees for professional and graduate programs in colleges and universities would be deregulated, part of the rationale was that students in these programs would be able to bear higher costs. As then-Finance Minister Ernie Eves noted to the legislature, for some of these programs, “job opportunities for graduates are virtually guaranteed and income after graduation is substantial”.35 OUSA’s concern about this implicit assumption in tuition-setting policy is that it assumes that students in these programs all successfully reach graduation and obtain high-paying employment. However, for a range of reasons, not all students acquire these financial benefits from their education, but are nonetheless levied higher levels of tuition than students in other programs.

R. Finnie, S. Schwartz, and E.Lascelles, “Smart Money?’ Government Spending on Student Financial Aid in Canada,” How Ottawa Spends, Ed. G. Bruce Doern, (Don Mills, ON: Oxford University Press, 2003), 155-171 34 Sean Junor and Alex Usher,“The End of Need-Based Student Financial Aid in Canada?” Educational Policy Institute, (Toronto: EPI, 2007), 47 35 Ontario Ministry of Finance, “Statement to the legislature by The Honourable Ernie Eves, Q.C., Minister of Finance on the 1997 Ontario Economic Outlook and Fiscal Review” (Toronto: Ministry of Finance, 1997); available from http://www.fin.gov.on.ca/english/budget/fallstatement/1997/97fs-st.html. 33

Furthermore, research on the perception of educational costs and benefits has found that individuals from lowerincome backgrounds tend to overestimate the cost of obtaining a post-secondary qualification, while underestimating the financial benefits typically accrued over a lifetime of higher earnings.36 These findings suggest that low-income Canadians in particular may be less likely to pursue a high-cost education, given the tendency to under-estimate potential financial benefits. The choice to enter a particular program can also be affected by differentiation of tuition based on program of study. A Statistics Canada study of access to professional programs found that enrolment patterns in law, medicine and dentistry had shifted. The proportion of students from high-income families increased, and the proportion from lowincome families grew slightly. However, the proportion of students from middle-income families declined.37 After graduating from a program, debt loads and the necessity of earning large income may also demand graduates choose higher paying private jobs rather than lower paying jobs at not-for-profit corporations and non-governmental organizations. Concern Five: Compulsory non-tuition related ancillary fees have increased substantially over the last 15 years in part to compensate for shortfalls in provincial operating grants. According to Statistics Canada, ancillary fees have increased approximately 90 per cent between 1993 and 2002, with the majority of those increases occurring in the five year period between 1997 and 2002.38 From year to year, ancillary fees increases have varied in increase. For example, students returning to school in 2007/08 saw a 3.1 per cent increase in ancillary fees in comparison to the year before.39 These increases have amounted to ancillary fees accounting for roughly 15 per cent of the total amount of tuition. Compulsory fees in Ontario, in 2007/08 were $701 on average, which is more than 25 per cent higher than in 2001/02.40 While ancillary fees have proven to be a large cost to students, the services that they fund are often vital programs, such as health counselling and athletics and recreation. However, a balance must be struck. Although these services are important, ancillary fee levels should not become a barrier to the entrance of or the continuation of higher education. These fees must also not be used to compensate for shortfalls in provincial operating grants to fund such essential services. Concern Six: Calls have been made to remove control over compulsory non-tuition related ancillary fees from students. During recent stakeholder consultations regarding a new tuition fee framework in Ontario, the Council of Ontario Universities (COU) recommended that the approval of CoNTRA fees be removed from the purview of students.41 Dr. Ross Paul, current chair of the COU stated in his opening remarks, “As part of a general tuition policy framework, all

Alex Usher, “A little knowledge is a dangerous thing: how perceptions of costs and benefits affect access to education,” Educational Policy Institute (Toronto: Educational Policy Institute, 2005); available from http://www.educationalpolicy.org/pdf/littleknowledge.pdf. 37 Mark Frenette, The Impact of Tuition Fees on University Access: Evidence from a Large-Scale Price Deregulation of Professional Programs, Analytical Studies Branch Research Paper Series (Ottawa: Statistics Canada, 2005). 38 Sean Junor and Alex Usher, The Price of Knowledge 2004: Access and Student Finance in Canada (Montreal: Canadian Millennium Scholarship Foundation, 2004), 123. 39 Joseph Berger, Anne Motte, and Andrew Parkin, The Price of Knowledge 2006: Student Costs and Resources (Montreal: Canada Millennium Scholarship Foundation, 2006) 5. 40 Statistics Canada, “University Tuition Fees,” The Daily, 18 September 2007 (Ottawa: Statistics Canada, 2007); http://www.statcan.ca/Daily/English/071018/d071018b.htm. For 2001/02 data concerning additional compulsory fees, please see Statistics Canada, “University Tuition Fees- Data Revision,” The Daily, 9 September 2002 (Ottawa: Statistics Canada, 2002); http://www.statcan.ca/Daily/English/020909/d020909a.htm 41 Council of Ontario Universities, “Tuition Framework Stakeholder Meeting: Notes for Dr. Ross Paul, Chair, Council of Ontario Universities,” 20 July, 2005 (Toronto: COU, 2005). 36

Ontario universities strongly recommend that governing bodies once again be permitted, after consultation with students, to set ancillary fees.”42 Governing bodies have few student voices, and university ‘consultations’ with students regarding tuition levels in deregulated programs yielded dramatic tuition increases. Given institutions’ penchant for increasing tuition at unprecedented rates in deregulated programs, it is not beyond the pale to posit that CoNTRA fees would increase at similar rates if they are placed entirely under the jurisdiction of university administrations. Concern Seven: The current cost-recovery model is unsustainable and inefficient without a well-researched and apparent solution. In a system where student to faculty ratios are high and have been increasing, infrastructure is crumbling without end in sight, and university and student budgets alike are beyond the breaking point, it is hard to imagine how the system could sustain itself at a much higher rate of 70 per cent of the eligible population. Despite a consensus that such a participation rate will be necessary, there has been despairingly little research published or pursued that would indicate how the system will need to evolve in order to meet the educational needs of students to serve the economic and social needs of Ontario. RECOMMENDATIONS Given the inadequacies of the current tuition fee cost-recovery model employed by the provincial government, OUSA believes there is a necessity in re-examining the fundamental structure and elements of the post-secondary education system. Unfortunately, the lack of current research does not allow specific recommendations to be made to overhaul the system. The recommendations being presented by OUSA will focus on changes that need to be made to the system, and open up the discussion for a new tuition fee cost-recovery model in Ontario. Rethinking Tuition and Funding Recommendation One: All tuition must remain regulated by the provincial government. In conceiving the current tuition framework in the current up-front cost-recovery model, the provincial government rightly decided in 2006 to regulate tuition fees. It is OUSA’s firm belief that the provincial government is in the single best position to control tuition fees in Ontario. As an objective third party, the province can balance competing stakeholder demands and build a system which is accessible, affordable, and able to offer the highest quality education. This is not an argument for absolutist central planning within the university sector. Rather, the provincial government should implement various safeguards and limits to institutional tuition fees, as opposed to dictating absolutely uniform fee levels across institutions and programs. From OUSA’s perspective, there are four compelling reasons why government must continue to retain control over all tuition fees in Ontario: 1. Control Student Cost. Tuition is the single largest expense faced by students, so fluctuations in fees 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 approximately $24, 047.43

Ibid. Joseph Berger, Anne Motte, and Andrew Parkin, The Price of Knowledge 2006: Student Debt: Trends and Consequences (Montreal: Canada Millennium Scholarship Foundation Canada Millenium Scholarship Foundation), 3. 42 43

As disturbing as these figures are, the situation is much worse in deregulated programs. Tuition has more than tripled, rising 261 per cent since 1993. For example, in medicine and dentistry, tuition fees increased, from 1995/96 to 2001/02 by 241 per cent and 315 per cent, respectively. In law, tuition fees also increased markedly, by 141 per cent.44 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, lower participation in higher education by socio-economically disadvantaged groups remains a persistent problem in Ontario. The increase in fees has already had notable impacts on the accessibility of deregulated programs. A study conducted by the Social Programs Evaluation Group at Queen’s University of accessibility at Ontario’s six law schools 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.45 Decreases in enrolment were also seen for students from French-speaking backgrounds and from Northern Ontario.46 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 his or her student loans. Worst of all, student debt unfairly penalizes those least able 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 $350.47 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 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. Ensure the predictability of student cost. In order to plan 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 a plan to finance his or her education. Moreover, once a student is in study, a sharp increase in tuition could well push university beyond his or her financial reach, forcing his or her withdrawal from the program. Total fee regulation is necessary to ensure 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. 3. 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 deregulation has occurred. Consider, for example, the case of law tuition. Under the Basic Income Unit (BIU) formula used by the provincial government to determine university operating grants, 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 an arts student. 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 used to shore up the operating budgets of other departments. 44Kathryn

McMullen, Tuition fee deregulation: Who pays? (Ottawa: Statistics Canada, 2006); available from http://www.statcan.ca/english/freepub/81-004-XIE/2006001/tcosts.htm 45 Social Program Evaluation Group, Study of Accessibility to Ontario Law Schools. (Kingston, ON: Queen’s University, 2004); available from http://www.law.uwo.ca/mainSite/info-news/AccessibilityExecutiveSummary.pdf 46 Ibid. 47 Ontario Student Assistance Program, “Repaying Your Loan” (Toronto: OSAP, 2007); available from http://osap.gov.on.ca/eng/not_secure/repay.htm.

OUSA believes the practice of extreme tuition differentiation for the purpose of leveraging additional revenue beyond program costs in unfair to students. Full regulation within a new tuition fee structure would eliminate this inequity. 4. 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 student-friendly, financial aid programs must make provisions for accompanying grant assistance, interest rate controls, interest relief, debt reduction and 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 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 2003.48 Students in certain professional programs faced drastic increases: medicine increased by 241 per cent, dentistry by 315 per cent, and law by 141 per cent.49 Currently, these students pay approximately $14, 853, $17, 525, and $12,250 respectively.50 Until the 2005/06 school year, the maximum financial aid package was frozen at its 1994 level of $9,350. While the maximum loan limit is now $11,200, this amount is still inadequate in accounting for the huge costs associated with deregulated programs. 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 unregulated 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 regulated fees.51 Recommendation Two: Tuition fees must not increase beyond the rate of inflation as measured by CPI. While tuition regulation is essential during the interim period before new models of cost-recovery can be considered and potentially implemented, regulation alone could continue to shift more of the financial burden of education onto students and undermine the effectiveness of the financial aid system. Under the current regulated tuition fee framework, increases to the base fee can increase by 4.5 per cent in lower cost programs such as arts and science and can increase as high as 8 per cent in additional cost-recovery programs such as engineering, commerce, law, and medicine. The most recent statistics reveal that, the university rate of inflation far exceeds the Consumer Price OUSA calculations based on data from Statistics Canada, “University Tuition Fees”, The Daily, August 12, 2003 (Ottawa: Statistics Canada, 2003), accessed online at http://www.statcan.ca/Daily/English/030812/d030812a.htm; Council of Ontario Universities Survey of Fees 2003; Statistics Canada, “University Tuition Fees”, The Daily, September 2, 2004; accessed online at http://www.statcan.ca/Daily/English/040902/d040902a.htm. 49 Mark Frenette, Summary of: The Impact of Tuition Fees on University Access: Evidence from a Large-scale Price Deregulation in Professional Programs (Ottawa: Statistics Canada, 2005), 3. 50 Numbers are estimated calculations based on high and low numbers from each institution and the average number generated between the two. Generated from Council of Ontario Universities, Facts and Figures: 2006 (Toronto: COU, 2006), 5-26. See also, Graeme Stewart, Back to School: A System Under Stress (Toronto: OUSA, 2003). 51 United States Government Accountability Office, Student Consolidation Loans (Washington: US Government Accountability Office, 2004); available from http://www.gao.gov/highlights/d04843high.pdf. Canadian statistics reveal that approximately “26 per cent of post-secondary borrowers who consolidated their loans at the end of the 2001-02 academic yeart had defaulted within three years” Found in Joseph Berger, Anne Motte, and Andrew Parkin, The Price of Knowledge 2006: Student Debt: Trends and Consequences (Montreal: Canada Millennium Scholarship Foundation Canada Millenium Scholarship Foundation), 9. 48

Index (CPI). CPI for 2006/07 was approximately 2.1 per cent.52 In contrast, the university rate of inflation for 2006/07 was approximately 4.3 per cent.53 Inflation must be measured by CPI and not the university inflation rate as presented by the Council of Ontario Universities. It is important to remember that while the costs at universities increase at a rate higher than CPI, the ability of students to contribute to the system is at best limited to CPI. By keeping tuition increases to CPI, the provincial government maintains the value of the student investment while simultaneously allowing public investment to catch up. Recommendation Three: The Student Access Guarantee must account for all reasonable costs of education, including but not limited to full tuition and ancillary costs, technology, textbooks, and living expenses. In the tuition framework announced in March 2006, the provincial government announced the creation of a ‘Student Access Guarantee’, promising that no qualified Ontario student would be prevented from attending a public university or college in the province. In order for a university to raise their tuition, they must participate in this guarantee. As of October 2006, the provincial government has begun to release more guidelines for institutions to follow on the implementation of the guarantee. The 2006/07 was an interim year for the Student Access Guarantee, where institutions themselves set out how they would fulfill two principles: 1. No qualified Ontario student should be prevented from attending Ontario’s public colleges and universities due to lack of financial support programs; 2. Students in need should have access to the resources they need for their tuition, books, and mandatory fees.54 Under the guarantee, students are expected to apply to OSAP, and their parents will still be expected to contribute to their child’s education. It is the responsibility of institutions to provide any additional resources to meet the costs of tuition, books, and fees, which are not provided by OSAP. The provincial government is allowing this unmet need to be provided through bursaries, scholarships, work-study positions, and employment between terms. For students in second-entry programs, including law, medicine, and some business programs, the institution can also meet their responsibilities by providing students access to a bank line of credit.55 While the creation of the guarantee was a significant gesture, OUSA has several concerns about its substance, as it currently stands. The first concern is that the provincial government is only guaranteeing students access to resources to fund their tuition, books, and mandatory fees. This ignores the existence of significant costs for living expenses. So while students can be assured that they will have sufficient resources to pay their university’s tuition, they may lack the funds to pay rent or buy groceries. This is a significant omission that impacts students’ day-to-day lives. Furthermore, for students in higher-cost second-entry programs, the access guarantee will likely mean access to more private bank debt, as institutions simply assist them in arranging bank lines of credit in order to fulfill the guarantee.

Statistics Canada, The Daily, “Consumer Price Index,” 19 June 2007 (Ottawa: Statistics Canada, 2007); available online from http://www.statcan.ca/Daily/English/070619/d070619a.htm. 53 Statistics Canada, “University Tuition Fees,” The Daily, 18 October 2007 (Ottawa: Statistics Canada, 2007); available online at http://www.statcan.ca/Daily/English/071018/d071018b.htm. 54 Ministry of Training, Colleges and Universities, Student Support Branch, “2006-07 Student Access Guarantee Guidelines”, (Toronto: MTCU, September 2006), 1. 55 Ibid, 4 52

Recommendation Four: At a minimum, the provincial government must increase university operating grants to the per student national average. Even after increased funding of approximately $900 million from 2002-03 to 2006-07 in response to Reaching Higher, Ontario is still outpaced in provincial operating grants provided to universities on a per-capita basis in relation to other jurisdictions in Canada.56 The Ontario government has provided the lowest levels of funding per capita of all the provinces, and has remained in the bottom place for ten years. The funding gap between Ontario and its peers is illustrated in the following chart: Figure One: Provincial Operating Grants Per Capita, 1989-200557

Increasingly, Ontario also measures its success on an international level, particularly against peer jurisdictions in the United States. Compared to peer American institutions, the Council of Ontario Universities found that Ontario universities had 24 per cent less revenue available, when comparing purchasing power.58 In order to remain competitive, Ontario will need to raise its per-student funding levels to match its peer jurisdictions. At the very least, it must compete with other jurisdictions in Canada by raising university operating grants to the per student national average. Recommendation Five: The provincial government must be more responsive in providing operating grants to institutions in the event of unplanned enrolment anomalies. Before the recent re-investment in post-secondary education, the university funding formula allowed for a phenomenon known as the “unfunded BIUs”, which saw universities have more students than they were funded to accommodate. In committing to funding these “unfunded students” in Reaching Higher, the province neglected to correct the underlying problem with the BIU funding model. Instead of determining a value of the Basic Income Unit and multiplying it by the number of students in the system (as calculated in BIUs) to determine the overall provincial funding level, the province continues to take the overall provincial funding level, divide it over the number of students in the system (as calculated in BIUs) and arriving at a value for the BIU. As a result, with 86,000 new students in universities since 2003 instead of the 50,000 new students projected by the province, the value of BIUs and therefore the per-student funding level in Ontario has decreased. In 2006-07 alone, there were 14,000 more students in the post-secondary university than projected under the Reaching Higher plan.59 Council of Ontario Universities, Resource Document-2007 (Toronto: COU, 2007), vii. Council of Ontario Universities, “Ontario’s Investment in Universities Relative to Other Jurisdictions” (Toronto: COU, 2007); available from http://www.cou.on.ca/content/objects/COUFundingComparisons2007Feb6_rev.pdf 58 Ibid. 59 Council of Ontario Universities, “Ontario budget provides $210 million to alleviate immediate cost pressures” (Toronto: COU, 2007); available from http://www.cou.on.ca/content/objects/COU%20Press%20Release%20on%20Provincial%20Budget%202007Mar23.pdf 56 57

The province provided $210-million in the 2007 Ontario budget to alleviate immediate cost pressures, but this funding came at the end of the universities fiscal year and was one-time only.60 In the future, the provincial government will still need to fund these students on an on-going basis and will need to be more responsive to unanticipated enrolment anomalies outside reasonable enrolment projections and institutional admissions policies. Recommendation Six: The provincial government must annually increase per-student operating grants in a manner that funds the university rate of inflation. In the 2005 provincial budget, the McGuinty government announced historic re-investment in higher education. Under the budget plan, the government will increase university operating grants by an average of six per cent per year until 2009/10 under constant enrolment.61 After a decade of government neglect, students and universities universally applauded the re-investment. However, in order to ensure that the promise of Reaching Higher is not eroded by inflationary pressures at universities, it is essential that on an annual basis, operating grants on a per-student basis must be at least indexed to cover university inflation. University inflation is usually increasing at a higher rate than CPI due to different cost drivers, including salary costs and high cost technological equipment. Given students cannot reasonably be expected to cover more than a CPI calculation of inflation, this will ultimately require the provincial government to cover both university inflation on the traditional provincial contribution portion and the difference between university inflation and CPI on the traditional student contribution portion. Recommendation Seven: Students must retain control of compulsory, non-tuition related ancillary fees at every Ontario university. The end of student control over non-tuition related expenses would negatively affect accountability, as institutions would be able to hide tuition charges in non-tuition related ancillary fees. Student partnership in Ontario’s fee structure would also be seriously damaged, as an area of effective student input and control would be eliminated. Moreover, if the elimination of student control led to an increase in non-tuition related fees, then the overall accessibility of the university system may be impaired. As such, OUSA strongly recommends the 1994 protocol remain in effect and students continue to control ancillary fees in Ontario. Recommendation Eight: The federal government must eliminate the tuition tax credit and provide the additional revenue to the provinces on top of a base for investment in grant programs for traditionally underrepresented groups. 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:62 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

Ibid. Government of Ontario, Reaching Higher: The McGuinty Government Plan for Postsecondary Education- 2005 (Toronto: Gov. of Ontario, 2005). 62Ross Finnie, Alex Usher and Hans Vossensteyn. “Meeting the Need: A New Architecture for Canada’s Student Financial Aid System,” Policy Matters 5, no.7 (2004): 14. 60 61

almost 40 per cent of all their student financial aid dollars in the form of education-related tax credits.”63 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.”64 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 underrepresented groups. This reform will ensure that individuals who cannot pay for higher education receive the funding they need while students who are in a more favourable financial situation make a more appropriate contribution to the university system. Recommendation Nine: The federal government of Canada must institute a dedicated higher education transfer to the provinces and must work with the provinces to create a Pan-Canadian Accord on PostSecondary Education. The underpinning of this paper has been the projection that 70 per cent of new jobs will require post-secondary education in Canada and the growing dialog coming out of the federal and provincial governments regarding competitiveness, specifically the economic rise of India and China. Given those challenges, the need for a national strategy on post-secondary education with the funding to match the goals is almost undeniable. The student financial aid system in particular has many players filling many overlapping roles causing confusion, duplication, and a general lack of transparency and accountability. The first ministers must hold a meeting specifically on this issue and hammer out a Pan-Canadian Accord on Post-Secondary Education and ensure financial resources are provided to meet the challenge of high post-secondary participation in Canada. Though the task seems jurisdictionally daunting, it is also important to remember that it has happened before. In splitting the Canada Health and Social Transfer (CHST) into the Canada Health Transfer (CHT) and Canada Social Transfer (CST) in 2003, the federal government negotiated the Health Care Renewal Accord with the provinces. It was struck in response to calls from the first ministers to improve “the transparency and accountability of federal support to provinces and territories.”65 The plan has provided not only greater transparency and accountability, but also increased investment of $17.3-billion over the last three years with an additional $17.5 billion in growth funding over the next two.66 The Social Union Framework Agreement (SUFA) of 1999 between all constitutionally recognized levels of government was also crafted under guiding principles of equality, access to social programs and services of reasonably comparative quality, and sustainable, stable funding. The same can be done for post-secondary education with sufficient political will, and the provincial government must continue to push this issue relentlessly with the federal government. Without the investment and the strategy, it would be difficult for the province to fund the changes to the system that are necessary, and Ottawa needs to come to the table to assist the re-visioning of post-secondary education to meet the demands of a globalised knowledge economy. Recommendation Ten: The provincial government must investigate alternate cost-recovery models for funding post-secondary education. The current system does not just contain a complex structure of student assistance, but also an unsustainable and illdesigned up-front cost-recovery system for the high participation rates envisioned for the future. In the Throne Speech following the 2003 provincial election, the incoming provincial government promised that it would, “…put in Ibid.; 16 Ibid.; 16. 65 Government of Canada, The Budget Plan 2003: Building the Canada We Want (Toronto: Queen’s Press, 2003). 66 Ibid. 63 64

place a long-term plan that ensures the quality and accessibility of higher education for generations to come.”67 The provincial government, however, has not provided any indication of how it will accommodate the future influx of students and addressing this increase is imminent. In undertaking an investigation of alternate cost-recovery models for funding post-secondary education, the provincial government must, through research and consultation with stakeholders, identify: Core elements of the various cost-recovery models employed in other jurisdictions Key questions needing to be posed in identifying models that could work in Ontario To carry out a successful investigation, the provincial government should consult thought-leaders on post-secondary education both here and abroad, and should particularly employ the Higher Education Quality Council of Ontario in the effort. With only an initial and cursory glance at various alternative models, OUSA has identified the following elements that should be considered by the provincial government: 1. Advance legislation which supports responsible cost-sharing in which a student contributes to his or her education but is not forced to shoulder unbearable financial burden. In addition, the government commits to funding a certain percentage of the student’s educational cost.68 2. Elimination of up-front costs (tuition) such that students would “go now, pay later” in a progressive, equitable, and fair manner. 3. An understanding of higher education as part of a comprehensive K-14 or K-16 strategy with high participation and timely completion of credentials. 4. Needs-assessment for other costs of education such as living expenses, textbooks, and transportation through an equitable student financial aid system. 5. Full-cost assessments for international students with refunds against the progressive tax system should they continue to reside and work in Canada after receiving a credential in Canada. The key questions that would need to be addressed so that OUSA would know whether any model could exist in Ontario are as follows: 1. At what additional levels and with what adjustments to tax brackets such a model would require? 2. How would the model provide sufficient incentives for students to complete degrees in a reasonable time with fair exceptions for extenuating circumstances? 3. How would the model differentiate between undergraduate programs and second-entry programs and/or graduate school, if at all? 4. How would the cost of educating international students be recovered, including if they continued to reside and work in Canada after receiving a credential? 5. How would the model address cost-recovery discrepancies associated with wage inequities for systemically disadvantaged groups 6. Could the system be transitioned from the current model to the potential alternative model? CONCLUSION From analysing the system as it stands, one thing is abundantly clear: it is not working for students nor will it continue to work for the province if it hopes to reach a 70 percent participation rate. To that end, it is critical that the provincial government begin visioning and investigating alternative cost-recovery models for funding post-secondary education.

James K. Bartleman, “Strengthening the Foundation for Change,” Speech from the Throne 20 November 2003. In a responsible cost-sharing situation, for example, the student could contribute 30 per cent of the finances for all education related costs (this includes accommodations, living costs, tuition fees, ancillary fees, etc.) and the two levels of government negotiate adequate distribution of funds to meet the additional 70 per cent of costs.

67 68

In the interim, the provincial government must ensure that the student contribution to the system does not continue to increase above the rate of inflation, that institutions receive the necessary funding to cover their inflationary needs, and that all students in the system are funded and have access to an effective financial aid system. Ontario must also provide per-student funding at least at the national average if it hopes to compete at home, let alone abroad. To rebuild the second pillar, the provincial government must look beyond the next election and secure the sustainability of public post-secondary education for the next generation. For Ontario to truly be a leader in learning in the globalised knowledge economy of the 21st century, envisioning a sustainable system to support the education generation must begin today.

tuition policy statement WHEREAS all willing and qualified students in Ontario must be able to access and excel within Ontarioâ&#x20AC;&#x2122;s system of post-secondary education. WHEREAS all those who benefit from the post-secondary education system must contribute to funding it. WHEREAS public education is a continuum that extends from early learning through post-secondary education. WHEREAS the provincial government must annually increase per-student operating grants at least at the university rate of inflation. WHEREAS the provincial government must increase university operating grants to the per student national average. WHEREAS the provincial government must fully fund all currently unfunded students in the university system. WHEREAS the federal government of Canada must institute a dedicated higher education transfer to the provinces and must work with the provinces to create a Pan-Canadian Accord on Post-Secondary Education. WHEREAS the provincial government must implement an effective financial aid system. WHEREAS deregulation of tuition has resulted in significant tuition increases over the last decade, putting at risk the affordability and accessibility of post-secondary education in Ontario. WHEREAS the prospect of 70 per cent participation rates in post-secondary education means the current system is unsustainable and inefficient without a currently apparent solution. WHEREAS differentiation of tuition on a program basis based on perceptions of future income is inaccurate, dissuades enrolment by low-income students, and may negatively affect career choices. WHEREAS students in Ontario pay a significantly larger portion of the cost of education than students in other provinces. WHEREAS compulsory non-tuition related ancillary fees have increased substantially over the last 10 years. WHEREAS calls have been made to remove control over compulsory non-tuition related ancillary fees from students. WHEREAS the current cost-recovery model is unsustainable and inefficient without a well-researched and apparent solution. WHEREAS the system of upfront payment of education costs through a complex structure of family and personal contributions, loans, and grants is confusing, inefficient, and leaves those without the ability to pay up front with sizeable debt loads. BIFRT all tuition must be regulated by the provincial government. BIFRT tuition fees must not increase beyond the rate of inflation as measured by CPI.

BIFRT the Student Access Guarantee must account for all reasonable costs of education, including full tuition costs, textbooks, and living expenses. BIFRT the provincial government must increase university operating grants to the per student national average. BIFRT the provincial government must fully fund all currently unfunded students in the university system. BIFRT the provincial government must annually increase per-student operating grants at least at the university rate of inflation. BIFRT students must retain control of compulsory, non-tuition related ancillary fees at every Ontario university. BIFRT 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 traditionally underrepresented groups. BIFRT the federal government of Canada must institute a dedicated higher education transfer to the provinces and must work with the provinces to create a Pan-Canadian Accord on Post-Secondary Education. BIRFT the provincial government must investigate alternate cost-recovery models for funding post-secondary education from the current up-front tuition fee mode

policy paper Building the Third Pillar: Reforming Ontarioâ&#x20AC;&#x2122;s Student Financial Aid System

October 2007

prepared by: jennifer chan, director of research and policy analysis ontario undergraduate student alliance edited by: david simmonds, president ontario undergraduate student alliance vice president education, university studentsâ&#x20AC;&#x2122; council university of western ontario lauren mcniven, vice president university affairs wilfid laurier university studentsâ&#x20AC;&#x2122; union, wilfrid laurier university

EXECUTIVE SUMMARY This paper is a comprehensive examination of Ontario’s student financial aid system. The Ontario Undergraduate Student Alliance (OUSA) has reviewed the many programs and policies that make up the province’s financial aid system, and outlines its concerns and recommendations for improvement. Our recommendations for the financial aid system fall into several broad categories: Need Assessment and Assistance Allocation It is crucial that the Ontario Student Assistance Plan (OSAP) need assessment accurately assesses students’ costs, as it plays the foremost role in determining the amount of aid that a student will receive. The OSAP need assessment must therefore be reformed to accurately assess students’ total reasonable costs during an academic year, including sensitivity to regional variations in living costs, and changes to costs due to inflation and tuition policy. Students in need must receive enough assistance to meet their full assessed need for the academic year, rather than an arbitrarily capped maximum level of assistance. Qualification and Eligibility for OSAP The provincial government must provide assistance to individuals who need it the most. It should reinstate OSAP eligibility for groups including part-time students, people on Ontario Works, students studying outside of Canada, students facing academic difficulty, and students with poor credit records. These students have legitimate financial need and often face the greatest barriers in attending post-secondary education without government financial assistance. There should also be a strong appeals system at institutional financial aid offices for students who may not receive an appropriate amount of assistance. Access The provincial government must develop a strategy to increase enrollment and graduation rates amongst individuals from under-represented groups. This should include targeted student financial assistance (particularly in the form of up-front, non-repayable grants), early outreach programs, academic and social support programs at institutions, and debt forgiveness. Institutional Financial Aid and the Student Access Guarantee The provincial government’s Student Access Guarantee should provide students with enough funding to meet their costs as assessed by OSAP, using an accurate need assessment formula. It should also not disqualify the same Ontario students who are barred from accessing OSAP. Priority should be given to distributing bursaries in order to meet students’ unmet need. Administration and Access to Information In order to make the financial aid system more effective, OSAP must improve its user-friendliness. This includes simplifying the application process, providing more information about the financial aid system to students, clearer explanations about how students’ assistance levels have been determined, more communication to borrowers in repayment, and providing guidance and counseling when students need it. Loan Repayment and Debt In order to make paying off OSAP more manageable and to reduce loan defaults, the provincial government should make the loan repayment system more flexible to suit individual circumstances. Interest rates should be lowered, students should be allowed to select a repayment system that adapts to their income level, and programs available to borrowers facing financial difficulty should be publicized. For students facing the greatest financial difficulty, the 10-year waiting period must be removed for receiving bankruptcy protection.

INTRODUCTION All willing and qualified students must be able to attend post-secondary education. This simple statement is one of the core principles held by the Ontario Undergraduate Student Alliance (OUSA), and is shared by many other stakeholders. This principle should not become empty or hollow; it should be what the student financial aid system continually strives to achieve. As the system that provides assistance for people to attend post-secondary education, the financial aid system is a major component of Ontario’s social safety net. However, many people are slipping through this net. In the last decade and a half, Ontario students have been subject to rapidly rising tuition, resulting in average undergraduate tuition fees more than doubling since 1990.69 The financial aid system has struggled – and failed – to keep pace. Student debt loads have steadily increased, many students report difficulty in repaying their loans, and large numbers of students have been barred or disqualified from accessing the system altogether. While there have been recent improvements to Ontario Student Assistance Program (OSAP), these are largely patch-up jobs that have not gone far enough. It is our collective responsibility to help create the best financial aid system possible, for both reasons of equality of opportunity, and for the future economic prosperity of the province. As long as the broken financial aid system is allowed to languish without more meaningful improvements, successive cohorts of students will be shut out of the post-secondary system, or forced to manage with inadequate assistance. Many will likely be forced to take private loans in order to meet the costs of their education, and some will take on additional employment that forces them to devote insufficient time and energy to their studies. Worse still, some will drop out of their programs due to lack of funds or due to rising debt loads. Part of the aim of this paper is to compile research conducted by experts, academics, and government agencies, and combine them with the experiences of Ontario students in order to present our concerns and recommendations about how to make our financial aid system better. The effectiveness of the financial aid system is not an academic or theoretical exercise, but is experienced by students on a daily basis as they pay for their tuition and other costs, and by graduates as they repay their loans. It is not simply about more money for financial aid, but that money and other forms of assistance are used in the right way, to ensure it is in the hands of the students who need it the most. The paper is organized into six sections. Section one reviews a history of Ontario’s student financial aid programs, and what role they have played in the development and expansion of the post-secondary system in this province. In sections two and three, we review the system itself, in order to understand the aid apparatus and drive our recommendations. Section two outlines the programs and policies that make up the financial aid system, from the need assessment, to the calculation of assistance levels, to repayment policies. The following section reviews what the financial aid system looks like on a social level, to put the system into context on a human scale. How many people receive assistance, and in what forms? Who tends to encounter difficulty in repaying their loans? Who is currently being shut out of the system, and why? Section four outlines OUSA’s system vision for financial aid, and section five sets out the principles that guide our analysis and recommendations. Section six outlines OUSA’s concerns with the student financial aid system, as it currently operates. In section seven, we outline our recommendations for reforming financial aid and building the ‘Third Pillar’ that, along with government funding and tuition, is an essential component of Ontario’s post-secondary system.

Statistics Canada, “University tuition fees”, (Ottawa: Statistics Canada, September 2006); accessed online at http://www.statcan.ca/Daily/English/060901/d060901a.htm. 69

THE CURRENT SYSTEM – AN ENVIRONMENTAL SCAN The Canadian financial aid system is immensely complex, with numerous levels of government and other organizations involved in its funding and administration. In order to discuss the system as a whole, OUSA has compiled an environmental scan of the financial aid system in the province. This chapter is intended to act as a resource compiling the different components of Ontario’s student financial aid system into one document, in order to give a bigger-picture view of what programs are in place, and how they work together. It is for informational purposes rather than to act as a policy manual. The review focuses primarily on need-based financial aid offerings, rather than any merit-based financial awards. Readers who are interested specifically in OUSA’s concerns and recommendations on the student financial aid system should turn to Section Six of this report. For simplicity, discussion focuses primarily on the financial aid system available to single, full-time undergraduate students with no dependents, except where noted. This includes both dependent and independent students, as classified under OSAP policies. The availability and amount of financial aid varies significantly for part-time students, married students, and students with dependents. The data is also presented primarily from the perspective of how the system works in 2006/07, rather than reviewing historical aspects about how each component of the financial aid system has changed over time. The Structure and Funding of Student Financial Aid in Ontario While students receive financial aid through their provincial government, their OSAP loan is actually composed of two loans, one from the federal government (Canada Student Loan, or CSL) and the provincial government (Ontario Student Loan, or OSL). The federal government funds 60 per cent of a student’s loan, which is provided to students in September, and the provincial government funds the remaining 40 per cent, which is provided in January.70 Since 2001, the two loan programs have been integrated and offered as the Canada-Ontario Integrated Student Loan. The integration of the two loan programs allows for greater simplicity in administering and repaying the loans. For students who received Canada Student Loans before August 1, 2000 or Ontario Student Loans before August 1, 2001, different policies apply for loan repayment, as loans were issued by financial institutions on behalf of the federal government. For simplicity and brevity, this paper focuses on students who have received the CanadaOntario Integrated Student Loan. OSAP Policies The general approach of the OSAP system is quite simple. For each student, their costs of studying are assessed, then their financial resources are assessed, and if there is a shortfall between their costs and resources, then OSAP provides funding for the difference. The assistance calculation is summarized by this equation: Need = Educational Costs - Financial Resources In other words, a student’s need is calculated as the costs of their education, minus what financial resources they have available from their savings, earnings, and from their families. While this appears to be remarkably simple, it quickly becomes more complicated. Each of the components of the equation are based on a set of rules around what are legitimate costs that can be included in the calculation, and what resources students and their families are expected to contribute. The details of these policies fill a 92-page manual on eligibility and need assessment.71 Innis College at the University of Toronto, “14 OSAP Tips”; accessed online at http://www.utoronto.ca/innis/osap_tips.htm. Ministry of Training, Colleges and Universities, Student Support Branch, 2006-2007 Student Eligibility and Financial Need Assessment Manual (Toronto: Ministry of Training, Colleges and Universities, 2006). 70 71

Qualifying For OSAP While it is the public financial aid program, there are some qualification restrictions for receiving assistance through OSAP. Recipients must be:72

A Canadian Citizen, Permanent Resident, or designated as a Protected Person (refugee) An Ontario resident under OSAP’s residency requirements A full-time student (minimum 60 per cent course load) in each term, or a 40 per cent course load for students with a permanent disability Enrolling in an approved program in an approved post-secondary institution Enrolling in a program that is 12 weeks or longer Not in default on any previous student loans In satisfactory academic standing Passing a credit check

These regulations limit the provision of OSAP and other financial aid funds to certain groups of people, namely fulltime students who are long-term residents of the province. These eligibility rules are also replicated in other student financial aid programs, including the provincial government’s new Student Access Guarantee. Need Assessment OSAP sets out need assessment policies that calculate students’ financial need and resources in great detail, in manuals that are provided to each institution’s financial aid office. The need assessment has countless different policies to take into account a broad range of different types of students at who face different life circumstances, from single dependent students, married or unmarried students, students with and without children, and students with disabilities. An overview of the policies is outlined below for general informational purposes. For greater detail, please refer to the OSAP Student Eligibility and Financial Need Assessment Manual, available at institutional financial aid offices or from the Ministry of Training, Colleges and Universities. The following chart outlines the acceptable costs in OSAP’s need assessment formula for a single student taking fulltime courses for two terms at an Ontario public university in 2006/07.

CanLearn website, “Determining Eligibility for a Canada-Ontario Integrated Student Loan”; accessed online at http://www.canlearn.ca/cgi-bin/gateway/canlearn/template.asp?a=student&l=en&sc=pay/apply/ON/ft/public/ determine_eligibility/your_eligibility.shtml. 72

Figure One: OSAP Maximum Allowable Educational Costs for a Full-Time Undergraduate Student, 2006/0773 Cost Allowable Costs For regular programs, the actual tuition and compulsory fees are used in Tuition and compulsory both the Canada and Ontario portions of the need assessment fees For Additional Cost Recovery programs (including undergraduate (compulsory fees include fees professional programs), actual tuition and fees are used for the Canada for co-op, student activities, portion of the need assessment; the Ontario portion caps costs at: athletics, health services, - $2,250 per term for non-co-op programs student union, lab, field - $2,675 per term for co-op programs (which includes $425 for co-op placement, technology fees) (excluding computers) Books, supplies, equipment Need assessment counts the lesser of $3,000 total per academic year or and computer allowance actual costs Book costs: $390 for general arts & science, $440 for applied science, engineering, or other specialized programs Supplies: $345 for non-fine arts programs Uniforms: $230 Field trips: $705 Major equipment (e.g. cameras, musical equipment, medical and dental supplies): $705 Professional association/examination fees: $485 Computer costs: $500 Living Expenses Student living at home: $414/month Student living away from home: $999/month Single parent (without dependant): $1,294 Married student and spouse (no dependant): $1,915 Transportation For dependent single students only: cost of return transportation to their permanent home, to a maximum of $1,200 per academic year Living Expense Breakdown The following chart documents how OSAP’s monthly living allowance for single dependent students of $407 for those living at home and $988 for those living away from home is calculated. Figure Two: 2006/07 Monthly Living Allowances in Ontario74 Category Student Living Student Living away at Home from Home Shelter (for student away from home, 0 $477 two bedroom apartment + utilities, shared by two) Food (Agriculture Canada’s Nutritious Food Basket) $166 $214 Miscellaneous (Personal & health care, $175 $231 clothing, household cleaning, communication Local Public Transportation $66 $66 Total Monthly Allowance $407 $988

73 Ministry of Training, Colleges and Universities, Student Support Branch, 2006-2007 Student Eligibility and Financial Need Assessment Manual (Toronto: Ministry of Training, Colleges and Universities, 2006), 18-24. 74 Ibid; 93.

Assessment of Financial Resources Calculations of Personal Assets OSAP counts students’ following personal assets in the need assessment: 100 per cent of assets held in their name 16 weeks before start of study period; Cars worth over $5,000 are considered assets, and any value over $5,000 is counted as an asset; in some cases this exemption level is raised to $10,000 by the financial aid office if public transit is not available within a reasonable travel distance, a vehicle is needed to complete program requirements, vehicle needed for a spouse for work or to transport a child, student or spouse has a disability; Students can accumulate $2,000 in RRSPs for every year they have been out of secondary school, which will not be counted in the need assessment.75 Assessment of Income during Study Period The provincial government counts 100 per cent of net income less a $50 exemption per week of study in the OSAP need assessment. Students who receive merit scholarships will see an exemption up to $4,40076. Parental Contribution Expectations The amount that parents are expected to contribute to their children’s income is calculated based on family size, income, and the number of post-secondary students in the family (data is provided for families up to ten people in size). The parents’ discretionary income is calculated by taking the net parental income and subtracting the amount the provincial government deems as a ‘moderate standard of living’: Figure Three: Moderate Standard of Living Data for Ontario, 200777 Family Size 2 3 4 5 $35,872 $41,049 $45,500 $49,435 After subtracting the moderate standard of living, the parents’ ‘Annual Discretionary Income’ is calculated. The financial aid system sets parental contributions as a percentage of this figure, with the proportion rising with the amount. The following chart tracks the amount that parents are expected to contribute to their dependent child’s education, based on a family of three: Figure Four: Expected Parental Contributions by Income in Ontario, 2006/0778 Family Income Expected Contribution <$50,000 0 $60,000 $510 $70,000 $2,339 $80,000 $4,918 $90,000 $8,300 $100,000+ $11,682 These figures are incorporated into their child’s need assessment calculations, regardless of whether parents contribute this amount or not. Ministry of Training, Colleges and Universities, Student Support Branch, 2007-2008 Student Eligibility and Financial Need Assessment Manual (Toronto: MTCU, 2006), p.59 76 Ibid, p.37. 77 Ibid, p.52. 78 Fred Hemingway, “Parental contributions: easing the middle-class burden of access to post-secondary study” (presentation to the CASFAA/Millennium Conference on Enhancing Access to Post-Secondary Education, Ottawa, Canada, September 16, 2006). 75

Loan Amounts The provincial government has set out a maximum loan amount for students accessing OSAP, at $350 per week for single students with no dependents, or $11,900 per year for student taking two terms of courses, or 34 weeks of study.79 As a consequence, many students that are assessed for higher needs are provided with only a portion of funds through OSAP to allow them to meet these financial needs. For example, through the need assessment chart in the previous section, a student could be reasonably assessed to have over $17,000 in legitimate costs. However, that student would receive a maximum of $11,900 in OSAP loans for the year based on this maximum loan allocation. Figure Five: Maximum Assistance from OSAP80 Student Type Max. Weekly Max. for 34-week study Full-Time Single Dependent $350 $11,900 Full-Time Single Independent $350 $11,900 Full-Time with Spouse $545 $18,530 Full-Time Single with Children $545 $18,530 Part-Time (through CSL only) $4,000 Student at an approved university $210 $7,140 outside Canada (through CSL only) Back-End Financial Assistance While up-front grants were absent from the Ontario post-secondary system for over a decade (from 1993 to 2005), one long-standing form of grant-based assistance is allocated to the heaviest borrowers in the OSAP system, through the Ontario Student Opportunity Grant (OSOG). These grants are allocated through debt reduction, so that borrowers will see their level of debt held to $7,000 for a two-term academic year. Students borrowing over $7,000 are automatically provided the grant if they meet several eligibility requirements, so it does not require an application. The main requirements are that students must complete their registered terms on a full-time basis, their income must be verified, and they must not have defaulted on previous student loans.81 The grant is used to pay down the Ontario portion of the Canada-Ontario Integrated Student Loan, and the funds are sent to the National Student Loans Service Centre (NSLSC). Students will not receive a cheque or any other form of funding, but a letter is sent to them indicating the amount of the grant. Under the OSAP annual loan limit of $11,900 for single students, this can result in an annual grant of up to $4,900 per year. The grant is applied at the end of the academic year.82 With an average OSAP loan of $7,600 in 2002/03,83 OSOG affects a significant proportion of student borrowers in the province, as most students with loans over $7,000 receive the grant.

OSAP website, “Maximum Assistance”; accessed online at http://osap.gov.on.ca/eng/not_secure/funds.htm#amount. Ibid. 81 Provincial Auditor of Ontario, 2003 Annual Report of the Office of the Provincial Auditor of Ontario to the Provincial Assembly (Toronto: Queen’s Printer, 2003), 256. 82 University of Toronto at Scarborough, “Ontario Student Opportunity Study Grant (Loan Forgiveness)”; accessed online at http://www.utsc.utoronto.ca/~registrar/finaid/finresources/osap/osog.html. 83 Provincial Auditor of Ontario, 2003 Annual Report of the Office of the Provincial Auditor of Ontario to the Provincial Assembly (Toronto: Queen’s Printer, 2003), 249. 79 80

Assistance for Part-Time Students While OSAP assistance is disproportionately weighted towards full-time students, there is some assistance that is available to individuals studying part-time, who have less than a 60 per cent course load. Unlike loans for full-time students, which are an integrated loan from federal and provincial governments, this financial assistance is only funded by the federal government. Loans for part-time students are not subsidized, so borrowers must make interest payments while they are in study.84 The federal government also provides some grants for certain students. The Canada Study Grant which is targeted towards high-need part-time students, including single parents, students with elderly dependents, and students with disabilities. The grant provides up to $1,200 in assistance per academic year. The Canada Study Grant for Students with Dependants provides up to $1,920 per year for part-time students.85 Because assistance programs for part-time students only comprise a tiny proportion of the OSAP system, the remainder of this environmental scan primarily discusses the financial aid system for full-time students only. Loan Repayment and Interest Rates86 Repayment Policies Student loans in Canada are repaid like a mortgage, where standard minimum monthly payments are established and made regularly until the loan is fully repaid with interest. This contrasts with other countries or jurisdictions, where loans are repaid based as a percentage of income, after a certain minimum wage threshold has been reached.87 The loan repayment process begins six months after a student has completed full-time studies, whether it is due to graduation, transferring to part-time study, withdrawing from courses, or taking time off from post-secondary education. The government stops subsidizing the interest on student loans immediately after the student leaves their studies, so interest begins to accrue, but students are given a six-month grace period before they must begin repayment of their loans. The first loan repayment is due at the end of the sixth month after leaving full-time studies. During this six-month period, students must contact the National Student Loan Service Centre (NSLSC) to consolidate their loans and to set up a repayment schedule. Through consolidation, all of a student’s loans over their years of study are combined into a single loan. The NSLSC provides a consolidation letter that details the interest rates on the student’s loan, repayment schedule, and minimum monthly payments.88 Upon consolidation, the maximum length of time a student can take to repay their loans (the amortization period) is 10 years (counting the six-month grace period), or 114 months. The following chart details the monthly payments and total payments that a student would have to make if they had either the average debt load at graduation89 ($22,700), or if they had borrowed the maximum amount provided by OSAP per year ($7,000) for four years ($28,000). OSAP website, “Assistance for Part-Time Students”; accessed online at http://osap.gov.on.ca/eng/not_secure/parttime.htm#PTCSL%20&%20Grants. 85 OSAP website, “Canada Study Grants”; accessed online at http://osap.gov.on.ca/eng/not_secure/csg.htm. 86 All information in this section is drawn from different pages on the CanLearn website, accessed online at http://www.canlearn.ca, unless otherwise specified. 87 Alex Usher, “Global Debt Patterns: An international comparison of student loan burdens and repayment conditions”, (Toronto: Educational Policy Institute, 2005), 10. 88 These policies differ slightly for students who received loans before August 1, 2001, as there were changes in the integration of Canada Student Loans and Ontario Student Loans. Information about policies for pre-2001 borrowers have been omitted here for simplicity. 89 Canada Millennium Scholarship Foundation, “The Price of Knowledge 2004: Ontario”; accessed online at http://www.millenniumscholarships.ca/en/research/pokon.asp. 84

Figure Six: Monthly Payments on OSAP Loans over 10 years Loan Amount Monthly Repayment Total Repayment Total Interest Paid $22,700 $303.05 $34,547.54 $11,847.54 $28,000 $373.80 $42,613.70 $14,613.70 Individuals encountering difficulty in meeting the monthly payments can apply for a revision of their terms of repayment, allowing them to take up to 15 years (174 months) to repay the full amount, thus reducing monthly payments. Figure Seven: Monthly Payments on a $28,000 OSAP Loan over 10 or 15 years Loan Amount Amortization Period Monthly Repayment Total Repayment Total Interest Paid $28,000 10 years $373.80 $42,613.70 $14,613.70 $28,000 15 years $296.97 $51,673.32 $23,673.32 However, this also results in higher interest paid by the borrower over the extended period of time, in this case, $9,059.62 in additional interest charges on the same loan, which is over 2.5 years worth of monthly payments. Interest Rates OSAP loans consist of two separate loans from the federal and provincial student loan programs, integrated into a single loan known as a Canada-Ontario Integrated Student Loan. With an OSAP loan actually consisting of two loans from different sources, there are two separate interest rates charged on OSAP loans, with different rates charged on the portions of the loan funded by the federal and provincial governments. Students can select to negotiate a fixed or floating rate of interest with their loan providers. The interest rates that are charged on student loans vary, however, at the time of writing. The Canada Student Loan portion of the loan is charged Prime + 2.5 per cent for loans with a floating interest rate, and Prime + 5 per cent for loans with a fixed interest rate. The Ontario Student Loan portion is charged Prime + 1.0 per cent.90 At the time of writing, the 6.25 per cent prime lending rate resulted in interest rates on student loans of 8.75 to 11.25 per cent for Canada Student Loans, and 7.25 per cent for Ontario Student Loans. Assistance for Borrowers Encountering Financial Difficulty91 There are various measures in place if an individual faces difficulty in repaying their student loans, ranging from spreading payments over a longer period of time, and six-month periods of interest relief, to some loan forgiveness for borrowers encountering prolonged periods of financial difficulty. These include:

Revision of Loan Terms (to reduce monthly payments) Interest Relief & Extended Interest Relief Debt Reduction in Repayment Permanent Disability Benefits

Revision of Loan Terms As noted in the above section on Repayment Policies, borrowers can apply to extend the amortization period of their loans to a length of up to 15 years, or 174 months. This results in lower minimum monthly payments, but also higher interest costs to service the loan. University of Toronto Admissions and Awards website, “Repaying your full-time student loans”; accessed online at http://www.adm.utoronto.ca/fa/counselling/loan_repayment.htm. 91 All information in this section is drawn from various pages on the CanLearn website, accessed online at http://www.canlearn.ca, unless otherwise specified. 90

Interest Relief and Extended Interest Relief Interest relief programs are aimed at assisting borrowers who face temporary difficulty in meeting their monthly loan obligations. Borrowers can apply to receive six-month periods of interest relief, where they do not need to make monthly payments on their loan, and interest on the loans will not accrue during that time (interest is paid by the government). If payments are made during periods of interest relief, they are applied against the borrower’s outstanding capital. Up to five periods of interest relief totaling 30 months can be granted. Applicants must meet certain income criteria to receive the interest relief, and must also be residing in Canada. The program is also offered to members of the Armed Forces and participants in international internship programs who may be living abroad. For up to five years after a student has left full-time studies, they are also eligible for Extended Interest Relief, which extends interest relief periods to up to 54 months from the time of leaving studies. Debt Reduction in Repayment Debt reduction programs are available to borrowers who face long-term financial difficulties, and have exhausted all available interest relief. This is typically provided to borrowers who have been out of school for over five years, and reduces both the loan principal and interest, so that monthly payments are reduced. At present, both the provincial and federal governments operate their own debt reduction programs, because of the separation between the Canada Student Loan and Ontario Student Loan programs up until 2001. A debt reduction program for Canada-Ontario Integrated Student Loans will be available after 2006, as five years will have passed for the first integrated loan borrowers from 2001 who face long-term difficulties in repayment.92 Funds are provided by the provincial and/or federal governments to the borrower’s financial institution that holds the loan, so borrowers do not receive a cheque or any payment. There are numerous qualification requirements around income, loan status, and Canadian residency, amongst other things, in order to receive either provincial or federal debt reduction. Provincial Debt Reduction. Up to three debt reductions are provided:93 First reduction: up to $4,300 Second reduction: up to $2,200 Third reduction: up to $2,200 Federal Debt Reduction. Up to three debt reductions are provided: First reduction: up to $10,000 Second reduction: up to $10,000 Third reduction: up to $6,000 Borrowers must wait 12 months after a debt reduction before further debt reduction can be requested. In that time, monthly payments must be made.

Ontario Student Assistance Program website, “Debt Reduction in Repayment (DRR)”; accessed online at http://osap.gov.on.ca/eng/not_secure/DRR.htm. 93 Ibid. 92

Permanent Disability Benefits Both the provincial and federal loan programs offer complete loan forgiveness for borrowers who have a permanent disability that is expected to reduce the individual’s earning capacity over their lifetime. Applicants must have exhausted all available interest relief in order to apply.94 Consequences for Students in Default If students do not make the required payments on their OSAP loans, they are considered in default, and face the same types of consequences as other types of loan defaults. Students may be reported to a credit agency and their credit rating will be adversely affected, a private loan collections company may be engaged to recover the loan, income tax refunds may be withheld, individuals may not be eligible for student loans in the future, and legal action may be taken.95 Bankruptcy Policies Students who are unable to repay their student loans face greater difficulties to access bankruptcy protection than individuals holding other forms of debt. Due to legislation introduced in 1998, an individual cannot be released from their student loan obligations if they file for bankruptcy, until ten years after the completion of their studies.96 Access Grants Up-front grants were re-introduced into the Ontario financial assistance system in 2005, after an absence of about 12 years. The grants are funded by either the provincial government, federal government, or Canada Millennium Scholarship Foundation, and are currently only available to first- or second-year students from low-income families. They are administered through the centralized OSAP application process, and therefore grant funding is not provided in addition to loans. Through the combination of Millennium-Ontario Access Grants and Canada Access Grants, firstyear students are eligible for up to 100 per cent of their tuition, up to $6,000, and second-year students can receive up to 50 per cent, or $3,000 of tuition. Millennium-Ontario Access Grants The Millennium-Ontario Access grants are provided to first-year students, and cover between 25 and 50 per cent of the costs of tuition, up to $3,000 in assistance. The funds are jointly provided by the Ontario provincial government and the Canada Millennium Scholarship Foundation.97 The Millennium Scholarship Foundation’s funding is part of a four-year project that will be evaluated by the Foundation in order to gauge whether providing low-income students with more grants will increase their participation

Ontario Student Assistance Program website, “Medical Loan Forgiveness Program”; accessed online at http://osap.gov.on.ca/eng/not_secure/repay.htm#medical%20L4G. 95 CanLearn website, “Regarding Defaults and Bankruptcy”; accessed online at http://www.canlearn.ca/cgibin/gateway/canlearn/template.asp?a=student&l=en&sc=pay/repay/ON/ft/public/repay_loan/defaults_bankruptcy.shtml and University of Toronto Admissions and Awards, “Repaying your full-time student loans”; accessed online at http://www.adm.utoronto.ca/fa/counselling/loan_repayment.htm. 96 CanLearn website, “Regarding Defaults and Bankruptcy”; accessed online at http://www.canlearn.ca/cgibin/gateway/canlearn/template.asp?a=student&l=en&sc=pay/repay/ON/ft/public/repay_loan/defaults_bankruptcy.shtml. 97 OSAP website, “Millennium/Ontario Access Grant”; accessed online at http://osap.gov.on.ca/eng/not_secure/Mill_OAG.htm. 94

in post-secondary education.98 This evaluation is carried out by the Foundation’s research division, in partnership with other research organizations. The amount of funding provided is dependent on parental income and family size, with the maximum amount allocated to students whose parents qualified for the National Child Benefit supplement (at a cut-off of $36,440 for a family of three in 2006/07), with smaller amounts provided to students with higher family incomes. The funding distribution for the Millennium/Ontario Access Grant is as follows: Figure Eight: Millennium/Ontario Access Grant for First Year Students: Grant Allocation, 2006/0799 Percentage of tuition costs funded by grant # of dependent children 50 per cent 50 to 25 per cent 25 per cent 1 $36,440 or less $36,441 to $47,000 $47,001 to $70,100 2 $36,440 or less $36,441 to $52,500 $52,501 to $74,800 3 $36,440 or less $36,441 to $57,500 $57,501 to $79,800 4 $41,336 or less $41,337 to $62,000 $62,001 to $84,800 5 $46,267 or less $46,268 to $65,500 $65,501 to $89,800 Canada Access Grants In 2004, the Government of Canada created two new grants, Canada Access Grants (CAGs) to financially assist lowincome students in their first year of study, and students with permanent disabilities. These were created to increase the accessibility to post-secondary education for students with a high level of need.100 CAGs are available to eligible students and do not have to be repaid. However, the money is considered taxable income and will appear on the next year’s income tax return. The eligibility of the CAGs are assessed at the time when a student applies for a student loan, and is based on their financial need and the student loan eligibility. Canada Access Grants for Students from Low-Income Families can cover up to one-half of students’ tuition costs, to a maximum of $3,000. They cannot exceed the Canada portion of the Canada-Ontario Student Loan assistance students are eligible to receive, which is 60 per cent of students’ assistance.101

Ministry of Training, Colleges and Universities and the Canada Millennium Scholarship Foundation, “Low-Income Ontario Students to Benefit from New Tuition Grants”, August 16, 2005; accessed online at http://www.cnw.ca/en/releases/crchive/August2005/16/c0596.html. 99 York University presentation, “Guidance Counsellors Day”, p.7; accessed online at http://www.yorku.ca/web/futurestudents/gcd/presentations/Financial_Aid.pdf. 100 CanLearn website, “Canada access Grants and Canada Study Grants”, 2004; accessed online at http://www.canlearn.ca/en/Multimedia/nslsc/pdf/CAG_CSG_EN.pdf. 101 OSAP website, “Canada Access Grants”, September 25, 2006; accessed online at http://osap.gov.on.ca/eng/not_secure/CAG.htm. 98

The table below shows income ceilings by family size.102 Figure Nine: Family Net Income Ceilings in 2006/07 Canada Access Grants for Students from Low-Income Families (3) Number of dependent children that parents have (1)

0-3

Parents’ net income (2)

$36,440

$41,336

$46,267

Number of dependent children, including the applicant, identified in Item 805 or Item 014 of the OSAP application. income (from Line 236 of the Income Tax form) of the applicant’s father, stepfather, legal guardian or official sponsor plus the applicant’s mother, stepmother, legal guardian, or official sponsor as identified on the OSAP Application. (3) Higher income ceilings are in effect for families with more than five dependent children. (1)

(2) Net

Ontario Access Grant Ontario Access Grants are non-repayable forms of assistance that are provided to students in their second year of undergraduate study. The grants can cover between 25 and 50 per cent of a student’s tuition, to a maximum of $3,000. The grants are available to students with family incomes of up to $74,800 for a two-child family.103 Income Tax Study Credits Income tax credits are forms of financial assistance provided to students through reductions on the amount of income tax they must pay. They are provided to all students regardless of need or family income. The types of nonrefundable tax credits that apply to students are interest paid on loans, and for the tuition and education amounts.104 The purpose of the education tax credit is to assist students by reducing the student's income tax by reference to the number of months that the student is enrolled in a qualifying educational program at a designated educational institution.105 The following is a case study of how the federal tax credits would benefit a student with tuition fees of $5,000: Figure Ten: Federal Tax Credit Calculation – Case Study106 Step One: Claim tuition fees $5,000 Step Two: Claim education amount $3,200 $400 per month full-time $120 per month part-time Step Three: Multiply total amount by credit rate $1,250.50 15.25 per cent in 2006 This student would receive a $1,250.50 benefit on their federal taxes. For their provincial tax, there would be a credit of $1,766.107

Ibid. OSAP website, “Ontario Access Grants”, accessed online at http://osap.gov.on.ca/eng/not_secure/OAG.htm. 104 Canada Revenue Agency, “Students and Income Tax”, January 31, 2006; accessed online at http://www.cra-arc.gc.ca/E/pub/tg/p105/p105-e.html#P145_11014. 105 Canada Revenue Agency, “Education Tax Credit”, September 6, 2002; accessed online at http://www.cra-arc.gc.ca/E/pub/tp/it515r2/it515r2-e.html. Qualifying educational program and designated educational institution are defined on this site. 106 Christine Neill, “Tuition and education tax credits” (presentation to the CASFAA/Millennium Conference on Enhancing Access to Post-Secondary Education, Ottawa, Canada, September 16, 2006). 107 Ibid. 102 103

If the amount of taxes owed by a student is greater than their amount of tax credits, then benefits accrue in the same year. If the student has more tax credits than the amount of tax owed, then they can transfer their credits to a parent, grandparent, spouse, or common-law partner, or carry them forward to a future year.108 Because students often have low incomes, their tax responsibilities are also often low and they therefore cannot immediately benefit from their tax credits. Registered Education Savings Plans (RESPs) A Registered Education Savings Plan (RESP) is a type of savings account created with a financial institution that grows tax free until the student is ready for post-secondary education.109 RESPs are usually created by parents or other family members on behalf of a beneficiary to pay future educational costs. The subscriber generally makes contributions to the RESP, which will earn income. The contributions are usually named for one or more beneficiaries and the financial institution usually pays the income earned on the contributions to the beneficiaries in the form of educational assistance payments (EAPs).110 The maximum annual contribution to an RESP is $4,000, and the lifetime contribution limit is $42,000 per beneficiary.111 Unlike the Registered Retirement Savings Plans (RRSPs), the RESP contributions cannot be deducted from the income of the subscriber on their income tax returns. The beneficiary can start receiving the EAPs as soon as they are enrolled in a qualifying educational program. Qualifying educational programs include apprenticeships, and programs offered by a trade school, CEGEP, college or university. If the beneficiary does not pursue post-secondary education, the subscriber is able to:112 • • • •

Wait for a period of time, he or she may decide to continue studying later; Use the money for a brother or sister who does continue education after high school; Transfer the money into a Registered Retirement Savings Plan (RRSP) to help you save for your retirement; Withdraw the money.

Subscribers can contribute to the RESP for up to 22 years after a non-family plan has been opened and up to the year in which the beneficiary turns 21 years of age in a family plan and must be terminated by the end of the 26th year.113 Contributions made to an RESP are not tax deductible, and are not taxed when returned to the subscriber, but the money grows tax free until the money is used. Individuals with RESPs can also benefit from other savings incentives provided by the federal government, including Canada Education Savings Grants and the Canada Learning Bond, which are described next. Canada Education Savings Grants (CESGs) The Canada Education Savings Grant provides contributions to an individual’s RESP up to the age of 17. The grant provides 20 cents for every dollar for the first $2,000 of annual RESP savings, or $400 per year in non-repayable Canada Revenue Agency, “Students and Income Tax”, January 31, 2006; accessed online at http://www.cra-arc.gc.ca/E/pub/tg/p105/p105-e.html. 109 CanLearn website, “Registered Education Savings Plan – Frequently Asked Questions”; accessed online at http://canlearn.ca/en/parent/save/growmoney/investing_101/invest_options/resp/rfaq.shtml. 110 Canada Revenue Agency, “ Registered Education Savings Plan”, January 31, 2006; accessed online at http://www.cra-arc.gc.ca/E/pub/tg/rc4092/rc4092-e.html. 111 Council of Ontario Universities, “Report From the COU Task Force on Student Assistance”, Section D, October 2001; accessed online at http://www.cou.on.ca/content/objects/Report_Section%20D.pdf. 112 Ibid. 113 Ibid. 108

assistance. For children aged 15 and older, RESP contributions must be made before December 31 in the year they turn 15.114 This amount of CESG assistance increases for lower-income families, as illustrated in the chart below. The income brackets are adjusted each year according to the rate of inflation.115 Figure Eleven: Additional CESGs provided for Lower-Income Families116 Net Family Income Level Additional Assistance Provided Maximum Additional Assistance per year Below $36,378 40 cents for each dollar on the first $200 $500 saved in an RESP each year $36,378 to $72,756 30 cents for each dollar on the first $150 $500 saved in an RESP each year Above $72,756 No additional assistance provided n/a The grants and accumulated earnings will be part of the educational assistance payments paid out of the plan to the beneficiary. The maximum CESG amount that a beneficiary can receive is $7,200.117 Canada Learning Bond The Canada Learning Bond provides $500 in one-time assistance into an RESP for a child born after 2003 from a low-income family. Qualification is based on if the child qualifies for the National Child Benefit Supplement, which is generally available for families with incomes below $35,595 (updated annually based on the rate of inflation). The child can receive an additional $100 per year for up to 15 years if their family continues to qualify for assistance. The lifetime assistance limit for the Canada Learning Bond is $2,000 per child.118 Canadian Millennium Scholarship Foundation – Bursaries In Ontario, the Canada Millennium Scholarship Foundation offers $3,000 bursaries to students who have high financial need. This is separate from the Millennium-Ontario Access Grants that are only provided to first-year students from low-income families. Ontario students who receive Millennium Bursaries will see this amount counted in their need assessment, so their need decreases by $3,000. In order to address concerns about this claw-back of aid, the provincial government provides a $500 top-up to Millennium Bursary recipients.119 Institutional Financial Aid Financial aid provided by institutions is funded by numerous sources, including private donors, the provincial government, and students themselves. The provincial government’s share has been provided through donationmatching programs including the Ontario Student Opportunity Trust Fund, which has since been renewed with some

CanLearn website, “The Canada Education Savings Grant”; accessed online at http://canlearn.ca/en/parent/save/growmoney/investing_101/invest_options/resp/cesg/index.shtml. 115 Ibid. 116 Ibid. 117 Canada Revenue Agency, “ Registered Education Savings Plan”, January 31, 2006; accessed online at http://www.cra-arc.gc.ca/E/pub/tg/rc4092/rc4092-e.html. 118 CanLearn website, “The Canada Learning Bond”; accessed online at http://canlearn.ca/en/parent/save/growmoney/investing_101/invest_options/resp/clb/index.shtml. 119 Institute of Intergovernmental Relations, Canada Millennium Scholarship Foundation: Evaluation of the Foundation’s Performance, 1998-2002 (Kingston: Queen’s University, 2003), p.45; accessed online at http://www.millenniumscholarships.ca/images/Reports/evaluation_en.pdf. 114

modifications as the Ontario Trust for Student Support.120 Since 1996/97, students have contributed to institutional financial aid pools through the tuition set-aside program, which requires a percentage of revenue from tuition increases to be set aside for locally-delivered financial aid. This percentage was set at 10 per cent for 1996/97, and was increased to 30 per cent from 1997/98 onwards. The tuition set-aside continues to be in effect for 2006/07.121 Institutional financial aid can be provided to students in the form of bursaries, work-study programs (which provide students with up to $1,000 in paid employment per term), student employment between academic terms, grants, or loans.122

Ministry of Training, Colleges and Universities, “McGuinty Government creates new trust to enhance access” (Toronto: MTCU, 2006); accessed online at http://ogov.newswire.ca/ontario/GPOE/2005/11/09/c2789.html. 121 Ministry of Training, Colleges and Universities, Student Support Branch, 2006-2007 Student Eligibility and Financial Need Assessment Manual (Toronto: MTCU, 2006), 98. 122 OSAP website, “Other options for financing your education”; accessed online at http://osap.gov.on.ca/eng/not_secure/funds.htm#Other%20Options%20for%20Financing%20Your%20Education; Ministry of Training, Colleges and Universities, Student Support Branch, 2006-2007 Student Eligibility and Financial Need Assessment Manual (Toronto: MTCU, 2006), p.98. 120

OUSA’S SYSTEM VISION FOR STUDENT FINANCIAL ASSISTANCE Introduction: The Current Context The typical Ontario university campus in 2006 would be unrecognizable to medieval scholars at the first universities in Bologna and Oxford. No longer the sole domain of the financially privileged or the intellectual elite, it is now virtually a necessity for young people to attend a post-secondary institution in order to obtain steady employment and opportunity over the course of their lives. The provincial government has frequently stated that in the coming years, 70 per cent of new jobs will require some form of post-secondary education or training, and has based its access improvement programs on this projection.123 Higher education is shifting towards a mass program that will be taken up by the majority of people, and there are many shifts in policy and programming that have been, and must continue to be made in order for post-secondary institutions to fulfill this changing role. One major area that must shift in relation to the changing role and audience of post-secondary education is the student financial aid system. At present, individuals from higher-income backgrounds are accessing the postsecondary system at a much greater rate than their lower-income counterparts.124 In order for the post-secondary participation rate to increase, governments must ensure that financial aid is available to the students from lowerincome groups, as well as adult learners, part-time students, and other individuals for whom finances are a barrier to access. The expansion of the post-secondary system is not simply needed for reasons of social equity, but for demographic reasons as well. Statistics Canada forecasts show that there will be a decline in the number of young people over the next two decades, as the so-called ‘echo boom’ passes out of the 18-24 age demographic. By 2026, they project 330,600 fewer young people aged 15 to 24, which will have a significant effect on the post-secondary sector and the workforce in general.125 The Canada Millennium Scholarship Foundation has advocated increasing enrollment and participation among groups that are traditionally under-represented in the post-secondary system, particularly lowincome Canadians, as a strategy to address the future labour shortage.126 Three Pillar Approach: OUSA’s Vision of the Role of Student Financial Assistance OUSA’s analysis and recommendations in this paper are guided by our ‘Three Pillar’ approach to the funding of higher education. This perspective sees three core elements supporting the post-secondary system, namely government operating grants, tuition paid by students, and government financial aid programs to provide assistance to those who cannot afford the costs of attending university or college. While government funding and tuition provide the bulk of funding for university operations, the system is untenable without an effective financial aid program to ensure that students who are unable to pay tuition and other educational costs are not excluded from the system. As a public investment, both university operating funding and financial aid programs are a way of assisting young people when they need it the most, at the start of their adult lives when they face costs in order to obtain an education and start their careers, but lack the funds to pay. The investments in student financial aid will be repaid by the contributions that a well-educated member of society makes over their lifetime through tax contributions and public participation, and will far outweigh the costs incurred by a poorly educated and economically dependent populace. OUSA also believes that because it provides assistance specifically geared to the situation of each Louise Brown, “What will bring students to university?” Toronto Star, February 8, 2006; accessed online at http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=113935261983 8&call_pageid=968350130169&col=969483202845 124 Canada Millennium Scholarship Foundation, “Raising Expectations” (presentation to CMSF Annual General Meeting, September 14, 2006, Ottawa), p.10; accessed online at http://www.millenniumscholarships.ca/images/news/AGM_2006_EN.pdf. 125 Ibid, .6. 126 Ibid, .9. 123

HTU

UTH

student, a well-designed financial aid system has a much greater potential to provide social equity than other possible programs in the post-secondary system, including tuition reductions. As the metaphor of three pillars suggests, each of the three elements must be balanced with each other in order to maintain a functional system. Changes to one element in the system, such as tuition, must be balanced with changes in the student financial aid system in order to ensure that some students are not left behind as tuition creeps upwards. However, this system has been in imbalance for a long period of time. Between 1990 and 2005, the proportion of university costs shouldered by students and their families steadily grew from 21.9 per cent to 45 per cent, while government funding has declined. In the case of student financial aid, the amount of aid available to students has sunk lower, eroded by rising tuition and lack of responsiveness to inflation. Figure One: University Provincial Operating Grants and Tuition Fee Revenue, 1990/91 to 2004/05127

$3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000

Operating Grants

2004-05

2003-04

2002-03

2001-02

2000-01

1999-00

1998-99

1997-98

1996-97

1995-96

1994-95

1993-94

1992-93

1991-92

1990-91

Tuition Fees

As these figures suggest, students have been shouldering an increasingly heavy proportion of educational costs. This indicates that the financial aid system is even more important to ensure that students can pay for their education.128 On the operational side of the financial aid system, OUSA suggests that the government set goals and objectives for the financial aid system to achieve, and continually assess whether the OSAP and other element of the financial aid system are meeting those objectives. The goal is not to make the financial aid system a self-supporting business, but rather to ensure that the system is providing sufficient funding for the students that need it the most, and is making the best and most effective use of financial aid dollars. In order to provide assistance to students that will be responsive to their particular needs, OUSA sees a significant component of the financial aid system as centered at their institutional financial aid offices. Staff at these offices have much greater familiarity with the circumstances facing their institution’s students, and have the ability to interact with them on a personal basis. This also provides students with the opportunity of more face-to-face contact with the financial aid system, and decision-making that would be more sensitive to their local needs and situations. Council of Ontario Universities, Ontario Universities – 2007 Resource Document (Toronto: COU, 2007), 1. Chart generated as a result of data provided in Resource Document. 128 Current data, as of 2004/05, indicates students at Ontario universities contribute approximately 45 per cent of university operating grants through tuition. In contrast, the university average amongst the other nine provinces is 29.6 per cent. For more information, please refer to Ontario Universities Resource Document-2007, “Percent University Operating Income by Source of Income- Provincial Comparison,” (Toronto: COU, 2007), 15. 127

Access Improvement Programs A crucial component of OUSAâ&#x20AC;&#x2122;s vision for the financial aid system is access improvement programs. These are not necessarily programs that provide money to students, but have similar goals as the financial aid system as a whole, in seeking to increase access to opportunity through post-secondary education. For more about OUSAâ&#x20AC;&#x2122;s recommendations around improving access, please see our policy paper on early outreach programs. With this approach to the higher education system in mind, in the next chapter OUSA sets principles underlying our perspectives and recommendations on the financial aid system.

PRINCIPLES FOR THE STUDENT FINANCIAL AID SYSTEM General Principles The following principles outline OUSA’s vision of the ideal role that the student financial aid system as a whole should play in the higher education system. Principle One: All willing and qualified students must be able to access and have the tools to excel in Ontario’s post-secondary system. As noted in the introduction, this is OUSA’s core belief about the financial aid and higher education system as a whole. Student financial aid is a core part of the equation, and the development of a strong financial aid system is a continuing theme in our principles and recommendations. The financial aid system must provide sufficient funding for students to attend post-secondary education and devote their attention to their studies. OUSA sees the inadequate amounts of financial assistance, which force students to take on long hours of employment to meet their costs, as not fulfilling this principle. Principle Two: Comprehensive and student-friendly financial aid program design is vital to the success of the university system in Ontario. The financial aid system should be carefully designed to offer the best provision of aid and user-friendliness to students in Ontario, and it should be comprehensive, so that no students or groups of students are excluded. It must also be continually evaluated and reviewed to ensure that the design of the financial aid system is continuing to fulfill its role, and keeps pace with changes in the post-secondary system, both in relation to policy changes and demographic shifts. Principle Three: The funding, tuition and financial aid structure in Ontario must guarantee the accessibility, affordability and quality of higher education for all students. There are certain core goals that OUSA believes that the student financial aid system in Ontario should seek to achieve, namely accessibility, affordability, and quality. First, the financial aid system should seek to increase access to post-secondary education, particularly amongst students who would otherwise be barred from obtaining a degree for financial reasons. Second, the financial aid system should be affordable, meaning that if loans are part of a student’s aid package, the repayment policies should be manageable and affordable, and not lead students to a lifetime of indebtedness. Last, the financial aid system should also promote a high-quality education, by not supplanting or sapping funding from other important areas of universities’ operations. Principle Four: The financial aid program must be designed to maximize student ease-of-use while minimizing operating cost. Another general principle guiding OUSA’s recommendations for student financial aid is that the system should aim to be simple and easy to use. The goal is for a system that not only provides easy access to information for students, but is also efficient and cost-effective in administration, so that the maximum amount of resources can be devoted to students themselves. Information about the financial aid system should target students both during and before their university careers, so they can incorporate this knowledge into their financial planning for university. As will be discussed later in the paper, the current financial aid system is exceedingly complex, involving the federal government, the provincial government, universities and third-party organizations, and consisting of loans, grants, need-based awards, merit-based awards, and tax credits. A guiding principle for changes to the current system should be towards greater simplicity for users and in administration.

Funding of Financial Aid Principle Five: The financial aid system is a public—and therefore government—responsibility. As stewards of the citizens of Ontario, the provincial government has both a responsibility to its citizens and is in the best position to provide a system of student support that is administered as an investment in both students and in the overall economic and social viability of the province. The government’s returns on investing in student financial aid accrue over decades, and the financial aid system should therefore not be treated as a financially self-sustaining business. Principle Six: The student financial aid system must provide accountability and transparency to the public. While OUSA believes that the financial aid system should not be seen as a profit-making enterprise, this does not suggest that OSAP should be financially profligate, either. There is little question about the importance of student financial aid programs, however it must also be recognized that they are extremely expensive to run, costing about $5 billion annually across the country.129 Alongside the push for greater accountability from universities for public investments, the government and the OSAP system must also be required to provide accountability for financial aid dollars. This is aimed at ensuring that the system is achieving its mandated outcomes of providing assistance to the students who need it the most. Accountability and transparency measures should be seen as part of continuing efforts to improve the financial aid system. Principle Seven: The distribution of financial aid dollars should be done in an equitable and student-centered manner. Because different universities have varying sizes of alumni pools and levels of fundraising capacity to draw upon, some universities will almost inevitably outperform others in attracting private donations for scholarships, bursaries, and other forms of financial aid. Nevertheless, OUSA believes that a general principle guiding government funding of financial aid should be the equitable distribution of funds to students across the province. Access to government financial aid in this province should not be unduly influenced by the institution that one attends. This is particularly applicable in the case of programs where private donations to an institution are matched by the government, such as the Ontario Trust for Student Support (OTSS), and its predecessor, the Ontario Student Opportunity Trust Fund (OSOTF). Eligibility Principle Eight: To ensure equitable university access for all Ontarians, financial aid must be available to all students in need. The distribution of aid to all students in need is one of the most important principles that should underlie the student financial aid system. OUSA believes that students with legitimate need should not be barred from the financial aid system due to policies that prevent certain types of students from receiving financial aid, inaccurate needsassessment calculations, or other reasons. It is entirely unacceptable that any qualified student be prevented from attending university due to a lack of up-front financial resources. Principle Nine: Financial aid should be distributed primarily on the basis of student need. In order to ensure the most equitable distribution of assistance, OUSA believes that financial aid should be distributed primarily on the basis of student need. This would prioritize the distribution of government financial aid 129 Ross Finnie, Alex Usher and Hans Vossensteyn, “Meeting the need: a new architecture for Canada’s student financial aid system” Policy Matters 5(7), August 2004, 8.

funding toward meeting unmet financial need (the amount of money needed to fund educational costs after taking an individual’s financial resources into account), over other forms of financial aid such as scholarships and awards. Furthermore, aid distribution should prioritize students with the greatest financial need, particularly for non-repayable forms of assistance. While many individuals and private organizations fund merit-based awards and scholarships, the government has the unique ability to run financial aid programs on a society-wide level, and should use this role to advance the goals of equality of opportunity. Furthermore, there is a growing consensus amongst education policy analysts that merit-based financial aid programs, where funding is distributed according to academic performance and without means-testing, tend to direct money to students from more affluent families who can afford the costs of education. This can often divert money from programs to provide assistance to students from lower-income families. While these programs are politically popular, many researchers and commentators note that this is not the most intelligent or equitable way to distribute public financial aid dollars.130 OUSA therefore believes that government-funded financial aid should be primarily directed towards student need, rather than merit-based awards. Principle Ten: The student financial aid system should incorporate some flexibility to address individual or program circumstances. While the financial aid system is a large and complex collection of policies, programs and administration, it must not be so rigidly bureaucratic as to leave some students in the lurch because they do not fit neatly into an administrative category. This creates more access barriers to individuals who likely face other barriers to post-secondary participation. OUSA believes that there should be some flexibility in the financial aid system where customized assistance can be provided to the small number of students who face particular circumstances. This could include people facing unexpected or disproportionately high costs that are currently not accommodated in the need assessment, many of whom are currently barred from the financial aid system. As will be detailed later in the paper, the OSAP appeals process, which is largely managed at each institution’s financial aid office, is ideally suited to personally consult with students about their situations and their needs. Needs Assessment & Funding Levels Principle Eleven: To be effective, the financial aid package must provide enough funding to cover all reasonable education costs. If the stated goal of a student financial aid system is to provide assistance to allow students to attend post-secondary education, then this system should provide sufficient funds in order for this goal to be achieved. With an effective needs-assessment calculation, the financial aid system should ensure that students can supplement their savings, earnings and parental contributions with enough assistance to afford their educational costs, including tuition, books, and reasonable living expenses. To supply less financial aid to students than their assessed need is to fall short of the system’s goals, forcing students to turn to private loans, additional employment, or in the worst scenario, abandoning their education due to lack of funds. Conversely, providing students with more money than they require, or providing assistance to students who do not actually need financial assistance, is to divert resources from other urgent uses. In OUSA’s view, neither of these scenarios is desirable.

See for example Fay Vincent, “No merit in these scholarships”, (Stafford, VA: Educational Policy Institute, 2005); accessed online at http://www.educationalpolicy.org/pdf/PPMerit.pdf; Donald Heller, “State merit scholarship programs: an overview”, (Boston: Harvard Civil Rights Project, 2004); accessed online at http://www.civilrightsproject.harvard.edu/research/meritaid/report04/3Heller_intro_ch_1.pdf. 130

Principle Twelve: The student financial aid system should provide a predictable amount of assistance to students. In order to allow students to plan and save for their education, the student financial aid system should strive to offer a predictable amount of assistance to students. This could be achieved through both information and policy. On the informational front, the provincial government should provide early estimates of assistance levels, as well as access to information about the types of financial aid available to them. On the policy front, the provincial government should work to keep the level of financial assistance available to students consistent and predictable through their course of study. Access grants currently tend to be only available in the first and second years of a student’s studies. Providing greater predictability will help prevent students from facing additional difficulties in making ends meet as their studies progress. Principle Thirteen: Non-repayable forms of financial assistance must compose a significant portion of the student aid package. While the financial aid system assists many students with the cost of attending post-secondary education, much of its work is simply to delay payment until a later time, often to be repaid with significant amounts of interest. Indeed, over the past ten to 15 years, the funding of post-secondary education has slowly shifted away from being primarily a government responsibility, towards a greater individual role in funding the costs of higher education through rising tuition fees. This shift has taken place without much consideration of what debt loads are manageable for students to bear. Recent research on post-secondary debt patterns indicate that there is a tipping point at which debt loads begin to have seriously detrimental effects on students’ rates of degree completion. With increased debt levels, students had a greater probability of abandoning their studies. However, these patterns could be changed through the provision of non-repayable financial assistance, in the form of bursaries and/or debt remission. By providing even a portion of grant-based assistance, policy-makers make it easier for students to focus on their studies, rather than worrying about their debt loads, seeking private loans, and juggling employment obligations in order to make ends meet.131 With the elimination of grant-based assistance between 1993 and 2005, there are clear indications that Ontario students are carrying heavy debts in exchange for post-secondary education. In Canada, as of 2006, 59 per cent of undergraduate students had some form of debt. Current debt levels are soaring, with the average national debt hovering around $24,047. Ontario students in 2006 owed an average of $22, 589. 132 In 2004, according to Statistics Canada, 40.7 per cent of Ontario students in the Class of 2000 graduated with government student loan debt, owing on average $22,700, compared to a national average of $18,900. Almost one in five, or 17.7 per cent of Ontario university graduates had over $25,000 in student loan debt, compared to 13.4 per cent at the national level.133 In order to ensure that students are not indebted for many years, the government should strive to ensure that significant amounts of non-repayable financial assistance is available to students in need. This assistance should particularly be targeted towards students from low-income backgrounds, and other groups with low post-secondary participation rates.

Canada Millennium Scholarship Foundation, “The impact of bursaries: debt and student persistence in post-secondary education” Research News 2(2) (Montreal: Canada Millennium Scholarship Foundation, 2006); accessed online at http://www.millenniumscholarships.ca/images/Publications/MRN04_Persistence_EN.pdf. 132 Canada Millennium Scholarship Foundation, “Report on Student Debt,” (Montreal: CMSF, 2007), 5; accessed online at http://www.millenniumscholarships.ca/images/Publications/070529_Student_Debt-en.pdf. 133 Sean Junor and Alex Usher, The Price of Knowledge 2004: Access and Student Finance in Canada (Montreal: Canadian Millennium Scholarship Foundation, 2004), p.283; Canadian Millennium Scholarship Foundation website, “The Price of Knowledge 2004: Ontario”; accessed online at http://www.millenniumscholarships.ca/en/research/pokon.asp. 131

Principle Fourteen: The provincial government must provide extensive additional non-repayable assistance to students from under-represented groups. Statistics on participation in post-secondary education indicate that certain social groups have persistently low rates of university attendance. These groups often lack the social, economic and/or cultural capital in order to enter and succeed in the post-secondary system. Some of the groups that have demonstrated lower rates of post-secondary participation include low-income Ontarians, Aboriginals, people with dependents, people with disabilities, and rural Ontarians. These groups’ rates of participation and barriers to post-secondary education will be discussed in detail in Section Six of this paper, and will be the basis of our recommendations on what actions the provincial government should take to provide additional assistance for these groups. In order to reduce longstanding inequalities, OUSA believes that the government should offer targeted, nonrepayable aid to encourage individuals from these groups to obtain a post-secondary education. This should include both monetary and non-monetary assistance, in the form of bursaries, financial aid, as well as academic supports once students reach the post-secondary system in order to ensure that they can identify the best post-secondary pathway, benefit as much as possible from their education, and successfully graduate. Loan Repayment Principle Fifteen: Repayment of graduate debt must be structured in a fair and progressive manner. While the majority of discussion around student aid revolves around the amount of money allocated to financial assistance, another significant facet of the issue is loan repayment. The government’s (or other lenders’) policies around loan repayment can be the determining factor in whether the financial aid system is manageable or not, and what sort of broader effects debt may have on a student’s life in the long term. However, many students do not face the realities of the financial aid system and borrowing until the years after they graduate as they repay their loans. While obtaining a post-secondary education brings a major return on investment for graduates,134 this rate of return is diminished as a student’s debt level rises. In order not to penalize students who turn to the provincial financial aid system for assistance, the government must ensure that repayment policies are fair. The repayment structure must also be progressive, and respect the fact that there is a vast disparity in earnings after graduation. This is not only due to the different earning potentials of different types of employment, but also that there are wage variations within many fields. What is a manageable monthly payment for some students will be impossible to repay for others. Furthermore, high interest rates result in more costly loans for borrowers who take longer to repay. The government must not unduly penalize people who do not work in the most lucrative industries, and it should also not make it impossible for people to take socially important, but less well-paying jobs, such as in social work, teaching, child care, and so on. The financial aid system should work to avoid leading students into loan default and bankruptcy. These results would not only be detrimental for the financial aid system, but they could also lead young people to face damaged credit and other spin-off effects for many years to come. To prevent debt from being untenable for graduates, the provincial financial aid system must respond to individual circumstances, and provide additional protection and relief to individuals who face difficulties in loan repayment.

134 Craig Alexander and Eric Lascelles, “Investing in post-secondary education delivers a stellar rate of return” TD Economics Topic Paper, 22 January, 2004 (Toronto: TD Economics, 2004); accessed online at http://www.cou.on.ca/content/objects/PSE%20Rate%20of%20Return1.pdf.

Principle Sixteen: The financial aid system must provide additional assistance for those facing difficulty in repayment. Even in the best-designed financial aid system, some individuals will face difficulty in meeting their financial obligations, for a variety of reasons. If the financial aid system is to be seen as an investment in social and individual development, then the program must work to assist former students who are unable to repay their loans. This principle would benefit both students who face financial difficulties, and the financial aid system as a whole, which must shoulder the cost of loan defaults. OUSA has recommended that this should consist of assistance to individuals who are unable to meet their monthly obligations in the form of reduced monthly payments or delaying repayment through interest relief, and targeted debt forgiveness for certain individuals who face prolonged difficulty in loan repayment.

CONCERNS ABOUT THE STUDENT FINANCIAL AID SYSTEM Need Assessment & Loan Allocation As the cornerstone of the financial aid system, the OSAP need assessment formula plays a major role in determining the ability of the financial aid system to allocate sufficient funds to the individuals that need it the most. However, the formula is currently failing on several fronts. Concern One: The OSAP need assessment formula fails to accurately assess the financial needs of students in Ontario’s universities. One of the most critical problems with the financial aid system is that the mechanism used to assess a student’s financial need systematically underestimates the amount of money required by students in order to meet their educational costs. This results in students regularly receiving less financial aid than they require, with little recourse. As noted in Chapter Two, the OSAP assessment functions by assessing each applicant’s costs for their studies, by compiling their costs for tuition, textbooks and living expenses. However, there is a widespread acknowledgement by many stakeholders that these assessment figures are inaccurate. In 2003, a working group on OSAP reform at the University of Toronto that included students and administrators commissioned a study on students’ cost of living. The study, conducted by Runzheimer Canada, an international organization specializing in cost-of-living data, examined costs in Toronto, London, North Bay and Kingston for several student profiles, including single students living at their parents’ home, single students living in rental apartments, single student parents, and students living with a partner. While the provincial government has made some upward adjustments to the OSAP need assessment since 2003, including about $700 in increased recognition of textbook and computer costs, the Runzheimer findings continue to be very relevant.135 Runzheimer found that for all the profiles they examined, students’ costs of living exceeded the OSAP assessment levels, which resulted in most students receiving less OSAP funding than required to meet their basic costs. Furthermore, because of maximum loan amounts set by OSAP, most students received even less assistance than estimated by the inadequate need assessment calculation. According to the Runzheimer calculations, for single students living in rental apartments, the OSAP assessment underestimated costs by 40 per cent. Single student parents with a child in unsubsidized daycare would face a gap of over $10,000 between their assessed need and their actual costs.136 These funding shortfalls are illustrated in Figure One below.

OSAP changes from Ministry of Training, Colleges and Universities, “McGuinty government plan to improve quality and access in postsecondary education” (Toronto: MTCU, 2006); accessed online at http://ogov.newswire.ca/ontario/GPOE/200/03/08/c0202.html. 136 Runzheimer Canada, Student Cost of Living Study (Toronto: University of Toronto, 2003); accessed online at http://www.abrightfuture.ca/docs/Cost%20of%20living%20-%20UofT.pdf. 135

Figure One: Comparison of Student Cost-of-Living Study, OSAP Assessment of Costs and OSAP Provision, Toronto 2003137

Concern Two: The OSAP need assessment formula does not reflect variances in cost of living in different parts of the province. Another significant problem about the OSAP need assessment formula is that it uses a fixed figure to assess living costs across the province, which does not recognize the significant price variation that exists for similar goods and services. In particular, rental accommodations in Toronto can be significantly more expensive than in other parts of the province. The Runzheimer cost-of-living study estimates room and board for a single student living off-campus in 2003 to be $7,064 in Toronto, compared to $4,120 in North Bay, a difference of almost $3,000.138 Figure Two139 Cost Comparison, OSAP Provision & OSAP Assessment for Single Students Living Off-Campus, 2003 $20,000

$18,507

$18,000

$15,277

$16,000

$15,434

$14,941

A ctual Co st

$14,512

$14,000

OSA P M aximum Lo an

$12,000

OSA P A ssessment o f Co st

$10,000 $8,000 Toronto

London

Kingston

North Bay

Provincial Avg

C I TY

Ibid, 5. Since the 2003 Runzheimer study, the provincial government increased maximum OSAP loan amounts to $11,900 for single students, which would still leave them with a shortfall compared to Runzheimerâ&#x20AC;&#x2122;s cost-of-living estimates. 138 Ibid, 3. 139 Ibid. While the Runzheimer figures are from 2003, the maximum OSAP assistance figures have been updated to reflect the increase in 2005 to $11,900. 137

By attempting to make a ‘one-size-fits-all’ need assessment across the province, the provincial government provides many students with less money than is realistically needed to meet their costs of attending post-secondary education. Concern Three: The student financial aid system is not responsive to tuition and inflationary cost changes over time. Another way that OSAP’s one-size-fits-all need assessment fails to function effectively is in its lack of responsiveness to cost changes brought about by tuition hikes or inflation. As a result, from year to year, students see their costs rise, but the need assessment and maximum levels of OSAP assistance fail to reflect these shifts. The following chart compares the rising costs of education and living expenses to the maximum OSAP loans in the coming four years, based on the data from Runzheimer Canada. The costs of living are calculated for London, Ontario, as a case study. Figure Three140 Tuition and Living Expenses in London, ON vs. Maximum OSAP Loans, 2006 to 2009 $17,000 $16,000 Total Costs (tuition, books, living expenses)

$15,000 $14,000

Maximum OSAP entitlement

$13,000 $12,000 $11,000 $10,000 $9,000 2006

2007

2008

2009

Based on these projections, students living in London could see a shortfall of over $5,000 by 2009 in their OSAP loans. These cost discrepancies are even more pronounced in higher-cost cities like Toronto. Without instituting more responsiveness to the system, the already-imperfect OSAP need assessment will move further and further from students’ financial realities. Concern Four: Many students are barred from receiving financial assistance because of OSAP policies. In current OSAP policies, numerous students are unable to receive government financial assistance for various reasons including enrolment status, academic record, financial record, and their institution. This situation is largely due to changes introduced in the late 1990s which systematically cut several groups of people out of the system. Partly as a result of the changes, the number of students who accessed public financial assistance dropped about 40

Adapted from Runzheimer Canada, “Student Cost of Living Study” (Toronto: University of Toronto, 2003), accessible at http://www.abrightfuture.ca/docs/Cost%20of%20living%20-%20UofT.pdf. Costs have been based on average tuition and cost-of-living figures provided by Runzheimer Canada for London, and adjusted based on the tuition policy in effect from the date of the study in 2003 to 2009, and by inflation for these dates (using the Ontario government’s projected CPI from 2006 to 2009). 140

per cent, from 212,189 in 1995 to 130,687 in 2002, despite slight enrolment growth, as groups including part-time students found themselves shut out of the system.141 While the current approach in OSAP policy aims to limit recipients to full-time students, OUSA believes that the students currently prohibited from accessing the financial assistance program can often be the students that most crucially need aid in order to obtain a post-secondary education, particularly sole-support parents and low-income individuals. OUSA has some concerns about the exclusion of the following groups from the financial aid system: Part-Time Students Ontario students are not eligible for OSAP if they take less than 60 per cent of a full course load. Students must be enrolled in this minimum course load for both terms, so there is no averaging of course loads over an academic year in order to qualify.142 This policy replaced the previous regulation prior to 1997/98 that limited financial assistance to students who took 20 per cent of a full course load or higher.143 Part-time students are eligible for some assistance through the Canada Student Loan program, however assistance is capped at $4,000 per year and there is no interest deferral on the loans. In 2003/04, 2,797 part-time students received a loan, with an average value of $1,679. The part-time student loan is a miniscule proportion of the federal loan program; these borrowers accounted for less than one per cent of all Canada Student Loan recipients.144 Part-time students make up a significant portion of the Ontario student body. Over the past ten years, between 18 and 25 per cent of Ontario undergraduate students have pursued their studies part-time.145 While there is little research on the demography of Ontario students studying part-time, it is known that women are more likely to enroll in their studies at all levels of university education,146 and that a majority of students with dependent children with children under the age of five study part-time.147 Students’ reasons for pursuing studies part-time vary, but include time commitments to employment and family, financial constraints, and choosing a more manageable workload, amongst others. Other students begin their studies in full-time status, but switch to part-time status due to dropping one or more courses, for a wide variety of academic or personal reasons. By taking a lighter course load, part-time students are assumed to have more time to work and earn an income, reducing their need for additional financial assistance. However, this assumes that part-time learners earn sufficient income to support themselves and any dependents, as well as pay for their tuition and other educational costs. The policy therefore creates particular financial difficulty for students with low incomes that cannot meet their costs through employment income, as well students with dependents, who cannot earn work enough to meet their financial needs due to time commitments caring for their children or other dependents. While the financial aid system works on the implicit assumption that students choose to study part-time, in fact many students with family or work responsibilities are unable to take on full-time studies, so they face the choices of studying part-time or not at all.148 With the policy of barring part-time student from receiving OSAP and other forms of financial assistance, the provincial government effectively prevents a large proportion of the student body from accessing financial support for their studies, often those who already do not have access to sufficient financial resources to afford all educational costs. Furthermore, by not qualifying part-time learners for OSAP, the government also prevents these students from Sarah Schmidt, “Fewer Ontario students getting provincial loans”, National Post, November 27, 2002. OSAP website, “Eligibility”; accessed online at http://osap.gov.on.ca/eng/not_secure/eligibility.htm. 143 Sarah Schmidt, “Part-time students hit hard with OSAP changes”, The Varsity, June 4, 1997; accessed online at http://www.varsity.utoronto.ca/archives/118/jun03/news/Part.html. 144 Human Resources and Social Development Canada, Canada Student Loans Program Annual Report 2003-2004 (Ottawa: HRSDC, 2006), p.4; accessed online at http://www.hrsdc.gc.ca/en/hip/cslp/publications/07_pu_AnnualReport20032004.pdf. 145 Data from 2004, from Council of Ontario Universities, Facts & Figures 2006 (Toronto: COU, 2006), 3-5. 146 Council of Ontario Universities, Facts & Figures 2006 (Toronto: COU, 2006), p.3-6. 147 Sean Junor and Alex Usher, The Price of Knowledge 2004 (Montreal: Canada Millennium Scholarship Foundation, 2004), 69. 148 Oriel Varga, “Juggling financial need and family responsibilities”, Voice (Toronto: Association of Part-Time Undergraduate Students, 2006), 3-4, accessed online at http://apus.utoronto.ca/Updates/20060403/FinalVoice_March_2006.pdf. 141 142

accessing numerous other forms of need-based assistance, including work-study programs, as well as many scholarships or bursaries. As a result, part-time learners are turning to private loans to fund their education at a higher rate than full-time students. In 2001, 36 per cent of part-time students reported using private loans, compared to 20 per cent of full-time students.149 These borrowers tend to face higher interest rates and faster repayment terms, and do not receive interest relief provided in the public system. Another significant issue of consideration for OSAP policy is the withdrawal of financial assistance for students who had already received assistance, due to withdrawing or failing from a course and thereby switching to part-time status. This may occur for a variety of academic reasons, including lack of interest or poor performance in a class, changing to a more manageable work load, and so on. It could also occur for personal reasons such as illness or family tragedy. For students who switch to part-time status, the withdrawal of financial support from OSAP and the demand to return disbursed loans could cause distress and suffering for the student, particularly those facing difficult personal situations or failing a course. OUSA believes that the provincial government should take these situations into consideration in order to make the financial aid system more sensitive to individual situations. Students receiving Ontario Works Until about ten years ago, welfare recipients in Ontario could attend a post-secondary institution and receive a combination of non-repayable welfare benefits for their living costs, alongside student loans that would fund their tuition and books. However, starting in 1996/97, students could no longer access financial assistance through Ontario Works while obtaining an education. Instead, these individuals were required to use OSAP assistance to fund all of their educational and living costs.150 This was a switch between providing low-income students with non-repayable assistance for their living costs, which could then be topped up with OSAP for their educational costs, to a system where students would only receive repayable assistance to fund both their tuition and living costs for themselves and their families. This change is estimated to have affected about 17,000 post-secondary students.151 This change has hit sole-support parents and other students with dependents the hardest. These groups already face many financial challenges in accessing the post-secondary system. According to the Runzheimer Canada study evaluating cost-of-living for Ontario students in 2003, a student with a child living in a Toronto rental apartment offcampus would face $39,428 in costs for a single academic year, if their child was in an unsubsidized daycare.152 However, the maximum amount currently available for sole-support parents through OSAP is $17,440.153 This leaves a major shortfall of over $21,000 in students’ budget that they cannot address through public assistance. This financial situation becomes even more dire for students with more children. OSAP provides the same maximum level of assistance no matter how many dependent children a student may support. So despite the fact that a parent may face higher housing costs for a larger apartment, higher daycare costs, and more expenses for food and other essentials, they still receive a maximum of $18,530 for a 34-week academic year. While the level of assistance provided through Ontario Works is also much lower than actual living costs, it at least provides some recognition of the added costs of additional children.154

Canada Millennium Scholarship Foundation, Making Ends Meet: The 2001-2002 Student Financial Survey (Montreal: Canada Millennium Scholarship Foundation, 2003), 57. 150 Bob Rae, Ontario: A leader in learning (Toronto: Queen’s Printer, 2005), 75. 151 “Ontario cuts students off welfare” UW Gazette, May 16, 1996; accessed online at http://www.communications.uwaterloo.ca/Gazette/1996/May15/Ontario%20cuts%20students%20off%20welfare. 152 Runzheimer Canada, “Student cost of living study” (Toronto: University of Toronto, 2003); accessed online at http://www.abrightfuture.ca/docs/Cost%20of%20living%20-%20UofT.pdf. 153 OSAP website, “Maximum assistance”; accessed online at http://osap.gov.on.ca/eng/not_secure/funds.htm#amount. 154 Assistance rates from the Income Security Advocacy Centre, “Fact Sheet: Social Assistance Rates” (Toronto: ISAC, 2006); accessed online at http://www.incomesecurity.org/documents/Socialassistancerates-factsheet-march06_001.doc. 149

Pursuing post-secondary education is a means for individuals to obtain better employment opportunities to support themselves and their families. In 2005, individuals with a bachelor’s degree had a 76.7 per cent employment rate, compared to a 65.7 per cent rate for high school graduates, and 44.5 per cent for people with who had not completed secondary school.155 According to the Ontario Works Act, one of the purposes of the program is to provide “temporary financial assistance to those most in need while they satisfy obligations to become and stay employed”.156 By barring the lowest-income individuals on social assistance from obtaining financial assistance through OSAP, the provincial government effectively prevents many people from raising themselves out of economic dependency. The inequity of barring individuals from receiving Ontario Works while attending a post-secondary institution was also recognized by Bob Rae, in his Postsecondary Review. As he writes, “Starting immediately, the provincial government should start providing better support to Ontario Works (OW) recipients who enroll in postsecondary programs. This report recommends immediate changes to allow sole support and married students who are OW recipients to continue to receive income support and associated benefits while in school. These students would still be eligible for student aid, but their student assistance for living costs would be reduced by non-repayable OW benefits while they are studying.”157 For more information about this topic, please see OUSA’s policy on students with dependents, Investing for Generations: Ensuring university access and success for students with dependents, available on OUSA’s website at www.ousa.ca. Students who do not achieve ‘satisfactory academic progress’ Under OSAP regulations, students are required to successfully complete their program’s academic requirements in order to remain eligible for financial assistance. If a student switches, drops, withdraws or repeats programs too frequently by OSAP’s standards, they may cease to be eligible for aid.158 This status is conferred by the student’s institution, and implemented by OSAP. OUSA believes that the financial aid system should not be seen as a tool to punish what is deemed to be ‘lack of academic progress or direction’. Each university already has its own effective, personalized and remedial procedures for placing students under academic probation, and they are better equipped to evaluate and work to improve a student’s academic performance through non-financial means. The removal of financial support for students who fail to meet OSAP’s requirements is a blunt and inappropriate measure that will likely add financial struggles to students’ roster of problems, and will not assist them in addressing the causes of their academic difficulties. Students with Poor Credit Since 1998/99, students with poor credit history have been barred from receiving OSAP. The provincial government defines this group as individuals who have been 90 days in arrears on three or more personal loans, including credit cards or car loans, with a combined value of $1,000 or more.159 Students can appeal if they have exceptional circumstances or can demonstrate a strong likelihood of repaying student loans.160

Statistics Canada, “People employed, by educational attainment” (Ottawa: Statistics Canada, 2006); accessed online at http://www40.statcan.ca/l01/cst01/labor62.htm. 156 Government of Ontario, The Ontario Works Act, 1997; accessed online at http://www.canlii.org/on/laws/sta/1997c.25sch.a/20050801/whole.html. 157 Bob Rae, Ontario: A leader in learning (Toronto: Queen’s Printer, 2005), 74. 158 OSAP website, “Eligibility”; accessed online at http://osap.gov.on.ca/eng/not_secure/eligibility.htm. 159 OSAP Appeal Board, “What you need to know about the OSAP Appeals Process”; accessed online at http://osap.gov.on.ca/eng/PDF/0405/OSAP%20Appeal%20Brochure%202004-E.pdf. 160 Ministry of Education and Training, “Johnson announces initiatives to help postsecondary students”, February 13, 1998. 155

Individuals who have past student loans that are in default also face difficulty in accessing any further financial assistance. Students who received Canada Student Loans between 1995 and 2001 must ensure that their loans are in good standing, or else they must meet their financial institution’s requirements to make up to six consecutive payments in order to rehabilitate their loans. Every effort must have been made to discharge loans from prior to 1995 in order to receive any new financial assistance.161 While the ostensive rationale for barring these individuals from accessing assistance is that they constitute a risk for the financial aid system, by denying assistance, the government essentially shuts the doors of the post-secondary system to them. Unlike other students, individuals with poor credit are likely unable to access private loans, and therefore are particularly in need of government financial assistance in order to attend post-secondary education. Ontario Students Studying Outside Canada Ontario students studying at approved post-secondary institutions are able to receive some financial assistance from the federally-funded Canada Student Loan program up to $210 per week for independent students. While the provincial government recently announced 150 scholarships to assist students to complete some of their studies abroad,162 the provincial government does not provide the same assistance as the federal government for students studying outside the country. Some students must attend a university outside of Canada in order to obtain an education in highly specified fields or with top scholars, particularly at the graduate level. In some academic fields, there is insufficient capacity at Canadian universities, necessitating some students to study abroad in order. Other students may choose to study abroad to gain more international experience or to learn a language. These students often face much higher costs for travel, living expenses, and tuition, but are unable to access loans or other assistance to fund their education. The Ministry of Training, Colleges and Universities has stated that it believes that international learning experiences will provide students with a diverse learning environment, and will help the province “remain competitive in the global economy”.163 Rather than the small number of scholarships, the government could help encourage Ontario students to gain international perspectives and experiences by providing some level of financial assistance for studies abroad. Overall, one of the main purposes of the publicly-funded financial aid system is to provide assistance to individuals who face barriers to accessing post-secondary education, due to low income, family commitments, and other reasons. Assisting these individuals to obtain an education will allow them to obtain better jobs, earn larger incomes, and provide greater support to their families. In the 2001 national census, the median income for families where the primary earner had a university degree was 51 per cent higher than households where the primary earner held a high school diploma.164 Denying these students access to financial assistance amplifies the barriers that they face in reaching their goals. Investments to expand the financial aid system will bring about an expanded tax base, greater economic vitality, and a more democratically engaged, socially responsible population.

CanLearn website, “Determining eligibility for a Canada-Ontario Integrated Student Loan”; accessed online at http://www.canlearn.ca/cgibin/gateway/canlearn/template.asp?a=student&l=en&sc=pay/apply/ON/ft/public/determine_eligibility/loan_default.shtml. 162 Ministry of Training, Colleges and Universities, “Provincial government establishing scholarships to help Ontario postsecondary students study abroad” (Toronto: MTCU, 2006); accessed online at http://www.cnw.ca/en/releases/archive/August2006/31/c9809.html. 163 Ibid. 164 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, 2004). 161

Concern Five: Certain students face difficulty in accessing sufficient levels of financial assistance due to OSAP policies. Access to OSAP is not only an issue for groups that are ineligible under current regulations; it is also a significant issue for groups that qualify, but tend to not receive sufficient levels of financial assistance under the current need assessment policies for certain reasons. These limitations of OSAP policy amplify the other problems around the need assessment formula discussed earlier, often creating acute shortfalls in financial assistance to certain groups. Groups facing particular difficulty include: Students who do not receive financial support from their families Our financial aid system operates on the assumption that families provide financial assistance to their dependent children when they attend post-secondary education, and that the assistance they provide at least meets the assumed family contribution levels set out by the government. Students are considered dependents for four years after leaving secondary school, unless they have spent at least two years in the labour market.165 There are some measures in place for students facing family breakdown to be eligible for OSAP assistance without considering their parental income, however these are highly restrictive. Students can qualify in cases of family breakdown due to physical or sexual abuse, or certain other situations at a financial aid administrator’s discretion. In all cases, the family breakdown must be documented by a third party, preferably a professional directly involved in the situation, such as social workers, physicians, or psychologists. Common reasons for parents not providing financial support to their children are not accepted as grounds to consider students’ OSAP applications without parental income information. Examples of reasons not accepted by OSAP include:

Parents who feel that their children are independent once they reach age 18; or Parents who do not agree with their child’s choice of program or institution; Parents who do not approve of their child’s living arrangement; Parents who feel it is the responsibility of the government to fund post-secondary education.166

Many students in Ontario fall into these examples outlined above, as well as numerous other legitimate reasons why they do not have the level of financial support from their families set out by OSAP in their need assessment formula. In some cases, this may be due to parents overestimating the amount of financial assistance available to their children, and not accumulating enough savings to meet OSAP’s expected parental contributions. A Statistics Canada study found that 29 per cent of parents with 13 to 18 year-old children expected their child to receive need-based grants, but only 15 per cent of 18 to 24-year-olds actually received funds from outside the family. For children with savings, the average amount saved for them by parents not expecting grants was $10,100, compared to $6,900 for parents who expected their children to receive grants.167 Considering that most students face annual costs of at least $10,000 per year of their undergraduate degree, clearly parental behaviour is not aligned with the expectations of the financial aid system. While Ontario’s student financial aid system is predicated on the assumption that parents will contribute to paying for their children’s undergraduate education, there should be alternate avenues open to students for whom this is not a reality. These individuals have a genuine need for financial assistance in order to attend post-secondary education.

Ministry of Training, Colleges and Universities, 2005-2006 Student Eligibility and Financial Need Assessment Manual (Toronto: MTCU, June 2005),17. 166 Ministry of Training, Colleges and Universities, OSAP 2006-2007 Review Manual (Toronto: MTCU, June 2006), 13. 167 Sophie Lefebvre, “Saving for post-secondary education” Perspectives on Labour and Income 5(7), (Ottawa: Statistics Canada, July 2004); accessed online at http://www.statcan.ca/english/freepub/75-001-XIE/10704/art-1.htm. 165

By setting out certain expectations for parents, and not providing recourse or appeal for students whose parents do not fulfill those expectations, the provincial government leaves many students out in the cold. Students who cannot live at their family home Another policy ingrained in the need assessment system is that dependent students whose families live within 40 kilometers of their institution should live at home during their studies and commute to classes. However, this policy ignores various legitimate reasons why some students cannot live with their families during their studies. This includes lack of regular public transit in order to commute to school, as the 40 kilometer catchment area can often include rural areas that do not offer transportation options. Another concern is if there are problems are in the home environment. While there currently are grounds for OSAP appeals for these reasons, qualification is limited to students who have one or more family member with a drug or alcohol dependency, physical or developmental disability, or long-term illness. A student who appeals their OSAP assessment on these grounds must provide documentation from at least one parent and a professional third party (such as a psychologist), amongst other things.168 Students facing these and other circumstances must pay higher living costs in order to reside away from the family home, and this is currently not recognized by OSAP. Students from Middle-Income Families While the provincial government has made efforts to improve financial aid in recent years, there are a few indications that students from middle-income families may be falling through the gaps in the system. Recent research on the composition of the student body in Ontario indicates that large tuition hikes have had a significant impact on the level of accessibility of students, with middle-income students particularly at risk. The result could be that participation rates in post-secondary education could follow a barbell pattern, with increasing participation among students from the lower and upper ends of the income scale, but participation among middle-income students falling behind. Statistics Canada research through the 1990s shows that participation rates for post-secondary education increased for the lowest income category (with incomes below $25,000) and a narrowing of the gap in participation between this demographic and students with family incomes over $100,000. However, at the same time, participation rates for students in middle-income demographics stagnated and showed signs of decline.169 This finding suggests that financial aid programs have been directed to an overly narrow income band, neglecting students from middle-income backgrounds who still struggle with the costs of post-secondary education. Furthermore, some components of the financial aid system, such as tax credits, provide more assistance to students from higher income backgrounds. This issue is detailed further in Concern Thirty-Three. The situation facing middle-income students is particularly acute in high-cost professional programs. While tuition fees have been substantially raised in the past decade partly based on the rationale that graduates will earn enough to repay student loans, the financial barriers to entry are too high for many students who do not already come from wealthy backgrounds. In a Statistics Canada study of access to professional programs in Ontario, researchers found that after the rapid tuition hikes following deregulation in 1997, the proportion of students from high-income backgrounds increased considerably, and the proportion of students from low-income backgrounds also increased to a lesser extent, though their numbers were still very small.170 However, one particularly troubling finding of the study was that the proportion of students from middle-income backgrounds declined. These findings suggest that as tuition increased, students from middle-income families were possibly unable to afford the deregulated tuition fees because they did not qualify for as many bursaries, scholarships, or other forms of financial assistance as students from low168

Ministry of Training, Colleges and Universities, OSAP 2006-2007 Review Manual (Toronto: MTCU, June 2006), p.34-35.

Cited by the University of Toronto, The choice for a generation: University of Toronto submission to the Rae Review (Toronto: University of Toronto, 2004), p.8; accessed online at http://www.raereview.utoronto.ca/downloads/UofTraesubfinal.pdf. 170 According to the study, the probability of students from low-income backgrounds enrolling in a professional program rose from 0.5 per cent to 1.2 per cent between 1995 and 2002. 169

income families.171 They also suggest that the government must take care to ensure that middle-income students are not forgotten in the student financial aid system, and are not simply given the option of accruing major debt loads in order to attend post-secondary institutions. Adult Learners In a recent study by Karen Myers and Patrice de Broucker for the Canadian Policy Research Networks on adults who seek to further their education, numerous concerns about the financial aid system were highlighted as barriers to access. One of the underlying reasons why the financial aid system often does not meet the needs of older students is that the system is designed primarily to meet the needs of student who enroll in post-secondary education immediately after graduating from high school. Three ways that the financial aid system deals with adult learners are particularly problematic:

Older students tend to have more savings that reduce their need assessment calculation, but these students are often reluctant to deplete their savings and redeem their RRSPs in order to pursue further education, particularly if they have dependents, as it may make them more vulnerable to economic misfortune.

Older students also tend to have more personal assets such as automobiles, which are tallied as part of their financial resources, but do not provide liquid assets with which to fund their education.

Spouses are expected to make significant financial contributions to their partner’s education, at a greater rate than parents funding their dependent children’s education. This requirement has a major effect on married students’ eligibility for OSAP.

It should be noted that there are exemptions built into the financial aid system to ensure that not all assets must be completely liquidated in order to pay educational costs, as outlined in Chapter Two. The value of automobiles under $5,000 is not counted as an asset, in addition to an exemption of $2,000 per year in RRSPs that an applicant (and their spouse, if applicable) has left secondary school. However, despite these exemptions, there are indications that many mature students struggle financially in order to obtain a post-secondary education. A survey of student finances revealed that mature students attending postsecondary and not working full-time tend to rely on a broad range of sources in order to fund their education, including government assistance, their families, employment, private sources, and other monetary sources. However, these students tend to face a significant cash shortfall each month, even with borrowing. The mature students surveyed reported a $738 net shortfall before borrowing, and a $252 monthly shortfall after loans were included.172 Accumulated month after month, this is a significant sum of money that could result in defaulted loans, poor credit, evictions, and other grim consequences for both the student and any dependents. These types of barriers facing adult learners led Myers and de Broucker to describe that the financial aid system as “one of the most significant disincentives to participation” in the post-secondary system.173 Concern Six: Deregulation of tuition has resulted in significant tuition increases for students in certain programs over the past decade, which has not been adequately recognized by the financial aid system. A major problem in the student financial aid system is the existence of a separate set of rules for financial assistance governing certain programs. These policies leave students in these programs regularly facing shortfalls between the Marc Frenette, “The impact of tuition fees on university access: evidence from a large-scale price deregulation in professional programs”, (Ottawa: Statistics Canada, 2005), 6; accessed online at http://www.statcan.ca/english/research/11F0019MIE/11F0019MIE2005263.pdf. 172 Canada Millennium Scholarship Foundation, Making ends meet: the 2001-2002 student financial survey (Montreal: CMSF, 2003), 91. 173 Karen Myers and Patrice de Broucker, Too many left behind: Canada’s adult education and training system (Ottawa: Canadian Policy and Research Networks, June 2006), 41-45; accessed online at http://www.cprn.org/documents/43977_en.pdf. 171

amount of financial aid offered by OSAP, and the actual costs they face. These shortfalls are in addition to the inadequate amounts provided by OSAP for living costs, that were outlined in Concern One. In 1998, the provincial government deregulated tuition fees in professional and graduate programs, allowing institutions to set fee levels themselves in programs including computer science, high-demand engineering programs, dentistry, law, medicine, pharmacy, and second-entry undergraduate business and commerce programs, amongst others. This replaced the long-standing practice where the provincial government would set out the policy for tuition fees for all programs across the entire province. Following the deregulation of tuition, fees in these programs rose dramatically, as illustrated in Figure Four below. Between 1994 and 2003 (when a tuition freeze was instituted), fees in deregulated programs increased 261 per cent, while tuition in regulated programs increased by 139 per cent in the same period.174 Figure Four175 Maximum Domestic Tuition Fees in Selected Programs at Ontario Universities, 1997-2006 Tuition deregulated

$18,000

Tuition freeze instituted

Arts & Science

$15,000 Maximum OSAP assistance for single students

$12,000 $9,000

Law Engineering ACRP Dentistry

$6,000

Medicine

$3,000

20 05/06

20 04/05

20 03/04

20 02/03

20 01/02

20 00/01

19 99/00

19 98/99

19 97/98

19 96/97

The deregulated programs were categorized in government policy as ‘Additional Cost Recovery Programs’ (ACRPs), and separate rules were created in the need assessment calculations for the provincially-funded portion of OSAP loans, which constitute 40 per cent of a student’s loans. In the calculation of allowable educational costs in the Ontario portion of the need assessment, costs for tuition and compulsory fees in Additional Cost Recovery Programs is capped at $2,250 per term (or $4,500 for a two-term program) as well as an additional $425 in co-op fees for students in these programs.176 This is significantly less than the tuition fees charged in ACRPs, which can reach as high as $18,000. In the policies around tuition deregulation, the provincial government provided institutions with greater authority to set fees, but it also relinquished some of its responsibility to fund financial aid for students in these programs who would be charged higher tuition. Now, under OSAP policy, if students in additional cost recovery programs do not receive OUSA calculations based on data from Statistics Canada, “University Tuition Fees”, The Daily, August 12, 2003 (Ottawa: Statistics Canada, 2003), accessed online at http://www.statcan.ca/Daily/English/030812/d030812a.htm; Council of Ontario Universities Survey of Fees 2003; Statistics Canada, “University Tuition Fees”, The Daily, September 2, 2004; accessed online at http://www.statcan.ca/Daily/English/040902/d040902a.htm. 175 Council of Ontario Universities, Facts & Figures 2006 (Toronto: COU, 2006), 5-26. 176 Ministry of Training, Colleges and Universities, Student Support Branch, 2006-2007 Student Eligibility and Financial Need Assessment Manual (Toronto: MTCU, 2006), 17. 174

enough funds to cover their financial needs, their institutions are required by the government to provide additional aid for the portion of tuition above $2,250 per term. This aid can be provided in the form of work-study programs, bursaries, scholarships and loans, which are funded largely by tuition set-aside funds.177 However, further details about this policy in another OSAP manual indicate that institutions are only responsible for providing the lesser of either (1) unmet financial need as defined by the OSAP need assessment, or (2) the amount of actual tuition and ancillary fees in excess of $4,500.178 Because the OSAP need assessment only calculates tuition costs up to $4,500 for additional cost recovery programs, institutions’ financial aid obligations to students in these programs will still fall short of the actual costs they face due to inflated tuition fees not recognized by the need assessment. This absolves institutions of some of their responsibility to provide financial aid for students in high-cost programs. It is also yet another way that the OSAP need assessment fails students in high-cost programs. Concern Seven: Maximum OSAP assistance levels result in students not obtaining enough financial assistance to fund their costs of education. As noted in Chapter Two, OSAP has maximum assistance limits for both the Canada and Ontario portions of the Canada-Ontario Integrated Student Loan, which total $350 per week in assistance. For a 34-week program (about eight months), this totals $11,900 for a single dependent or independent student with no dependents of their own, and $18,530 for a student who is either married, in a common-law relationship, or a sole-support parent.179 OUSA has three major concerns with these maximum assistance limits, and the effects they will have on students’ abilities to meet their educational costs. Firstly, the existence of maximum levels of assistance that can often be well short of the financial need recognized by the financial aid system is a testament to how OSAP fails to provide enough aid to students. These assistance limits create a shortfall between aid allocations and a student’s assessed cost in the need calculations, resulting in many students having ‘unmet need’. The assistance limit is identical for dependent and independent students, despite the fact that independent students often have higher costs and lack the same safety net available to dependent students living in their family home. Furthermore, recent history has demonstrated that the assistance limits can often remain in place without adjustment for inflation or other cost increases, thereby eroding the value of OSAP loans year after year. Between 1994 and 2005, maximum OSAP assistance provided to a single independent student remained constant at $9,350, until it was finally raised to the current level of $11,900. This case demonstrates the results that can be incurred in a period of financial constraint, or when post-secondary education is not a political priority. As Figure Five below illustrates, the value of the $9,350 in assistance that would be provided to a student in 1994 would be worth much more than the same assistance package provided to a student in 2004. Due to inflation, the real value of a $9,350 loan in 2004 would be equivalent to $7,630 in 1994 dollars, over $1,700 less.

OSAP website, “Funding Available for Full-Time Students”; accessed online at http://osap.gov.on.ca/eng/not_secure/funds.htm#tuition%20limits. 178 Ministry of Training, Colleges and Universities, Student Support Branch, 2006-2007 OSAP Review Manual (Toronto: MTCU, 2006), 65. 179 OSAP website, “Funding Available for Full-Time Students”; accessed online at http://osap.gov.on.ca/eng/not_secure/funds.htm#amount. 177

Figure Five180 OSAP Maximum Loan Amount, Adjusted for Inflation $9,500 $9,000 $8,500

OSAP max loan 1994 value

$8,000 $7,500

19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04

$7,000

Lastly, maximum assistance amounts limit the effectiveness of other policy changes in the rest of the financial aid system. For example, if the federal or provincial government made adjustments to their parental contribution expectations, or any other element of the need assessment formula, these changes may not actually make a difference for students with the greatest financial need, because their aid allocations will be capped by the assistance limits. Student financial aid allocations should ideally be responsive to change and variation, including geographical cost variations, inflationary changes, or others. By capping assistance levels regardless of need allocations and other policy changes, maximum assistance limits act as blunt measures that prevent the system from assisting students effectively. Concern Eight: The OSAP need assessment formula currently penalizes students who gain employment income by clawing back financial aid. In the OSAP need assessment formula, a studentâ&#x20AC;&#x2122;s earnings during both the summer and the academic year are counted as part of the financial resources available to funding the costs of their education. There is a small exemption for study period earnings of $50 a week, which translates to $1,700 for an eight-month academic year. Students reported an average income of about twice this rate, with average monthly earnings of $478 per month, or $3,824 in an academic year.181 OUSAâ&#x20AC;&#x2122;s concern about this policy is that it prevents students from meeting their costs through additional employment. These earnings are vital resources that students use to make up the shortfall between the amount of aid allocated by OSAP and their actual costs. In the 2001/02 Student Financial Survey, 57 per cent of students who received a government loan or bursary also reported holding some form of employment.182 The survey also shows a clear correlation between the amount of total loans received by a student, and the number of hours worked. The lesser the amount of loans received, the more hours that a student worked.183 By counting a large proportion of this earned income as part of the financial resources available to them in the academic year, the provincial government denies students from making up for the inadequacies of OSAP through paid employment. As long as the financial aid system fails to provide enough assistance to students to meet their Based on authorâ&#x20AC;&#x2122;s calculations. EKOS Research Associates, Making ends meet: the 2001-2002 student financial survey (Montreal: Canada Millennium Scholarship Foundation, 2003), 42. 182 Ibid, 40. 183 Ibid, 45. 180 181

assessed need, employment earnings will likely remain a vital financial resource, and should therefore not be clawed back. Concern Nine: Students are increasingly required to take on part-time employment to fund their educational costs, which can be detrimental to the quality of their education. While part-time jobs and other forms of employment are important for providing money and work experience for students, there are some concerns that too much work may be detrimental to the quality of studentsâ&#x20AC;&#x2122; educational experiences. In the 2001/02 Student Financial Survey, full-time students with a grade average of C or lower were more likely to be employed (68 per cent were employed, compared to 62 per cent of students with higher averages). They also tended to work more hours per week (18 hours, compared to 15.3 and 15.5 for students with A and B averages, respectively).184 While it is difficult to definitively say whether the studentsâ&#x20AC;&#x2122; work loads contributed to their academic performance, this statistics are still cause for concern and caution around heavy employment commitments during the academic year. More worrisome findings emerge from survey questions where 41 per cent of full-time students thought they could complete their studies in a more timely way if they did not have to work.185 These responses indicate that for some students, lack of sufficient financial resources are forcing them to take on more employment than can be adequately managed alongside full-time studies. The student financial aid system should be filling that gap. Access One of the broader social goals of the student financial aid system is to assist individuals from disadvantaged demographics to gain access to post-secondary education, and thereby assist them in socio-economic advancement. However, due to certain policies in the financial aid system and a lack of a broader strategy to target these groups, the financial aid system is not fulfilling its goals in this area. Concern Ten: Certain groups in Ontario are accessing post-secondary education at lower rates than the rest of the population. Certain groups in society continue to access the post-secondary system at lower rates than the rest of the population, and at dramatically lower rates than their counterparts from high-income families. This is a major cause for concern for the student financial aid system, whose main purpose is to promote more equitable access to post-secondary education for individuals of all socio-economic backgrounds. It also indicates need for more assistance for these students that reaches beyond simply financial aid, including outreach programs, learning supports, transitional programs, access to high-quality child care, and so on. As statistical evidence indicates, the following groups face particular difficulties in accessing post-secondary education. It should be noted that these demographic classifications tend to correlate in real life, with many people from disadvantaged groups also tending to have low income backgrounds as well, resulting in greater barriers to post-secondary education. Low-Income Ontarians: Young people from low-income backgrounds are much less likely to attend post-secondary education than their higher-income counterparts. The university participation rate in 2001 for 18 to 21-year olds from families from the highest income quartile is double that of those in the lowest income quartile.186 While participation rates for lower-income groups increased between the late 1970s and the 1990s, this has mirrored an increased Ibid, 42. Ibid, p.44. 186 Atiq Rahman, Jerry Situ and Vicki Jimmo, Participation in post-secondary education: evidence from the Survey of Labour and Income Dynamics (Ottawa: Statistics Canada, 2005), 15. 184 185

participation rate at a societal level, so the participation rates of highest and lowest income quartiles remains separated by about 20 per cent. For every ten per cent increase in parental income, Statistics Canada correlates a 2.5 per cent increase in probability of university attendance in 2000.187 Aboriginals: The rate of Aboriginal Canadians holding university degrees was only five per cent in 1996, and this fell to 4 per cent in 2001, compared to 16 and 15 per cent for the Canadian population for the same years. The Aboriginal population living in cities has higher rates of university participation, at 7 per cent, compared to 2 to 4 per cent of Aboriginals living on reserves and in rural areas and small towns. Moreover, a high proportion of Aboriginals had low levels of high school completion, with 43 per cent of Aboriginal people aged 20 to 24 reporting less than a high school education, compared to 16 per cent for the rest of the country.188 This suggests that raising rates of university participation will be a challenge that extends beyond simply financial aid. Rural and Northern Residents: Nine per cent of Ontarians live more than 80 kilometers from a university, defined by Statistics Canada as beyond commuting distance of an institution. At a national level, the participation rate of this demographic is 11 per cent, compared to 23 per cent of their counterparts living within 40 kilometers of an institution. In addition, 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. 189 Distance and the lower family incomes associated with rural residency are preventing many individuals from advancing into the university system. It should also be noted that there are some distinct differences between rural and northern residents, and not all rural residents live far from a post-secondary institution. Students with Dependents: As noted earlier, individuals with dependents tend to face many barriers, including financial and time constraints, to accessing post-secondary education. There is little published data on the proportion of students with dependents in Canada; however, some indicators suggest that women with children tend not to attend post-secondary education. In 2001, approximately 19 per cent of women between the ages of 20 and 24 had dependent children, however only four per cent of 20-year-old women attending university reported having a child.190 Also, in 2001, only 12.5 per cent of women who were lone parents in Ontario had a university certificate, degree or other qualifications, compared to the Ontario average of 19.6 per cent.191 Students with Disabilities: About 13.5 per cent of Ontarians report living with a disability. Twelve per cent of adults with disabilities hold a university degree, compared to 25 per cent of all adults. Barriers to students with disabilities can include inadequate financial resources, physical inaccessibility, lack of accessible curricula and evaluation methodology, educational barriers due to learning disabilities, problems accessing support services, and lack of understanding by faculty and other students.192 Middle-Income Students: There is also growing evidence that rising tuition fees, both concretely and as a percentage of household income, may be squeezing middle-income students out of the university system. According to research conducted by Statistics Canada, the university participation rate for students from middle-income families Miles Corak, Garth Lipps and John Zhao, Family income and participation in post-secondary education (Ottawa: Statistics Canada, 2003), pp. 2, 11, 33. 188 Michael Mendelson, “Aboriginal peoples and postsecondary education in Canada” (Ottawa: Caledon Institute of Social Policy, July 2006), 10-16; accessed online at http://www.caledoninst.org/Publications/PDF/595ENG%2Epdf. 189 Marc Frenette, “Too far to go on? Distance to school and university participation” (Ottawa: Statistics Canada, 2002), pp.2, 11, 13; accessed online at http://www.statcan.ca/english/research/11F0019MIE/11F0019MIE2002191.pdf. 190 David Holmes, Embracing Differences: Post-Secondary Education among Aboriginal Students, Students with Children and Students with Disabilities (Ottawa: Canada Millennium Scholarship Foundation, 2005), 23. 191 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 and Census Agglomerations, 2001 Census - 20% Sample Data,” 2001 Census (Ottawa: Statistics Canada, 2003); 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, 2004). 192 Bob Rae, Ontario: a leader in learning (Ontario: Queen’s Printer, 2005), 69-70. 187

in Canada decreased during the mid-nineties, until the final year of reported data.193 Another Statistics Canada study found that students from middle-income families were the only group to experience declining enrolment in professional programs after the deregulation of tuition fees in the late 1990s.194 It is uncertain whether this represents a long-term trend that will continue. Concern Eleven: The provincial government’s Student Access Guarantee only guarantees students access to resources for tuition, books and mandatory fees, and is limited to students who are eligible to apply for OSAP. In the tuition framework announced in March 2006, the provincial government announced the creation of a ‘Student Access Guarantee’, promising that no qualified Ontario student would be prevented from attending a public university or college in the province. In order for a university to raise their tuition, they must participate in this guarantee. As of October 2006, the provincial government has begun to release more guidelines for institutions to follow on the implementation of the guarantee. The 2006/07 academic year will be an interim year for the Student Access Guarantee, where institutions themselves will set out how they will fulfill two principles: 1. No qualified Ontario student should be prevented from attending Ontario’s public colleges and universities due to lack of financial support programs; 2. Students in need should have access to the resources they need for their tuition, books, and mandatory fees.195 Under the guarantee, students are expected to apply to OSAP, and their parents will still be expected to contribute to their child’s education. It is the responsibility of institutions to provide any additional resources to meet the costs of tuition, books, and fees, that are not provided by OSAP. The provincial government is allowing this unmet need to be provided through bursaries, scholarships, work-study positions, and employment between terms. For students in second-entry programs, including law, medicine, and some business programs, the institution can also meet their responsibilities by providing students access to a bank line of credit.196 While the creation of the guarantee was a significant gesture, OUSA has several concerns about its substance, as it currently stands. The first concern is that the provincial government is only guaranteeing students access to resources to fund their tuition, books, and mandatory fees. This ignores the existence of significant costs for living expenses. So while students can be assured that they will have sufficient resources to pay their university’s tuition, they may lack the funds to pay rent or buy groceries. This is a significant omission that impacts students’ day-to-day lives. Furthermore, for students in higher-cost second-entry programs, the access guarantee will likely mean access to more private bank debt, as institutions simply assist them in arranging bank lines of credit in order to fulfill the guarantee. A second major concern around the Student Access Guarantee is that it excludes from its purview any students who are not eligible to apply for OSAP. This will yet again exclude groups like part-time students and students with poor credit histories, who are already unable to receive OSAP, and bar them from accessing the assistance that is available to their counterparts who are eligible for the Student Access Guarantee.

Miles Corak, Garth Lipps and John Zhao, Family income and participation in post-secondary education (Ottawa: Statistics Canada, 2003), p.33. Final year of reported data is 1997. 194 Marc Frenette, The impact of tuition fees on university access: evidence from a large-scale price deregulation in professional programs (Ottawa: Statistics Canada, 2005), 19. 195 Ministry of Training, Colleges and Universities, Student Support Branch, “2006-07 Student Access Guarantee Guidelines”, (Toronto: MTCU, September 2006), 1. 196 Ibid, 4. 193

The third concern revolves around the Student Access Guarantee’s lack of measures to address expanding access among under-represented groups, despite its designation as an ‘access guarantee’. This is part of a broader concern around the lack of a strategy on how to target students from under-represented groups, discussed next. Concern Twelve: The government lacks a meaningful access improvement strategy. Based on the contents of Student Access Guarantee, it is somewhat disingenuous for the program to be referred to as an ‘access guarantee’. The policy will guarantee the availability of financial assistance to students who are already attending college or university and are eligible to apply for OSAP, but it does not reach out students who are currently not accessing the post-secondary system, or include any efforts to actually expand access. Under the current terms, the Student Access Guarantee would be more aptly referred to as a financial aid guarantee. Much more must be done to expand access amongst young people who are currently not considering even applying for post-secondary education, or see it as outside their realm of possibilities. The provincial government’s strategy on increasing access is currently only at an early stage. The government has expanded the mandate of the Higher Education Quality Council of Ontario (HEQCO) to include research and monitoring on access, which was a very positive step. The government has also created advisory committees on Francophones, people with disabilities, Aboriginal peoples, and first-generation students to advise the Minister of Training, Colleges and Universities, and promised $10 million to fund programs to outreach to these groups. While these are positive first steps to provide guidance on expanding access, the provincial government still lacks a clear strategy and plan on how they intend to do this. Set-Aside Concern Thirteen: Institutional financial aid funded by the tuition set-aside is mostly limited to OSAP-eligible students. In the past decade, institutional-level financial aid has become an increasingly important part of the student funding puzzle. The provincial government’s establishment of the tuition set-aside policy in 1996, provincial matching programs for institutional fundraising (such as OSOTF and OTSS), and the introduction of the Student Access Guarantee (which requires institutions to fund the costs of tuition, books and mandatory fees that are unmet by OSAP), are all steps towards a greater reliance on institutional financial aid in the delivery of assistance, as opposed to systemic provincially-funded student financial aid. In so doing, the provincial government is now treating institutional financial aid as part of the core provision of assistance, rather than as supplementary aid or add-ons. One of OUSA’s concerns about this shift is that institutional financial aid also tends to rely on the provincial qualification criteria for financial aid, so recipients often must be eligible for OSAP in order to access the range of bursaries, scholarships, and work-study positions offered at the institutional level, and this requirement excludes many students who have legitimate financial need. This has helped to create a dual system where OSAP-eligible students can receive OSAP loans and grants, in addition to institutional financial aid, while students who are not qualified for OSAP are entirely shut out. For example, the University of Toronto Advance Planning for Students program (UTAPS) is conducted by the University of Toronto in addition to the OSAP assessment. For students who are assessed by OSAP as requiring the maximum level of assistance, but whose assessed need is not covered by government financial aid, the university provides additional funding to cover the unmet need, in part through set-aside funds.197 However, the set-aside program largely funds OSAP-eligible students, leaving many ineligible students with neither OSAP funds nor additional set-aside funding.

“University of Toronto Advance Planning for Students (UTAPS)”; accessed online at http://www.adm.utoronto.ca/fa/UTAPS/default.htm. 197

Concern Fourteen: There are inconsistent levels of institutional financial aid available at different universities. The increasing reliance on institutional financial aid raises additional concerns about the varying levels of financial aid dollars available at different universities across the province. In many cases, institutional financial aid is funded by donations to the university, some of which are matched by the provincial government. Past experience has shown that older and more prestigious institutions with larger and wealthier alumni bases tend to outpace other institutions in their fundraising capacity, resulting in more non-repayable financial aid that is available to their students. These institutional inequities can be seen in the current institutional financial aid offerings the University of Toronto. This university currently offers financial aid guarantees to fund ‘unmet need’ based on students’ OSAP need assessments. The guarantee has been in place at the University of Toronto since 1998. The institution provides additional grants, bursaries, loans and employment to students whose OSAP cheques fall short of the need assessed by the provincial loan program. With a maximum OSAP loan of $11,900 for an eight-month academic program, many students, particularly those facing higher tuition in professional programs, do not receive sufficient loan amounts to cover their expenses. The University of Toronto’s guarantee ensures that each student is provided with access to resources needed to meet their OSAP-assessed need. Much of the funding for these guarantees at the university has been generated in part from institutional financial aid programs, including the tuition set-aside, as well as through endowment funds generated through private donations and matched by the provincial government through various programs.198 It is no coincidence that the only institutions in Ontario that currently offer this guarantee are universities with the largest pool of private donations. The University of Toronto has long been a fundraising powerhouse compared to other Ontario institutions. With its large and relatively affluent alumni pool as well as its advanced fundraising capabilities, the university received the largest sum of private donations in the OSOTF II program, and consequently received over $110 million in matching funds from the provincial government. This sum was one-third of the total funds allocated for all of Ontario’s 22 universities.199 While the University of Toronto has been able to provide a significant amount of assistance to students, other institutions have much more limited resources and will face difficulty in meeting their aid obligations under the new Student Access Guarantee. Concern Fifteen: The tuition set-aside drives up overall financial need and debt for students across the province. The 30 per cent tuition set aside policy has created the situation where a significant amount of the cost of nonrepayable student aid is not borne by taxpayers at large but by students themselves, without any incentive for institutions to keep tuition costs as low as possible. This is done without any test of ability to pay, creating several perverse effects. Firstly, it drives up overall financial need. For example, at one Ontario law school, tuition was increased by $4,000 in a single year, requiring students to contribute $1,200 each to the set-aside fund through this tuition hike.200 If the 30 per cent extra charge were removed, there would be fewer students with financial need. Furthermore, because there is no needs test, the cost of the extra contribution falls more heavily on the middle class than the upper class. Students who do not qualify for financial aid receive no benefit from what amounts to an involuntary transfer of wealth. The extra 30 per cent is essentially a compulsory contribution, in the form of a regressive income tax surcharge. In the case of the $1,200 contribution to the set-aside fund cited above, a student whose family falls short of qualifying for financial aid by just $1 makes the same $1,200 contribution as the student whose family wealth is $1 University of Toronto, The Choice for a Generation: University of Toronto Submission to the Rae Review (Toronto: University of Toronto, 2004), 7; accessed online at http://www.raereview.utoronto.ca/downloads/UofTraesubfinal.pdf. 199 Jeff Henry and Anthony Piscitelli, Fixing the Ontario Student Opportunity Trust Fund (Toronto: OUSA, 2005). 200 Tuition figures from Alan J.C. King et al., Study of Accessibility to Ontario Law Schools (Kingston: Queen’s University Social Programs Evaluation Group, 2004), 39. 198

million. This is an unfair system for students who are already in high need situations. It is comparable to requiring that everyone pay their taxes but only deeming a few individuals be eligible for free health care. The current financing of the tuition set-aside is unfair for students who do not qualify for OSAP, as they pay into a system they cannot benefit from. Additionally, it may create more debt for all those students who receive OSAP as their tuition increases drive up their need for loans. The funding cuts of the last decade and the lagging financial assistance system have created a structure in which the costs of attending post-secondary education and the assistance available for students are separated by a substantial gap. Set-aside funds are poorly addressing the gap by driving up the overall need of students in the system. Concern Sixteen: Work-study positions require students to help fund their paid employment through the tuition set-aside policy. While some work-study positions offer useful career experience for students, the funding of work-study through the tuition set-aside is a concern for many students. By providing need-based financial aid through paid employment, students must dedicate time and energy to these work-study positions, simply to receive funds to which they already contributed through higher tuition. While intended to offset the effects of tuition increases by simultaneously increasing the availability of financial aid dollars, the set-aside policy results in all students – whether they can afford them or not – paying higher fees in order to generate these funds. Students who obtain a work-study position must then work in order to earn back the money they paid through increased tuition fees. Inevitably, many needy students do not benefit from a work-study position. Furthermore, because work-study positions are mostly limited to OSAP-eligible students, other students who have legitimate financial need are barred from benefiting from these portions of set-aside funds. Concern Seventeen: Some work-study positions are lacking educational substance and are unrelated to students’ studies. The work-study program provides students with financial need with an opportunity to earn income toward their next term’s educational costs. It is intended in part to provide students in need with an opportunity to acquire work experience relevant to their academic and personal development.201 However, at some institutions, work-study jobs often have little relevance to a student’s program of study, and are instead used to fulfill staffing needs at the university, working in positions such as a parking lot attendant. Concern Eighteen: Some institutions experience an inequitable distribution of institutional financial aid funded by the tuition set-aside, where students from high-cost programs often receive a disproportionate amount of aid. Concerns have been raised at some institutions that students in certain faculties with comparatively high tuition are receiving the lion’s share of money distributed from tuition set-aside funds, so students from other faculties contribute to the funds but do not receive a significant benefit. For example, in the 1999/2000 academic year, medical and dental students at the University of Western Ontario received $1,552,153, or 22 per cent of total set-aside funds available at the university that year, despite only composing 6 per cent of the total student population eligible for the set-aside.202 In that year, first-year medical and dental students paid tuition fees of $10,000 and $14,000, respectively.203 It is certain that these high tuition fees were closely tied to the elevated financial needs of these University of Western Ontario, Office of the Registrar, “Work Study”; accessed online at http://www4.registrar.uwo.ca/FinancialServices/WorkStudy.cfm. 202 University of Western Ontario Board of Governors, “Report of the Campus and Community Affairs Committee”, November 25, 1999; accessed online at http://www.uwo.ca/univsec/board/minutes/1999/r9911cca.html. 203 University of Western Ontario, “Recommended Full-Time Student Tuition Fee Rates for 1999-2000”; accessed online at http://www.uwo.ca/western/Budget99/table10a.html. 201

students. Considering that tuition for these programs are now over $15,000 for medical students and $27,000 for dental students, the financial needs of these students are likely even higher.204 This concern has also been raised at Queen’s, where the it has been noted that the common pooling of set-aside funds results in the prejudicial allocation to students in faculties with relatively higher tuition fees, resulting in students in lower-cost programs effectively subsidizing higher tuition fees in other faculties.205 Access to Information While there is a huge body of work examining the issue of access to post-secondary education, the issue of access to information about the post-secondary system and financial aid are often a quiet afterthought to these discussions. However, access to post-secondary education necessarily begins with access to information. Without knowledge of the post-secondary system, students could not possibly apply or enroll to a university, and without knowledge of the student financial aid system, students could not receive any funding to assist them in the costs of their education. For students in secondary school, applying for university and for OSAP could potentially be some of the first major decisions that are taken by the students themselves, and not automatically done by their schools or parents on their behalf. New high school graduates are not the only audiences for this information; adult learners who are considering post-secondary studies are another significant audience, and they often lack access to resources such as high school guidance counsellors in investigating university or financial aid. It is therefore crucial that accessible and userfriendly information is provided to all applicants who are embarking on a major new path in their lives. In the area of financial aid, there are currently many barriers in place that hinder prospective students from obtaining enough information about the financial aid system. This includes barriers around applying for financial aid, as well as understanding the highly complex system of financial aid itself. By addressing these obstacles, the provincial government could help ensure that students receive the assistance that is available to them, and that they also understand their obligations in the financial aid system, so students can navigate the aid system as smoothly as possible. Concern Nineteen: Students report having insufficient knowledge about the financial aid system. High school students applying for college or university for the first time often have little knowledge about the postsecondary system, nor of the types of student financial aid that is available to them. In the Ontario University Applicant Survey conducted in 2004 by Acumen Research, a high proportion of students reported having little knowledge of the financial aid programs and scholarships available to them. Their responses are illustrated in Figure Six.

University of Western Ontario, “Tuition and Ancillary Fee Schedule for 2005-2006”; accessed online at http://www3.registrar.uwo.ca/FinancialServices/2005_2006FeeScheduleUGRDFT.pdf. 205 Grant Bishop, Report of the Rector – March 4th, 2006; accessed online at http://www.queensu.ca/rector/BOT_Reports/Grant/BOTMarch2006.htm. 204

Figure Six: Knowledge of Student Financial Aid Programs amongst University Applicants, 2004206

A separate survey in 2003 found that only nine per cent of students felt that they had enough information about loans and scholarships, and many students wanted more information on the costs of post-secondary education.207 These informational gaps about financial aid may be acting as barriers to the post-secondary system for certain students. In a 2003 survey, 40 per cent of respondents who had never attended post-secondary education reported being unaware of how to apply for a student loan. The same percentage of respondents also reported finances as being a barrier.208 Concern Twenty: Students face difficulty in obtaining useful information about the student financial aid system. One of the major challenges facing Ontario’s student financial aid system is to make the highly complex array of financial aid programs understandable and accessible to its applicants. OSAP is currently failing on this front. The following are some of the main problems with OSAP’s communications with students: (1) The OSAP website is not user-friendly. Visiting the OSAP website is a frustrating experience that can provide no information on certain important issues, far too much information on others, and presents all of this in a miniscule eight-point font size. The OSAP application is a portal to numerous financial aid programs, including Canada Student Loans, Ontario Student Loans, Millennium Bursaries, Access to Opportunity Scholarships, and many others. Students visiting the OSAP website must sift through vast amounts of highly detailed information related to all of these programs in order to find the information that specifically applies to them. Even then, applicants may be unsure about whether the information applies to their case. One way to address the ‘information overload’ would be to require users to enter basic data about themselves (e.g. full-time or part-time status, public or private institution, etc.) and display only the information that is applicable to their situation. This is the set-up of the Canada Student Loan website (www.canlearn.ca), which enables the website to provide applicable information for applicants from a much broader range of circumstances, as different rules apply for each province. This option will be discussed further in the ‘Recommendations’ section of the paper, in Chapter Seven. Another monumental problem with the user-friendliness of the financial aid system is the complexity of the Acumen Research, Funding University Education in Ontario: Ontario University Applicant Survey Report (Montreal: Canada Millennium Scholarship Foundation, 2006), p.17; accessed online at http://www.millenniumscholarships.ca/images/Publications/ouas-report_en.pdf. 207 Christine Laporte, “Financial Barriers to PSE” (presentation to the CASFAA/Millennium Conference on Enhancing Access to Post-Secondary Education, Ottawa, Canada, September 15, 2006). 208 Heather MacDonald, “What is Keeping People Out? Perspectives on Barriers to PSE” (presentation to the CASFAA/Millennium Conference on Enhancing Access to Post-Secondary Education, Ottawa, Canada, September 15, 2006). 206

OSAP application process. This issue merits its own full discussion, which follows in Concern Twenty-One below. (2) There is a lack of awareness about programs and assistance available to students. Usage statistics indicate that there is insufficient awareness of programs such as Interest Reduction in Repayment that are aimed at assisting students facing financial difficulties. While 35 per cent of Ontario borrowers in repayment in 2000 were eligible for Interest Relief, only 43 per cent of eligible students took advantage of the program, which would prevent interest from accruing on their loans for six-month terms.209 In a separate study conducted by OSAP, about one-third of survey respondents said they were unaware of interest relief programs. The study’s authors concluded that awareness of the interest program should be increased through greater loan counseling that should be offered online, by institutions, and loan service centres.210 (3) The consolidation and repayment process is overly complex. Within six months of completing full-time studies, students must contact the National Student Loan Service Centre to consolidate their provincial and federal assistance into a single loan for repayment, and set the terms for the repayment schedule.211 The Canadian Student Loan Program reports that many problems encountered in the loan repayment process are attributable to the complexity of the financial aid system, as students may be carrying loans from different private financial institutions and levels of governments, and many have also encountered changes to the financial aid system over the course of their post-secondary education.212 (4) There is no system information available. OSAP provides little to no information about the program on a system-wide basis. This information is very important to researchers and other stakeholders who attempt to assess the effectiveness of the financial aid programs. This stands in contrast to the federal government, which publishes an annual report for the Canada Student Loan Program (CSLP) detailing their activities, loan disbursements, the demographic profile of borrowers, average indebtedness, the uptake of relief and aid programs, and more.213 The provincial government should follow this example and provide the same accountability for financial aid dollars that it requires from universities and colleges for their operating funds. (5) There is no way to contact OSAP for more information. OUSA is frequently contacted by students who are frustrated with the OSAP system and are unable to obtain more information about how their application was assessed. There is no contact information available for applicants or other stakeholders who have questions about their application on the OSAP website; these individuals are directed to the financial aid office of their post-secondary institution, which vary in their ability to provide assistance and advocate for students’ best interests. Concern Twenty-One: The OSAP application is exceedingly complex. At the heart of the financial aid system is the OSAP application, which must be completed by anyone in Ontario who receives loans, bursaries or scholarships funded by the government. The paper version of the OSAP application runs a lengthy 22 pages, and requires applicants to list detailed information about their income, savings, and assets, as well as this data for their parents and/or spouse. It also requires applicants to obtain and provide supporting documentation for many items, including documentation of marital status and gross market value of automobiles. Jerry Situ, Canada Student Loans Repayment Assistance: Who Does and Does Not Use Interest Relief? (Ottawa: Statistics Canada, 2006), 16; accessed online at http://www.statcan.ca/english/research/81-595-MIE/81-595-MIE2006047.pdf. 210 John Mortimer and Patrick Codrington, “Interest Relief Program and Loan Repayment” (presentation to the CASFAA/Millennium Conference on Enhancing Access to Post-Secondary Education, Ottawa, Canada, September 16, 2006). 211 CanLearn website, “Repaying your student loan”; accessed online at http://canlearn.ca/cgibin/gateway/canlearn/template.asp?a=student&l=en&sc=pay/repay/ON/ft/public/repay_loan/how_consolidate.shtml. 212 Human Resources and Social Development Canada, Canada Student Loans Program Annual Report 2003-2004 (Ottawa: HRSDC, 2006), p.34; accessed online at http://www.hrsdc.gc.ca/en/hip/cslp/publications/07_pu_AnnualReport20032004.pdf. 213 Human Resources and Social Development Canada, Canada Student Loans Program Annual Report 2003-2004 (Ottawa: HRSDC, 2006); accessed online at http://www.hrsdc.gc.ca/en/hip/cslp/publications/07_pu_AnnualReport20032004.pdf. 209

While this information is necessary to assess the amount of assistance available to each student, it can be very difficult for many applicants to understand and correctly complete the application in full. It also costs $10 to submit the paper application. In contrast, an individual tax return containing forms for both federal and provincial tax returns runs for 19 pages, slightly less than the 22 pages of the OSAP application. Like the financial aid application, each individual filing a tax return is not required to complete the entire form, but only the sections that pertain to their particular situation. However, unlike the OSAP application, many people obtain the paid assistance of professional accountants in order to complete their taxes accurately. By contrast, many students applying for OSAP lack the assistance of guidance counselors or other knowledgeable individuals to ensure they are completing the application accurately. They also often lack extensive experience in dealing with complex applications or financial information. The OSAP application process should aim to be as simple and easy to use as possible, as the accuracy of information entered on an OSAP application is highly important and can intricately affect the amount of assistance that a student receives. Students who enter incorrect information on their application, whether intentional or not, can face serious repercussions including becoming ineligible for future assistance.214 By simplifying the OSAP application process, the provincial government could provide better and more accurate assistance to the students. The OSAP website could also be used proactively to provide better targeted information to visitors about the OSAP application, through tools such as an online estimator of loan allocations. This could allow students to know in advance whether they could expect to receive financial assistance, and roughly how much it would be. For students who would likely not receive assistance, such a calculator would save them a great deal of time and effort that would be required to collect the information and documentation. Concern Twenty-Two: The financial aid system does not provide clarity or transparency in assessing need assessments or loan allocations. After they complete the lengthy loan application process, the OSAP system only provides applicants with two pieces of information, namely whether or not they qualified, and how much funding they will receive. The reasons behind these decisions are not included, which leaves many students confused and frustrated. In order to help students understand the logic behind the financial aid system, and to determine whether or not they should pursue an appeal of the decision, more information should be provided about the assessment process. Concern Twenty-Three: High school guidance programs often fail to provide sufficient information about financial aid to students. Despite the knowledge gap around student financial aid, the front-line resource of high school guidance counsellors are frequently not providing students with the information they need about programs that are available to them, or skills that they need to manage their financial resources and obligations. Guidance counsellors in middle and high school are expected to fulfill countless roles for students, ranging from crisis management, teach effective work habits, providing career education, as well as providing students with information about post-secondary education and financial aid. However, guidance counsellors in Ontario frequently find themselves overworked as they attempt to provide services to far too many students. In Ontario high schools, there is a rate of one guidance counsellor for every 370 students. Only 15 per cent of Grade Seven and Eight schools have guidance counsellors, and those that do have an average of one half-time counsellor per 895 students.215 With these heavy workloads, there is insufficient opportunity for counsellors to provide customized information to students about financial aid and how to manage their finances in post-secondary education and beyond. There is also an inconsistent level of knowledge about financial aid programs amongst guidance counsellors.

OSAP website, â&#x20AC;&#x153;Verificationâ&#x20AC;?; accessed online at http://osap.gov.on.ca/eng/not_secure/verif.htm. People for Education, The Annual Report on Ontarioâ&#x20AC;&#x2122;s Public Schools (Toronto: People for Education, 2006), p.12; accessed online at http://www.peopleforeducation.com/OPSReports/annual06.pdf. 214 215

Given these time and staffing pressures, it is not surprising that a study of guidance services in Canada found that high school students had little knowledge of financial aid programs that were available to them, especially needbased bursaries. While there tended to be more awareness of excellence awards and other merit scholarships, these were seen as accessible only to the academically gifted.216 Loan Repayment While the majority of the focus on the student financial aid system on the front end, through need assessments and loan allocations, the back end of the aid system, loan repayment, is equally important. Students do not face this element of the financial aid system until after they graduate or otherwise leave their studies, so it tends to receive less attention. However, the loan repayment policies play an important role in determining the effectiveness and equity of a financial aid system. The manageability of loan burdens is largely shaped by details such as monthly payment amounts, the level of flexibility in repayment processes, and the provision of programs for borrowers facing financial difficulty. The following concerns outline some of the problem areas OUSA has identified in the OSAP loan repayment process. Concern Twenty-Four: Many students face difficulty in repaying their student loans. Student loans are often the first major financial responsibility shouldered by young people. However, like any form of debt, they must be managed responsibly, or long-term consequences can ensue. At present, a large proportion of students in post-secondary education are taking on some form of debt, with 40.7 per cent of Ontario students holding government student loans.217 Not all students face difficulty repaying their student loans. About 22 per cent of undergraduate students who graduated in 2000 report completely repaying their loans within two years of graduation. However, these students are still in the minority. A slightly larger proportion of graduates, 24 per cent, reported difficulty in repaying their loans in 2000, and 14 per cent had loans of greater than $25,000. This figure also does not include the significant proportion of students (41 per cent) who pursue additional education after graduation.218 Worse still, a sizeable number of borrowers enter default; in 2004, OSAP reported a loan default rate of 14.4 per cent.219 This is well above the Ministry’s business plan to reduce default rates below ten per cent.220 Human Resources and Social Development Canada reported a three-year blended CSL default rate in Ontario of 29.2 per cent in 2003/04. This is the proportion of the loan value entering repayment that the Canadian Student Loan Program (CSLP) anticipated would default (in arrears for more than 270 days) within three years of consolidation. Analysis done by the CSLP found that debt loads above $15,000 were associated with a higher likelihood of default; this

Canadian Career Development Foundation, The Role of Guidance in Post-Secondary Planning (Montreal: Canada Millennium Scholarship Foundation, 2003), 28. 217 Canada Millennium Scholarship Foundation, “The Price of Knowledge 2004: Ontario”; accessed online at http://www.millenniumscholarships.ca/en/research/pokon.asp. 218 Statistics Canada, “National Graduates Survey: Student debt” The Daily, April 26, 2004 (Ottawa: Statistics Canada, 2004); accessed online at http://www.statcan.ca/Daily/English/040426/d040426a.htm. 219 This is calculated as the number of loans in default as a percentage of the number of loans issued; this calculation is different from the Canadian Student Loan Program’s method of calculating default rates. From OSAP website, accessed online at http://osap.gov.on.ca/eng/not_secure/default.htm, and Ontario Ministry of Training, Colleges and Universities, “Ontario Student Loan Recipients and Defaults for Ontario Postsecondary Institutions, 2004 and 2003”; accessed online at http://osap.gov.on.ca/eng/PDF/0405/default%200405%20-%20sector.pdf. 220 OSAP website, “2003 Default Rates”; accessed online at http://osap.gov.on.ca/eng/not_secure/default.htm 216

category encompasses about one in five borrowers in the program. Borrowers with debt loads of $27,000 or higher faced a 3 per cent increased probability of default for every extra $1,000 in debt.221 These statistics are troubling for both the borrowers and the financial aid system as a whole. Not surprisingly, high debt loads and loan defaults lead to long-term financial difficulties for the borrower (which will be discussed in further detail in Concern Twenty-Nine). Furthermore, the cost of defaulted loans cost the OSAP system $96 million in 2002/03, which was 27 per cent of their overall expenditures, more than the amount spent on all provincially-funded bursaries and scholarships. Clearly, reducing the level of defaulted loans would be in the best interests of the provincial government. Concern Twenty-Five: Interest rates on OSAP loans are higher than in peer jurisdictions, resulting in higher costs to borrowers who take longer to repay their loans. Another crucial element of the financial aid system that tends to be overlooked is the interest rates charged on student loans, which significantly affects the amount of money a borrower is obligated to repay, and therefore the manageability of loans. At present, the financial aid system in Canada subsidizes the cost of interest on loans while a borrower is a student, but then charge relatively high interest rates compared to other jurisdictions after students graduate and begin to repay their loans. As noted in Chapter Two, the interest rates at the time of writing (October 2006) were 8.5 to 11 per cent for Canada Student Loans, and 6 per cent for Ontario Student Loans. Compared to other jurisdictions, these interest rates are very high, as illustrated below in a report from 2005. Figure Seven: Interest Rates Charged on Student Loans222 Country Interest Rate Interest Rate During Studies During Repayment Australia 2.4 per cent 2.4 per cent Canada 0 6 per cent Germany 0 0 Netherlands 3.05 per cent 3.05 per cent New Zealand Inflation 7 per cent Sweden 3.1 per cent 3.1 per cent United States 0 3.37 per cent Canadaâ&#x20AC;&#x2122;s relatively high interest rates result in a system where borrowers who take a longer time to repay their loans, whether due to large debt loads, low income levels, or other reasons, can be charged substantially more on their loans than students who pay off their loans quickly. This makes the financial aid system more onerous for borrowers who are already in more difficult financial situations. Unfortunately, there is little research conducted on borrowers facing difficulty in repayment, since graduate surveys only tend to occur up to five years after graduation.223 Furthermore these surveys tend to exclude students who leave their studies without graduating, who also face higher risk of default.224

Human Resources and Social Development Canada, Canada Student Loans Program Annual Report 2003-2004 (Ottawa: HRSDC, 2006), p.33-35; accessed online at http://www.hrsdc.gc.ca/en/hip/cslp/publications/07_pu_AnnualReport20032004.pdf. 222 Alex Usher, Global Debt Patterns: An International Comparison of Student Loan Debt Burdens and Repayment Conditions (Toronto: Educational Policy Institute, 2005), 3; accessed online at http://www.educationalpolicy.org/pdf/Global_Debt_Patterns.pdf. 223 Sean Junor and Alex Usher, The Price of Knowledge 2004 (Montreal: Canadian Millennium Scholarship Foundation, 2004), 287. 224 US Department of Education, Office of Student Financial Assistance, Ensuring Student Loan Repayment: A national handbook of best practices (Washington, DC: US Department of Education, 2001), 27; accessed online at http://www.ifap.ed.gov/eannouncements/attachments/0118nhbook1web.pdf. 221

As the chart below demonstrates, borrowers who extend their amortization period by five years face substantially greater costs to service their loan: Figure Eight: Monthly Payments on a $28,000 OSAP Loan over 10 or 15 years225 Loan Amount Amortization Period Monthly Repayment Total Repayment Total Interest Paid $28,000 10 years $389.67 $46,760.77 $18,760.77 114 months $28,000 15 years $326.97 $56,893.02 $28,893.02 174 months In this case, a student repaying their $28,000 loan over 15 years rather than ten will pay $9,059.62 in additional interest charges on the same loan, which is over 2.5 years worth of monthly payments. Concern Twenty-Six: There is very little flexibility in the OSAP loan repayment process for borrowers with different income levels and/or fluctuations in income. Because of the mortgage-style repayment system for OSAP loans, students are obliged to make fixed monthly repayments based on the value of their loan, without any other factors taken into consideration. There are no adjustments for students with lower incomes in order to make the payments more manageable. Furthermore, students who choose to make larger monthly payments to OSAP cannot later re-adjust their payment levels to a smaller amount if their income decreases. There are measures in place for students who have low incomes and cannot afford the monthly payments through Interest Relief and Debt Reduction in Repayment programs, however they are primarily intended for students who face severe and/or prolonged financial difficulties. Students’ loan obligations must comprise a large proportion of their incomes, particularly for students with the heaviest debt loads, in order to qualify for interest relief or debt reduction. For example, a student with a $1,400 combined monthly payment on all student loans cannot qualify for interest relief unless their income is lower than $3,305 per month.226 This disqualifies students whose monthly payments comprise less than 42.4 per cent of their income. For students who do not qualify for interest relief but are still having difficulty meeting their loan obligations, there are no measures in place to make loan payments more manageable. No partial payments are permitted, leading more students into default. Concern Twenty-Seven: Due to wage inequalities, graduates from systematically disadvantaged groups may experience additional barriers in loan repayment. One major concern about student loan repayment policies is that certain groups in society systematically earn less than others, even when performing jobs of equal value. Under the current mortgage-style loan repayment system with fixed repayment terms and relatively high interest rates, for groups who systematically earn less than their peers, the loan repayment process may become longer, more onerous, and more expensive, both as a percentage of their income and in real dollar terms. This has the effect of making the manageability of the loan repayment system unequal due to broader wage inequalities in society. Wage inequalities continue to be a reality in the Canadian workforce. In 2001, the federal government created a Pay Equity Task Force to conduct a review of the equal pay provisions entrenched in the Canadian Human Rights Act.

Based on Prime Rate as of September 2007. Prime rate of 6.25%. Amortization period calculated as a 10 and 15 year repayment minus six months to address grace period. Negates to address interest accrued during first six months. 226 OSAP website, “Income Eligibility Chart”; accessed online at http://osap.gov.on.ca/eng/PDF/0506/Income%20Eligibility%20Chart%20-%20August%201%20%202005.pdf. 225

This act indicates that it is discriminatory for an employer to establish or maintain different wages for male and female employees doing work of equal value in the same establishment. The task force found that Canadian women continue to earn less, on average, than men, with an income of 71 cents for every dollar earned by male counterparts in 2000. This is attributed in part to discrimination where female dominated jobs tend to be paid less than male dominated jobs of equal value. While much of the focus in pay equity surrounds gender inequalities, the task force also found that other disadvantaged groups suffer from similar discrimination, including visible minorities, persons with disabilities, and Aboriginal people.227 Concern Twenty-Eight: Bankruptcy policies make it excessively difficult for students encountering severe financial difficulties to access bankruptcy protection. For individuals facing prolonged and insurmountable difficulty in repaying their loan obligations, bankruptcy protection is an important last-resort protection measure. However, due to policy changes instituted in 1998, student loans in Canada cannot be discharged as part of a claim for personal bankruptcy unless the person has been out of study for at least ten years. The policy was introduced shortly after the government began to shift a greater proportion of the costs of education to students through drastically tuition fees and larger debt loads, and effectively prevented students from discharging those loan obligations through bankruptcy. This policy change was unexpectedly introduced by the federal government, and was instituted just a year after the federal government conducted extensive stakeholder consultations, which led to the establishment of a two-year waiting period before student loans could be discharged. The federal government never provided an explanation for this drastic change, but speculation was that it was made in response to suspicions that young professionals were simply declaring bankruptcy to eliminate their debt despite an ability to repay their loans.228 However, research conducted by Saul Schwartz, a leading Canadian researcher at Carleton University on the manageability of student loans, shows that this type of situation only represents a tiny fraction of cases. His analysis of the individuals seeking bankruptcy protection on debts including student loans found that most had very low incomes, and no guarantee of higher future incomes. As he argues, “waiting ten years is not only unlikely to change their economic situation, but will deny them the ‘fresh start’ that is one of the aims of the BIA [Bankruptcy and Insolvency Act].”229 Debt Concern Twenty-Nine: There is high reliance on repayable forms of assistance. With the elimination of universal grants in Ontario in 1993 and the increasing reliance on student loans as a means of meeting higher tuition costs, there has been an implicit shift in the philosophy underlying the funding of postsecondary education. Student assistance programs that rely primarily on loans use a basic assumption that future earnings will be sufficient to repay the loans, and leave enough net gain to justify the original investment. One clear articulation of this assumption is the deregulation and rapid escalation of tuition fees in programs where graduates are assumed to earn high wages, which would thereby allow them to repay larger debts. However, since about the early 1990s, returns on investments in higher education in Canada have been leveling off and even declining.230 This trend roughly corresponds to the time when tuition started to rapidly increase for Canadian students. As public subsidies go down and private costs go up, the net rates of return decline because Department of Justice Canada, “Pay Equity Review: Backgrounder” (Ottawa: Department of Justice Canada, May 2004); accessed online at http://www.justice.gc.ca/en/payeqsal/6026.html; Department of Justice Canada, “Pay Equity Review: Chapter One – Wage Inequities” (Ottawa: Department of Justice Canada, May 2004); accessed online at http://www.justice.gc.ca/en/payeqsal/6005.html. . 228 Saul Schwartz, “The dark side of student loans: debt burden, default, and bankruptcy”, Osgoode Hall Law Journal 37(1,2), 331. 229 Ibid. 230 Sean Junor and Alex Usher, The Price of Knowledge 2004 (Montreal: Canada Millennium Scholarship Foundation, 2004), 324. 227

more of the increases in wages have to go to repaying student loans. In Canada, the federal government and most provincial governments seem unaware of how relatively low the net rates of private return on investments in higher education have become, calling into question Ontario’s predominant reliance on repayable student aid. The provincial government recently announced that non-repayable assistance would be made available to low- and middle-income families, for the first time in approximately a decade. However, these grants are only available to students in their first or second year of undergraduate studies, so low-income students in their upper years of university will face greater financial difficulty in meeting their educational costs. Concern Thirty: Students are accumulating high debt loads, which can lead to them abandoning their studies. The heavy reliance on loans in Ontario’s student financial aid system has left students in the province with significant debt loads. In the most recent survey of university graduates, 40.7 per cent of Ontario’s Class of 2000 reported having government student loan debt, averaging $22,700. This was significantly higher than the national average of $18,900, and does not include students holding private loans.231 There are indications that debt levels are continuing to rise; the Canada Millennium Scholarship Foundation reports university graduate debt in 2006 at an average of $24,047.232 While the size of debt loads is a significant concern, the broader effects of debt are even more worrisome. As the Canada Millennium Scholarship Foundation notes, there is clear empirical evidence that qualified students can be driven to abandon their post-secondary studies due to high debt loads. Research conducted by Lori McElroy found that the larger the annual loan allocation, the lesser the probability that a student would complete their degree. Students with annual loans in the range of $3,000 to $9,999 had a 51 per cent probability of degree completion, and students with annual loans greater than $10,000 had just a 34 per cent probability of graduating.233 These students will not be able to access the full economic benefits of receiving a post-secondary degree through increased income levels, and will also be saddled with heavy debts. Statistics Canada reports an employment rate of 76.7 per cent for individuals who have completed a bachelor’s degree, but only a 63.1 per cent rate of employment for those who have only some post-secondary experience.234 Concern Thirty-One: Students who are unable to access OSAP or do not receive sufficient assistance from OSAP are using private loans in order to finance their education. Statistics on students’ financial resources clearly indicate that many are turning to private loans in order to fund their education. This includes both students who receive OSAP but face additional financial shortfalls, as well as students who do not receive government student assistance. Furthermore, these students borrowed substantial amounts of money from private sources. These loans often come in the form of student lines of credit offered by banks, which are not need-tested, and are therefore often available to students who do not qualify for OSAP. Most student lines of credit require students to make monthly payments on the interest on their loans, and then provide a 12-month grace

Canada Millennium Scholarship Foundation, “Price of Knowledge 2004: Ontario”; accessed online at http://www.millenniumscholarships.ca/en/research/pokon.asp. 232 Canada Millennium Scholarship Foundation, “Raising expectations”; accessed online at http://www.millenniumscholarships.ca/images/news/AGM_2006_EN.pdf. 233 Canada Millennium Scholarship Foundation, “The impact of bursaries: debt and student persistence in post-secondary education” Research News 2(2) (Montreal: Canada Millennium Scholarship Foundation, 2006), p.1-3; accessed online at http://www.millenniumscholarships.ca/images/Publications/MRN04_Persistence_EN.pdf; Canada Millennium Scholarship Foundation, “Raising expectations”; accessed online at http://www.millenniumscholarships.ca/images/news/AGM_2006_EN.pdf. 234 Statistics Canada, “People employed, by educational attainment” (Ottawa: Statistics Canada, 2006); accessed online at http://www40.statcan.ca/l01/cst01/labor62.htm. 231

period before the loan converts to a regular amortized loan requiring monthly payments on both the interest and principal.235 Amongst students with government student loans, 18.5 per cent took out private loans, borrowing an average of $585 a month. For students without government loans, 11.1 per cent turned to private lenders, and borrowed an average of $727 a month.236 Considering that the OSAP need assessment currently budgets $969 per month in living allowance for a dependent or independent student living away from home, these borrowing figures indicate that students have substantially greater need than the OSAP need assessment would suggest. Borrowing patterns also indicate that lower-income students are turning to private loans in greater proportions than their higher-income counterparts. For students whose parentsâ&#x20AC;&#x2122; highest level of education was high school, 18.7 per cent used private loans, compared to 15.9 per cent of students with parents who graduated from college, and 11.6 per cent of students whose parents graduated from university.237 OUSA believes that the growth of private student assistance is a highly negative trend in student assistance. There are four major areas of concern: 1. Private loans are 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 thus can be structured in accordance with the principle of maximizing university access while minimizing the negative impacts of student debt. 2. Private loans tend to require repayment in study. Under almost every publicly-administered student aid program including OSAP, a student makes no repayment 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, simply to service their debt.238 This usually does not include any repayment of the principal of the loan. This represents the addition of a considerable financial burden to students who are already struggling to finance their studies. 3. Private loans have 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 (OSOG), interest relief at both the federal and provincial levels, and additional debt reduction program 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 not 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, including damaged credit, garnished salaries, and even the seizure of personal property. 4. Private loans have higher interest rates. Students sometimes end up paying higher interest rates under privately administered student loan programs, and even more punishing interest rates for outstanding

Sean Junor and Alex Usher, The Price of Knowledge 2004 (Montreal: Canada Millennium Scholarship Foundation, 2004), 237238. 236 Christine Laporte, â&#x20AC;&#x153;Making ends meet: financial barriers to PSEâ&#x20AC;? (presentation to the CASFAA/Millennium Conference on Enhancing Access to Post-Secondary Education, Ottawa, Canada, September 16, 2006). 237 Ibid. 238 EKOS Research Associates, Making Ends Meet: The 2001-2002 Student Financial Survey (Montreal: Canada Millennium Scholarship Foundation, 2003), 86. 235

balances on student credit cards. The following chart lists the interest rates for student lines of credit and student credit cards, current at the time of writing (September 2006). Figure Nine: Interest Rates for Student Borrowing at Major Canadian Banks239 Bank Student Line Student Credit of Credit Card TD Canada Trust 7.75 per cent 19.75 per cent Royal Bank 7.25 per cent 18.5 per cent Bank of Montreal 7.25 per cent 18.5 per cent Scotiabank 7.25 per cent 18.5 per cent CIBC 8.25 per cent 18.5 per cent (depends of credit rating) Concern Thirty-Two: There is a lack of research on the long-term effects of student debt. Over the past 15 years, as the higher education system has faced funding pressures, higher tuition has come to play an increasingly prominent role in funding the costs of post-secondary studies. Larger student loan burdens have accompanied this shift, as students defer the costs of their education until after they have graduated and enter the workforce. Graduates of undergraduate programs in the Class of 2000 owed about 30 per cent more than the Class of 1995, and 76 per cent more than the Class of 1990, even after adjusted for inflation.240 This policy shift towards higher debt loads and longer periods of repayment has likely occurred without analysis of what thresholds might exist before debt becomes unmanageable. Other important considerations are what the longterm effects of deferring payment until later in students’ lives might be, on either an individual and societal level. It is an easy fix to allow students to pay for higher tuition through broadened eligibility criteria, longer repayment periods, and higher loan limits in the financial aid system, however more thought must be given to what the potential longterm trade-offs might be. With the 76 per cent increase in debt loads in less than a generation, what will be the effects on graduates’ plans to pursue more education, purchase homes, or raise children? Rather than providing a simple solution for increasing students’ financial contributions to their education, increased debt loads may have much longer-term impacts upon our society. The career choices of high-debt graduates may serve as a useful case study. A report by the State PIRGs’ Higher Education Project examined the debt burdens of public and private university graduates in the United States, and gauged whether they would be able to afford to take jobs in essential public service fields such as teaching or social work. Using a measure of ‘manageable debt’, they show that 23 per cent of public university graduates carry too large a loan burden to manageably repay their debts as a starting teacher, and 37 per cent would not be able to afford a position as a social worker. For private university graduates, these proportions rise to 38 per cent for teaching and 55 per cent for social work.241 Limiting students’ career choices due to loan burdens will have consequences for both these important professions and the broader economy. System Issues Concern Thirty-Three: Governments have displaced their commitments to student financial aid in reaction to the availability of other aid dollars from other sources.

Calculations as a result of phone calls to each bank, and website. Interest rates as of 18 September, 2007. Statistics Canada, “National Graduates Survey: Student debt” The Daily, April 26, 2004 (Ottawa: Statistics Canada, 2004); accessed online at http://www.statcan.ca/Daily/English/040426/d040426a.htm. 241 Luke Swarthout, Paying back, not giving back: student debt’s negative impact on public service career opportunities (Washington, DC: State PIRGs’ Higher Education Project, 2006), 4-5; accessed online at http://www.pirg.org/alerts/route.asp?id2=23337. 239 240

There are many different players and programs that make up Ontario’s student financial aid system, including the federal and provincial governments, institutional financial aid, a federal foundation, as well as private scholarships and bursaries. While the CSL and OSL programs are fairly well coordinated, the federal and provincial governments have used the availability of financial aid money from other sources as justification to reduce the amount of government financial aid provided to students. As a result, students have seen no difference in their personal finances despite the creation of major new financial aid programs and the allocation of new sums of money for student aid. The best-known case of student aid displacement involves the implementation of need-based bursaries in certain provinces by the Canada Millennium Scholarship Foundation (CMSF). The CMSF was created in 1998 through a $2.5 billion endowment from the federal government, with the purpose of granting scholarships to students who are in financial need and demonstrate merit, in order to improve access to post-secondary education.242 The program supplies both merit-based scholarships and need-based bursaries to students across the country. The funding is not directly disbursed to students; rather, it is paid to each provincial government and applied to the student’s outstanding loan balance. On the surface, the Millennium Scholarship model is an effective means to provide backend financial assistance in order to reduce debt loads. Unfortunately, the administration of the OSAP program has interfered with the program reaching its full effectiveness 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. These students also receive a $500 top-up funded by the provincial government. Once the bursary has been applied to the loan principle, a student is only eligible for a maximum of $1,900 in provincial debt remission. This has a major impact upon students, as illustrated in Figure Ten below. Rather than receiving any new money for debt reduction, as was the intended effect of the bursaries, due to political negotiations around the implementation of the bursaries in Ontario, students simply saw the source of their existing debt remission funds switch in part to the CMSF. Figure Ten: Consequences of the Millennium Bursary Displacement of OSOG Financial Circumstance Maximum OSAP Award Millennium Bursary OSOG Contribution Millennium Top-Up Total Yearly Debt

Financial Results Financial Results with Displacement without Displacement $11,900 $11,900 ($3,000) ($3,000) ($4,900) ($4,900) $500 n/a $6,500 $4,000

The CMSF responded to the displacement by creating agreements with each provincial government on the use of displaced funds, which would be required to be used in the ‘same or related priority area’, which was defined as being ‘for the benefit of students’. In Ontario, this produced an agreement for the provincial government to reinvest displaced funds into guaranteed $500 top-ups for bursary recipients, increased operating grants for universities, increased in-school work and scholarship exemptions, Ontario Graduate Scholarships, and a doubling of the workstudy program. In 2000/01, these re-investments came to a sum of $85 million.243 While these uses do assist students in some way, they decrease the level of non-repayable assistance that would be available to students without the Millennium displacement.

House of Commons, Bill C-36, Budget Implementation Act, February 24, 1998; accessed online at http://www2.parl.gc.ca/HousePublications/Publication.aspx?pub=bill&doc=C-36&parl=36&ses=1&language=E&File=29#3. 243 Institute of Intergovernmental Relations, Queen’s University, Canada Millennium Scholarship Foundation: Evaluation of the foundation’s performance, 1998-2002 (Montreal: Canada Millennium Scholarship Foundation, 2003), 45; accessed online at http://www.millenniumscholarships.ca/images/Reports/evaluation_en.pdf. 242

By the end of 2005, the Millennium Scholarship Foundation reported providing a total of $638,103,000 for debt reduction for Ontario students since the foundation’s creation in five years of distributing funds.244 This is a huge pool of funds that the provincial government has chosen to not provide to Ontario students in the form of non-repayable assistance as a result of the availability of Millennium funds. Concern Thirty-Four: Tax credits for post-secondary education tend to disproportionately benefit higher income individuals and/or families. In Canada, tax credits do not equally benefit individuals across income brackets. On average, high income earners claim more through the tax credits than do people from low or middle income families, likely due to the fact they tend to pay more in taxes. In 2004, the average tuition and education amount claimed by families in the bottom income quartile, with an average income of $28,800, was $520. By contrast, parents in the highest income quartile, with average incomes of $200,100, claimed an average tuition and education tax credit of $2,000. Middle-income parents in the second and third quartiles claimed $1,300 and $1,600, respectively.245 Tax credits do little to help lower income families to gain access to post secondary education. The educational tax credit system requires students to pay their tuition, living expenses and related fees for their education with money up-front, and then the credits are provided several months later on the individual’s income taxes. Tax credits do not help with the initial financial entrance into the post secondary education system, unlike other forms of financial assistance like up-front bursaries or grants. The students will most benefit from tax credits are already in the system. The federal government now spends over $2.5 billion in student financial assistance programs that are implemented through the income tax system, including both tax credits, and to a lesser extent, Canada Education Savings Grants. This is more money than is spent through the entire Canada Student Loans Program through loans and grants.246 Tax credits offer about $2,000 in total tax savings to each student in Ontario (based on $5,000 in tuition fees), regardless of need or income. Furthermore, tax credits are becoming increasingly popular, with large recent increases in the amount of education credits provided by the federal and other provincial governments.247 OUSA believes that the money spent on tax credits would be much more effectively used as up-front financial aid that is targeted to students with the greatest need. Concern Thirty-Five: Ontario tax credits do not provide the same credit for residence fees as other forms of rental housing. While OUSA has fundamental concerns about the use of education tax credits as a means of distributing financial assistance, they are not the only types of tax credits that impact post-secondary students. In Ontario, students (and residents over age 18 in general) are eligible to receive tax credits for property tax or rental costs. According to the provincial government, the Ontario Property Tax Credit and other forms of tax credits are aimed at assisting Ontario residents with low to moderate incomes.248 The program provides up to $250 in tax credits for individuals paying

Canada Millennium Scholarship Foundation, The cross-Canada impact of Canada Millennium Scholarship Foundation programs (Montreal: CMSF, 2006); accessed online at http://www.millenniumscholarships.ca/uploadfiles/documents/annual_reports/impact_2005_en.pdf. 245 Christine Neill, “Tuition and education tax credits” (presentation to the CASFAA/Millennium Conference on Enhancing Access to Post-Secondary Education, Ottawa, Canada, September 16, 2006). 246 Sean Junor and Alex Usher, Student Aid Time Bomb: The coming crisis in Canada’s student financial aid system (Toronto: Educational Policy Institute, 2006), p.18; accessed online at http://www.educationalpolicy.org/pdf/timebomb.pdf. 247 Christine Neill, “Tuition and education tax credits” (presentation to the CASFAA/Millennium Conference on Enhancing Access to Post-Secondary Education, Ottawa, Canada, September 16, 2006). 248 Ontario Ministry of Finance, “Property Tax Credit”; accessed online at http://www.trd.fin.gov.on.ca/userfiles/HTML/cma_3_2483_1.html. 244

property tax or rent in Ontario, and applies to a broad range of housing, including houses, apartments, condominiums, hotel or motel rooms, mobile homes and rooming houses.249 OUSA’s concern about this tax credit is that students who live in university residences cannot benefit from the same amount of tax credits as individuals living in rental apartments, and can only claim $25 in credit. This is ostensibly due to these residences being exempt from paying municipal or school tax.250 However, the cost of living in a university residence is often on par with rental housing, if not more. The students who live in these facilities should not be barred from accessing the same level of tax credits as other students.

Certified General Accountants of Ontario, “Ontario Provincial Tax”; accessed online at http://www.cgaontario.org/contentfiles/publications_promotions/ptp/ontario.aspx; Canada Revenue Agency, “Completing your Ontario Forms”, p.6; accessed online at http://www.cra-arc.gc.ca/E/pub/tg/5006-n/5006-n-05e.pdf. 250 Canada Revenue Agency, “Completing your Ontario Forms”, 6; accessed online at http://www.cra-arc.gc.ca/E/pub/tg/5006n/5006-n-05e.pdf. 249

RECOMMENDATIONS This chapter sets out OUSA’s recommendations for reforming the student financial aid system in Ontario. Our recommendations include both structural changes to how financial aid is assessed and allocated, as well as shorterterm measures that would immediately help current students to meet their educational costs. Recommendation One: The provincial government must provide sufficient funding to the student financial aid system in order to ensure that it can provide sufficient levels of assistance to all students in need. Due to the vital importance of student financial aid to equitable university access, it is of the utmost importance that the system of support receives sufficient funding from the provincial government. This system should be administered as a social good, where the needs and interests of students are prioritized. The financial aid system must not be structured as a business, so the primary concern should be around the financial sustainability of both students and graduates, rather than the question of whether the system is achieving cost-recovery. Above all, the system must not be administered for profit, as this is contrary to the core mission of student financial aid. Recommendation Two: Tuition must be government regulated. When considering the financial aid system, it is important to recognize the intrinsic connection between tuition and student assistance. Any changes to the way tuition fees are set will have a major impact on the ability of the student financial aid system to meet students’ needs. One major step to ensure a greater level of control and predictability of tuition fees is to ensure that they remain regulated by the government. For many years, university presidents have lobbied for the provincial government to cede their regulation of tuition, and provide them with greater power and ‘flexibility’ to set tuition fees at their own institutions. While universities may promise to keep tuition levels at manageable levels, past experience has shown that deregulation invariably leads to rapid and unpredictable tuition hikes. The student financial aid system often cannot provide enough assistance to meet these escalating costs, and students are simply encouraged by their institutions to pursue private bank loans and lines of credit that the institution sometimes helps to arrange.251 And as the experience of deregulation in professional programs in 1998 has shown, this has a significant impact on access for middle and lower income students.252 To prevent any magnification of this problem, the government must retain their control over setting tuition policy. Need Assessment and Loan Allocation Recommendation Three: The provincial government must develop an accurate assessment of total student costs in Ontario. In order for the financial aid system to function effectively, a core requirement is for it to accurately gauge student costs, and provide them with sufficient financial assistance in order to meet those costs. As outlined in Concerns One through Nine, the OSAP system is currently not meeting this basic goal. Despite several improvements made to the need assessment formula in 2005/06, these were relatively minor and long overdue measures. Numerous problems in the way OSAP determines a student’s level of financial assistance remain in place, and will worsen year after year if structural changes are not made.

See for example information about the RBC/Queen’s Student Line of Credit, accessed online at http://www.queensu.ca/registrar/awards/student/student-loc.html, and UofT’s financial aid information for medical students, accessed online at http://www.facmed.utoronto.ca/English/Financial-aid-information.html. 252 Marc Frenette, “The impact of tuition fees on university access: evidence from a large-scale price deregulation in professional programs”, (Ottawa: Statistics Canada, 2005); accessed online at http://www.statcan.ca/english/research/11F0019MIE/11F0019MIE2005263.pdf. 251

In order to address the most egregious problems with the need assessment, OUSA recommends that the provincial government should strike a task force to revamp the OSAP need assessment. This task force, or any other group charged with reviewing the need assessment formula, must ensure that it accurately assesses the costs of tuition, books, living expenses, and other educational costs that a student faces in an academic year. Recommendation Four: The amount of financial assistance allocated to students must be large enough to completely cover actual tuition and reasonable cost of living expenses. Another key step required to make student financial aid function effectively is the provision of adequate amounts of assistance. At present, the existence of maximum OSAP assistance levels that fall well short of most studentsâ&#x20AC;&#x2122; need assessments undermines the basic purpose of assessing need, since the financial aid system cannot even provide them with enough assistance to meet it. OUSA believes it should be a fundamental goal for the financial aid system to provide students with enough assistance to meet their assessed need. This should ideally be done through the government financial aid programs, CSL and OSL; however institutional financial aid can also play a role in meeting the assessed need. Recommendation Five: In depth research of Ontarioâ&#x20AC;&#x2122;s regions must occur to account for the geographic circumstances that must be built into the cost of living loan assessment by developing need assessment calculations uniquely specific to each city with a post-secondary institution. Many of the problems that OUSA has identified in OSAP derive from the fixed, one-size-fits-all approach used in the need assessment formula, which hinders the system from having any geographic sensitivity or responsiveness to external change. As outlined in Concern Two, there is a great deal of variation in the cost of living around the province. While the OSAP need assessment currently adapts to the differing costs of tuition, books and equipment in different programs and institutions, a standard figure is used province-wide as the allocation for living costs. This places a large proportion of Ontario students in financial difficulty, simply due to the location where they are studying. For example, Runzheimer Canada found that a single student living in a Toronto apartment faced 34 per cent more in room and board, and other living expenses compared to a student in North Bay.253 To address this issue, OUSA recommends that geographic sensitivity be incorporated into the assessment process for the cost of living loan under a new financial aid system. Cost of living data should be developed specific to each city with a post-secondary institution, by reviewing local rent and living costs. This information would be used to assess studentsâ&#x20AC;&#x2122; OSAP applications, and assistance would be provided in a way customized to students at each institution. Another concern around OSAP policies on geographic circumstances is the expectation for students whose families live within 40 kilometers of their institutions to live at home. This is particularly difficult for students living in rural areas that are within that distance of their institution, in part because there is often no reliable public transit for them to travel. These students should be able to appeal their OSAP assessment and receive enough assistance to live closer to their institutions. Students living within 40 kilometers of their institution should also be able to receive OSAP assistance for them to live in residence for the first year of their education. This will allow them to participate more fully in the broader university environment and increase student engagement. Recommendation Six: The student financial aid system must include mechanisms to automatically adjust aid allocations and loan limits to changes in tuition policy and inflation. In order to negate the need to continuously revisit the OSAP need assessment formula, the provincial government must incorporate mechanisms into the financial aid system that automatically adjust aid allocations to changes in tuition policy and inflation. In this model, the amount of financial aid provided to students would be pegged to the 253 Runzheimer Canada, Student Cost of Living Survey (Toronto: University of Toronto, 2003), 3; accessed online at http://www.abrightfuture.ca/docs/Cost%20of%20living%20-%20UofT.pdf

government’s tuition policy, so that if tuition is regularly increasing (as it will in the current tuition framework), the level and value of assistance to be provided to students would remain constant. This would ensure that students continually receive the amount of assistance that they need to fund their studies, and not simply when it is a political priority. By calculating need assessments based on inflation-indexed living expenses, provincial policy will recognize the changes in cost that occur over time, and avoid the situation outlined in Concern Three where maximum levels of OSAP assistance remained static for over a decade. Inflation indexing is already practiced in various parts of government. For example, the Canada Pension Plan adjusts all benefits once a year by the Consumer Price Index, in order to ensure that seniors’ pension payments are adjusted for them to have the same purchasing power.254 Low-income cut-offs (often described as the ‘poverty line’) are also often indexed to inflation, so child tax benefits and other government programs aimed at helping low-income people are sensitive to changes in buying power.255 These policies recognize that for people on limited budgets, such as seniors and low-income individuals, depreciation through inflation can have a major impact. This same consideration should be applied to students receiving OSAP. Recommendation Seven: The provincial government should change parental contribution formulas to include more responsiveness to regional costs of living and individual circumstances. In continuing with our broader recommendation that OSAP policies should include greater responsiveness to cost differentials across the province, OUSA recommends that there should be more sensitivity to regional costs of living in the parental contribution formula. OUSA also recommends more sensitivity to individual circumstances that may affect the contributions that parents can reasonably make to their children’s educational costs. In the OSAP need assessment, expected parental contributions for dependent students are calculated by taking the net parental income, and subtracting an amount deemed to be a ‘moderate standard of living’ for the family size. The remaining amount is deemed to be the parent(s)’ ‘Annual Discretionary Income’, a percentage of which is expected to be contributed to their child’s post-secondary expenses. The proportion of discretionary income to be devoted to paying post-secondary costs increases according to the net parental income.256 Calculations are based on Moderate Standard of Living figures provided by the federal government through the Canada Student Loans program, which vary by province, as illustrated below.257

Human Resources and Social Development Canada website, “General Information about the Canada Pension Plan”; accessed online at http://www.sdc.gc.ca/asp/gateway.asp?hr=/en/isp/cpp/cppinfo.shtml&hs=cpr#17. 255 Statistics Canada, “Low Income Definitions”. Accessed online at http://www.statcan.ca/english/freepub/75F0011XIE/2005001/notes_lowincome.htm. 256 Ministry of Training, Colleges and Universities, Student Support Branch, OSAP 2006-2007 Student Eligibility and Financial Need Assessment Manual (Toronto: MTCU, 2006), 53. 254

Figure One: Moderate Standard of Living Estimates by Family Size for 2007-08 Loan Year258 Family Size 2 3 4 5 6 7 8 9 10

PEI

31,331 39,144 45,242 49,970 53,836 57,102 59,933 62,429 64,662

32,342 41,116 47,344 52,172 56,118 59,453 62,341 64,892 67,169

35,643 44,352 50,528 55,320 59,236 62,547 65,417 67,945 70,209

31,766 39,419 44,851 49,063 52,504 55,415 57,935 60,157 62,143

36,156 45,696 52,459 57,713 61,999 65,625 68,768 71,539 74,017

41,054 50,968 58,002 63,463 67,916 71,689 74,951 77,830 80,411

35,080 43,934 50,215 55,091 59,075 62,441 65,356 67,929 70,227

34,470 43,173 49,344 54,133 58,074 61,354 64,219 66,746 69,007

43,447 52,075 58,193 62,943 66,821 70,101 72,945 75,449 77,695

39,477 51,286 59,661 66,156 71,465 75,955 79,845 83,274 86,340

42,740 50,234 55,552 59,676 63,051 65,899 68,369 70,545 72,493

As illustrated by the chart, the federal government recognizes that there is as much as a 42 per cent cost differential for a family of four living in the Yukon rather than in Quebec. As OUSA and other provincial stakeholders have argued, there are also significant cost differentials within Ontario that merit recognition. While it is not recognized in OSAP policies, the provincial government cites the different costs of Ontario cities compared to Canadian and international counterparts as marketing information on an ‘Invest in Ontario’ website.259 The “2Ontario.com” website cites an international cost of living survey by human resources consultants William Mercer, where Toronto is ranked as the most expensive Canadian city, with Vancouver, Calgary, Montreal and Ottawa each costing successively less. Another concern about the parental contribution formula is that the amount is not adjusted to consider the number of children that plan to enroll in post-secondary education in the coming years, nor any additional costs that parents may face for various reasons. For example, parents who face elevated costs due to a child with disabilities, or high debt loads, may not be able to contribute the expected amount to their children’s education. These students should not suffer from budgetary shortfalls due to their parents’ larger financial obligations. OUSA recommends that the provincial government should obtain or calculate moderate standard of living figures by city in Ontario, and that this data should be used both in OSAP need assessment calculations (as outlined in Recommendation Five), as well as parental contribution information. OUSA also recommends that there be provisions for students to appeal the parental contribution expectations in their OSAP need assessments if their parents face particularly high costs. Recommendation Eight: The provincial government should allow an exemption of a small amount of savings in the OSAP need assessment, to allow for emergencies, cash shortfalls, and to promote prudent financial planning and saving. In the OSAP need assessment, almost all of a student’s assets are counted as part of their resources expected to fund their post-secondary studies. This includes all savings held in cash, at financial institutions, or in the form of Guaranteed Investment Certificates or other investments. Exemptions are in place for the gross market value of vehicles less than $5,000 (as reported by the Ministry of Transportation) and for $2,000 in Registered Retirement Savings Plans (RRSPs) for every year that the student has been out of secondary school.260

Human Resources and Social Development Canada website, “Moderate Standard of Living Estimates by Family Size”; accessed online at http://www.hrsdc.gc.ca/cgi-bin/hrsdcrhdsc/print/print.asp?Page_Url=/en/hip/cslp/Policies/41_po_Table8ModerateStandardLiving.shtm 258

Ontario Economic Development website, “Cost of Living in Major Cities: International Comparison”; accessed online at http://www.2ontario.com/welcome/coca_701.asp. 260 Ministry of Training, Colleges and Universities, Student Support Branch, OSAP 2006-2007 Student Eligibility and Financial Need Assessment Manual (Toronto: MTCU, 2006), 48. 259

These savings and assets are used in the OSAP need assessment to reduce a student’s assistance level on a dollarfor-dollar basis. For example, a student with just $300 in their bank account would be expected by OSAP to use the full $300 to fund their education, as their assistance level would be reduced by $300.261 This creates an implicit expectation that students should finish the academic year with no money or savings. By requiring students to liquidate all of their assets other than a certain amount of RRSPs, the provincial government leaves many students in a precarious financial situation, without any of the reserve funds they may have worked long and hard to build. Many students, particularly those with children, attempt to keep some funds set aside in the event of emergency, illness, or other situations.262 The provincial government recognizes that it is reasonable for older students to maintain some of their savings, and therefore does not require the liquidation of all funds held in RRSPs. However, many students who accumulate savings do not deposit them into RRSPs for various reasons, including the need for more easily accessible savings, or because they have not reached an income level where this would be financially beneficial to them, amongst other reasons. These students should not have their financial savings treated differently based on how they are saved. OUSA therefore recommends that the provincial government implement a reasonably-sized exemption for all assets for students. This exemption level should adjust according to each student’s age and circumstances, including their number of dependent children. Recommendation Nine: OSAP should give the option for students to receive their OSAP allocations on a monthly basis. In the present student financial aid system, students receive their loan allocations in two installments, one at the beginning of the academic year in September, which provides 60 per cent of the student’s loan, funded from the Canada Student Loans program, and another in January, providing the remaining 40 per cent that is funded by Ontario Student Loans. These essentially provide loan advances for the following months. Students studying for the full calendar year can find themselves in a situation where they have received all of their loan disbursements after just a term of study, yet face another eight months of classes to complete. Many students face difficulty in managing these lump sum payments so that they stretch for the full eight months of an academic year. While they receive these payments biannually, many of their costs – such as rent, phone bills, public transit passes, and so on – must be paid on a monthly basis. Switching to a system of monthly payments would also be a means of reducing OSAP costs. In the 2003 Auditor’s Report that reviewed OSAP, the provincial auditor recommended matching assistance payments more closely to students’ cash flow requirements. The auditor notes that this would be a means of reducing OSAP overpayments to students who leave their studies before the completion of the academic year, and it would also allow students to more prudently manage their finances, which would likely also reduce the number of loan defaults.263 According to the Deputy Minister of the Ministry of Training, Colleges and Universities, the provincial government is attempting to follow up on the Auditor’s recommendation. The federal government has issued a Request for Proposals (RFP) for a loan service provider that would enable monthly loan disbursements in Spring 2006.264 Monthly payments are already utilized by the student financial aid system in Saskatchewan. Students receive the CSL portion of their assistance package in September, which allows them to pay for certain up-front costs such as

University of Toronto, UofT Students and Administration Speak Out for OSAP, (Toronto: UofT, 2003); accessed online at http://www.raereview.utoronto.ca/UTresponse_17_appendixB.html. 262 Ibid. 263 Provincial Auditor of Ontario, 2003 Annual Report of the Office of the Provincial Auditor of Ontario to the Legislative Assembly (Toronto: Queen’s Printer, 2003), 254; accessed online at http://www.auditor.on.ca/en/reports_en/en03/310en03.pdf. 264 Philip Steenkamp, Presentation to the Standing Committee on Public Accounts, Ontario Legislature, April 20, 2006; transcript accessed online at http://www.ontla.on.ca/hansard/committee_debates/38_parl/session2/accounts/pdfP008.pdf. 261

tuition, rental deposits and books. The Saskatchewan portion of the funding package is disbursed on a monthly basis.265 OUSA recommends implementing Saskatchewan’s model in Ontario as an option for students. Following this model of disbursing only OSL on a monthly basis would allow the provincial government to implement the transition without requiring co-ordination with the federal government through the Canada Student Loans program. It would also mean that institutions could continue to receive a substantial of their payments for tuition in September, allowing them to continue accumulating interest on these funds through the academic year. There should also be the option for students to opt-out to the current system of biannual payments if this better suits their cash flow requirements. There should continue to be the option for students to receive the current system of biannual payments if this better suits their cash flow requirements. Recommendation Ten: The provincial government should allow students to earn income up to the amount of their unmet need before their OSAP is clawed back. One of OUSA’s concerns about the financial aid system is around how students meet their ‘unmet need’, or the gap between their assessed costs and the actual amount of financial assistance they receive. In the province’s financial aid system, institutions have been handed the responsibility to provide funds to meet this unmet need, however as noted in Concern Fourteen, these efforts are varied and scattershot. With insufficient amounts of OSAP and institutional financial assistance, many students use employment earnings during the school year as a way of meeting their costs. Students are currently entitled to earn $50 a week, or $1,700 for a 34-week academic year, before employment earnings are counted as part of their study period income and their OSAP need assessment begins to decline.266 This penalizes many students for attempting to earn more money, despite having legitimate financial need that is recognized by OSAP. The student may subsequently be classified as having received an overpayment due to their additional income, and they may see the overpayment deducted from future loans, or be forced to repay the excess to OSAP. Students who fail to rectify their overpayments may cease to be eligible for future financial assistance.267 OUSA believes that if the financial aid system recognizes unmet need, students should be able to earn that amount of income through paid employment without seeing their OSAP allocations decline. The OSAP online system already provides calculations of each student’s unmet need to their university’s Financial Aid Office.268 After institutional financial aid is taken into account, this figure should then be used as the personal income exemption amount allowed for that student, on top of the current exemption of $50 a week. This will encourage students who wish to work more to do so without financial punishment. Qualification for OSAP The vision of Ontario’s student financial aid system, as outlined by OSAP, is: “To assist eligible students who do not have the resources to meet the costs of postsecondary education. The intention is to promote equality of opportunity for postsecondary studies by providing financial assistance for educational costs and basic living expenses where students (and their families) do not have the resources to meet these costs.”269 [emphasis added]

Saskatchewan Advanced Education and Employment website, “Receiving your student loan funds”; accessed online at http://www.aee.gov.sk.ca/student_loans/receivingfunds/. 266 Ministry of Training, Colleges and Universities, Student Support Branch, OSAP 2006-2007 Student Eligibility and Financial Need Assessment Manual (Toronto: MTCU, 2006), 37. 267 OSAP website, “Overpayments”; accessed online at http://osap.gov.on.ca/eng/not_secure/changes.htm#Overpayment. 268 Ibid, 62. 269 OSAP website, “Objective and purpose”; accessed online at http://osap.gov.on.ca/eng/not_secure/general.htm#osap. 265

However, OSAP is falling well short of meeting these goals, due to qualification rules that bar many students with the greatest need from accessing the financial aid system. Facing budgetary deficits in the late 1990s, the provincial government disqualified certain groups of students from receiving assistance for their post-secondary studies. This resulted in a rapid 40 per cent decline in the number of students receiving OSAP, from 212,189 in 1995 to 130,687 in 2002, despite slight enrolment growth, as groups such as part-time students and students with imperfect credit histories found themselves shut out of the system.270 With a new investment of $1.5 billion to financial aid through the Reaching Higher plan, the provincial government should provide assistance for some of the most disadvantaged groups who require assistance the most in order to attend a post-secondary institution. This should occur through an expansion, or in some cases restoration, of qualification rules to include certain categories of students, as well as by providing an improved appeals process for students in unique circumstances to have their case heard by their financial aid office. Recommendation Twelve: The provincial government must remove unfair categorical ineligibilities from the financial aid system that disqualify individuals including, but not limited to, part-time students, individuals receiving Ontario Works, students studying outside of Canada, students facing academic difficulties, and students with poor credit records. OUSA recommends that the following groups, discussed in detail in Concern Four, should be eligible for OSAP assistance:

Part time students. Students who are enrolled on a part-time basis represent a broad cross-section of the post-secondary population, but count a large proportion of adult learners, students with dependents, and other under-represented groups, who are often unable to dedicate the time and resources required to study full-time. Providing them access to financial assistance will help make post-secondary education more accessible and manageable. It would also cease to penalize students who, for whatever reason, withdraw from or fail a course, and then see their OSAP eligibility reversed due to their lighter course load.

Individuals on Ontario Works. In a recent study by the Canadian Policy Research Networks, Karen Myers and Patrice de Broucker report that 42 per cent of Canadians aged 16 to 65 have literacy levels below the standard needed to live and work in today’s society, and these rates have not changed in the past decade. They point out that less-educated individuals tend to experience lower wages, higher likelihood of unemployment, and lower-status jobs, and these individuals tend to fall further and further behind their better-educated counterparts over the course of their lives.271 However, rather than facilitating lifelong learning, the current financial aid system creates barriers for adults seeking to obtain more education or upgrade their skills, particularly those who are not already well-educated professionals. There are simple ways to address these persistent problems. One crucial step would be to reinstate assistance to individuals receiving Ontario Works, who face some of the greatest barriers to accessing postsecondary education. This will have a profound effect on expanding access to individuals who did not have the opportunity to obtain more education and seek better-paying and more fulfilling employment. It will also lead to higher future returns for the province through an elevated tax base.

Students studying at institutions outside of Canada. OUSA believes that students should be able to receive the same level of financial assistance that is provided to students studying in Ontario or in other Canadian provinces. As noted in Concern Four, students study at foreign institutions for a variety of reasons, such as to study in a specialized program that is unavailable or has insufficient capacity in Canada, studying with top scholars located outside of the country, the desire for international experience and language study, amongst others. These students often face elevated costs and should be able to access

Sarah Schmidt, “Fewer Ontario students getting provincial loans”, National Post, November 27, 2002. Karen Myers and Patrice de Broucker, Too many left behind: Canada’s adult education and training system (Ottawa: Canadian Policy and Research Networks, June 2006), 41-45; accessed online at http://www.cprn.org/documents/43977_en.pdf.

270 271

financial assistance.

Students who do are not achieving satisfactory academic progress. OUSA does not believe that needbased financial assistance should be seen as a means of evaluating a student’s academic progress. If a student is struggling in their studies or lacking direction, institutions should use academic means of placing a student under probation, rather than barring them from receiving financial assistance.

Students with poor credit. As part of the province’s social safety net that helps low-income and other disadvantaged groups, OUSA believes that the government financial aid system should not be run using the business logic where the ‘bottom line’ takes primacy over investments in human capital. As such, students with poor credit or who are in arrears on loans should not be banned from receiving OSAP. These individuals are likely unable to receive assistance from private borrowers due to their credit ratings, and thus crucially need government financial assistance in order to attend post-secondary education.

Recommendation Thirteen: OSAP should expand the appeals process at institutional financial aid offices for students who do not receive OSAP, or do not receive sufficient levels of assistance, due to qualification policies. This appeals process should be timely and not onerous for students. There are numerous students who are disqualified from receiving OSAP, or don’t receive enough assistance due to the reasons outlined above and in Concern Five. OUSA believes that the financial aid system should offer greater responsiveness to assess individual cases, so applicants are not automatically and permanently disqualified despite extenuating circumstances. This flexibility can be incorporated through the OSAP appeals process, which can be conducted on a case-by-case basis at each institution’s Financial Aid Office. These offices already manage the appeals process for the majority of circumstances, and could be easily provided with additional authority to deal with new appeals. OUSA believes that institutions should continue to hold a high level of authority in conducting student reviews and appeals of their OSAP need assessments, in order to provide more personal contact for students conducting an appeal, and a close level of decision-making. The provincial government should provide transparency and oversight to ensure that the Institutional Financial Aid offices are effectively conducting OSAP appeals. The appeals process should be used in particular to consider the individual cases of students who are classified in the OSAP application as dependents, but whose parents do not provide them with any financial assistance, or insufficient levels of assistance. At present, these students could only appeal their case on extreme grounds, such as physical or sexual abuse. OUSA believes that there are many other students with legitimate need whose parents are, for some reason, unwilling to support them. These students should not be barred from the system. Access Recommendation Fourteen: The provincial government’s Student Access Guarantee must ensure that students receive sufficient levels of financial assistance to meet their assessed costs using a true-cost and accurate need assessment formula. There are two levels of scope in OUSA’s recommendations on the Student Access Guarantee. The first area surrounds how to make the Access Guarantee, as currently defined, function most effectively for Ontario students. Our second area of recommendations involves how to expand this to a full guarantee on access. In order to guarantee that students will not face a cash shortfall over their academic year, OUSA recommends that the provincial government guarantee that students in need will receive sufficient financial assistance to meet the costs of tuition, books, fees, and living costs for the academic year. This would be assessed on an individual basis by an accurate need assessment formula. As noted in Concern Fourteen, this recommendation is already being fulfilled by the University of Toronto. This institution conducts their own need assessment for their students, and guarantee that students in need will have access to that level of assistance.

In order for this to be an ‘access guarantee’, the provincial government must do more to reach out to groups that are under-represented in the post-secondary system, through targeted financial aid and early outreach programs. These are discussed in greater detail below. Recommendation Fifteen: The provincial government must establish early outreach programs to encourage students from under-represented groups to attend post-secondary education. Promoting increased access to post-secondary education must reach further than students who have already applied to university. In order to target those young people who do not even consider post-secondary education as an option, due to costs, lack of interest, or other reasons, the provincial government must implement targeted early outreach programs to encourage these people to consider attending university. This is particularly needed for so-called ‘firstgeneration students’ whose parents or family members have no experience of post-secondary education, and therefore need to gain familiarity with the benefits, costs, and academic preparation needed for higher education. Early outreach programs such as the Pathways to Education Program in Toronto’s Regent Park neighbourhood target students who otherwise would not consider attending university and who have elevated dropout rates in high school. These programs encourage students who are both educationally and economically disadvantaged to gain the information and perform the steps needed to enter ‘post-secondary education pipeline’, by providing tutoring, career mentoring, support workers who act as a bridge between the community, parents, students, schools and programs.272 For more detail on OUSA’s recommendations for early outreach programs, please see our policy on early outreach programs, entitled Early Outreach Programs: Reaching out Early to Reach up Higher. Recommendation Sixteen: The provincial government must provide targeted non-repayable financial assistance to students from under-represented groups. In order to create more equitable university access for all Ontarians, OUSA believes that grants should be targeted at certain under-represented groups, including lower income, rural, northern, and Aboriginal students. These grants should seek to address both up-front debt aversion that many students face, as well as the issue of long-term wage inequities that students from these groups often face in the workforce. The development of new grants should include consultation with representatives of the under-represented group that is targeted by any grant program, and extensive analysis of the barriers that each under-represented group faces in order to ensure the greatest effectiveness of the program. Recommendation Seventeen: Students from low-income families must be provided with up-front access grants through to degree completion. The continuing prospect of high debt may hamper access, which is particularly troubling for lower-income and disadvantaged demographic groups. Targeted non-repayable financial assistance towards these groups would help reduce graduate debt by off-setting borrowing. If it is provided up-front, non-repayable 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 272 Alisa Cunningham, Christina Redmond and Jamie Merisotis, Investing Early: Intervention Programs in Selected US States (Montreal: Canadian Millennium Scholarship Foundation, 2003),1; Pathways to Education website, http://www.pathwaystoeducation.ca.

other words, the tuition waiver would be income-dependent. It should also be available to students through their entire undergraduate degree. At present, only first- and second-year students are eligible for access grants, through the Canada Access Grant and Millennium/Ontario Access Grant for first-year students, and the Ontario Access Grant for second-year students. Each of the programs provides up to $3,000 in non-repayable assistance to students depending on their family income, resulting in a maximum of $6,000 for first-year students or $3,000 for second-year students.273 In order to encourage and increase persistence for students from lower-income families, these grant programs should be expanded to include all undergraduate students. This program would go a long way to overcoming what Dr. Bruce Johnstone of the International Comparative Higher Education Finance and Accessibility Project describes as 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.”274 Recommendation Eighteen: The Higher Education Quality Council of Ontario should conduct research on the effects of wage inequalities of graduates from systematically disadvantaged groups on their ability to repay their student loans. As noted in Concern Twenty-Seven, there are clear inequalities in wage patterns in Canada where groups including women, visible minorities, persons with disabilities, and Aboriginal people tend to earn less than their peers for work of equal value. As part of its mandate to monitor system accessibility, the Higher Education Quality Council of Ontario should strive to learn more about these wage inequalities and the effect they have on loan repayment for individuals from systematically disadvantaged groups. This research should inform the policy and system design underlying the student financial aid system, and the loan repayment apparatus in particular. The Council could explore best practices to address these wage inequalities, including questions of whether policies should focus on specific groups, or focus on the underlying causes of inequities. Recommendation Nineteen: The provincial government must provide funding for institutions to offer academic and social support programs targeted at students from under-represented groups. Increasing access to post-secondary education does not simply consist of getting more students through the doors of a college or university. This is just one of the many steps that must be taken. In order to ensure that students successfully complete their degrees and are able to gain the greatest benefit from their education, institutions must provide supports to address the particular needs of students. In their submission to the Rae Review, the University of Toronto describes the particular need to provide outreach and support to non-traditional post-secondary students: “If the goal is to provide access to students who might not otherwise have been able to come to the University, it is likely that to some extent their needs will not be met by current curriculum, pedagogy, services and supports ... Thus our outreach initiatives need to be connected to discussions about the student experience at the University of Toronto from the perspective of the students for whom we are providing access and outreach. It is important to note that just as these students enrich the university in terms of university and life experience, any "accommodations" we make to support and enhance their educational experience will contribute positively to the experiences of all students. It is also important to

OSAP website, “How grant amounts are determined”; accessed online at http://osap.gov.on.ca/eng/not_secure/funds.htm#grants%20determined. 274 Bruce Johnstone, “Cost-Sharing and Equity in Higher Education: Implications of Income Contingent Loans” (Buffalo: University of Buffalo International Comparative Higher Education Finance and Accessibility Project), 2003), 6; accessed online at http://www.gse.buffalo.edu/org/inthigheredfinance/publications.html. 273

note that there will be costs (in terms of both financial aid and people providing necessary support and accommodation) associated with these students.”275 OUSA therefore recommends that the provincial government take the lead in meeting the costs of academic and social support programs for students attending post-secondary institutions. This will help to ensure that students receive sustained support to not only enter but also thrive in their post-secondary education. These supports should be targeted but not limited to students from under-represented groups. Accompanying these programs should be other offerings to increase sensitivity among the rest of the student body around issues facing under-represented groups. These should aim to raise awareness and celebrate diversity, as well as promote integration of diverse groups. Institutional Financial Aid and the Tuition Set Aside Recommendation Twenty: Until the reforms to the financial aid system outlined in Recommendations Three to Eight are achieved, the set-aside policy should remain in place, but be guided by the following shorterterm recommendations. As noted in Chapter Two, institutional financial aid is largely funded through private donations to an institution, much of which received matching funding from the provincial government through the OSOTF program and now the OTSS programs. Another significant portion is funded through the tuition set-aside program, which requires a percentage of revenue from tuition increases to be set aside for locally-delivered financial aid. This percentage was set at 10 per cent for 1996/97, and was increased to 30 per cent from 1997/98 onwards. OUSA sees the tuition set-aside program as an imperfect but necessary means of generating financial aid funds. While there are many concerns about the way that set-aside dollars are collected, to immediately discontinue the tuition set-aside program without first achieving the fundamental reforms to the OSAP system recommended elsewhere in this paper would remove a significant amount of money from the financial aid system. Such a move would cause financial hardships for the many students who benefit from the bursaries, scholarships and work-study programs offered through the set-aside funds, and rely on this funding to continue their education. Consequently, OUSA recommends that the set-aside policy should remain in place until the financial aid system has achieved significant reforms around need assessment and loan allocation policies. Recommendation Twenty-One: Institutional financial aid funded by the provincial government must be available to all students in need, including those who do not receive OSAP. As noted in Concern Five, OSAP currently excludes many students from receiving or being eligible to receive assistance, including part-time students, students with poor credit histories, many students from middle-income families, and so on. In order not to reproduce the inequities of the OSAP eligibility criteria in other parts of the student financial aid system, OUSA recommends that institutional financial aid be distributed on the basis of need, rather than relying on the OSAP eligibility regulations. This is already accomplished at many universities by requiring students to complete an application detailing their financial need. Recommendation Twenty-Two: Institutional financial aid provided to students taking Additional Cost Recovery Programs must meet their unmet financial need, using an accurate need assessment formula. When the provincial government deregulated tuition fees for graduate and professional programs in 1998, it provided institutions with greater authority to set tuition fees, as well as greater responsibility to provide financial aid to 275 University of Toronto, “Appendix D: Access and Outreach Programs at the University of Toronto”, in The Choice for a Generation: Investing in Higher Education and Ontario’s Future (Toronto: UofT, 2004); accessed online at http://www.raereview.utoronto.ca/UTresponse_19_appendixD.html.

students in these programs if they raised tuition above a certain level. If students in these programs do not receive enough funds from OSAP to cover their financial need, their institutions are required by the government to provide additional aid for the portion of tuition above $2,250 per term, or $4,500 for a two-term academic year. This aid can be provided in the form of work-study programs, bursaries, scholarships and loans.276 The provincial government also instituted a policy whereby 30 per cent of tuition increases would be set aside for student assistance, in order to provide greater funding for institutional financial aid. These policies provided a measure of counter-balance in student financial aid if institutions increased fees. As noted in Chapter Six, further details about this policy reveal that institutions are only responsible for the lesser of the studentâ&#x20AC;&#x2122;s unmet financial need as defined by the OSAP need assessment, or the amount of tuition and fees in excess of $4,500.277 Taking the case of a single independent student in the Honours Business Administration program at the University of Western Ontario facing $18,000 in annual tuition, their need would be assessed by OSAP as the following: Calculations include the $440 maximum allowance for books and equipment for specialized programs, the $500 annual computer allowance, and $7,761.90 in living expenses (weekly allowance of $225.35 x 34 weeks).278 Figure Two: OSAP need assessment for single independent HBA student Category OSAP Need Assessment OSAP Need Assessment with tuition cap without tuition cap Tuition $4,500 $18,000 Books and equipment $440 $440 Computer costs $500 $500 Living expenses $7,761.90 $7,761.90 TOTAL $13,201.90 $26,701.90 Max. OSAP assistance $11,200 $11,200 OSAP Unmet Need $2,001.90 $15,501.90 Based on these need assessments, under the current rules, an institution would be responsible to provide the student with the lesser of their unmet need ($2,001.90), or the difference between $4,500 and their actual tuition and fees ($13,500) in institutional financial aid. Due to these regulations, the student would only receive about two thousand dollars in institutional financial aid, despite having much higher financial need. The existence of this $4,500 tuition cap in calculating financial need absolves institutions of a significant portion of their financial aid responsibilities. In order to make institutions who raise tuition fees responsible for providing sufficient financial aid to students, OUSA recommends that institutions be required to provide sufficient aid to match the actual amount of unmet need. Recommendation Twenty-Three: Institutional financial aid funded by the provincial government and tuition set-aside funds should be distributed on a priority basis, with unmet student need addressed first. Set-aside funds are designed to be distributed through bursaries to students in financial need and through work-study programs. OUSA recommends that a priority-setting structure be established in order to guarantee that the students with the greatest need are able to receive the necessary support. First and foremost, unmet need must be met for students at the institution, only then to be followed by work-study programs. By following this priority structure, financial aid offices can address the specific dollar requirements needed for students to remain enrolled in the OSAP website, â&#x20AC;&#x153;Funding Available for Full-Time Studentsâ&#x20AC;?; accessed online at http://osap.gov.on.ca/eng/not_secure/funds.htm#tuition%20limits. 277 Ministry of Training, Colleges and Universities, Student Support Branch, 2006-2007 OSAP Review Manual (Toronto: MTCU, 2006), p.65. 278 Ministry of Training, Colleges and Universities, Student Support Branch, OSAP 2005-2006 Student Eligibility and Need Assessment Manual (Toronto: MTCU, 2005), p.20-21. 276

university, before distributing the money to work-study programs, which are less geared towards meeting the specific financial requirements of each individual. This also ensures that the majority of financial aid dollars are not allocated only to students who can afford the time and meet the employment requirements of the work-study positions on offer that year. The University of Waterloo’s report from its Task Force on Undergraduate Student Financial Support provides an idea of what such priorities for distribution might be. It states that: The University of Waterloo should use a wider range of mechanisms to ensure that all tuition fee set-aside funds generated each year are allocated to students with financial need. First priority for these funds must be the provision of bursaries to fulfill the guarantee to meet the unmet need, as defined by OSAP for every undergraduate student. As resources allow, other mechanisms should include, in priority order, the provision of bursaries to meet University-defined unmet need of qualified undergraduate students, which at minimum must include tuition fees not recognized in the OSAP calculation of provincial unmet need; ongoing funding of the Work Placement program; and the introduction of scholarships for meritorious students with financial need.279 The priorities discussed at Waterloo provide an adequate framework for set-aside distribution at Ontario institutions. Ensuring that student unmet need is appropriately met is the priority for this fund and it should be part of the assistance process. Recommendation Twenty-Four: Set-aside funds should continue to be distributed to work-study programs within the priority structure, and work-study positions should be related to students’ professional and/or academic development. Continuing to fund the work-study program has potential to provide experiential learning opportunities and concrete work experience for students on campus, and provides certain students with income during or between academic terms. This practice should continue as long as a certain quality of jobs is guaranteed and as long as funding for the program does not come at the expense of meeting unmet need for students in the form of bursaries. The priority for the fund must be to meet unmet need, both as defined by OSAP and the institution. Recommendation Twenty-Five: Distribution of tuition set-aside funds should be given in priority, but not limited to, the proportion contributed by each faculty at an institution. In order to address the situation where students in high-cost programs receive the majority of tuition set-aside funds, OUSA recommends that at institutions where this is a concern, tuition set-aside funds should be distributed approximately in proportion to the amount contributed by the students in each faculty. This will ensure that if one faculty offers programs with significantly higher tuition, they will not deplete the tuition set-aside funds for students in other faculties. Administration & Access to Information Providing access to information about the financial aid system is an important role for the provincial government, in partnership with institutions and other stakeholders. OUSA’s general approach to this issue is that outreach should not be limited to borrowers, and it should not only take place over a student’s time in post-secondary education. Instead, the provincial government should stretch its outreach efforts several years earlier, to when students in middle and high school are developing post-secondary aspirations and plans, and also after a student has left postsecondary education, and is repaying their loan. It should also include more publicizing of the appeals process, in order to ensure that students who do not receive the correct amount of assistance can have this corrected. 279 University of Waterloo, “Final Report of the Provost’s Task Force on Undergraduate Student Financial Support at the University of Waterloo,” (Waterloo: University of Waterloo, 2004), p.36; accessed online at http://secretariat.uwaterloo.ca/governance/Board/2005.feb1.bog.ag.open.pdf

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Recommendation Twenty-Six: The provincial government must create an effective, user-friendly and practical OSAP website that empowers students to access information about the financial aid system, institutional financial aid, the amount of assistance that is available to them, and ways to contact OSAP for more information. The internet is one of the most effective and efficient communication resources available to the student financial aid system. However, OSAP does not make adequate use of the medium, either in the areas of student outreach or administration. To maximize the user-friendliness of the financial aid system, the provincial government must invest in a website that provides the following services to avoid the burden of the complex process: 1. Extensive information. Students must be able to access information on every aspect of the student aid system on the website, including government and institutional financial aid. This information must also be presented in an easy-to-understand manner that is accessible to readers who do not have extensive knowledge or experience of borrowing or financial services. Material on eligibility, applying, receiving assistance and repaying loans should be readily available. Search tools must also be included to allow students to find the desired material quickly. The provincial government must also start to provide greater accountability for money used for student financial aid, by providing greater system information about OSAP on its website. This could be done by posting an annual report for OSAP online. Further details about OUSAâ&#x20AC;&#x2122;s recommendations for an OSAP annual report are outlined in Recommendations Twenty-Eight 2. Accurate online estimation tool. The Canada Student Loans Program website (www.canlearn.ca) 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 to feel more secure about their financial situation prior to commencing their studies. It will also allow students who do not qualify for OSAP to save time and effort, as it would allow them to determine whether they are eligible for the financial aid system, and therefore whether they should gather all the information and documentation required to complete the application. 3. Online application. The current OSAP website allows and encourages students to apply for assistance online. This feature should be maintained and improved on the new OSAP website. Further details about OUSAâ&#x20AC;&#x2122;s suggestions for improving the OSAP application are outlined in the next recommendation. 4. Better use of e-mail. E-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 an online e-mail list which would periodically send 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 Twenty-Seven: The OSAP application should be simplified so that applicants are only presented with the sections that pertain to their situation. In order to collect needed information from applicants falling under every application category and permutation thereof, the current OSAP application is a long 22 pages. Greater user-friendliness is urgently required in the financial aid system, and OUSA believes that a simplification of the application would be a significant step in making OSAP more user-friendly. Almost all OSAP applicants are using the online application to submit their request for financial aid. In 2002/03, about 90 per cent of applications received by the Ministry of Training, Colleges and Universities were received through the

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website, and this proportion has likely gone up since then.280 Changes made to simplify the online application will therefore reach the vast majority of OSAP applicants. OUSA recommends that the online application should be simplified by only presenting applicants with the forms that pertain to their particular situation. This can be done by asking applicants to check off boxes corresponding to different application categories (e.g. are they a dependent or independent student, are they single/married/commonlaw, do they have dependent children, do they have RRSPs, etc.). Once they have narrowed down their application categories, the website would then present them with a list of the information and supporting documentation they will require to complete their application. The online application would then present them only with the forms that pertain to their applicable categories. For the print applications, there should be different versions of the application pertaining to different student situations, that only present applicants with the forms that apply to their situation. Recommendation Twenty-Eight: The financial aid system must provide specific need assessment summaries and information about the appeals process to applicants in order to foster greater transparency and clarity in the application process. At present, students are provided with exactly two pieces of information at the end of their OSAP application 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 or frustrated. By providing applicants with an assessment report clearly outlining how the studentâ&#x20AC;&#x2122;s eligibility was evaluated, applicants are able to better understand the process. This should include details about how much money was allocated for different costs, as well as the amount of employment earnings during the academic year that are exempted from the need assessment formula before additional earnings are clawed back. Furthermore, more detailed reports will allow students to make better informed decisions about whether to mount an appeal if they feel their assessment was inaccurate. Information about the appeals process should be provided to students so they are aware that this process exists. Recommendation Twenty-Nine: The provincial government should publish an annual report for OSAP. In order to provide more transparency in the financial aid system, the provincial government should begin to publish an annual report for the OSAP system. This report should ideally include information about the number of students receiving assistance, the average or median amount of assistance provided, loan repayment patterns, amongst other things. It could also be the platform for presenting the accountability information already provided by the provincial government, namely the graduation and OSAP default rates for each program and institution. As the provincial government embarks on multi-year plans, Student Access Guarantees, and other measures requiring greater accountability from institutions for public investments, it must also recognize that accountability is a two-way street. The government must also provide the same accountability to students and the public at large for the substantial investments and expenditures in the financial aid system. The federal government already publishes an annual report on the Canada Student Loan program, and other provinces such as Saskatchewan produce lengthy reports about its provincial financial aid system.281 These annual reports could be incorporated as part of a broader effort for the financial aid system to continually improve on its performance, by trying to better target assistance to students with the greatest need, to continually increase access amongst students from under-represented groups, and to continually decrease loan default rates. Provincial Auditor of Ontario, 2003 Annual Report of the Office of the Provincial Auditor of Ontario to the Legislative Assembly (Toronto: Queenâ&#x20AC;&#x2122;s Printer, 2003), 249; accessed online at http://www.auditor.on.ca/en/reports_en/en03/310en03.pdf. 281 Human Resources and Social Development Canada, Canada Student Loans Program Annual Report 2003-2004 (Ottawa: HRSDC, 2005); accessed online at http://www.hrsdc.gc.ca/en/hip/cslp/publications/07_pu_AnnualReport20032004.pdf; Government of Saskatchewan, 2005-2006 Annual Report: Saskatchewan Learning & Saskatchewan Student Aid Fund (Regina: Government of Saskatchewan, 2006); accessed online at http://www.aee.gov.sk.ca/sf_assist/pdf/2005-06annreport.pdf. 280

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These accountability measures could be integrated with the work of the Higher Education Quality Council of Ontario (HEQCO) once it begins its operations, in order to ensure that any research conducted by the Council and recommendations that emerge can be effectively implemented in the financial aid system. Recommendation Thirty: The provincial government, through the Ministry of Education, must ensure that there are an adequate number of guidance counsellors in high schools. These counselors must receive regular training on post-secondary admissions processes and the student financial aid system, to meet the needs of students. High school guidance counsellors play a crucial role in providing information to students about post-secondary education and the student financial aid system, particularly for students who don’t have family or friends who can assist them in the process. In a study on the role of guidance in post-secondary planning, students consistently cited their guidance counsellors as “among the first and most reliable sources of expert information on post-secondary education opportunities, financial support and assistance with decision making”.282 However, as noted in Concern Twenty-Three, many guidance counsellors are overworked and spread too thin, as they attempt to provide services to far too many students. It is difficult to communicate post-secondary options and the financial aid programs that target students’ particular circumstances, when each guidance counsellor is attempting to provide assistance to an average of 370 students.283 Students in the study on guidance reported wanting more time from guidance specialists than was available to them, particularly in the form of individualized support in career and educational planning. One of the particular frustrations reported was the complexity of information and applications, particularly for scholarships and student loans. Respondents also noted that information about bursaries tended to be relatively hidden.284 If the province is serious about expanding access to post-secondary education, its efforts must start well before students graduate from secondary school. This is particularly important when considering that most students make decisions about their educational pathways at an early age, and tend not to change their educational expectations from Grade Six onwards.285 Improved financial aid programs and increased numbers of post-secondary spaces will not have much effect if students do not have any awareness about them. The provincial government should ensure it provides adequate resources to inform students’ decision-making. This should be done by ensuring that students have access to guidance counsellors who can provide them with accurate and up-to-date information about their post-secondary options. Recommendation Thirty-One: The provincial government must develop materials for guidance counsellors to present to high school students about applying for post-secondary education and student financial aid. As noted above, guidance counsellors tend to be stretched for time and resources to provide assistance to their students. Furthermore, because financial aid policies and programs can change frequently, information that is just a few months out of date may exclude some important changes about eligibility regulations or the amount of funding that is available to students. The provincial government should take the lead role in producing information for secondary school students on postsecondary education and financial aid, in order to assist guidance counsellors in obtaining updated information about post-secondary education and financial aid, and to ensure that the information is current, correct, and consistent Canadian Career Development Foundation, The role of guidance in post-secondary planning (Montreal: Canada Millennium Scholarship Foundation, 2003), 25. 283 People for Education, The Annual Report on Ontario’s Public Schools (Toronto: People for Education, 2006), p.12; accessed online at http://www.peopleforeducation.com/OPSReports/annual06.pdf. 284 Canadian Career Development Foundation, The role of guidance in post-secondary planning (Montreal: Canada Millennium Scholarship Foundation, 2003), 25, 28. 285 Sean Junor and Alex Usher, The Price of Knowledge 2004: Access and Student Finance in Canada (Montreal: Canada Millennium Scholarship Foundation, 2004), 11. 282

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across the province. The materials could be in the form of a video, presentation, written material, or any other form that may be useful to guidance counsellors. They should be tailored to specific student needs. The information and more details should ideally also be available online, so that students who wish to conduct more research can do so. Recommendation Thirty-Two: The provincial government, through the Ministry of Education, must introduce curriculum at the high school level that provides training on personal financial management. Student loans are often the first major debt that a young person will take on in the course of their lives, and it is important to ensure that they are equipped with the knowledge and resources to know how to manage that debt. Promoting financial planning, saving, budgeting and good financial management to students before they enter postsecondary education will benefit both the students and the financial aid system as a whole. In 2002/03, claims for defaulted loans cost the financial aid system $96 million, or about a quarter of its total expenditures for the year.286 At an individual level, student loan default could bring the borrower years of financial difficulty and damaged credit. At a conference of financial aid professionals in the United States, it was suggested that the main lesson on reducing the number of student loan defaults was to start early, and prepare students and their families academically, socially, and financially for post-secondary education. It was noted that many students enter post-secondary studies lacking basic financial literacy.287 Part of students’ preparation in Ontario should include some high school curriculum that provide students with background on how the financial aid system works (e.g. difference between grants vs. loans), how to manage their finances and any debt they may accrue through the course of their post-secondary education. This curriculum could be incorporated into broader material on post-secondary education and the financial aid system, and could take place through a career studies course. Recommendation Thirty-Three: Institutional student financial aid offices should provide counselors and information on personal financial management for current students and recent graduates, and these programs should be widely publicized to students. Over 62 per cent of OSAP applicants are under the age of 24.288 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 provided with large amounts of 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. This may lead to short and long-term financial difficulties, as students face cash shortages or large loans that they must repay. In a handbook on student financial aid best practices compiled from across the United States, recommendations for institutions include:

Engaging and informative entrance and exit counseling sessions to ensure that students understand their repayment obligations and options (these counseling sessions are required by American federal law); Offering many types of communication with students; Frequent communication with borrowers; Targeting the message to students’ needs; Identifying and focusing special efforts on high-risk borrowers; and

Provincial Auditor of Ontario, 2003 Annual Report of the Office of the Provincial Auditor of Ontario to the Legislative Assembly (Toronto: Queen’s Printer, 2003), 246; accessed online at http://www.auditor.on.ca/en/reports_en/en03/310en03.pdf. 287 US Department of Education, Office of Student Financial Assistance, Ensuring Student Loan Repayment: A national handbook of best practices (Washington, DC: US Department of Education, 2001), 11, 31; accessed online at http://www.ifap.ed.gov/eannouncements/attachments/0118nhbook1web.pdf. 288 Ministry of Training, Colleges and Universities, Student Support Branch, “Student assistance in Ontario: an overview” (Presentation given April 2003). 286

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Teaching personal financial management skills.289

As part of its responsibility to students, OSAP must work to help students manage their financial aid. The financial aid system should consider some of the best practices listed above as ways to outreach to borrowers both while they are in study and after their studies. 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. These programs should be widely publicized to students at various strategic points through the academic year (such as when they receive their loan allocations, and at times when students tend to face budget crunches), and to graduates who are facing repayment. Particular attention should be directed to borrowers who are identified at high risk of defaulting on their loans, which include students who fail to graduate, did not provide current contact information, face poor job prospects, had other forms of debt, came from a low-income household, were single parents, low academic performers, and married another student with loan debt.290 Loan Repayment Recommendation Thirty-Four: While OUSA supports a student financial aid system which minimizes debt, provides for income contingency and payment flexibility, the Ontario government must not implement an income contingent loan repayment program in Ontario as articulated in our research. OUSA believes that when they are considered in the broader economic and political realities in Ontario, that an income-contingent loan repayment program is problematic. In particular, OUSA is concerned about the following considerations: 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.291 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.”292 In an environment of fiscal austerity and a provincial deficit, OUSA is concerned this investment would pull money away from the funding of institutions already 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.

US Department of Education, Office of Student Financial Assistance, Ensuring Student Loan Repayment: A national handbook of best practices (Washington, DC: US Department of Education, 2001), 22-34; accessed online at http://www.ifap.ed.gov/eannouncements/attachments/0118nhbook1web.pdf. 290 US Department of Education, Office of Student Financial Assistance, Ensuring Student Loan Repayment: A national handbook of best practices (Washington, DC: US Department of Education, 2001), 27; accessed online at http://www.ifap.ed.gov/eannouncements/attachments/0118nhbook1web.pdf. 291 Nicholas Barr, “Financing education: lessons from the UK debate and elsewhere,” The Political Quarterly 2003, p.373. 292 Bruce Johnstone, “Responses to Austerity: The Imperatives and Limitations of Revenue Diversification in Higher Education” (Buffalo: University of Buffalo International Comparative Higher Education Finance and Accessibility Project, 2001), 5. 289

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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 Canadian Federation of Students (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 $42,000.293 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.294 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. It is OUSA’s opinion that the problem of wage inequities is more cheaply and effectively salved through a conventional loan program, particularly through income-based remission programs. 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, OUSA recommends against the development and implementation of an income-contingent repayment scheme in Ontario. A more thorough discussion of OUSA’s position on ICRP can be found in The Hot Potato: Income-Contingent Repayment Policy. Recommendation Thirty-Five: Graduates must not be required to begin repayment, nor should interest accrue, until their income exceeds an acceptable debt-to-earnings 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. While interest relief programs allow graduates with low or no incomes to delay repayment without accruing additional interest, these programs are underutilized by students in need, partly due to lack of awareness, and have a maximum length of 30 months.295 To help eliminate this problem, repayment under the financial aid system must not begin until a suitable debt-to-earnings ratio has been achieved, and the interest-free period on their loans should be extended over this time.

Canadian Federation of Students, “Compromising Access: A Critical Analysis of Income Contingent Loan Repayment Schemes”, 2nd Edition (Ottawa: CFS, 1997), 35. 294 Canadian Federation of Students, “Compromising Access: A Critical Analysis of Income Contingent Loan Repayment Schemes”, 2nd Edition (Ottawa: CFS, 1997), 34. 295 Jerry Situ, “Canada Student Loans Repayment Assistance: Who does and does not use interest relief?” (Ottawa: Statistics Canada, 2006); accessed online at http://www.statcan.ca/english/research/81-595-MIE/81-595-MIE2006047.pdf; OSAP website, “Interest Relief”; accessed online at http://osap.gov.on.ca/eng/not_secure/ir.htm. 293

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This type of indicator is already utilized by Statistics Canada and the Federal Government as an indicator of the burden of student borrowing.296 It is also 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 student loans until their debt-to-earnings ratio rises to 1.5 :1. Because the financial aid system uses mortgage-style repayments where monthly loan payments are based on the total debt load, this would ensure that the borrower would be able to better manage their payments. Loan Amount Monthly Repayment Repayment Income Threshold $15,000 $200.25 $10,000 $28,000 $373.80 $18,667 By extending the interest-free period on students’ loans until repayment begins, students who face greater difficulty in beginning their careers will not be penalized through higher interest charges. This recommendation will help individuals gain a level of income stability before becoming responsible for starting to repay their student loan, lowering the reliance on interest relief programs and protecting the individual from the adverse consequences of default. There would also continue to be interest relief programs for individuals who still face difficulty in meeting their loan repayment obligations. Recommendation Thirty-Six: When consolidating their loans, graduates should be able to choose a repayment term which works for their unique financial situation, and be provided with information about the implications and consequences. 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.297 To create greater choice and flexibility in repayment, the Revision of Terms program should be taken a step further. Under this new system, graduates would be able to select a range of term lengths depending on their assessment of the monthly cost they are able to bear, including repayment terms of eight, 10, 12, 14, 16 or 18 years. Once they have commenced repayment, students must also be allowed to change their repayment terms either shorter or longer, with the understanding that monthly payments will change to accommodate the new schedule. These longer options in term repayment should not increase borrowers’ loan burden, so they should only be indexed to inflation for the additional years of a loan’s term. 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 through inflationary increases as the result of an extended repayment term.

Julie Dubois, Trends in student borrowing and pathways: Evidences from the 1990, 1995, and 2000 classes (Ottawa: Human Resources and Social Development Canada, 2006), 6; accessed online at http://www11.hrsdc.gc.ca/en/cs/sp/hrsdc/lp/publications/2006-002850/SP-619-01-06E.pdf 297 OSAP website, “Revision of Terms”; accessed online at http://osap.gov.on.ca/eng/not_secure/repay.htm#Revision%20of%20Terms. 296

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Recommendation Thirty-Seven: The provincial government should lower the interest rate applied on student loans in repayment to prime minus one. Interest charges are a reality for any form of financial borrowing. However, in the current system, students who take longer to repay their loans pay substantially more money than their counterparts who are able to make larger payments. This leads to students who have lower incomes paying substantially more for their education. As a government service and part of the social safety net that promotes equality of opportunity for citizens, the financial aid system should not be administered for a profit. OUSA also believes that the financial aid system should offer greater interest subsidization for borrowers with longer repayment terms who likely have larger debts and lower post-graduation incomes. OUSA therefore suggests that the provincial government subsidize the interest rate to ensure no graduate pays higher than prime -1 per cent on their entire loan. This interest subsidization will help prevent student borrowers from excessively amplifying the costs of education for relatively low-income students compelled to access repayable support programs. It is unfair to require graduates to pay more for their education simply because they were unable to afford the up-front costs. While this would increase interest subsidization costs for the government, it would also reduce loan default rates, which cost the financial aid system substantially more. In 2002/03, the provincial government had $96 million in claims for defaulted loans. By contrast, the cost of subsidizing all interest for students in study cost the provincial government $28.8 million.298 Recommendation Thirty-Eight: The provincial government must publicize the interest relief and debt reduction programs that are available to OSAP recipients, particularly to borrowers with high risk of default. As a recent study released by Statistics Canada revealed, federal programs aimed at students facing difficulty in loan repayment are being under-utilized by students who face low incomes after graduation.299 The provincial government also reports a lack of awareness about its interest relief programs.300 These are just two of many indications that students require better access to information about the financial aid system and different programs that are available to them. In order to ensure that existing default prevention programs and other forms of assistance programs fulfill their mandate, the government must take steps to publicize these and other financial aid programs to borrowers. This could include listing programs that are available to students on communications to borrowers in repayment, as discussed further in the next recommendation. Other jurisdictions report targeted outreach to students who are at a high risk of defaulting as effective means of reducing its occurrence. For example, Xavier University provides individualized exit interviews to students who drop out of school, who are at high risk of defaulting. At the interviews, a counselor discusses the student’s future plans, identifies their student loan providers, and reviews the student’s repayment obligations and options. This strategy has been identified as a best practice that the US Department of Education promotes to other institutions in order to increase successful loan repayment. Similar strategies could be deployed in Ontario to inform certain students about interest relief and debt reduction programs.

Provincial Auditor of Ontario, 2003 Annual Report of the Office of the Provincial Auditor of Ontario to the Legislative Assembly (Toronto: Queen’s Printer, 2003), p.246; accessed online at http://www.auditor.on.ca/en/reports_en/en03/310en03.pdf. 299 Jerry Situ, “Canada Student Loans Repayment Assistance: Who does and does not use interest relief?” (Ottawa: Statistics Canada, 2006); accessed online at http://www.statcan.ca/english/research/81-595-MIE/81-595-MIE2006047.pdf. 300 John Mortimer and Patrick Codrington, “Interest Relief Program and Loan Repayment” (presentation to the CASFAA/Millennium Conference on Enhancing Access to Post-Secondary Education, Ottawa, Canada, September 16, 2006). 298

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Recommendation Thirty-Nine: OSAP should provide regular statements about loan status that outline the amount owed, how much has been paid, and the interest rate on the loan, along with information about programs available for borrowers facing difficulty in repayment. With the complexity of Ontario’s student financial aid system, it is important that OSAP continually strives to be as easy to use as possible. At present, borrowers in repayment only receive an annual statement detailing the total amount remaining on the loan, and the amount paid to the principle and through interest. The financial aid system should aim to be more proactive in providing students and graduates with information about their loans, for the entire life of their loans. For borrowers in repayment, this should include providing students with regular statements about the amount of money that a student owes, the interest rate they are paying, and the balance on their loans. This statement should ideally be accessible online, so borrowers are easily able to consult their loan information when they wish. As noted in the Canada Student Loan Program annual report, these types of statements would increase the perceived seriousness of the loan, and would remind borrowers of their obligations.301 Recommendation Forty: The Bankruptcy and Insolvency Act must be amended to treat student debt like all other types of consumer debt. In his analysis of student loan bankruptcy, Carleton University professor Saul Schwartz notes that, (1) only a minority of student loan borrowers in Canada experience severe difficulty in repaying their student loans, (2) those who default on their student loans genuinely cannot pay and are using bankruptcy as a last resort, rather than using bankruptcy protection as a means of avoiding payment, and (3) these individuals face even more difficult economic situations than the average person seeking bankruptcy protection. He also notes that the ten-year waiting period currently required to discharge student loan debts is unlikely to change their economic situation.302 These findings suggest that bankruptcy should be available for student loan debts, in order to provide last-resort protection for individuals facing severe financial distress, and it should force these borrowers to face prolonged difficulties for a full decade before providing the same bankruptcy provisions as other forms of consumer debt. OUSA recommends that bankruptcy policies should therefore be reverted to its stance from prior to 1997 where student loan debts were not singled out for different treatment under the Bankruptcy and Insolvency Act. Recommendation Forty-One: The Higher Education Quality Council of Ontario should conduct research on the long-term effects of student debt and the manageability of debt as part of its mandate to monitor accessibility. The Higher Education Quality Council of Ontario recently released their 2007 Review and Research Plan303, which included commitments to study barriers to accessing a post-secondary education, and factors that affect the retention of students once they are in the system. The research path does not commit to studying the long-term social and economic effects of debt loads upon graduation. Some of the issues that HEQCO should investigate in its 2008 Research Plan include the long-term effects of student debt and the manageability of debt. With more students holding larger debt loads, HEQCO should explore what might the long-term effects be on other areas of their lives, including career choices, choosing to pursue more education, purchasing homes, having children, and so on. The need for more research in this area has already been identified

Human Resources and Social Development Canada, Canada Student Loans Program Annual Report 2003-2004 (Ottawa: HRSDC, 2005), 34; accessed online at http://www.hrsdc.gc.ca/en/hip/cslp/publications/07_pu_AnnualReport20032004.pdf 302 Saul Schwartz, “The dark side of student loans: debt burden, default, and bankruptcy”, Osgoode Hall Law Journal 37(1,2), 308. 303 Higher Education Quality Council of Ontario, Review and Research Plan 2007, (Toronto: Queen’s Printer), pp. 7-19; accessed online: http://www.heqco.ca/pdf/101_EN.pdf 301

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as a priority in a report authored by Human Resources and Social Development Canada’s Learning Policy Directorate.304 Other areas of investigation around accessibility that HEQCO could pursue involve The research conducted by the Council should feed into continuing efforts to improve the financial aid system. The ongoing goal of the research and any actions that follow from it should be to provide the best forms of financial assistance to students that increase access and reduce debt, while keeping rates of students facing difficulty in repayment or loan default as low as possible. Funding Recommendation Forty-Two: The provincial government must not reduce its commitments to student financial aid with the introduction of aid programs by other levels of government. As the federal government considers making greater investments in post-secondary education, the provincial government should be reminded to not reduce its commitments to student financial aid in relation to any new funds provided by other funding sources. The federal government is currently conducting consultations on addressing the so-called ‘fiscal imbalance’ through increased investments in post-secondary education, and will soon need to consider the future of the Canada Millennium Scholarship Foundation (CMSF), whose mandate ends after 2009. There was a great deal of controversy around the displacement of financial aid funds with the establishment of the Foundation in the late 1990s. Since then, the CMSF reports that the Ontario government has committed substantial funds over and above the amount of displaced money to financial aid, The provincial government now spends $80 million to keep additional loans down to the pre-limit increase levels while the $500 top-up bursaries paid to each Millennium Bursary recipient in Ontario now cost $19 million annually.305 OUSA commends the provincial government for reinvesting the funds in student financial assistance, and encourages the government to continue with this approach in the context of any new investments in financial aid from other sources. Recommendation Forty-Three: The federal government must eliminate the tuition tax credit and provide the additional revenue to the provinces on top of existing post-secondary funding 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 full-time study. These credits can be used in one of three ways: 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 funds allocated to student financial aid through education-related tax-credits. Furthermore, tax credits are not distributed on the basis of need. Much of the money goes to students from higher income families, as lower income families either lack the tax obligations required to take advantage of the benefits, or at best, receive no more assistance than higher income families. In fact, 60 per cent of all education and tuition tax credits go to families

Julie Dubois, Trends in student borrowing and pathways: Evidences from the 1990, 1995, and 2000 classes (Ottawa: Human Resources and Social Development Canada, 2006), p. 23; accessed online at http://www11.hrsdc.gc.ca/en/cs/sp/hrsdc/lp/publications/2006-002850/SP-619-01-06E.pdf. 305 Canada Millennium Scholarship Foundation, The Millennium Bursary Program: Benefits to Students and the Interaction with Provincial Programs (Montreal: CMSF, 2006), 3. 304

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with incomes above the national median. 306 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 and other improvements to the financial aid system. This reform will ensure that individuals who cannot pay for higher education 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 Seventeen. This form of encouragement would be widely available on the basis of merit, not tax bracket. Recommendation Forty-Four: The provincial government should recognize actual costs of residence fees when calculating students’ rental tax credits. As noted in Concern Thirty-Five, the provincial government’s Property Tax Credit gives up to $250 in credit for rent or property tax paid by Ontario residents, but only $25 to students living in university residences. This is inequitable, and should be changed so that students in residence can receive the same amount of tax credits as their counterparts living in rental housing.

306 Ross Finnie, Alex Usher and Hans Vossensteyn, “Meeting the Need: A New Architecture for Canada’s Student Financial Aid System”, Policy Matters 5(7), August 2004, 14, 16.

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CONCLUSION: AN ACTION PLAN FOR STUDENT FINANCIAL ASSISTANCE Student financial aid in Ontario is an immensely complicated system. As such, OUSA’s analysis and recommendations on how to improve this system are also lengthy and complex. Our recommendations range from addressing large scale systemic issues about how financial aid funds are collected and distributed, to seemingly minor shifts to help ensure that students have enough money to meet their daily costs. Fixing the system will not be a simple process, nor a rapid one. It is also unlikely that there will ever be a moment when the financial aid system is ‘perfect’. However, if the financial aid system gains the sustained attention of the provincial and federal governments, and there are efforts to continually review and improve its operations, the bedrock will be set for a strong future. In order to set out some crucial steps for the future, OUSA has developed a five-part action plan for student financial assistance: 1. Fix the need assessment formula. Recognize the real costs of attending post-secondary education around the province and add greater responsiveness to cost changes over time. 2. Reinstate OSAP eligibility for certain groups, including part-time students, people receiving Ontario Works, people with poor credit histories, and students studying outside of the country. 3. Make OSAP more user-friendly by simplifying the OSAP application, providing more information about the financial aid system, and equipping students with the tools and resources to manage their finances. 4. Make repayment policies more manageable for students who hold debt, by making repayment policies more adaptable to individual financial situations, while ensuring that lower earners aren’t penalized. 5. Increase access among under-represented groups through targeted financial assistance, including upfront grants.

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student financial assistance policy statement WHEREAS all willing and qualified students must be able to access and have the tools to excel in Ontario’s postsecondary system. WHEREAS comprehensive and student-friendly financial aid program design is vital to the success of the university system in Ontario. WHEREAS the funding, tuition and financial aid structure in Ontario must guarantee the accessibility, affordability and quality of higher education for all students. WHEREAS the financial aid program must be designed to maximize student ease-of-use while minimizing operating cost. WHEREAS the financial aid system is a public—and therefore government—responsibility. WHEREAS the student financial aid system must provide accountability and transparency to the public. WHEREAS the distribution of financial aid dollars should be done in an equitable and student-centred manner. WHEREAS to ensure equitable university access for all Ontarians, financial aid must be available to all students in need. WHEREAS financial aid should be distributed primarily on the basis of student need. WHEREAS the student financial aid system should incorporate some flexibility to address individual or program circumstances. WHEREAS to be effective, the financial aid package must provide enough funding to cover all reasonable education costs. WHEREAS the student financial aid system should provide a predictable amount of assistance to students. WHEREAS Non-repayable forms of financial assistance must compose a significant portion of the student aid package. WHEREAS provincial government must provide extensive additional non-repayable assistance to students from under-represented groups. WHEREAS repayment of graduate debt must be structured in a fair and progressive manner. WHEREAS the financial aid system must provide additional assistance for those facing difficulty in repayment. WHEREAS the OSAP need assessment formula fails to accurately assess the financial needs of students in Ontario’s universities. WHEREAS the OSAP need assessment formula does not reflect variances in cost of living in different parts of the province. WHEREAS the student financial aid system is not responsive to tuition and inflationary cost changes over time.

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WHEREAS many students are barred from receiving financial assistance because of OSAP policies. WHEREAS certain students face difficulty in accessing sufficient levels of financial assistance due to OSAP policies. WHEREAS deregulation of tuition has resulted in significant tuition increases for students in certain programs over the past decade, which has not been adequately recognized by the financial aid system. WHEREAS maximum OSAP assistance levels result in students not obtaining enough financial assistance to fund their costs of education. WHEREAS the OSAP need assessment formula currently penalizes students who gain employment income by clawing back financial aid. WHEREAS students are increasingly required to take on part-time employment to fund their educational costs, which can be detrimental to the quality of their education. WHEREAS certain groups in Ontario are accessing post-secondary education at lower rates than the rest of the population. WHEREAS the provincial governmentâ&#x20AC;&#x2122;s Student Access Guarantee only guarantees students access to resources for tuition, books and mandatory fees, and is limited to students who are eligible to apply for OSAP. WHEREAS the government lacks a meaningful access improvement strategy. WHEREAS institutional financial aid funded by the tuition set-aside is mostly limited to OSAP-eligible students. WHEREAS there are inconsistent levels of institutional financial aid available at different universities. WHEREAS the tuition set-aside drives up overall financial need and debt for students across the province. WHEREAS work-study positions require students to help fund their paid employment through the tuition set-aside policy. WHEREAS some work-study positions are lacking educational substance and are unrelated to studentsâ&#x20AC;&#x2122; studies. WHEREAS some institutions experience an inequitable distribution of institutional financial aid funded by the tuition set-aside, where students from high-cost programs often receive a disproportionate amount of aid. WHEREAS students report having insufficient knowledge about the financial aid system. WHEREAS students face difficulty in obtaining useful information about the student financial aid system. WHEREAS the OSAP application is exceedingly complex. WHEREAS the financial aid system does not provide clarity or transparency in assessing need assessments or loan allocations. WHEREAS high school guidance programs often fail to provide sufficient information about financial aid to students. WHEREAS many students face difficulty in repaying their student loans.

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WHEREAS interest rates on OSAP loans are higher than in peer jurisdictions, resulting in higher costs to borrowers who take longer to repay their loans. WHEREAS there is very little flexibility in the OSAP loan repayment process for borrowers with different income levels and/or fluctuations in income. WHEREAS due to wage inequalities, graduates from systematically disadvantaged groups may experience additional barriers in loan repayment. WHEREAS bankruptcy policies make it excessively difficult for students encountering severe financial difficulties to access bankruptcy protection. WHEREAS there is high reliance on repayable forms of assistance. WHEREAS students are accumulating high debt loads, which can lead to them abandoning their studies. WHEREAS students who are unable to access OSAP or do not receive sufficient assistance from OSAP are using private loans in order to finance their education. WHEREAS there is a lack of research on the long-term effects of student debt. WHEREAS governments have displaced their commitments to student financial aid in reaction to the availability of other aid dollars from other sources. WHEREAS tax credits for post-secondary education tend to disproportionately benefit higher income individuals and/or families. WHEREAS Ontario tax credits do not provide the same credit for residence fees as other forms of rental housing. BIRT the provincial government must provide sufficient funding to the student financial aid system in order to ensure that it can provide sufficient levels of assistance to all students in need. BIFRT tuition must be government regulated. BIFRT the provincial government must develop an accurate assessment of total student costs in Ontario. BIFRT the amount of financial assistance allocated to students must be large enough to completely cover actual tuition and reasonable cost of living expenses. BIFRT sensitivity to geographic circumstances must be built into the cost of living loan assessment by developing need assessment calculations specific to each city with a post-secondary institution. BIFRT the student financial aid system must include mechanisms to automatically adjust aid allocations and loan limits to changes in tuition policy and inflation. BIFRT the provincial government should change parental contribution formulas to include more responsiveness to regional costs of living and individual circumstances. BIFRT the provincial government should allow an exemption of a small amount of savings in the OSAP need assessment, to allow for emergencies, cash shortfalls, and to promote prudent financial planning and saving. BIFRT OSAP should give the option for students to receive their OSAP allocations on a monthly basis.

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BIFRT the provincial government should allow students to earn income up to the amount of their unmet need before their OSAP is clawed back. BIFRT the provincial government must remove unfair categorical ineligibilities from the financial aid system that disqualify individuals including, but not limited to, part-time students, individuals receiving Ontario Works, students studying outside of Canada, students facing academic difficulties, and students with poor credit records. BIFRT OSAP should expand the appeals process at institutional financial aid offices for students who do not receive OSAP, or do not receive sufficient levels of assistance, due to qualification policies. This appeals process should be timely and not onerous for students. BIFRT the provincial governmentâ&#x20AC;&#x2122;s Student Access Guarantee must ensure that students receive sufficient levels of financial assistance to meet their costs, using an accurate need assessment formula. BIFRT the provincial government must establish early outreach programs to encourage students from underrepresented groups to attend post-secondary education. BIFRT the provincial government must provide targeted non-repayable financial assistance to students from underrepresented groups. BIFRT students from low-income families must be provided with up-front access grants through to degree completion. BIFRT the Higher Education Quality Council of Ontario should conduct research on the effects of wage inequalities of graduates from systematically disadvantaged groups on their ability to repay their student loans. BIFRT the provincial government must provide funding for institutions to offer academic and social support programs targeted at students from under-represented groups. BIFRT until the reforms to the financial aid system outlined in Recommendations Three to Eight are achieved, the set-aside policy should remain in place, but be guided by the following shorter-term recommendations. BIFRT institutional financial aid funded by the provincial government must be available to all students in need, including those who do not receive OSAP. BIFRT institutional financial aid provided to students taking Additional Cost Recovery Programs must meet their unmet financial need, using an accurate need assessment formula. BIFRT institutional financial aid funded by the provincial government and tuition set-aside funds should be distributed on a priority basis, with unmet student need addressed first. BIFRT set-aside funds should continue to be distributed to work-study programs within the priority structure, and work-study positions should be related to studentsâ&#x20AC;&#x2122; professional and/or academic development. BIFRT distribution of tuition set-aside funds should be given in priority, but not limited to, the proportion contributed by each faculty at an institution. BIFRT the provincial government must create an effective OSAP website that allows students to access information about the financial aid system, institutional financial aid, the amount of assistance that is available to them, and ways to contact OSAP for more information. BIFRT the OSAP application should be simplified so that applicants are only presented with the sections that pertain to their situation.

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BIFRT the financial aid system must provide specific need assessment summaries and information about the appeals process to applicants in order to foster greater transparency and clarity in the application process. BIFRT the provincial government should publish an annual report for OSAP. BIFRT the provincial government, through the Ministry of Education, must ensure that there are guidance counsellors in high schools with regular training on post-secondary admissions processes and the student financial aid system, in adequate number to meet the needs of students. BIFRT the provincial government must develop materials for guidance counsellors to present to high school students about applying for post-secondary education and student financial aid. BIFRT the provincial government, through the Ministry of Education, must introduce curriculum at the high school level that provides training on personal financial management. BIFRT institutional student financial aid offices should provide counselors and information on personal financial management for current students and recent graduates, and these programs should be widely publicized to students. BIFRT the provincial government must not implement an income-contingent loan repayment plan in Ontario. BIFRT graduates must not be required to begin repayment, nor should interest accrue, until their income exceeds an acceptable debt-to-earnings ratio. BIFRT when consolidating their loans, graduates should be able to choose a repayment term which works for their unique financial situation, and be provided with information about the implications and consequences. BIFRT the provincial government should lower the interest rate applied on student loans in repayment to prime minus one. BIFRT the provincial government must publicize the interest relief and debt reduction programs that are available to OSAP recipients, particularly to borrowers with high risk of default. BIFRT OSAP should provide regular statements about loan status that outline the amount owed, how much has been paid, and the interest rate on the loan, along with information about programs available for borrowers facing difficulty in repayment. BIFRT the Bankruptcy and Insolvency Act must be amended to treat student debt like all other types of consumer debt. BIFRT the Higher Education Quality Council of Ontario should conduct research on the long-term effects of student debt and the manageability of debt as part of its mandate to monitor accessibility. BIFRT the provincial government must not reduce its commitments to student financial aid with the introduction of aid programs by other levels of government. BIFRT the federal government must eliminate the tuition tax credit and provide the additional revenue to the provinces on top of existing post-secondary funding for investment in non-repayable assistance programs. BIFRT the provincial government should recognize actual costs of residence fees when calculating studentsâ&#x20AC;&#x2122; rental tax credits.

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financial aid acronyms Acronym CEGEP CESG CMSF CSL (or CSLP) DR (or DRR) HEQCO HRSD (or HRSDC) ICLR (or ICL, or ICLRP)

IR MTCU NSLSC OSAP OSOG OSOTF OSL (or OSLP) OUSA OTSS

Meaning In French, Collège d’enseignment général et professional ‘College of General and Vocational Education’, a two-year junior college attended prior to university in Quebec Canada Education Savings Grant A grant provided for a child’s post-secondary education that is provided through a Registered Education Savings Plan. Canada Millennium Scholarship Foundation A federal foundation that provides bursaries and scholarships to Canadian students and conducts research on access to post-secondary education. Canada Student Loan (or Canada Student Loan Program) Student loans provided by the federal government; they compose 60 per cent of an Ontario borrower’s assistance package. Debt reduction (or Debt Reduction in Repayment) Provincial and federal programs that reduce a borrower’s debt load if they have experienced prolonged difficulty in repaying their loans. Higher Education Quality Council of Ontario An independent government body that will monitor quality, accountability and accessibility at Ontario post-secondary institutions. Human Resources and Social Development Canada The federal government ministry responsible for post-secondary education. Income-contingent loan repayment (or income-contingent loans, or income contingent loan repayment programs) A system of financial assistance where, in some cases, no tuition is paid up-front, but instead is charged after a student graduates at a rate based on their post-graduation income level. This system is currently used in Australia, the United Kingdom and New Zealand. Interest relief Provincial and federal programs that prevent the accumulation of interest for a certain period of time while the borrower has an income below a certain level. Ministry of Training, Colleges and Universities The provincial government ministry that is responsible for post-secondary education. National Student Loans Service Centre An organization that helps administer student loans distribution and repayment in Ontario, as well as for the federal and other provincial loan programs. Ontario Student Assistance Program The provincial financial aid program in Ontario, which coordinates assistance from both provincial and federal governments. Ontario Student Opportunity Grant A provincial debt-reduction program that reduces a student’s debt to $7,000 per academic year if they complete the year. Ontario Student Opportunity Trust Fund A provincial government program that matched private donations to universities (ended 2005). Ontario Student Loan (or Ontario Student Loan Program) Student loans provided by the provincial government; they compose 40 per cent of an Ontario borrower’s assistance package. Ontario Undergraduate Student Alliance Ontario Trust for Student Support A provincial government program that matches private donations to universities (replacing OSOTF in 2005), and providing 3:1 matching to institutions with smaller endowments.

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RESP SFA

Registered Education Savings Plan A type of savings account where money can grow tax-free until it is withdrawn for post-secondary education, and is supplemented by federal matching programs to encourage saving. Student financial assistance A general term for any form of monetary aid provided to students.

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policy paper Teaching Quality: A Reassessment of Priorities

October 2007 Prepared By: julia mitchell vice president university affairs queen’s alma mater society, queen’s university alexi white academic affairs commissioner queen’s alma mater society, queen’s university with contributions from: stephanie murray vice president education mcmaster students’ union, mcmaster university vanessa voakes vice president university affairs university of windsor students’ alliance, university of windsor

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Executive Summary High quality teaching is fundamental to Ontario’s post-secondary education system. As the Provincial Government and the public demand greater emphasis on quality, it is imperative teaching quality at post-secondary institutions be examined. As this paper will show, there are positive steps the Provincial Government can take to improve teaching quality at Ontario universities. Some recommendations require increased investment in the system; others do not. However, OUSA does recognize that change can only come if teaching quality is also addressed at the institutional level. OUSA asks that government and institutions emphasize teaching quality and combine their efforts for improvement in this area. Key Findings: • At many post-secondary institutions, research is often prioritized before teaching quality. As a result, institutions and instructors regard teaching ability as less important than research performance when awarding tenure and hiring instructors. •

Ontario universities do not receive sufficient funding to maintain or improve teaching quality.

•

The instructional support programs that are currently in place across the province differ very much in quality, as there are currently no provincial funds allocated for the establishment and maintenance of these programs.

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University instructors often receive little or no formal training in teaching.

Key Recommendations: • The Provincial Government must at least increase university operating grants to the per-student national average. Funding should increase at a stable level to allow for planning to enhance teaching quality. •

Funding must be designated by the government of Ontario to found and maintain instructional support programs that encourage innovation in teaching and provide ongoing professional development for Ontario’s post-secondary educators.

•

Quality teaching must be weighted equally with research performance for all decisions related to hiring, promotion and tenure. In addition, innovation in teaching and innovation in research must be given equal consideration.

•

Course and instructor evaluations must be made accessible to students.

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The Ontario Government must mandate all new teaching assistants and professors, who will be teaching or leading students for any length of time, to complete a formal system of instruction in teaching.

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INTRODUCTION The primary purpose of attending university is to gain knowledge through direct interaction with experts in one’s field. Quality teaching is essential to the development of this knowledge, stimulating Ontario graduates to become active citizens and thought-leaders. In Ontario, a recent survey of public opinion on post-secondary education showed that, out of a list of seven indicators, Ontarians overwhelmingly feel that improvements in the quality of teaching should be the number one priority for government.307 The report summarized that, “teaching is the key factor that resonates most strongly in the minds of Ontarians when thinking about quality and the university.”308 These views are reflective of the sentiments felt by many stakeholders who experience first-hand the quality of teaching at universities. In recent years, a greater emphasis has been placed on teaching and the improvement of the learning experience for students, as well as the support mechanisms that are available to instructors* who wish to improve their teaching skills. This emphasis comes at a time when the role of instructors seems to be in a transitional state. Technology has played a role in shifting the learning process into a more self-directed activity. As Nancy Van Note Chism argues, “[there is] an emerging shift in roles and responsibilities from the teacher as presenter of content to a facilitator of learning, where focus moves away from what the teacher does with the course content to what the learner needs and can do.”309 In the past, students were dependent on their instructors to relay important information. Now we are experiencing a shift toward viewing instructors as facilitators in the larger process of learning and discovery. Many universities are implementing new and innovative teaching techniques to inspire students and engage them in creative problem solving. There is currently a good deal of consensus among institutions that teaching and research should be of equal priority. There is a long-standing tradition at Canadian and American universities that professors should allocate 40 per cent of their time to research, 40 per cent to teaching and the last 20 per cent to administrative and service duties. Although there has been an acknowledgement of the need for balance between teaching and research, the reality of the situation is that research is consistently given greater emphasis, for a number of reasons. One is the prevailing view that the highest quality post-secondary institutions are all regarded as “research intensive”. In order to receive additional funding in the form of grants from the government, universities must make research a top priority. As a result, teaching quality is often overlooked as an equally important aspect of post-secondary education. It is no longer respectable for an institution to focus on undergraduate teaching. Some have also noted that the imbalance begins with the training that is provided to PhD students and new professors. Graduate students obtain research skills and learn vast amounts of knowledge in their discipline, yet are often given little direction when it comes to communicating that information to others. For years, institutions have been searching for the best method of measuring teaching quality. Timetabling, curriculum, and popularity of a course can all have a large impact on the evaluation process; it can be difficult to isolate and judge an instructor’s ability amid all these factors. As new research emerges, this issue will no doubt continue to be debated at universities across North America. It is OUSA’s firm belief that, while there are many ways to evaluate teaching, student input is essential to any model. Furthermore, compiling a high-quality evaluation is not enough; accountability for teaching quality can only be achieved when teaching evaluations are put to good use. As a major stakeholder in post-secondary education and as the direct beneficiaries of quality teaching, students have a right to know how their professors are performing. OUSA recognizes that some of the ideas proposed below are not changes that can be implemented at the government level, as they deal with issues that fall within the jurisdiction of individual institutions. Still, the Ontario government must spearhead the push for increased teaching quality, through new funding programs and regulations. Ekos Research Associates for the Council of Ontario Universities, “Public Perceptions on Quality” (Toronto: COU, 2003), 39. Ibid,; 40. 309 Nancy Van Note Chism, “Toward the best in the Academy” Essays on Teaching Excellence, 16 no.5 (2005) : accessed online at http://www.cofc.edu/~cetl/Essays/DevelopingaPhilosophyofTeaching.html. * For the purposes of this paper, “instructor” includes all individuals who teach at a post-secondary institution, including professors and teaching assistants. 307 308

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The purpose of this paper is to outline principles and concerns that OUSA has regarding teaching quality in the province of Ontario. Several documents and reports describe a forward-thinking philosophy of teaching and learning that, though written many years ago, has yet to be widely accepted. The Boyer Commission in particular describes a definition of scholarship that is highly progressive yet has for too long been met with hesitation and reluctance. The research is there and it is time to act upon it. PRINCIPLES OUSA has examined the issue of teaching quality for students in Ontario and developed recommendations in accordance with the following principles: Principle One: Ontario universities require stable and adequate public funding in order to establish and maintain excellence in teaching. Any discussion on the quality of education must parallel a discussion on the price of that education. In the last fifteen years, students have seen the price of their education increase while quality has decreased. The Boyer Commission, which has examined the education of undergraduates in the United States, notes “tuition income for undergraduates is one of the major sources of university income, helping to support research programs and graduate education, but the students paying the tuition get, in all too many cases, less than their money’s worth.”310 Although funding for teaching quality in Ontario has been increased through government programs like the Quality Improvement Fund, enrolment has also increased and the new money that has been allocated has not sufficiently addressed the issues that surround teaching quality. As the Council of Ontario Universities reports, “the investment in university operating grants intended to significantly enhance the quality of the educational experience has essentially gone to fund enrolment increases.”311 OUSA believes that it is imperative that stable models of funding be established so that universities can predict the level of funding that will be available, and plan accordingly. The introduction of multi-year funding plans has forced the government to be accountable for the provision of funding, and the institutions to be accountable for the responsible use of that funding. It is our hope that this will help to create the highest quality learning experience for students. Stable funding would allow universities to plan for long-term improvements and clearly outline a path to improve teaching quality. The government also has the responsibility to provide an amount of funding that is adequate to increase and maintain teaching quality. The Ontario government has often stated its belief in the necessity of higher education and its inherent economic benefits, yet without a greater monetary investment in quality, we will not see significant improvement in teaching. Principle Two: The delivery of high quality teaching is fundamental to Ontario’s post-secondary education system. Providing a quality education to students is one of the primary functions of Ontario universities. In order to accomplish this, our provincial government and our universities must continue to place great emphasis on the delivery of quality teaching to all students. As Christopher Knapper, founding president of the Society of Teaching and Learning in Higher Education and Queen’s University professor emeritus argues, “teachers do make a difference, especially through their role in motivating students, providing guidance on learning strategies, offering feedback on students’ performance and generally serving as validators of students’ own learning efforts and The Boyer Commission on Educating Undergraduates in the Research University, “Reinventing Undergraduate Education: A Blueprint for America’s Research Universities”(New York: Boyer Commission, 1998), 5; accessed online at http://naples.cc.sunysb.edu/Pres/boyer.nsf/. 311 Council of Ontario Universities, “Progress Report: University Access, Accountability and Quality in the Reaching Higher Plan” (Toronto: COU, 2006), 4. 310

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accomplishments.”312 Teaching is an integral part of Ontario’s post-secondary education system and the provincial government has a responsibility to support quality teaching through new programs and targeted funding. Unfortunately, many students are currently facing a less than ideal learning environment, mostly as a result of high student-faculty ratios and inadequate instructional development for our teachers. Without addressing these and other concerns, Ontario cannot deliver the high quality teaching that is fundamental to post-secondary education in this province. Principle Three: Teaching and research are two equally essential components of our post-secondary education system. Universities are, first and foremost, places of learning. This learning includes both the cutting-edge research that broadens our collective knowledge, as well as the transfer of this collective knowledge from instructor to pupil. It should be the goal of every university to ensure that both of these pursuits are given equal consideration. At Ontario’s post-secondary institutions, there is currently a general consensus that teaching and research should be awarded equal significance. In fact, most of Ontario’s universities direct their instructors to expend the same amount of effort on their teaching as they do on their research. This is an important principle that OUSA whole-heartedly supports. There is much evidence, however, that this equality is paid only lip-service by many of our institutions. As the Boyer Commission points out, “every research university can point with pride to the able teachers within its ranks, but it is in research grants, books, articles, papers and citations that every university defines its true worth.”313 Principle Four: Innovation in teaching should be recognized and encouraged through funding by the province. The federal government has made academic research and innovation a major priority by establishing organizations such as the Canadian Foundation of Innovation, founded to fund research initiatives at colleges and universities across Canada.314 In addition, the Provincial Government has partnered with the federal government to provide funding dedicated to Canada Research Chair positions, further demonstrating their commitment to high quality academic research. It is important for the Ontario government to realize the potential that exists by providing similar funding opportunities for the development and implementation of innovative teaching and learning experiences at universities. As Jane Harrison argues, “the new economy places new expectations on its workers and requires of them new skills and abilities. To ensure that students are better prepared for this environment, universities must change how they teach students and assess what they have learned.”315 New innovations in teaching are more commonly accepted than ever before. In fact, the processes of learning and discovery are being more widely researched, and OUSA commends these endeavours. It is imperative that the Ontario government support this research and encourage the use of innovative teaching methods at all Ontario universities. In addition, OUSA believes that there is great potential in providing funding for technological innovation in teaching. The Boyer Commission notes that “if faculty give appropriate attention to teaching innovations, universities can

Christopher Knapper, “Research on College Teaching and Learning: Applying What We Know” (Kingston: Queen’s University, 2004), 2. 313 The Boyer Commission on Educating Undergraduates in the Research University, “Reinventing Undergraduate Education: A Blueprint for America’s Research Universities” (New York: Boyer Commission, 1998); accessed online at http://naples.cc.sunysb.edu/Pres/boyer.nsf/webform/overview 314 Canadian Foundation for Innovation, “Home Page” (2007); accessed online at http://www.innovation.ca/index.cfm. 315 Jane E. Harrison, “The Quality of University Teaching: Faculty Performance and Accountability. A Literature Review”, Canadian Society for the Study of Higher Education Professional File, 21 (2002): 5; accessed online at http://robertwright.ca/Harrison.pdf. 312

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become the technological pacesetters in teaching that they have always been in research.”316 It should be cautioned however, that technology should never be a substitute for teaching but rather an enhancement to the interaction that exists between an instructor and his or her students. Principle Five: Instructional support programs for professors and teaching assistants are essential to improving teaching quality and supporting innovation in teaching. Learning to teach is not a static process that takes place only at the beginning of one’s professorship; rather it is a constant campaign to improve oneself. All professors should have the option of gaining instructional support at any time. To facilitate this, it is vital that support mechanisms are in place at every institution in Ontario. In recent years, many Ontario universities have established centres or programs to provide teaching support to instructors. These centres often assist in the training and mentoring of new professors and teaching assistants, but also provide on-going support for experienced instructors who wish to improve further. For instance, Waterloo’s Centre for Teaching Excellence “provides leadership in the promotion, development and advancement of excellence in teaching and learning at the University of Waterloo.”317 Other such centres actively promote innovative methods of learning such as McMaster University’s Centre for Leadership and Learning which “is dedicated to improving learning in higher education through research into the effectiveness of inquiry pedagogy and how students learn how to learn.”318 Unfortunately, establishing, funding and staffing these centres is difficult because they are in constant competition for resources with other areas at universities. Therefore, it is vital that that the province recognizes the need for these centres in order to establish local support and increase overall teaching quality. Principle Six: Students should continue to complete regular course and instructor evaluations. These evaluations should be weighted heavily in the overall evaluation of the instructor and all data should be released back to the students. It is widely accepted that the introduction of course and instructor evaluations in the late 1960’s and early 1970’s has improved teaching. In his 2005 paper entitled “Student Evaluation of Teaching: Has It Made a Difference?,” Dr. Harry Murray states that 68.8 per cent of surveyed faculty believe that student evaluations have improved teaching.319 Gauging student opinion can provide a wealth of valuable data and should be considered an essential element of any teaching review process. As the chief beneficiaries of quality teaching, students have a vested interest in ensuring accountability in this area. Students are volunteering important information through these evaluations and deserve to see the results. The release of all aggregate data is essential because it gives students a macro view of the state of teaching at their institution. The release of individual instructor results is also essential, because it allows students to make more informed decisions when selecting courses. That said, OUSA recognizes that evaluations can be skewed by a number of factors and it is sometimes necessary for some evaluations to remain confidential. Still, it is imperative that a great deal of the data from student evaluations be released back to the students.

Boyer Commission on Educating Undergraduate in the Research University, “Reinventing Undergraduate Education,” (New York: Boyer Commission, 1998), 26; accessed online at http://naples.cc.sunysb.edu/Pres/boyer.nsf/. 317 University of Waterloo, Centre for Teaching Excellence (2007) ; accessed online at http://cte.uwaterloo.ca/who_we_are/index.html 318 McMaster University, Centre for Leadership in Learning (2007); accessed online at http://www.mcmaster.ca/cll/inquiry/inquiry.research/home.html 319 Harry G. Murray, “Student Evaluation of Teaching: Has It Made a Difference?” Paper presented at the Annual Meeting of the Society for Teaching and Learning in Higher Education, Charlottetown, PEI; June 2005. 316

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Principle Seven: Quality teaching should be recognized and encouraged through teaching awards and other programs recognizing outstanding teaching. Presenting a teaching award, recognizing the efforts and successes of a professor, is often the best way to encourage and acknowledge a commitment to quality. Many hundreds of teaching awards are given out each year across Ontario, conferred by student organizations, faculty groups, alumni groups, and other groups that support teaching excellence. Almost all student organizations in Ontario have recognized the need to honour excellence in teaching and have committed resources behind this initiative. Often teaching awards run by student groups are nominated by students, assessed by students and given out by students, and OUSA applauds these efforts. The criteria for these awards are often very fluid and can change from year to year. This is important as it allows the awards given out to mirror the classroom requirements for success and the professors that are responding to those requirements. Many also offer lifetime achievement awards in recognition of professors who devote their career to good teaching.320 If a student organization has the resources to do so, it is very important that awards of recognition be granted, as students are the main beneficiaries of quality teaching, and this is just one way for students to take an active role in the process of improving teaching quality. While teaching awards are an excellent way of promoting teaching quality, it is important to note that they should be used only as part of a wider campaign. It is especially important that the provincial government does not devote too many resources to the establishment of new awards, when this money can be better spent elsewhere. Principle Eight: Teaching quality is enhanced by the inclusion of research methods in the classroom. A great deal of the latest research has concluded that teaching and research are stronger when integrated. The most constructive environment for both students and teachers seems to be a forum that allows both groups to learn from each other through a constructive dialogue and sharing of research results. Education policy researcher Jane Harrison sums up this process of mutual discovery saying, “the student learns within and is inspired by an environment of enquiry and creativity; while faculty are re-energized and revitalized by the act of teaching through which they gain new perspectives on old ideas.”321 The Boyer Commission briefly explores the potential opportunities at universities if research and discovery are integrated for the benefit of all parties, “scholar-teachers would treat the sites of their research as seminar rooms in which not only graduates but undergraduates observe and participate in the process of both discovery and communication of knowledge.”322 If Ontario is to offer a high quality educational experience, the prevailing university pedagogy must incorporate these new ideas. Principle 9: All University instructors should receive in-depth, formal training to develop their teaching skills. Ontario public school teachers must acquire a degree in education before being allowed to teach. OUSA believes that any individual who will be teaching undergraduate students for any length of time should also be required to participate in some sort of formal training in teaching. It is unreasonable that an education degree is required when teaching a senior high school student, yet teaching a first-year university student does not require training of any kind. The Boyer Commission recognizes the lack of training that instructors receive and complains that “they are too often expected to know how to teach with little more than a few days or weeks of casual training and with little or no supervision throughout the year.”323 With the establishment of instructional support programs at universities across McMaster Students Union, Policies and Bylaw “Teaching Awards” (August, 2002). Jane E. Harrison, “The Quality of University Teaching: Faculty Performance and Accountability. A Literature Review”, Canadian Society for the Study of Higher Education Professional File 21 (2002): 4; accessed online at http://robertwright.ca/Harrison.pdf. 322 Boyer Commission on Educating Undergraduate in the Research University, “Reinventing Undergraduate Education” (New York: Boyer Commission, 1998): 18; accessed online at http://naples.cc.sunysb.edu/Pres/boyer.nsf/. 323 Boyer Commission on Educating Undergraduates, Reinventing Undergraduate Education: A Blueprint for America’s Universities (New York: Boyer Commission, 1998); accessed online at http://naples.cc.sunysb.edu/Pres/boyer.nsf/webform/VIII 320 321

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Ontario, the infrastructure to handle such a process is now in place and it is time for the provincial government to give serious thought to this matter. Principle 10: Universities must be accountable to students and to the public. The post-secondary sector is unique in that it is not funded solely by the government, but also in large part by student dollars. Students are by no means small contributors either. For example, in 2004/05, tuition fees represented a substantial share of revenue for universities, at 45 per cent of the total operating funding for institutions in Ontario.324 Thus both students and the public at large deserve to know how universities spend students’ money, and what these institutions are doing to ensure that teaching quality is a top priority. The provincial government has a responsibility to ensure that taxpayers and students receive this information. CONCERNS Concern One: Ontario Universities are not receiving sufficient funding to maintain or improve teaching quality. Over the last two decades, the provincial government of Ontario has under-invested in the university system. Ontario lags behind the OECD and the rest of Canada in terms of the proportion of public funding provided to universities and in terms of per-student funding provided to universities. Further, a 32 per cent enrolment increase in Ontario has been met with a 1.3 per cent decrease in real funding dollars from 1995 to 2004.325 This pervasive under-funding of the university sector has seriously compromised the quality of university education in Ontario. One effect of this funding shortfall is that faculty-student ratios are rising across Ontario (see Figure One). Another consequence is that faculty hiring is lagging behind the recent increases in enrolment (see Figure Two). Professors are forced to take on heavier teaching loads and students are forced into larger classes to make up for our inability to hire extra instructors. This also reduces the amount of time professors are available outside of class, and most importantly, limits students’ ability to gain a quality education. The number of classes taught by part-time instructors, adjunct professors and teaching assistants is increasing because universities cannot afford tenured professors. As seen in Figure 1, “Ontario universities [have] the highest ratio of FTE students to full-time faculty in the county, [and therefore], the quality of university education is adversely affected.”326 Figure 2 shows the amount of faculty and staff compared to enrollment in Ontario universities. Enrolment has increased substantially but the number of faculty and staff has not.

Council of Ontario Universities, Resource Document- 2007 (Toronto: COU, 2007), 15. OECD, Education at a Glance (OECD, 2007): 205; accessed online at www.oecd.org/dataoedc/4/55/39313286.pdf, Data regarding increased funding from the Reaching Higher initiative is currently unavailable. However, trend reports indicate increased funding has been offset by increased enrolment. 326 Council of Ontario Universities, “Progress Report: University Access, Accountability and Quality in the Reaching Higher Plan” (Toronto: COU, 2006): 6. 324 325

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Figure 1: FTE Enrolment Per FTE Faculty, Canadian Universities Provincial Comparison 1987/88 to 2003/04 327

Figure 2: Faculty and Staff Compared to Enrolment, Ontario Universities 1987/88 to 2004/05 328

The Ontario Confederation of University Faculty Association (OCUFA) reports that “more than half of the facilities at Ontario universities are in a state of poor repair, requiring investments of about $1.8 billion in maintenance, repair, and update and renovation.”329 The physical environment on campus has a direct influence on students’ learning experience and must be considered in all discussions of quality. Students require a comfortable environment that can

Council of Ontario Universities, Resource Document-2007 (Toronto: COU, 2007); accessed online at http://www.cou.on.ca/content/objects/Resource%20Document%202007.pdf 328 Ibid. 329 OCUFA, Quality in the Balance: Undergraduate Education in Ontario at Risk (Toronto: OCUFA, 2007), 4. http://www.ocufa.on.ca/research/Undergrad_educ_quality_May_2007.pdf 327

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deliver the latest innovations in teaching. It is unacceptable that our system currently faces “a major deferred maintenance problem, which impacts students and teaching on a regular basis.”330 In order to provide a high quality educational experience, the government must ensure that institutions are financially stable by providing the appropriate level of funding. One way to do this is to set out provincial funding commitments for quality improvement on a multi-year basis. Concern Two: Teaching has become less of a priority than research. Institutions and instructors regard teaching ability as less important than research performance when awarding tenure and hiring instructors. It is not only student groups who are concerned with the inequity of teaching and research. Professors, especially those that often focus much of their efforts on teaching have publicly shared that they feel that an imbalance exists. Dr. Geri Van Gyn, a professor at the University of Victoria states that “the research record of the individual mitigates the impact of the teaching record on the final result. The stronger the research record, the less impact a weak teaching record will have on the outcome. In the case of a weak research record, it is unlikely that strong teaching will tip the balance toward a positive decision.”331 In the graduate studies curriculum of most Ontario universities, priority is given to high-quality academic research over teaching. “Preparations for teaching in higher education pales in comparison to the preparation graduate students receive to do research. Generally, graduates students are expected to learn teaching tools and pedagogy by trial and error, and also gain advice from colleagues who learned about teaching in the same way.332 This is an important concern because these are the students who will someday make up a large portion of Ontario’s university faculty. According to the National Research Council’s 1995 Survey of Earned Doctorates, 54 per cent of all doctoral students will seek employment in colleges and universities.333 Of this high percentage of students, few will have received the training they need to excel. This favoritism toward research is constantly affecting the outcome of hiring and tenure decisions at Ontario’s universities. Not only have professors and administrators noted this inconsistency, but direct evidence is displayed daily in the way our universities scramble to be considered “research intensive”. They widely publicize their feats in recruiting world-renowned researchers to their institutions, yet resources are never allocated for the recruitment of world-renowned instructors. In general, stories of success inside the classroom are never given the same credit awarded to advancements in research. Concern Three: The instructional support programs that are currently in place across the province differ very much in quality, as there is currently no provincial money allocated for establishing and maintaining these programs. It is important that all universities have the ability to improve their teaching through instructional support programs; however this is simply not the case. Jane Harrison argues that Ontario universities do not offer the same level of development and support to instructors. She notes that “[t]here are institutions at every stage of development on the trajectory from the very simplest first steps through to a comprehensive teaching improvement programs.”334 It is the

Council of Ontario Universities, Progress Report: University Access, Accountability and Quality in the Reaching Higher Plan (Toronto: COU, 2006), 6. 331 Ibid. 332 Dr. Geri Van Gyn, “”Why teaching should really count,” (BC: The University of Victoria, 2003). 333 Boyer Commission on Educating Undergraduates, Reinventing Undergraduate Education: A Blueprint for America’s Universities (New York: Boyer Commission, 1998); accessed online at http://naples.cc.sunysb.edu/Pres/boyer.nsf/webform/VIII 330

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responsibility of the provincial government to ensure that all of Ontario’s universities possess comprehensive improvement plans and the instructional support programs necessary to complete them. In their strategic plans, many Ontario universities have identified teaching quality as one element of the university experience to be developed extensively in the coming years. OUSA is concerned, however, that limited resources will force universities to divert funds allocated for hiring new faculty. If universities are independently left to initiate programs for improving teaching quality, there is a concern that it simply will not be made a priority due to other pressing issues requiring funding. It is up to the Ontario government to demonstrate its commitment to teaching quality by both requiring and directly funding instructional support programs across Ontario. Concern Four: At many institutions, instructor evaluations do not ask questions that adequately address the learning experience of a student. Student evaluation of teaching is an essential element of any evaluation procedure; unfortunately, the quality of these evaluations differs widely across Ontario. Some institutions, such as the University of Western Ontario have in-depth teaching evaluations that examine all aspects of the teaching and learning experience students receive in the classroom. In contrast, other universities just require students to answer one question such as “how good was your professor?” An example of this problem can be found with the student evaluations that are used by many of the departments at McMaster University. The questionnaire deals more with the affordability of the required text and the comfort of the classroom seating than it does with the quality of the learning experience. Although infrastructure and teaching material is important, it should not be the focus of an evaluation. Ontario institutions must ensure that their instructor evaluations ask appropriate questions to properly gauge the learning experience that each student has had. This should include questions on communication skills, course content, quality of feedback to students, and the instructor’s ability to facilitate learning. Concern Five: Teaching evaluations are often not made available to students. Another concern about teaching evaluations is their level of availability to students. In order to hold their professors and institutions accountable for a high-quality education, students must have the ability to view the data collected from the evaluations they fill out. At present, the availability of faculty evaluations is poor or non-existent at many institutions and is inconsistent across the province. The popularity of websites such as RateMyProfessor.ca, that allow students to post and read reviews of instructors at their universities, demonstrates the demand for information about a professor’s teaching abilities. In its four-year existence, the website has received over 5 million ratings of over 700,000 professors on Canadian campuses.335 However, there are numerous concerns about these websites, as there is no guarantee the contributors are students that have taken the class, and the comments often have little to do with teaching effectiveness. The sample sizes are also flawed so that students could be making course choices based on one or two students’ reviews. The main impediment to the public availability of teaching evaluations is that they are often treated as the private property of the professor under faculty collective agreements, and so the professor’s permission is required in order to make the information public.336 Rather than automatically making them public, many universities require professors to opt-in to a program that publishes the results of student evaluations. These types of contracts and agreements demonstrate the resistance at many institutions to open and public teaching evaluations.

335 336

As of March 2006; from RateMyProfessors website, accessed online at http://ratemyprofessors.ca/index.jsp. Ann Dowsett Johnston, “Grading the Graders”, Maclean’s, 14 November 2005, 26.

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Concern Six: University instructors do not receive regular formal training in teaching. University professors are expected to conduct research and to publish their findings. To accomplish this they use their research skills, gleaned while completing many years of graduate work. Along the way they are faced with many tests, to ensure that their research is of the highest calibre. Yet these same professors are asked to devote an equal amount of time to teaching as they do to research, after receiving absolutely no formal training in education. They are told that teaching and research must be balanced equally, yet are given no formal instruction on how to teach. They may receive teaching tips from their peers, or they may attempt to emulate a worthy professor from their past, but the majority do not have the basic instruction in teaching that will allow them to excel. Professors and teaching assistants are given the tremendous responsibility of encouraging the development of knowledge in others, without any training on how this should be done. We cannot expect quality teaching from these individuals without first teaching them how to instruct others. While some instructors do improve quickly, gaining confidence and experience as they go, others are soured by initial failure and never push themselves to improve. Ontario universities claim to value teaching and research equally, but do not push new instructors to meet criteria concerning teaching ability. While instructional development programs are available at many institutions, they are optional and many instructors choose not to partake. It is up to the provincial government to insist that instructors at our public institutions are capable of quality teaching, before they are thrust in front of a class. The quality of undergraduate teaching cannot truly advance until formal training in teaching is implemented. RECOMMENDATIONS Recommendation One: The provincial government must increase university operating grants to at least the per-student national average. Funding should increase at a stable level to allow for planning to enhance teaching quality. Before many of the issues surrounding quality can be addressed, it is imperative that funds be allocated to address some of the fundamental problems that have evolved in recent years due to drastic under-funding of post-secondary education. In 2003/04, the Ontario government ranked 9th out of ten provinces on a per student basis.337 Class size has a great impact on the quality of learning experience at Ontarioâ&#x20AC;&#x2122;s post-secondary institutions. As class sizes continue to climb, professors are able to provide less and less individual attention to students. This problem is especially evident in first and fourth year classes that should be based on direct engagement between the students and their professor. OUSA believes that institutions require adequate funding with a level of predictability that allows governing bodies to plan for the future. Multi-year funding agreements between the government and individual institutions are a step in the right direction as they allow universities to develop and implement strategic plans based on the stable knowledge of levels of funding. These agreements also assist the provincial government in developing realistic accountability frameworks with institutions. Recommendation Two: Funding must be designated by the government of Ontario to found and maintain instructional support programs that encourage innovation in teaching and provide ongoing professional development for Ontarioâ&#x20AC;&#x2122;s post-secondary educators. Neither teaching nor learning are static processes and should not be treated at such. The provincial government must recognize that Ontarians believe that improvements in teaching quality are one of the fundamental areas of investment for the government. At present, â&#x20AC;&#x153;most campuses have centres to encourage better teaching practices but

337Council

of Ontario Universities, Resource Document (Toronto: COU, 2007): ix.

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they are not mandatory, and often it is teachers who need help most who get it the least.”338 Individual institutions have made commendable efforts to improve the support offered to instructors; however the province must make a significant investment in the improvement of teaching quality to all institutions in Ontario. The first step is to provide targeted funding to instructional support programs. Additional investments must also be made to improve the English as a Second Language courses at Ontario’s Universities. Ontario universities have benefited greatly from international students. It is imperative that proper support be afforded to these students to allow them to improve their language skills. One of the fundamental components of quality education is communication. No educator wishing to improve his or her language skills should be turned away due to ESL classes that have reached capacity. McMaster University has had great success in the development of Problem-Based Learning (PBL) in the faculty of health science. This innovative method exemplifies the prospects available through funding of innovative teaching. The program has been given national awards as it challenges students to identify and solve problems, to think critically, to work in groups and to communicate more effectively. One student recalls the impact the program has had on his learning experience. As he describes, “by the end of the year, I had a better understanding and I knew that I had grown in so many ways… from where I sit now, I can see that I am a much more mature learner than many students I know from other faculties.”339 With increased funding for innovation in teaching, many more students will benefit from similar programs Recommendation Three: The provincial government must insist that teaching quality remain a fundamental part of all future multi-year accountability agreements. OUSA is pleased to see the emphasis on quality that has resulted from the recent implementation of multi-year accountability agreements (MYAA). However, little information is available about how the government plans to hold Ontario universities accountable to these agreements and OUSA urges the government to clarify this process. One of the objectives of the MYAAs is to ensure each institution receives a predictable level of funding over a period of several years. Our universities must be confident of receiving their designated funding with sufficient time to implement improvements to teaching quality. Unfortunately, this has not always been the case. OUSA recommends that in the future, the government supply promised funding in a more timely fashion. Recommendation Four: Quality teaching must be weighted equally with research performance for all decisions related to hiring, promotion and tenure. Teaching and research are often said to be of equal value, but in reality most institutions heavily favor research, especially in hiring, promotion and tenure decisions. One study shows that faculty estimate “evaluation of teaching is rated around 20-30 % in salary, promotion and tenure decisions, compared to 60% or more for research.”340 In the hiring, tenure and promotions process, more emphasis must be placed on an individual’s ability to teach. Currently, peer reviews of a professor’s research are taken into consideration when the question of promotion arises. If teaching is going to carry the same weight in the evaluation, it is only fair that teaching be reviewed by a member’s peers under the same critical lens. As Jane Harrison argues, “many commentators argue that faculty teaching must

Bob Rae, Ontario-A Leader In Learning-Report and Recommendations (Toronto: MCTU, 2005): 17. Sheila Barrett, Julie Butler, Elizabeth Cates, Carl deLottinville, Delsworth Harnish, Manel Jordana, Erika Kustra, Jennifer Landicho, Annie Lee, Andrea McLellan, Jennifer McKinnell, Stash Nastos, Debbie Nifakis, Sean Park, Stacey Ritz, Margaret Secord, Henry Szechtman and Kristina Trim, “Skill Development with Students and Explicit Integration Across the Curriculum,” Teaching and Learning in Higher Education 41 (Hamilton, ON: McMaster University/ STLHE, 2005): 7. 340 Harry G. Murray, “Student Evaluation of Teaching: Has It Made a Difference?” Paper presented at the Annual Meeting of the Society for Teaching and Learning in Higher Education, Charlottetown, PEI; June 2005. 338 339

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similarly be laid open to the scrutiny of the teacher’s peers for it to gain the same respect accorded faculty research efforts.”341 Further, OUSA would argue that students need to be on the promotion and review boards for professor evaluations. Many institutions have students that sit on these boards because it most adequately reflects the student experience. Student teaching evaluations can do an acceptable job of quantitatively reflecting the experience, however, student involvement on promotional boards would allow for students to further elaborate and reflect on the quality of the learning experience. Recommendation Five: The government must mandate all Ontario Universities to perform teaching evaluations and these evaluations must be made public and easily accessible to all university stakeholders, including students. Students contribute a great deal to Ontario universities, in exchange for a quality education. Thus, the accessibility of information on quality is of greatest concern to Ontario students – they have a right to know how their tuition is benefiting them. OUSA believes it is absolutely necessary that students have access to information on quality, especially teaching quality, to ensure they are making educated course and program choices. The vast majority of teaching evaluation survey results must be made public in order to provide instructor and institutional accountability. Because some collective agreements between universities and faculty associations prevent open access to professor evaluations, this may require that future collective agreements with faculty include this requirement. OUSA recommends that universities work with student governments to ensure that the data from these course evaluations are available in order to improve students’ access to high-quality teaching at their institutions. Furthermore, OUSA asks that the provincial government, as another proponent of institutional accountability, evaluate possibilities to increase public access to these important data. Recommendation Six: The Ontario government must mandate all new instructors, who will be teaching or leading students for any length of time, to complete a formal system of instruction in teaching. . Peer jurisdictions are looking at quality as an essential part of post-secondary education. “More than 60 UK universities now sponsor either voluntary or mandatory teaching accreditation programs for faculty members”.342 In Canada, most universities are “less active than many of those in the United States in implementing teaching improvement and evaluation programmes.”343 The Higher Education Quality Council of Ontario was created to conduct research regarding teaching quality but is not meant to regulate instructional programs for teaching in the province. At present, it is up to the institution to ensure their teaching assistants and instructors receive adequate instruction for teaching. In order to teach in elementary or secondary school in Ontario, teachers must have received extensive education and training. Prospective instructors must have attended teachers’ college, and through it, survived some of the most competitive entrance requirements in Ontario. Governments in the past have gone so far as to mandate that teachers must be tested on an ongoing basis to ensure that they still meet certain standards and requirements. However, at post-secondary institutions, where students pay tuition fees in order to receive an education, there is no mandated training or assessment of teaching ability to become a professor. The 2006 National Survey of Student Engagement

Jane E. Harrison, “The Quality of University Teaching: Faculty Performance and Accountability. A Literature Review”, Canadian Society for the Study of Higher Education Professional File 21 (2002): 7; accessed online at http://robertwright.ca/Harrison.pdf. 342 Gail Riddell, Teaching and Academic Growth Newsletter 12, no.2 (BC: UBC, 1998). 343 Jane E. Harrison, “The Quality of University Teaching: Faculty Performance and Accountability. A Literature Review”, Canadian Society for the Study of Higher Education Professional File, 21 (2002): 3; accessed online at http://robertwright.ca/Harrison.pdf. 341

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(NSSE) showed that 22 per cent of first year students and 24 per cent of upper year students indicated that their university most needed to address quality of course instruction by professors.344 The most effective way to make real improvements in teaching quality is to teach our instructors how to teach. OUSA recommends that the provincial government direct all new professors to complete a formal system of instruction in teaching. The system should include a basic curriculum and a minimum number of hours of instruction. All the required instruction should be administered through the instructional support programs currently in place at each institution and curriculum flexibility should be included in order to allow individual institutions to emphasize different aspects of teaching, at their discretion. Teaching assistants (TAs) also play a fundamental role in the learning process and should be subject to a similar mandatory training program. TAs are often graduate students or even undergraduate students who are taking a leadership role in the education process for the first time. It is important that resources are available to develop their skills â&#x20AC;&#x201C; skills that will benefit students in the short term and the long term, as many of these individuals move on to become professors. The 2006 NSSE results indicate that 31per cent of first year students thought their university most needed to address the quality of instruction by teaching assistants.345 OUSA recommends that the provincial government direct all new TAs to complete a system of formal instruction in teaching, similar to that recommended for professors, but with less strenuous requirements. Again, all instruction should be administered through the instructional support programs currently in place at each institution and curriculum flexibility should be included. It is important to add that these programs remain fluid and responsive to new research and methods of engagement in teaching. In addition to the completion of mandatory professional development programs, all TAs must be proficient in the language in which they teach. At present, TAs are required to pass a language proficiency test. Despite this, many continue to have difficulty communicating with their students. Recommendation Seven: Innovation in teaching and innovation in research must be given equal consideration. Universities must offer support to instructors wishing to improve their classroom experience. OUSA recommends that if a professor is working on the development of classroom activities, this work be defined as scholarly research and should be taken into account on the amount of research required from the professor, rather than a decrease in the number of teaching hours. This only seems logical, as a professor looking to study innovation in the classroom would need to stay connected with their subject matter. In order for teaching and research to be accorded equally high esteem, the province must provide the same opportunities for advancement and recognition. Currently, Canada Research Chair positions are highly respected positions appointed at universities, and funded jointly by the provincial and federal government. OUSA recommends that the provincial government begin to establish an equivalent position dedicated to the advancement of teaching. This idea was first proposed by the Society for Teaching and Learning in Higher Education in their submission to the Rae Review and is supported by OUSA. As noted earlier, advancements in research innovation has impact socially and economically for the province and institutions; innovations in teaching would have a similar effect. CONCLUSION OUSA recognizes that many of the ideas and suggestions put forward in this policy paper do not simply apply to the provincial government; several cross the boundary into the responsibilities of Ontario universities. Universities may be asked to make small sacrifices in their autonomy in exchange for greater investment and funding. It has been noted that quality of the teaching experience at universities is a public priority for Ontarians, and requires a public 344 National Survey of Student Engagement Items Frequency Distributions Report, (Kingston, Ontario: Queenâ&#x20AC;&#x2122;s University, 2006), 25. 345Ibid.

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investment. It is important that any public investment comes with channels of accountability. The provincial government has made necessary measures moving forward through the establishment of both the Quality Improvement Fund and the Higher Education Quality Council of Ontario. Both the funding and accountability mechanisms are in place. Now teaching quality in Ontario must become a national benchmark for experiences in learning and discovery.

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teaching quality policy statement WHEREAS Ontario universities require stable and adequate public funding in order to establish and maintain excellence in teaching WHEREAS the delivery of high quality teaching is fundamental to Ontarioâ&#x20AC;&#x2122;s post-secondary education system. WHEREAS teaching and research are two equally essential components of our post-secondary education system. WHEREAS innovation in teaching should be recognized and encouraged through funding by the province. WHEREAS instructional support programs for professors and teaching assistants are essential to improving teaching quality and supporting innovation in teaching. WHEREAS students should complete regular course and instructor evaluations. These evaluations should be weighted heavily in the overall evaluation of the instructor and all data should be released back to the students. WHEREAS quality teaching should be recognized and encouraged through teaching awards and other programs recognizing outstanding teaching. WHEREAS teaching quality is enhanced by the inclusion of research methods in the classroom. WHEREAS all University instructors should receive in-depth, formal training to develop their teaching skills. WHEREAS universities must be accountable to students and to the public WHEREAS Ontario Universities are not receiving sufficient funding to maintain or improve teaching quality. WHEREAS teaching has become less of a priority than research. Institutions and instructors regard teaching ability as less important than research performance when awarding tenure and hiring instructors. WHEREAS the instructional support programs that are currently in place across the province differ very much in quality, as there is currently no provincial money allocated for establishing and maintaining these programs. WHEREAS at many institutions, instructor evaluations do not ask questions that adequately address the learning experience of a student. WHEREAS teaching evaluations are often not made available to students. WHEREAS university instructors regularly receive no formal training in teaching. BIRT the provincial government must at least increase university operating grants to the per-student national average. Funding should increase at a stable level to allow for planning to enhance teaching quality. BIFRT funding must be designated by the government of Ontario to found and maintain instructional support programs that encourage innovation in teaching and provide ongoing professional development for Ontarioâ&#x20AC;&#x2122;s postsecondary educators. BIFRT the provincial government must insist that teaching quality remain a fundamental part of all future multi-year accountability agreements.

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BIFRT quality teaching must be weighted equally with research performance for all decisions related to hiring, promotion and tenure. BIFRT course and instructor evaluations must be made public and easily accessible to all university stakeholders, including students. BIFRT the Ontario government must mandate all new teaching assistants and professors, who will be teaching or leading students for any length of time, to complete a formal system of instruction in teaching. BIFRT innovation in teaching and innovation in research must be given equal consideration to research.

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policy paper Early Outreach Programs: Reaching Out Early to Reach Higher

October 2007

prepared by: paris meilleur, vice president education university studentsâ&#x20AC;&#x2122; council, university of western ontario edited by: jonah levine, vice president education waterloo federation of students, university of waterloo zach cranny, vice president university affairs university of windsor studentsâ&#x20AC;&#x2122; alliance, university of windsor

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EXECUTIVE SUMMARY This paper outlines the necessity of developing a post-secondary early outreach and retention strategy in the Province of Ontario. A significant portion of students will decide to pursue post-secondary education (PSE) before age nine. Therefore, OUSA recommends that the provincial government take a leading role in supporting successful community-based initiatives that direct youth to pursue PSE. These programs can benefit all students in Ontario but could be especially vital to the success of under-represented groups in PSE. OUSA has recognized the following concerns regarding under-represented students346: Difficulties in getting to PSE: Students from under-represented groups are often at risk for lower levels of academic achievement in elementary and secondary school. Subsequently, these students experience significant barriers in accessing PSE. Students are not adequately supported during transition periods throughout their educational pathways and there is insufficient information available to students, families and communities regarding 1) educational pathways, 2) the cost of education and 3) available student financial aid. Difficulties in getting through PSE: Students from under-represented groups often experience barriers to accessing appropriate social and academic supports upon entering PSE. To address these concerns, OUSA recommends that the provincial government implement an early outreach and retention strategy to foster increased participation in all types of post-secondary education. Vital to this strategy are the following components: An arms-length not-for-profit foundation with an endowment large enough to sufficiently fund early outreach programs across Ontario Funding for universities to implement and strengthen social and academic support programs targeted for, but not limited to, under-represented students Encourage the Higher Education Quality Council of Ontario (HEQCO) to expand its research and priorities into broader issues related to early outreach and retention Existing models of early outreach programs, such as Pathways to Education in the Regent Park area of Toronto347, show that they have more success when community support is committed to them. Given this, Ontario’s early outreach and retention strategy should contain the following components: Funding approval criteria for the aforementioned foundation must include a commitment to funding community-based and community-tailored early outreach programs Early outreach programs should strive to build cultural capital through mentorship, leadership opportunities, and social integration Ontario can become a leader in early outreach and retention if the provincial government recognizes a responsibility for funding such programs. However, funding should not be provided on a “one-size-fits-all” basis. In fact, programs such as these are more likely to succeed if they are community driven. Providing not-for-profits, higher education institutions, community groups and school boards the opportunity to find the best solution for their community is imperative to success. The creation of community-driven, provincially funded early outreach and retention programs can ease barriers faced by these students and make Ontario a leader in this area.

346 Under-represented students include: Aboriginal, low-income, rural, northern and first-generation students (students who are the first in their family to attend PSE). 347 See APPENDIX: EARLY OUTREACH PROGRAMS IN OTHER JURISDICTIONS

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INTRODUCTION Early outreach is the active pursuit and engagement of youth in a dialogue about education, its purpose to better inform future students, their parents and communities as a whole on the benefits and outcomes of post secondary education and the world of opportunities it offers. The notion of early outreach is an idea that has been thrown around by policy makers for sometime. The need to develop policy on early outreach programs is based on the awareness that students decide their “educational pathways” at an early age. Some studies cite that in Ontario, approximately three-fourths of all students make the decision to attend university before age 15; while one-third decide before they turn nine years old.348 There are a number of reasons, then, for OUSA to develop a series of recommendations around “early outreach”. First, given the importance of a post-secondary education, from university to college to the skilled trades, in the knowledge-based economy, it has become increasingly important that students assess the pathway that fits their needs and interests sooner rather than later. In addition, given OUSA’s concern with the accessibility of postsecondary education, it is essential that we begin to examine groups that typically do not receive attention when discussing access. These are not students who have decided to leave university or who are graduating with heavy debt burdens; these are students who are not even considering PSE in the first place. There are a number of groups that qualify as under-represented, including Aboriginal students, students from low-income backgrounds, rural and northern students and first-generation students. There are a number of sociological reasons why these groups of students are not thinking about post-secondary education. They range from lack of opportunity to lack of support from parents and the community as well as academic, financial and interest/motivational barriers.349 In the discussion of early outreach it is essential, however, that any focus and attention towards the establishment of these programs should not obscure the debate about the significant cost barriers associated with a post-secondary education, especially attending university. All of these barriers will be addressed in more detail throughout the paper. As previously noted, in addition to targeting students who are traditionally under-represented, the aim of this policy is to suggest ways in which early outreach programs can be developed to help all students decide on pathways that are best for them, whether in the skilled trades, college or university. In addition, early outreach should also focus on reaching out to parents, families and their communities. Communities should be seen in a number of ways. In relation to the student, the term ‘communities’ refers to the support system surrounding students that influence decisions around educational pathways. ‘Communities’ in other contexts in this paper refers to the broader community including but not limited to the third-sector (not-for-profit), businesses, especially those that use skilled labour and attract apprentices to other associations. This paper seeks to address all Ontario students in different ways. First, to address accessibility for underrepresented groups, early outreach at the elementary school level should help show students the pathways available, followed by the appropriate supports at the high school level to help students define the pathway they will take. Second, early outreach should be done for all students at the high school level using various methods discussed in this paper to help address pathway choices. Any recommendations that come out of this paper are not a panacea, but rather a starting point. Early outreach is about starting the conversation around future pathways with students, their parents, their schools and communities. How a person chooses his or her future and the elements that influence those decisions are complex and cannot be fully known. This is an attempt to try to identify some of the guiding principles that should inform early outreach programs, concerns with existing programs and a vision for what some programs should look like. This is not an implementation plan, but rather a series of values and possible program models and characteristics that should inform a provincial strategy on early outreach.

348 349

Council of Ontario Universities, Applicant Survey Highlights (Toronto: COU, 2003). Alex Usher and Sean Junor, The Price of Knowledge (Montreal: Canada Millennium Scholarship Foundation, 2002).

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PRINCIPLES The creation of early outreach programs in Ontario should be informed by the following principles. Principle One: All willing and qualified students in Ontario must be able to access and excel within Ontario’s system of post-secondary education. While participation rates in post-secondary education have been increasing over the last decade, participation rates of groups traditionally under-represented in post-secondary education have not followed suit.350 OUSA recognizes the individual and collective benefits of a higher education, especially from an economic and social perspective. In economic terms, the oft-quoted statistic that within the next 10 years, 70 per cent of jobs will require some form of post-secondary education or training sheds light on this principle of the individual benefits of higher education.351 Canada will not be able to meet the challenges of the new “knowledge-based economy”352 with a declining birth rate and the demographic pressures of an aging and retiring workforce. Aside from the social justice argument that all students should have equal access to education as a basic right of citizenship, the economic need to engage underrepresented groups in post-secondary education is clear.353 From a social perspective, many students from under-represented groups face barriers related to socio-economic status, systemic discrimination based on race or ethnicity, and other such barriers that without proper social measures will continue to grow and disadvantage already disadvantaged populations. The societal benefits of a highly educated population range from relief from the poverty cycle, to reductions in crime rates, to increased citizenship in community and social affairs.354 In terms of under-represented groups, Aboriginal students, rural and northern students, low-income students, and first-generation students are particularly at risk for not attending post-secondary. In addition, while there is not a significant amount of literature about early outreach programs and initiatives for students with disabilities and students with dependants, these groups of Ontarians are also under-represented in post-secondary education.355 Principle Two: Early outreach should assist students to choose the post-secondary pathway that best suits their skills and interests. Given that post-secondary education has become somewhat of an expectation, at least in the context of economic competitiveness, students should be given the resources, information and support to make decisions that make the most sense for them. Ontario has a history of favouring university over college, a history that is currently being challenged and should continue to be challenged. Early outreach programs should provide neutral, fact-based information to illustrate possible career paths and benefits of various educational pathways from university to college to the skilled trades. Across Canada, there is growing concern that the labour market will not be ready to accommodate for changes in demographics, especially in the areas of the skilled trades.356

Andrea Rounce, Access to post-secondary education: does class still matter? (Saskatoon: Canadian Centre for Policy Alternatives, 2004). 351 Louise Brown, “What will bring students to university?” Toronto Star, February 8, 2006; accessed online at http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1139352619838 &call_pageid=968350130169&col=969483202845. 352 See Thomas J. Courchene, Citistates and the State of Cities: Political-Economy and Fiscal-Federalism Dimensions (Montreal: Institute for Research on Public Policy, 2005), for more discussion on the nature of the knowledge-based economy (KBE). 353 Presentation by Norman Riddell, Canada Millennium Scholarship Foundation, University of Alberta, Edmonton, August 2006. 354 TD Economics, Investing in higher education delivers a stellar rate of return (Toronto: TD Economics, 2004). 355 OUSA, Open Doors: University Access for Disabled Students (Toronto: OUSA, 2004); Graeme Stewart, Investing for generations: ensuring university access and success for students with dependents (Toronto: OUSA, 2005). 356 See for example the Trends, Opportunity and Priorities report from the Elgin Middlesex Oxford Local Training Board at http://localboard.on.ca/localboard/english/newsPubs/tops/TOPS2006.pdf . 350

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Principle Three: Early outreach programs should be community-based and supported by various provincial government Ministries and co-ordinated with existing community programs. In the few models that exist, it appears that the more community support that is committed to early outreach projects and programs, the more successful they will be.357 In developing solutions that address local concerns, it is important that a model be developed that is flexible and can adjust to fit unique community needs, not “one-size-fits all”. In addition, successful programs like Pathways to Education in Toronto’s Regent Park have used integrated approaches that acknowledge the interconnectedness of social issues such as the connection between poverty, health and education. In working to develop these programs, the Ministry of Training, Colleges and Universities should look to engage the Ministry of Education, Ministry of Community & Social Services and the Ministry of Citizenship & Immigration through funding commitments and the leveraging of resources and community links. Principle Four: The provincial government should play the leading role in funding early outreach programs. Addressing access to post-secondary education is the responsibility of the provincial government. In order to fully address access, the concept must be re-defined. Currently, access tends to be discussed within the context of increased student financial aid. This understanding does not address the serious questions about access that begin at a much earlier age for students than grade 12. Students should be presented with financial support through a variety of programming options including, but not limited to, summer opportunities as early as elementary and high school. The provincial government has the resources, community links and mandate to deal with these issues at an earlier stage. Principle Five: Early outreach should be included as part of the larger student financial aid system. In order to affect access throughout the system, access needs to be recognized as an issue that starts earlier. The language around student financial aid should be broadened to include financial barriers and non-financial barriers experienced by students from under-represented groups. For a more detailed discussion about the ways in which early outreach should be integrated in the larger student financial aid system, see OUSA’s paper Building the Third Pillar: Reforming Ontario’s Student Financial Aid System. CONCERNS Concern One: Students from under-represented groups experience significant barriers in access to postsecondary education. There are a number of groups that experience barriers in access to post-secondary education. OUSA has identified that in addition to Aboriginal, low-income, rural, northern and first-generation students, students with dependants and students with disabilities also experience significant barriers. However, due to lack of research regarding general early outreach and specific early outreach targeted for these students, the focus on under-represented groups in this paper does not include these two groups. Aboriginal students While participation rates of Aboriginal students within Canada’s post-secondary education system have significantly increased over the past 20 years, these students are still far less likely to move on to higher education when compared to other non-Aboriginal students. The importance of accessibility and participation for these students will only grow in the next six years, when the Aboriginal 20 to 24 age group is expected to peak.358 There are a number of Alisa Cunningham, Christina Redmond, & Jamie Merisotis, Investing Early: Intervention Programs in Selected U.S. States (Montreal: Canada Millennium Scholarship Foundation, 2003), 4. 358 David Holmes, Embracing Differences: Post-secondary Education among Aboriginal Students, Students with Children and Students with Disabilities (Montreal: Canada Millennium Scholarship Foundation, February 2005). 357

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factors that could contribute to lower participation rates for Aboriginal Ontarians. In 2000, the total cost of education was roughly one third of median family income for Aboriginal households in Ontario.359 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, or the need to work to pay for higher education, have been cited as primary reasons for the inability to complete post-secondary studies. One in three Aboriginal Canadians cited financial reasons such as the requirement to work, as a reason for not completing their post-secondary schooling.360 However, financial difficulties were not the only factor – family responsibilities were cited as another major reason for inability to complete post-secondary studies.361 Culture and cultural preservation may also play an important role in the ability of young Aboriginal Ontarians to move into and advance through higher education. Like many Ontarians from predominantly rural backgrounds, Aboriginal students who complete higher education may be tempted to remain in urban regions where their earning power is significantly enhanced. This is particularly true of graduates who have accrued student debt. Consequently, this presents challenges for non-urban Aboriginal communities in retaining their university-educated members. This is a serious problem for communities that are struggling to stimulate economic development and maintain the integrity of their culture. Thus, this may act as a disincentive for many potential students in the pursuit of higher education. In 2001 the average household income was 51 per cent higher where the primary income earner had a university degree, compared to households where the primary income earner had only a high school diploma.362 Conversely, the average household income of Aboriginal families is 65 per cent of the average Ontarian household.363 Clearly, successful completion of post-secondary education could help eliminate this huge disparity. Beyond strict economics, there is a well-defined relationship between continued education and social well-being and citizenry. University participation rates reflect the health and well being of communities. If Aboriginal students are unable to equitably access higher education, the economic and social viability of these individuals and Ontario as a whole will be compromised. rural and northern students Students from rural and northern parts of the province are also under-represented in the university system. Scattered across Ontario are 18 universities. Of these, 15 are concentrated in Ontario’s largely urban southern areas. For the 15 per cent of Ontarians who live in rural or northern regions, the question of attending higher education goes far beyond a simple question of high school grades. These students face unique social and economic barriers to university access. In order to attend school, they must live away from home, thus incurring higher transportation and living costs. Moreover, average incomes in rural areas tend to be lower, as are the education attainment rates. When these factors are combined with steadily rising tuition fees and student debt levels, it seems almost logical that these students do not participate in post-secondary education nearly as much as their urban counterparts. Ontario’s rural

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); Richard Van Loon, Report from the COU Task Force on Student Assistance (Toronto: Council of Ontario Universities, October 2001), 10. 360 Statistics Canada, “Commonly reported reasons for not completing post-secondary schooling by sex, Aboriginal identity nonreserve population aged 25 to 64, Canada, 2001” Aboriginal Peoples Survey (2001). 361 Ibid. 362 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,” 2001 Census (Ottawa: Statistics Canada, 2003). In 2000, a two income family with university degrees earned $86454 per annum. In contrast, a family with two income recipients with a high school diploma earned approximately $53802: a 60.6 per cent difference in earnings. 363 Ibid. 359

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and northern students are trapped in a cycle of facing high costs with relatively low resources. There are, however, degrees of barriers for rural and northern students. The student living in a rural community that is just outside of a major urban area faces less barriers than the student living in a rural, northern and remote community, for instance. Given these differences, the approach to supporting rural and northern students must be sensitive to these differences in order to be effective. students from low-income backgrounds Often Aboriginal and rural and northern students are also challenged by the additional systemic barrier of being lowincome. A study from the Canadian Policy Research Networks reveals that students from high-income families are two to three times more likely to go on to university than youth from low-income families.364 The study concludes that while financial considerations play a role in determining access, parental education and expectations along with geography have a strong impact on the decision-making related to educational pathways. In addition to these overlapping barriers, Canadians from low-income families are more likely to overestimate the cost of undergraduate university tuition and significantly underestimate the average salary of a university graduate.365 To illustrate this point, Alex Usher notes that while the average annual income differential between high school and university graduates is $27,191, Canadians in general and low-income Canadians specifically, underestimate the differential as being $4,885. Other studies confirm the suggestion that students from low-income families are under-represented in postsecondary education and that this barrier in access has remained constant from 1993 and 2001.366 According to Usher and Junor in the Price of Knowledge, “low-income students, on average, suffer from a family environment that is unsupportive of education – a by-product of economic insecurity (the unequal environment theory, which is closely related to cultural capital theory).”367 first-generation students A fairly new term in higher education, first-generation is generally understood as students whose parents’ highest level of education is high school or less.368 Parental education, when controlling for other factors, has a very strong impact on university and college participation or non-participation. 45 per cent of students whose parents went to university attended university. In contrast, 21 per cent of students whose parents only completed high-school went to university.369 Family background and level of educational attainment of parents appears to continue to affect decisions of students to attend post-secondary education even among students who appear to be equally qualified and motivated.370 Concern Two: Students from under-represented groups are often at risk for lower levels of academic achievement in elementary and secondary school. While more research still needs to be conducted on the impact of systemic barriers and academic achievement, some studies suggest that low-income youth have lower measured achievement during high school, perhaps as a

Patrice De Broucker & Katherine Mortimer, Getting There and Staying There: Low-income Students and Post-Secondary Education (Ottawa: Canadian Policy Research Networks, March 2005), 2. 365 Alex Usher, A Little Knowledge is a Dangerous Thing: How Perceptions of Costs and Benefits Affect Access to Education (Toronto: Educational Policy Institute, July 2005). 366 Marie Drolet, Participation in post-secondary education in Canada: Has the role of parental income and education changed over the 1990s? (Ottawa: Statistics Canada, 2005). 367 Alex Usher and Sean Junor, The Price of Knowledge (Montreal: Canada Millennium Scholarship Foundation, 2004), 99. 368 Alisa Cunningham, Christina Redmond and Jamie Merisotis, Investing Early: Intervention Programs in Selected U.S. States (Montreal: Canada Millennium Scholarship Foundation, February 2003), 23. 369 Mylene Lamber, Klarka Zeman, Mary Allen and Patrick Bussiere, Who pursues post-secondary education, who leaves and why: Results from the Youth in Transition Survey (Ottawa: Statistics Canada, 2004). 370 Finnie, Ross, Lascelles, Eric & Arthur Sweetman, Who goes? The direct and indirect effect of family background on access to post-secondary education (Ottawa: Statistics Canada, 2004). 364

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consequence of lower parental support, reducing the probability of university acceptance.371 These lower levels of achievement often lead students to “self-select” themselves out of the pathway towards university or college.372 Also contributing to lower academic achievement levels is the fact that often students from under-represented groups, especially students from low-income backgrounds, are required to take on part-time employment while they are in high school in order to help support their families, resulting in less time to focus on academics. For students whose parents did not pursue post-secondary education, there is also the added barrier of parental attitudes towards higher education opportunities based on a lack of awareness and experience which can then contribute to a lack of support from the home environment for strong academic achievement levels. The concept of “cultural capital” also plays a significant role in access to post-secondary education for students from underrepresented groups. Concern Three: Students from under-represented groups often experience barriers to accessing appropriate social and academic supports once they do attend university. The transition from high school to university is a significant change for all students. For students from underrepresented groups, that transition and their social and academic life at university can be even more challenging. The barriers faced by these groups – Aboriginal, low-income, first-generation, rural and northern – when in elementary and high school do not disappear and often intensify when surroundings and support systems have altered or disappeared altogether. While some programs do exist at most universities, they are often not adequately funded to support the level of student need. For example, the University of Western Ontario provides personal counselling services for students to address personal concerns and to help facilitate the transition from high school to university and other social needs.373 Despite the provision of these services, adequate funding is not available which has meant up to threemonth waiting times for students to meet with a counsellor.374 Concern Four: Students are not adequately supported during transition periods throughout their educational pathways and there is insufficient information available to students, families and communities about educational pathways, the cost of education and available student financial aid. The ability of students to make decisions about their educational pathways relies on many factors. In elementary school, students are required to make choices about their future educational “streams” at the high school level, and many students lack effective guidance to assist in that transition. Ineffective guidance counselling at the high school level also creates another unnecessary barrier for students. In the mid-1990s, elementary and high school education was dramatically reformed. Part of these reforms included funding cuts that had many impacts, including the loss of guidance counsellors at high schools exclusively dedicated to counselling students. As a result, counselling that does exist does not properly prepare students for educational pathways. 375 Concern Five: Research on early outreach programs and various issues related to outreach is insufficient. Despite the importance of access for under-represented groups and the need to address educational pathways, there is currently an insufficient amount of research being conducted to gain insight into these issues. This is, unfortunately, consistent with the general lack of research conducted around post-secondary education in Canada. Michael Coelli, “Tuition Increases and Inequality in Post-Secondary Education Attendance”, paper presented at the Annual Meeting of the Canadian Economics Association, University of Toronto, 4-6 June, 2004. 372 Alex Usher and Sean Junor, The Price of Knowledge (Montreal: Canada Millennium Scholarship Foundation, 2004). 373 Personal Counselling, Student Development Centre website, accessed online at http://www.uwo.ca/sdc. 374 Cigdem Iltan, “Stressful shortage – students face long wait for counselling services” The Gazette, 25 October 25 2006; accessed online at http://www.gazette.uwo.ca/articles.cfm?section=FrontPage&articleID=781&month=10&day=25&year=2006. 375 People for Education, The Annual Report on Ontario’s Public Schools (Toronto: People for Education, 2006), 12; accessed online at http://www.peopleforeducation.com/OPSReports/annual06.pdf. 371

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RECOMMENDATIONS Recommendation One: The provincial government must implement an early outreach strategy to foster increased participation in all types of post-secondary education. The need to support students, families and communities with the information and resources to help students make informed decisions about their educational pathways is clear. The need to target students from under-represented group in order to increase participation, retention and completion rates for these students is also clear. The methods, however, are multi-faceted and multi-focused. In the United States, where many early outreach programs exist on a state-wide basis, many approaches to early outreach are employed, from academic and informational support services, to financial incentives to parental involvement activities to mentoring to personal/social integration and enrichment to summer activities.376 All of these methods are valid and have the potential to positively impact the targeted groups. Programs should be designed with the purpose of combining some or many of these elements, but do not need to address all elements of early outreach. Recommendation Two: Early outreach programs must be tailored to the unique needs of a community and co-ordinated to ensure that community plans effectively support the programs of early outreach. While the provincial government has the obligation to fund and provide the broad infrastructure for early outreach programs, programs that will be the most successful will be those created, supported and administered by the local community. Post-secondary education institutions, not-for-profit groups and school boards all have a vested interested in supporting improved higher educational outcomes for their youth.377 Working in a co-ordinated way with various Ministries – the Ministry of Training, Colleges & Universities, the Ministry of Education and the Ministry of Community & Social Services - at the local level will allow the programs to address many community needs at the same time. However, it must also be recognized that different communities have varied capacity to create and support programs of this nature. The provincial government, through its various Ministries has an obligation to help build capacity where it does not exist and create the supportive infrastructure to ensure the success of programs focused on early outreach. Also, higher education institutions have an obligation to the community to take the leadership co-ordination role in the development and support of early outreach programs within their communities. Recommendation Three: The provincial government must establish an arms-length not-for-profit Foundation with an endowment to sufficiently fund early outreach programs across Ontario. Early outreach is a complex and multi-faceted solution and therefore requires a flexible funding model. The creation of a foundation that would function in a similar way to the current Ontario Trillium Foundation would be an appropriate way to provide this support. In developing “granting principles” this early outreach foundation would be able to set out broad program expectations while allowing communities to innovate and support their own programs.378 Programs already in existence like Pathways to Education in Toronto’s Regent Park would be able to apply for maintenance funding while at the same time initiatives being undertaken by a university and college in a particular city could also be supported. This would ensure that a large number of diverse and multi-faceted programs could be running throughout the province to address the challenges that students, under-represented and not, face. The Foundation would be able to provide predictable cash-flow to community early outreach programs to encourage long-term planning and results. Alisa Cunningham, Christina Redmond & Jamie Merisotis, Investing Early: Intervention Programs in Selected U.S. States (Montreal: Canada Millennium Scholarship Foundation, February 2003). 377 University of Toronto, “Appendix D: Access and Outreach Programs at the University of Toronto”, in The Choice for a Generation: Investing in Higher Education and Ontario’s Future (Toronto: UofT, 2004); accessed online at http://www.raereview.utoronto.ca/UTresponse_19_appendixD.html. 378 Ontario Trillium Foundation (Toronto: Government of Ontario, 2006); accessed online at http://www.trilliumfoundation.org. 376

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Recently, the McGuinty government committed $19 million dollars over four years to Pathways to Education in recognition of its success (beginning in 2007).379 OUSA commends this investment by the provincial government and recognizes it as a positive step toward increased investment in early outreach. Future investment in an arms length Foundation should have several areas of focus. Early outreach programs funded by the Foundation should equally encourage participation in all types of post-secondary education including university, college and the skilled trades. In addition, programs should promote student mobility, choice in institutions and a variety of career paths. Funding should be allocated with sensitivity to community capacity where smaller communities without infrastructure should be supported appropriately but at a higher level than to maintain existing programs. In addition, where capacity does not currently exist in communities to create and implement programs of early outreach, the Foundation, with support from various Ministries of the provincial government should provide personnel and appropriate resources to help build capacity and community infrastructure. To ensure maximum use of the Foundation’s funding allocation, the application process should not be overly onerous to complete. Furthermore, the Foundation should actively endeavour to identify regions with high need for early outreach, but a deficit of the social entrepreneurship needed to initiate such programs. In these cases, efforts should be made to work with communities to develop capacity and programs in a more active manner. The creation of a foundation should include comprehensive consultation of stakeholder groups, particularly the groups and associations representing high school and post-secondary students. Students should be included in the governing structure of the Foundation. In addition, the foundation should provide an annual report as well as audited financial statements. The Foundation should be arms-length from the provincial government, but under the purview of the Ministry of Training, Colleges and Universities. Recommendation Four: Early outreach programs must provide information and resources to students, families and communities to assist in making better informed decisions about educational pathways, including but not limited to guidance counselling, parental involvement activities and curriculum changes. Presently, the provincial government is engaged in an information campaign to better educate Ontarians about the availability of student financial aid through television commercials in an effort to provide more information to parents and students. This is not nearly enough. Outlined below are some areas where the provincial government should take meaningful steps towards providing relevant information and resources to students and their parents. Guidance Counselling – In addition to the re-establishment of at least one guidance counsellor at every Ontario high school, the provincial government must also provide the support for professional development to ensure that counselors, and for that matter all teachers, are accurately informed about developments in student financial aid and about various post-secondary options. Through one-on-one counselling and group presentations, guidance counsellors and teachers, if armed with the right information and enough information, would be able access students throughout high school.380 In addition to support for students in high school, effective counselling and support is needed at the elementary level for students beginning the transition to high school. Parental Involvement Activities - All early outreach programs should include an element of parental involvement. From resource manuals with accurate information about both the costs and benefits of a post-secondary education to actively engaging parents with their children in discussing educational pathways, parents are an essential link in the decision-making processes for students.

Office of the Premier, “Helping more students stay in school, graduate and find success,” 6 November 2007 (Toronto: Queen’s Park, 2007); accessed online at http://www.premier.gov.on.ca/news/Product.asp?ProductID=1725&Lang=EN 380 Canadian Career Development Foundation, The role of guidance in post-secondary planning (Montreal: Canada Millennium Scholarship Foundation, March 2003). 379

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Curriculum Changes - Through the Ministry of Education, curriculum should be introduced at the high school level that provides training on personal financial management as well as information through the Career course on the benefits of university, college and the skilled trades. British Columbia high schools are in the process of piloting one such project with an interactive CD and training programs.381 Also, the Civics course is an opportunity to engage students in a discussion about the need for outreach programs that target under-represented groups as an obligation of active citizenship. The curriculum should also be altered to integrate information about various career choices and opportunities into all courses. Recommendation Five: Early outreach programs need to build cultural capital through mentorship, character education and social integration as well as offer tutoring and bridging programs to help improve students’ academic performance. Building cultural capital needs to be an essential element of early outreach programs. This can be done in a number of ways including the support of peer mentors and the mentoring of post-secondary education students and graduates. The Women in Skilled Trades & Technology Day at Humber College is an example that connects students in their early years to mentors who can serve as both informational resources and guides through various educational pathways.382 Oftentimes, lack of confidence, as a result of a number of life circumstances, can have an impact on students and their tendencies to “self-select” themselves out of post-secondary. Personal enrichment activities through leadership development conference can help to build up confidence and help identify passions, interests and skills, thus helping to determine pathways.383 To help address concerns around lower levels of academic achievement for under-represented groups, early outreach programs can provide tutoring programs to support students. In particular, higher education institutions and local school boards have the ability to take the role of coordinating the development of programs that would support students academically, and would also help increase cultural capital through mentorship. Bridging programs that seek to ensure a smoother transition from elementary to high school and high school to university of college could be linked to broader Ministry of Education curriculum reform. Recommendation Six: The provincial government should adequately fund and PSE institutions should implement and strengthen social and academic support and assistance programs targeted for, but not limited to, under-represented students. Getting into university or college is already a challenge for students from under-represented groups. In an effort to ensure that support mechanisms are in place to help students from these groups succeed once they do attend, institutions must take the leadership role with adequate funding resources from the provincial government. If postsecondary institutions and government are genuinely interested in early outreach opportunities, the approach to student support and retention must be holistic. Comprehensive support and retention services for under-represented and other students will provide “counseling, tutoring, academic support, career planning and placement services, as well as work to improve the social and racial climate on campus and the cultural competency skills of academic advisors and faculty members”384

Academica Group Inc., Perspectives: Getting an Inside look at post-secondary education, (Toronto: British Columbia Ministry of Advanced Education and the Canadian Millenium Scholarship Foundation, 2006). 382 Humber School of Applied Technology, “Women in Skilled Trades & Technology Day” (Toronto: Humber College, 2005); accessed online at http://appliedtechnology.humber.ca/news/womenST.htm 383 Alisa Cunningham, Christina Redmond and Jamie Merisotis, Investing Early: Intervention Programs in Selected U.S. States (Montreal: Canada Millennium Scholarship Foundation, February 2003). 384 Dumas-Hines as cited by American Speech-Language-Hearing Association, Minority Student Recruitment, Retention and Career Transition Practices: A Review of the Literature (Maryland: ASHA, 2007); accessed online at http://www.asha.org/about/leadership-projects/multicultural/recruit/litreview.htm. 381

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The College Student Journal, for example, has outlined methods proposed by researchers to attract and retain under-represented individuals. They recommend increasing the role of the academic advisor, faculty, mentor or university representative as this is often the only link the student has with the institution. As the writers note, “contact with a significant person within an institution of higher education is a crucial factor in a student’s decision to remain in college.”385 One handbook on outreach observes that “the process of becoming socially integrated into the fabric of the university has also been found to be both a cumulative and compounding process.”386 Peer relations, role models, and mentors all significantly impact the well-being of an under-represented student in university, as well as his or her success. Other strategies are also feasible. For example, diversity appreciation workshops for students and faculty can improve campus climate and create a more welcoming environment for under-represented students. Student clubs, social groups, and cultural activities can also be organized and funded to promote diversity and integration into the campus community for new students. One study notes that these initiatives have the ability to reduce “experiences of social and cultural isolation and can have a positive effect on [a student’s] personal persistence to succeed academically.”387 Programs already in place in Canada and other countries can act as a template for universities seeking to strengthen support programs for under-represented students. For example, the Cultural Awareness and Resource Center at Kennesaw University (USA) has developed an array of resources such as books, DVDs, VHS audio tapes, magazines and “other minority specific information.”388 As noted, support centers that provide support, mentorship, tutoring and leadership opportunities are imperative to student success. For Aboriginal students, support programs such as these are especially essential. Many post-secondary institutions throughout Canada have begun bringing community support onto campuses. This is integral in ensuring that Aboriginal students can successfully achieve their academic pursuits. Services for Aboriginal students on campus should include academic support, student personal support, access to elder support and general space for Aboriginal cultural activity. Although the scope of these services may vary between institutions based on need, the value delivered to Aboriginal students would be immeasurable. At the University of Western Ontario, the First Nations Services program was developed in 1993 and currently has a staff of four. This service provides an orientation program at the beginning of the school year, as well as social and academic support throughout the year. The service supports 150 students, providing a real community for individuals away from their homes.389 Other Ontario universities have also recognized the importance of creating appropriate supports for underrepresented groups. In their submission to the Rae Review, the University of Toronto describes their commitment to achieving these ends. If the goal is to provide access to students who might not otherwise have been able to come to the University, it is likely that to some extent their needs will not be met by current curriculum, pedagogy, services and supports ... Thus our outreach initiatives need to be connected to discussions about the student experience at the University of Toronto from the perspective of the students for whom we are providing access and outreach. It is important to note that just as these Dana L.Heissere and Phil Parette, “Advising at-risk students in college and university settings,” College Student Journal (March 2002); accessed online at http://findarticles.com/p/articles/mi_m0FCR/is_1_36/ai_85007770. 386 Watson Scott Swail, Kenneth E. Redd, and Laura W. Perna, “Retaining Minority Students in Higher Education: A Framework for Success”, ASHE-ERIC Higher Education Report, 30 no.2 (2003): vii-ix. 387 American Speech-Language-Hearing Association, Minority Student Recruitment, Retention and Career Transition Practices: A review of the Literature (Maryland: ASHA, 2007); accessed online at http://www.asha.org/about/leadership-projects/multicultural/recruit/litreview.htm 388 Kennesaw State University, Minority Student Retention Services (2007), accessed online at http://www.kennesaw.edu/stu_dev/msrs/resource.shtml 389 University of Western Ontario, First Nation Services Website (London: UWO, 2006); accessed online at http://www.sdc.uwo.ca/firstN. 385

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students enrich the university in terms of university and life experience, any "accommodations" we make to support and enhance their educational experience will contribute positively to the experiences of all students. It is also important to note that there will be costs (in terms of both financial aid and people providing necessary support and accommodation) associated with these students.390 There are a variety of support services and curriculum design that can and should be effectively targeted at the institutional level to support all students, especially Aboriginal, low-income, first-generation and rural and northern students. Recommendation Seven: Regular assessment must be done on any early outreach programs that are implemented to evaluate the effectiveness of these programs. In order to ensure that early outreach programs are meeting the needs of the community effectively, evaluation and assessment on the programs and outcomes must be done, with both a short term to longitudinal perspective. To help facilitate this, institutions should develop methods to track under-represented groups to determine entrance, retention and completion rates. In order to determine funding allocations for community-based early outreach programs, this new foundation must have the ability to assess the value and objectives of the proposed programs. This kind of assessment can and should be done in-house. In addition, regular program reviews and evaluations to track the short-term and longitudinal success of programs should be conducted by independent research bodies. This research will help contribute to an under-developed field in the area of PSE. Recommendation Eight: The Higher Education Quality Council of Ontario (HEQCO) should be tasked with investigating broader issues related to early outreach. Currently, HEQCO has committed itself to “develop[ing] evidence-based approaches to improving participation among under-represented groups.”391 It also states that “we would like to know how to improve retention and completion rates generally, and particularly for groups that are traditionally under-represented.”392 Given the general lack of research available on early outreach, the Higher Education Quality Council of Ontario can contribute to the discourse on access for under-represented groups and in particular, how to effect meaningful programs of early outreach. For example, future research could evaluate the age at which students should be exposed to early outreach programs and to which programs they should be exposed. CONCLUSION It is time for the provincial government to take the lead in introducing a system to support early outreach programs. Commercials that make students aware of changes in the student financial aid system are not sufficient and neither are one-size-fits all models for all communities and under-represented groups. Ontario has the potential to become a leader in Canada and the world in the area of early outreach, and in so doing increasing participation rates of underrepresented groups from Aboriginal, low-income, rural, northern and first-generation students. There are a number of principles that should guide the implementation of early outreach programs, particularly the responsibility of the provincial government to fund such programs. But there also ought to be a great deal of openness for not-for-profits, higher education institutions, community groups and school boards to develop and implement solutions that will work most effectively in their communities. The creation of early outreach programs across Ontario will help alleviate some of the barriers in access to a post-secondary education.

University of Toronto, “Appendix D: Access and Outreach Programs at the University of Toronto”, in The Choice for a Generation: Investing in Higher Education and Ontario’s Future (Toronto: UofT, 2004); accessed online at http://www.raereview.utoronto.ca/UTresponse_19_appendixD.html. 391 Higher Education Quality Council of Ontario (HEQCO), Review and Research Plan (Toronto: Queen’s Printer, 2007), 19. 392 Ibid.; 18. 390

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early outreach policy statement WHEREAS all willing and qualified students in Ontario must be able to access and excel within Ontarioâ&#x20AC;&#x2122;s system of post-secondary education. WHEREAS early outreach should assist students to choose the post-secondary pathway that best suits their skills and interests. WHEREAS early outreach programs should be community-based and supported by various provincial government Ministries and co-ordinated with existing community programs. WHEREAS the provincial government should play the leading role in funding early outreach programs. WHEREAS students from under-represented groups experience significant barriers in access to post-secondary education. WHEREAS students from under-represented groups are often at risk for lower levels of academic achievement in elementary and secondary school. WHEREAS students from under-represented groups often experience barriers to accessing appropriate social and academic supports once they do attend university. WHEREAS students are not adequately supported during transition periods throughout their educational pathways and there is insufficient information available to students, families and communities about educational pathways, the cost of education and available student financial aid WHEREAS research on early outreach programs and various issues related to outreach is insufficient. BIRT the provincial government must implement an early outreach strategy to foster increased participation in all types of post-secondary education. BIRFT early outreach programs must be tailored to the unique needs of a community and co-ordinated to ensure that community plans effectively support the programs of early outreach. BIRFT the provincial government must establish an arms-length not-for-profit Foundation with an endowment to sufficiently fund early outreach programs across Ontario. BIRFT early outreach programs must provide information and resources to students, families and communities to assist in making better informed decisions about educational pathways, including but not limited to guidance counselling, parental involvement activities and curriculum changes. BIRFT early outreach programs need to build cultural capital through mentorship, character education and social integration as well as offer tutoring and bridging programs to help improve studentsâ&#x20AC;&#x2122; academic performance. BIRFT the provincial government should adequately fund and PSE institutions should implement and strengthen social and academic support and assistance programs targeted for, but not limited to, under-represented students. BIRFT regular assessment must be done on any early outreach programs that are implemented to evaluate the effectiveness of these programs. BIRFT the Higher Education Quality Council of Ontario (HEQCO) should be tasked with investigating broader issues related to early outreach.

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APPENDIX: EARLY OUTREACH PROGRAMS IN OTHER JURISDICTIONS The following are some of the successful early outreach programs in practice: Pathways to Education, Toronto The Pathways to Education program was founded by the Regent Park Community Health Centre in 2000, aiming to break the cycle of poverty in one of the poorest neighbourhoods in the province by increasing the rate of young people attending post-secondary education. The broader long-term goal is that the children of Regent Park will become doctors, nurses, administrators, lawyers, and civil servants, and ultimately return to the community and support its ongoing development.393 About 800 Regent Park students participate in the program, about 95 per cent of eligible participants. The program provides mandatory tutoring for students whose marks fall below a certain level, and participants have mentors and support workers who can speak to them, their parents or their school. Participants receive public transit fare (since there is no local high school and many students cannot afford bus fare), and are provided $1,000 a year towards college or university tuition.394 Pathways also develops a relationship with parents to ensure that they are playing an active role in their child’s education, particularly where there are language and cultural barriers.395 The program’s annual budget is $2.9 million a year, and it is funded mainly by businesses, community groups, unions, and individuals. The provincial government provides 15 per cent of its funding. The program has 33 full-time and part-time employees, as well as 200 adult volunteers. 396 Pathways has demonstrated dramatic results in improving the academic performance and future prospects of its participants: The high school drop-out rate has fallen from 56 per cent to 10 per cent; There has been an increase in post-secondary enrollment from 20 to 80 per cent. There has been a 60 per cent reduction in the number of students with serious attendance programs;397 The proportion of Regent Park youth moving on to college or university has tripled from less than 20 per cent to over 60 per cent since 2001.398 GEAR-UP (Gaining Early Awareness and Readiness for Undergraduate Programs), United States There is a longer history of early outreach programs in the United States, where the federal government has offered matching funding programs for states that offer such programs since 1992. The current federal program is called GEAR-UP (Gaining Early Awareness and Readiness for Undergraduate Programs), and funds partnerships between high-poverty middle schools, colleges and universities, community organizations, and businesses. Projects offer tutoring, mentoring, counselling, parent involvement activities, curricula and staff development. Services include financial aid counselling, information about federal financial aid, college and admission test Carolyn Acker, “A Message from the Executive Director,” Pathways to Education, 8 November 2007; accessed online at http://pathwaystoeducation.ca/home-executive.html. 394 “The Pathways Chance”, Globe and Mail, 28 September, 2005, A24. 395 Carolyn Acker, “A Message from the Executive Director,” Pathways to Education, 8 November 2007; accessed online at http://pathwaystoeducation.ca/home-executive.html. 396 “The Pathways Chance”, Globe and Mail, 28 September, 2005, A24. 397 Pathways to Education, “Groundbreaking Results,” 8 November, 2007; accessed online at http://pathwaystoeducation.ca/results.html 398 “Pathways students move on”, Pathways Newsletter, (Toronto: Pathways, 2006); accessed online at http://pathwaystoeducation.ca/regent/Fall-2006.pdf. 393

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preparation, advice on college application procedures, and information for parents on helping their children prepare for college. Rather than targeting particular students, the projects are offered to entire cohorts of students at schools serving predominantly low-income communities. Some projects offer scholarships to participants that are funded by the state government. 399 Average grants to projects are US$1.2 million for partnership projects run by schools and post-secondary institutions in partnership with other community-based organizations, and US$3 million for state partnership projects.400 Advancement Via Individual Determination (AVID), California AVID is one of the longest-running early outreach programs, and can therefore illustrate some longer-term outcomes achieved after students complete high school, which are not yet available for most other programs. Participation in AVID involves enrolling in one for-credit class through both middle and high school, where they learn academic survival and college entry skills such as note-taking techniques, time management, research skills, and strategies for writing tests. AVID courses also include tutoring sessions, motivational activities, as well as career and college exploration. The program targets middle and high school students from low-income, first-generation, ethnic minority backgrounds. AVID began in San Diego County in 1980 and has since expanded to more than 800 sites across California as well as 16 states. In 2002, the program served about 65,000 students in the United States. The pathways of AVID graduates indicate that the program has had a clear long-term impact upon their academic success and post-secondary participation:

In 1994-95, 98 per cent of AVID program graduates enrolled at California post-secondary institution, compared to 55 per cent of non-participants from the same area. AVID graduates were three times more likely to attend four-year colleges than the state average, and they had higher retention rates once enrolled. The AVID program also appeared to overcome the negative effect of parental income and education. AVID graduates from lowest-income groups enrolled in colleges in equal or greater proportions to students from higher income groups who had not participated in AVID.401

Alisa Cunningham, Christina Redmond and Jamie Merisotis, Investing Early: Intervention Programs in Selected U.S. States (Montreal: Canada Millennium Scholarship Foundation, February 2003),.9-11. 400 United States Department of Education, “Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP),” (Higher and Continuing Education, 2007), 121; accessed online at http://www.ed.gov/programs/gearup/gtepgearup.pdf. 401 Alisa Cunningham, Christina Redmond and Jamie Merisotis, Investing Early: Intervention Programs in Selected U.S. States (Montreal: Canada Millennium Scholarship Foundation, February 2003), 43-44. 399

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policy paper Non-Tuition Related Ancillary Fees

October 2007

prepared by: shane gonsalves vice president education university students council, university of western ontario edited by: damien oâ&#x20AC;&#x2122;brien vice president university affairs brock university studentâ&#x20AC;&#x2122;s union, brock university

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EXECUTIVE SUMMARY This paper provides an overview, and addresses the limitations of, compulsory, non tuition-related ancillary fees (CoNTRA fees or ancillary fees) in Canada. Currently, ancillary fees are not regulated and vary among postsecondary institutions across the province; thus, posing challenges for students. The Ontario Undergraduate Student Alliance (OUSA) recognizes “responsible cost-sharing” requires student contribution in the form of tuition and other compulsory fees. However, this must not compromise the accessibility and affordability of a post-secondary education for any willing and qualified student. This paper addresses two broad themes concerning ancillary fees: Student Control

Student representation on governing bodies that determine the removal or levying of ancillary fees is limited; calls have been made to further reduce student control over ancillary fees. Despite student control since 1994, ancillary fees have continued to increase over the past decade. In addition, student control over ancillary fees is not retroactive; therefore, high pre-1994 fees remain unchanged. As a result, the cost of ancillary fees should be subject to student evaluation and remain in student control, both to garner legitimacy for fee increase and to ensure fee increases are relative to student’s cost-sharing responsibility. This must also include a 25 per cent student representation on governing bodies.

Government Funding Assessment formulas often fail to incorporate ancillary fees into financial needs; oftentimes, student cost burden increases as a result of ancillary fees. Government financial assistance assessment forms should acknowledge ancillary fees at each university and increase targeted non-repayable grants in recognition of these fees. Government operating grants should increase in order to assuage institutional reliance upon ancillary fees. Students recognize the merit of ancillary fees: these fees enhance the quality of their post-secondary education (PSE) experience. However, students in Ontario pay the highest ancillary fees in the country and ancillary fees impact student accessibility and affordability of PSE. A holistic assessment of the PSE system should include ancillary fees.

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INTRODUCTION Compulsory, non-tuition related ancillary fees (aka: CoNTRA fees or ancillary fees) are emerging as a hot-topic across university campuses in Ontario. As the cost of these fees continues to climb, many students raise valid questions about their existence. If Ontario students already pay the second-highest tuition fees in Canada, why are they asked to pay more through additional charges? What mechanisms are currently in place to control ancillary fees? Perhaps most importantly, how much are students actually paying in ancillary fees? To answer these questions, the Ontario Undergraduate Student Alliance (OUSA) set out to examine the current ancillary fee landscape across Ontario universities. The Ministry of Training, Colleges and University (MTCU) defines a compulsory ancillary fee as “a fee that is imposed or administered by a given institution, or one of its constituent parts or its federated or affiliated institutions, in addition to regular tuition fees, which a student is required to pay in order to enroll in, or successfully complete, any credit course.”402 Further, non-tuition related ancillary fees are “fees that are levied in order to cover the costs of items that are not normally paid for out of operating or capital revenue.”403 The responsibility for establishing ancillary fees falls under the jurisdiction of student governments. This authority stems from a Ministry of Training, Colleges and Universities Memo of Understanding written in 1994, and has now been incorporated into The Ontario Operating Funds Distribution Manual. Currently each student government in Ontario uses different means by which to set ancillary fees to best match the needs of their students. Accordingly, each student government charges a different amount in ancillary fees based on their unique financial requirements. The setting and approval of ancillary fees falls under an individual student government’s internal jurisdiction, so the administration of ancillary fees is beyond the influence of OUSA policy. However, OUSA is ideally positioned as an information resource, providing a system-wide view of ancillary fees and acting as a data clearinghouse in the event students on specific campuses choose to discuss these issues. To that end, the following document is an updated OUSA report on ancillary fees as it pertains to public policy decisions under the scope of the provincial government. Debates on this issue could also occur on individual campuses, and it is hoped that this paper will assist members in exploring the issue and informing discussion. BACKGROUND: COMPULSORY, NON-TUITION RELATED ANCILLARY FEES, PAST AND PRESENT Historically, the development of ancillary fees once included tuition-related compulsory ancillary fees. A tuition-related compulsory ancillary fee was defined by MTCU as “a fee that is levied to cover the costs compulsory, non-tuition related ancillary fees of items normally paid for out of operating or capital revenue (operating and capital grants and tuition fees).” Fortunately, these fees are no longer collected, as September 1, 1991 marked the date that all compulsory, non-tuition related ancillary fees for items eligible for capital grants were prohibited. Seven years later, on May 1, 1997, all ‘tuition-related’ ancillary fees for items normally paid for out of operating revenue were prohibited. Since 1994, ancillary fees in Ontario, unlike tuition fees, could only be collected with the permission of either the student body via the recognized form of referenda, or their student government. This change was articulated in a memo, which was sent to post-secondary institutions by the provincial government, and was subsequently enshrined in the Ontario Operating Funds Distribution Manual. As a result of this shift in policy, each university created a memorandum of understanding with their student governments on the collection of such fees. Although students have been given the power to set and control ancillary fees, students did not retain authority over ancillary fees that were in place prior to 1994.

402 Ministry of Training, Colleges and Universities, The Ontario Operating Funds Distribution Manual (Toronto: Queen’s Printer, 2002). 403 Ibid.

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Considering that each university student association has the ability to set and control its fees, it becomes an internal matter for each association to asses the best means of collection as well as the appropriateness of fee levels for consideration. This is particularly important considering the differences in service provision by individual student associations. It is also important that every campus continues to assess students’ needs and review internal policy whenever possible. Unfortunately, the amount of money flowing into the higher education sector has been reduced over the past decade, often pressuring universities to seek alternate sources of funding. Such sources of funding have included corporate dollars and alumni donations, as well as ancillary fees. Ancillary fees have continued to increase over the past decade even under student control, as can be seen in the graphs below. Figures One to Three outline changes to compulsory, non-tuition related ancillary fees over the past ten years, provincial differences as well as current fee levels. University Undergraduate Tuition & Additional Fees by Province, 2007/08404

$7,000 $6,000 $5,000 $4,000

Tuition

$3,000

Ancillary Fees

$2,000 $1,000 $0 NFLD

PEI

QUE

SASK

generated based upon data made available by Statistics Canada. Statistics Canada, “University Tuition Fees,” The Daily 18 October 2007 (Ottawa: Statistics Canada, 2006); accessed online at http://www.statcan.ca/Daily/English/060901/d060901a.htm

404Chart

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Figure Two: Average University Ancillary Fee Ranges in Canada (in 2003 real dollars)405 $1,200 $1,000 Low er Range

Upper Range

$800 $600 $400

$200 $0 19931994

19941995

19951996

19961997

19971998

19981999

19992000

20002001

20012002

20022003

20032004

Figure Three: Lower and Upper Ranges for Ancillary Fees at Ontario Universities, 2003/04406

Institution Brock University Carleton University Guelph University Lakehead University Laurentian University McMaster University Nipissing University University of Ottawa Queen's University Ryerson University University of Toronto Trent University University of Waterloo University of Western Ontario Wilfred Laurier University University of Windsor York University

Lower Range $122 $518 $261 $667 $592 $725 $213 $444 $598 $846

Higher Range $485 $603 $264 $936 $674 $813 $1, 497 $659 $822 $1,018

Fee Midpoint $304 $561 $753 $423 $263 $802 $747 $633 $769 $485 $846 $820 $406 $824 $552 $710 $923

Tuition Fee/Arts $4,184 $4,152 $4,184 $4,184 $4,133 $3,950 $4,163 $4,193 $4,262 $4,184 $4,184 $4,194 $4,194 $4,140 $4,184 $4,084 $4,181

Ancillary Fee Percentage 7% 14% 18% 10% 6% 19% 19% 15% 18% 11% 20% 20% 10% 20% 13% 17% 22%

To further explain the above table, it should be noted that the tuition fees are reflective of students taking an Arts program at each respective university, but do not include ancillary fees. In order to calculate the average tuition and ancillary fees, the tuition and the fee midpoint must be added.

405 Statistics Canadaâ&#x20AC;&#x2122;s Annual Tuition and Fee Survey, as cited by Sean Junor and Alex Usher, The Price of Knowledge 2004 (Montreal: Canada Millennium Scholarship Foundation, 2004), 123. 406 Ibid.; 126.

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PRINCIPLES OUSA believes that any policy related to ancillary fees must fulfill the following principles: Principle One: All willing and qualified students must be able to access higher education in Ontario. If our government introduced a service that created a cohort of citizens with better health, who lived longer lives, had better communication skills and self-confidence, and were less likely to participate in crime, it would be difficult to find any Ontarian who would oppose significant investments in such a remarkable initiative. A study by TD Economics argues that a university degree provides graduates with all of the above benefits, and much more.407 University graduates are also more tolerant of other races, and are likely to vote in elections.408 As such, post-secondary education is an important building block of a healthy, tolerant and civil society. Significant economic benefits flow from receiving a university degree. 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.409 University graduates are significant contributors to the tax base, are less likely to use expensive social services such as health and social assistance, as well as contributing to a more tolerant and democratically active population.410 Given the above factors, it is a benefit to both the individual and the province as a whole to provide a system which enables academically qualified students from all backgrounds to attend university, regardless of their socio-economic circumstances. Ancillary fees are not the only factor threatening the affordability of a university education in Ontario, but it is important that all mandatory costs associated with studies be maintained at a level which reflects the caliber of services being delivered, and that fees being charged remain accountable to those who are paying them. Principle Two: Compulsory fees associated with post-secondary education in Ontario must contribute to a system of responsible cost-sharing. Universities in Ontario receive their funding from two primary sources: operating grants, which are distributed by the provincial government, and tuition fees paid by students. This ‘cost-sharing’ system is used around the globe, as “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.”411 Unfortunately for students at Ontario universities, average tuition rates have increased 139 per cent in regulated programs and an astonishing 261 per cent in deregulated programs since 1993.412 These increases have put Ontario’s university students in a situation where they now contribute approximately 45 per cent of the total operating

TD Economics, Investing in Postsecondary Education Delivers a Stellar Rate of Return, (Toronto :TD Canada, 2004), 2. Higher Education Funding Council for England, Benefits for Higher Education Reach Far Beyond the Job Market (London: HEFCE, 2003). 409 Statistics Canada, “Household income Groups (24) in Constant (2000) Dollars and Selected Demographic Educational, Cultural and Labor 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, 2004). 410 Sean Junor and Alex Usher, The Price of Knowledge 2004: Access and Student Assistance in Canada (Montreal: Canadian Millennium Scholarship Foundation, 2004), 321-322. 411 Meagan Van Harte, Can Student Loan Schemes Ensure Access to Higher Education? (Buffalo: International Comparative Higher Education Finance and Accessibility Project, 2002); accessed online at http://www.gse.buffalo.edu/org/inthigheredfinance/publications_SASLoans.html. 412 Statistics Canada, “University Tuition Fees”, The Daily, 2 September 2004. (Ottawa: Statistics Canada, 2004). 407 408

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income of universities.413 While the determination of what constitutes a fair student contribution can be a source of debate, an examination of the proportion that students in peer jurisdictions pay provides some interesting insight. Consider the following graph: Figure Four: Percent of University Operating Income by Source of Income Provincial Comparison 2004/ 05414

10.0%

48.3% 45.0%

61.3% 29.6%

38.4%

53.9%

58.3% 32.8%

57.6% 32.1%

62.7%

71.1% NS

28.3%

20.0%

21.4%

30.0%

19.5%

40.0%

52.9% 40.5%

52.7%

50.0%

40.7% 48.3%

60.0%

31.0%

70.0%

71.7%

80.0%

0.0% NFLD

PEI

QUE

MAN

SASK

Provincial Government Grants

Fees

9 Provs

The graph demonstrates that Ontario students contribute a higher percentage of university operating costs at 45 per cent, as compared to19.5 per cent in Quebec, and the nine provinces (minus Ontario) of 29.6 per cent. While tuition in Ontario is the highest cost associated with attending university, ancillary fees are a substantial cost to students, and another instance in which students in Ontario are paying the highest rates in the country. Ancillary fees place an even greater proportion of the cost of operating a university directly onto students. A steady increase in ancillary fees across Ontario, even with the need for student approval in the form of referenda or student committee approval before such increases can take place, demonstrates students’ willingness to pay for improved services that improve their quality of life, and their enjoyment of the broader learning environment outside the traditional classroom.415 OUSA believes in the introduction of a system of “responsible cost-sharing” for Ontario’s universities whereby the level of student contribution in the form of tuition and other compulsory fees such as ancillary fees must never be allowed to compromise the accessibility and affordability of the system. For our universities to remain accessible and affordable, student contributions through tuition fees should not account for more than 30 per cent of the operating costs of universities, and it must be recognized that there are substantial additional compulsory costs to attend university such as ancillary fees that must be taken into account in such a formula.416 A financial aid system that meets real student need must be available to prevent debt from becoming a disincentive to attend university, or an unreasonable burden for young Ontarians beginning their lives as independent members of

Ontario Universities Resource Document-2007, “Percent University Operating Income by Source of Income- Provincial Comparison,” (Toronto: COU, 2007), 15. 414 Council of Ontario Universities, Ontario Universities – 2007 Resource Document, (Toronto: Council of Ontario Universities, 2004), 15. 415 The ‘broader learning environment’ includes athletics, clubs and extra-curricular activities, and leadership opportunities outside of the classroom. 416 CoNTRA fees are not factored into OUSA’s proposed 30/70 student/government cost sharing arrangement. 413

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society. Unfortunately, the student financial assistance system in Ontario does not adequately meet student need, resulting in growing student debt loads, and an increased reliance on private loans. To maintain and improve upon the quality of our universities, we must also see an appropriate long-term public investment from the provincial government.417 In short, students understand that they must foot the bill for certain costs, but feel that the government must provide the support necessary for the system to reach its highest potential, while remaining accessible to all qualified students. Principle Three: Students must be active partners in determining Ontario’s fee structure. Although the services paid for by ancillary fees varies from one institution to the next, typically they include fees for recreation and athletics, student health services, safety services, services for students with disabilities, and student associations. By their very definition, compulsory, non-tuition related ancillary fees are for services that are used almost exclusively for students. Given that these services are funded almost entirely by students, and that students are primary users of the services, it is only logical that students have input into the determination of any fee structure related to ancillary fees. Through a working partnership with university administrations, and government officials, students will better be able to understand the challenges faced by institutions to provide a quality student experience in an era of tight financial resources. An ancillary fee structure supported by elected student representatives ensures that the structure will reflect the needs of students, and will foster a spirit of co-operation and partnership for all those involved in the process. Principle Four: The level of compulsory, non-tuition related ancillary fees must not deter students from pursuing higher education in Ontario. Ancillary fees exist at Ontario universities to provide financial resources, allowing institutions to offer students better services and a better all around student experience. Students have demonstrated a willingness to pay for bigger gymnasiums, better weight rooms, or new student centres. However, there are many students for whom the persistent increases in ancillary fees threaten their ability to afford a post-secondary degree, especially considering ancillary fees are not accounted for in the financial aid system. Principle Five: The administration of all compulsory fees must be accountable, and transparent. Taxpayers fund a significant portion of the operating costs of Ontario universities. As such, the current provincial government has correctly placed a high priority on accountability in the university sector. They have done so by negotiating accountability agreements with each institution before distributing operating grants, and will begin doing so on a multi-year basis in the future. The province will further strengthen accountability in coming years. The Higher Education Quality Council of Ontario (HEQCO) is committed to evaluating accountability measures at Ontario universities. In addition, the Reaching Higher plan proposed by McGuinty in 2005 made Ontario’s universities subject to the Freedom of Information and Protection of Privacy Act , which came into effect 10 June, 2006. The legislation commits universities, as public bodies, to be “more open and accountable by providing the public with the right of access to records.”418 Graeme Stewart, Ending the Endless Debate: Recommendations for a New Tuition Policy (Toronto: Ontario Undergraduate Student Alliance, 2005). 418 University of Ontario Institute of Technology, “Frequently Asked Questions: What is FIPPA?” (Toronto: UOIT, 2006); accessed online at http://www.uoit.ca/EN/main2/202429/148433/148449.html. Developed in response to the Government of Ontario, Reaching Higher: The McGuinty Government Plan for Postsecondary Education, (Toronto: Queen’s Printer, 2005). 417

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Ancillary fees fund almost all of the operating costs of many student services, but the level of accountability afforded to taxpayers is not extended to students. Students have very little input into universities’ budgeting processes other than through institutional governing bodies, where they are generally a small minority. In the long-term students must have a stronger voice on university governing bodies; in the short-term, detailed budgets for services funded through ancillary fees must be made readily accessible to students as well as the general public. Principle Six: For the interests of students to be protected, the ability to implement and change compulsory non-tuition related ancillary fees must remain in the hands of students. Until 1994, the implementation of new ancillary fees was under the control of each university, through its Board of Governors, Governing Council, or other equivalent governing body. Following decreases in government funding in the late 1980s and early 1990s, institutions increasingly turned to ancillary fees to cover budget deficits. This practice led to a marked increase in such fees. Due to the dramatic rise in ancillary fees students lobbied successfully for new regulations governing ancillary fees.419 The changes gave student unions significant influence and control over existing fees, as well as control over the implementation of new fees through student referenda, or student council ratification.420 The principles that brought these changes into effect are still factors today. University administration should not have free reign to increase ancillary fees to side-step tuition regulations imposed by government. The control of ancillary fees must lie with students as they stand to bear both the costs and the benefits. CONCERNS Given the background and principles on ancillary fees in Ontario, OUSA has the following concerns: Concern One: Compulsory, non-tuition related ancillary fees have been used as alternative sources of operating revenue for universities in Ontario. Prior to 1993, a tuition freeze was in place in Ontario, and it was felt by many student groups that administrators were simply using ancillary fees as a “financial shell” for tuition increases.421 In the ten years following 1993, universities in Ontario experienced decreases in public funding, which increased the funding burden on students through significant tuition increases. It was felt that universities were also levying student fees for services housed in buildings that also housed academic units, and that expenses that should have been coming from operating grants were being downloaded to students through ancillary fees.422 If ancillary fees were removed from student control, the same conditions will exist that led to abuses prior to 1993. As universities continue to strive to offer the “best student experience” the demand for more and more of these “nonacademic” services is increased. Fee increases, where approved by a student referendum are appropriate, but fees brought in unilaterally by institutions are unacceptable.

Ontario Undergraduate Student Alliance, Our New Responsibility: Meeting the Guidelines for the New Ministry of Education and Training Policy on Compulsory Tuition Fees (Toronto: Ontario Undergraduate Student Alliance, 1994), 1. 420 Ministry of Training, Colleges and Universities, The Ontario Operating Funds Distribution Manual (Toronto: Queen’s Printer, 2002). 421 Ontario Undergraduate Student Alliance, Our New Responsibility: Meeting the Guidelines for the New Ministry of Education and Training Policy on Compulsory Tuition Fees (Toronto: Ontario Undergraduate Student Alliance, 1994). 422 Ibid. 419

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There is also concern that if certain services are funded exclusively through ancillary fees, there is less incentive for the administrators to run the services efficiently. When the time comes to make difficult choice elsewhere in the institution, it will always be easier to raise fees for the student-funded services. Concern Two: Students in Ontario fund a significantly larger proportion of the cost of their education than the national average. Students in Ontario are paying 45 per cent of the operating costs of their education, a much higher proportion than student in other provinces. The average amount paid in ancillary fees in Ontario in 20007/08 was $701 among the highest fees among the nine provinces.423 There is high degree of variation between institutions, with students at the University of Western Ontario paying almost $900 in the 2004/2005 academic year. With generally similar ancillary units and services being offered at universities across Canada, it is quite concerning that the students of Ontario are paying significantly more than their counterparts in other provinces. Concern Three: Extra costs that are not part of the assessment formula for grants and loans contribute to the high levels of unmet need experienced by university students in Ontario. Prior to an increase in the Ontario Student Assistance Program (OSAP) maximum loan limit in 2005, students in Ontario went over decade without any increases to the amount of assistance available to them. During this period ancillary fees have increased between 7 and 22 per cent424 and the cost of living has also increased. According to the OSAP website in February 2005, “financial assistance is provided to cover tuition and compulsory fees within certain established limits, [to which] OSAP [will] recognize up to $2,250 per term (plus co-op fees of $425 per term, where applicable) for tuition and incidental fees when calculating the amount of assistance you are eligible to receive.”425 This alone indicates that there are students that are not receiving enough to cover tuition and ancillary fees at institutions across the province. For example, the costs associated with an Arts & Science program at McMaster University for 2004-05 is $4,813.56.426 Students in this program will be required to fund $313.56 of the cost of tuition and ancillary fees, making it much harder for students in financial need to be able to access higher education. In order for all students in Ontario to have access to higher education, the financial assistance available to students must be an adequate representation of the actual costs associated with attending a higher education institution. Many new student assistance programs focus on providing students with non-repayable grants to cover a percentage of their tuition fees. For example, the Canada Access Grants which provide students with the lesser of either $3000 or 50 per cent of their tuition.427 Although ancillary fees are mandatory, they are not included in the assessment calculation for such grants. The increased costs cannot be a barrier to higher education for potential or current students, and therefore maximum loan limits must be increased.

Statistics Canada, “University Tuition Fees”, The Daily, 18 October 2007 (Ottawa: Statistics Canada, 2007); accessed online at http://www.statcan.ca/Daily/English/030812/d030812a.htm. 424 Statistics Canada’s Annual Tuition and Fee Survey, as cited by Sean Junor and Alex Usher, The Price of Knowledge 2004 (Montreal: Canadian Millennium Scholarship Foundation, 2004), 126. 425 Ontario Student Assistance Program, “How loan amounts are determined”, (Toronto: Queen’s Printer, 2007); accessed online at http://osap.gov.on.ca/eng/not_secure/funds.htm#How%20Loan%20Amounts%20are%20Determined. 426 McMaster University, McMaster University Undergraduate Calendar, (Hamilton: McMaster University, 2004-05), 28. 427 Ontario Student Assistance Program, “Canada Access Grants”, (Toronto: Queen’s Printer, 2007); accessed online at http://osap.gov.on.ca/eng/not_secure/CAG.htm 423

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Concern Four: Students are underrepresented on university governing bodies. According to acts of the provincial legislature (with the exception of Queen’s University) each university has a governing body that is responsible for its operation and accountability.428 The composition of these bodies is unique to each institution, and is outlined in their respective legislative acts. One thing that remains constant across governing boards is the low ratio of student members to non-student members. The list below outlines a sample of student representation (including both undergraduate and graduate students) on boards of governors in some Ontario universities: Institution

Governing Body

University of Western Ontario McMaster University Brock University Wilfred Laurier University University of Windsor University of Waterloo Queen’s University

Board of Governors Board of Governors Board of Governors Board of Governors Board of Governors Board of Governors Board of Trustees

Number of Students 3 of 27 2 of 37 3 of 32 3 of 32 4 of 30 5 of 39 2 of 44

% of Students on Governing Body 11.1 5.4 9.3 9.3 13 12.8 4.5

It is quite clear from the list above that students are underrepresented given that they are an integral component of the university community, and who contribute over 40 per cent of the universities’ operating costs through tuition fees. This is problematic as the governing bodies of universities have the final word on the levying or removal of ancillary fees; if ancillary fees are removed from student control, students will have a disproportionately small student voice on the bodies that will determine ancillary fee levels. Concern Five: Calls have been made to remove control over compulsory non-tuition related ancillary fees from students. During recent stakeholder consultations regarding a new tuition fee framework in Ontario, the Council of Ontario Universities (COU) recommended that the approval of ancillary fees be removed from the purview of students.429 Dr. Ross Paul, current chair of the COU stated in his opening remarks: “as part of a general tuition policy framework, all Ontario universities strongly recommend that governing bodies once again be permitted, after consultation with students, to set ancillary fees.”430 Governing bodies have few student voices, and university ‘consultations’ with students regarding tuition levels in deregulated programs yielded dramatic tuition increases. Given institutions’ penchant for increasing tuition at unprecedented rates in deregulated programs, it is not beyond the pale to posit that ancillary fees would increase at similar rates if they are placed entirely under the jurisdiction of university administrations. Concern Six: Compulsory non-tuition related ancillary fees have increased substantially over the past 10 years. According to Statistics Canada, ancillary fees have increased approximately 90 per cent over the past decade, with the majority of those increases occurring in the past five years.431 These increases have amounted to ancillary fees

Ibid. Council of Ontario Universities, “Tuition Framework Stakeholder Meeting: Notes for Dr. Ross Paul, Chair, Council of Ontario Universities,” 20 July 2005 (Toronto: COU, 2005). 430 Ibid. 431 Sean Junor and Alex Usher, The Price of Knowledge 2004: Access and Student Finance in Canada (Montreal: Canadian Millennium Scholarship Foundation, 2004), 123. 428 429

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accounting for roughly 15 per cent of the total amount of tuition. For students in Ontario, this works out to be approximately $640 per year.432 While ancillary fees have proven to be a large cost to students, the services that they fund are often vital programs, such as health counselling and athletics and recreation. However, a balance must be struck. Although these services are important, ancillary fee levels should not become a barrier to the entrance of or the continuation of higher education. RECOMMENDATIONS Given the above principles and concerns, OUSA makes the following recommendations. Recommendation One: The level of fees institutions charge for “costs of items which are not normally paid for out of operating or capital revenue” should remain in student control. The single easiest way to address the concerns raised in this paper is to keep control of compulsory non-tuition related ancillary fees in student hands. Ancillary fees are charged for “costs of items which are not normally paid for out of operating or capital revenue.” As previously mentioned, increases to ancillary fees have not been prevented when control was given to students in 1994. Year after year, student unions across the province run referendums for new fees, and it is up to the students to decide whether or not to approve them. Given that the services funded by ancillary fees are by and large student services, it seems quite counterintuitive to remove control of such fees from the hands of students and to create the potential for students to be assessed fees for services that they do not want or need. It is not the contention of OUSA that these fees should be eliminated, but simply that they remain in student control to ensure that students have the opportunity to voice their opinions through referenda on new fees or fee increases. Recommendation Two: Compulsory non-tuition related ancillary fees must be included during assessments for government funded financial assistance. Over the past decade, students have faced increases in tuition at alarming rates, paired with quickly mounting ancillary fees. Unfortunately over that same period, OSAP loan limits were not adjusted to reflect the rising tuition, and ancillary fees were not taken into account when assessing the amount of government funded assistance applicants should be eligible for. This is not to say that the government should simply increase loan limits and further compound the debt students are already burdened with. The focus should be primarily on non-repayable forms of financial assistance such as bursaries and grants, targeted to those with the most need. While the recent increases in OSAP limits are a welcome improvement to the financial aid system, tuition costs and ancillary costs continue to rise. For example, tuition costs from 2006/07 to 2007/08 rose by 4.4 per cent in Ontario.433 Moreover, ancillary costs during that time frame rose by 3.1 per cent.434 As such, it is only logical to pair increases to mandatory costs associated with attending university to matching increases in the amount of financial aid available to students.

Ibid.; 126. Statistics Canada, “University Tuition Fees,” 18 October 2007 (Ottawa: Statistics Canada, 2007); accessed online at http://www.statcan.ca/Daily/English/071018/d071018b.htm. 434 Ibid. 432 433

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Recommendation Three: The provincial government must amend university charter legislation so that students hold at least 25 per cent of seats on governing bodies of each institution. Students are extremely important to the decision-making process of universities based on the large contribution that students make to fund the university, its programs and resources, based on ancillary fees. The level of student representation on university governing bodies is hopelessly incongruent to the financial and intellectual contributions they make to their institutions. Students are typically the last to learn of proposed changes discussed by governing boards, yet are the ones most affected by the boards’ decisions. Students need to be present at the discussion tables of university governing bodies to participate in sustainable decision-making processes for universities and for students. Having students engaged in the entire decision-making process also helps ensure that their concerns can be addressed from the start. An open and co-operative relationship will increase buy-in from students on decisions made at the institutional level, and help ensure that decisions being made will benefit all stakeholder groups (including students) as much as possible. Recommendation Four: Provincial government legislation and protocol policies must affirm the right of students to assess and collect compulsory, non-tuition related ancillary fees. Students have proven themselves capable of collecting fees and playing a decision-making role in ensuring that their money is spent in accordance to their needs. Given that virtually all compulsory, non-tuition related ancillary fees are directly related to the actual services which universities offer its students, it is important that students and their representatives remain as chief agents in determining ancillary fee levels. The ability of student unions to assess and collect fees must be enshrined in legislation. Such legislation would follow precedents set in the provinces of Quebec and British Columbia, and would codify the role of students in determining and collecting ancillary fees. Recommendation Five: The provincial government must continue to increase operating grants so that institutions’ reliance on compulsory non-tuition related ancillary fees is reduced. While students do recognize that many of the services funded by ancillary fees are not necessarily part of the academic mission of the university, they do still play an extremely important role within the university community. Prior to the funding cuts experienced by our institutions through the 1990s there was no need to charge specific, additional fees for such services. The people of Ontario recognize that PSE institutions are about far more than classrooms and books. They are vibrant communities that go beyond educating students in their specific area of concentration; they develop healthy, caring and civically engaged young people. As such, the government should provide adequate funding to quell the need for institutions to charge fees for services that are necessary. Such funds are critical to maintain and improve upon universities’ collegial atmosphere, which contributes significantly to the socio-economic development of our population. Recommendation Six: All compulsory non-tuition related ancillary fees should be in student control, regardless of the date they were initially implemented. When the government gave control over ancillary fees to students, they made a compromise to satisfy institutions; new ancillary fees were mandated to be passed by a student referendum, but existing fees were not subject to the same approval process. 435 In essence, students were given the ability to set their new fees, but could not adjust fees that were already in place before 1993. 435 Ministry of Training, Colleges and Universities, The Ontario Operating Funds Distribution Manual (Toronto: Queen’s Printer, 2002).

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This policy decision was likely a compromise aimed at calming nervous university administrations. Institutions voiced concern that increased student control would result in fee freezes or reductions, or a hesitance to implement new fees for services that the university deemed necessary. Student leaders have demonstrated these concerns to be false. Over the past ten years students have been responsible administrators of ancillary fees; the time has come to place all fees under student purview. The student desire to adjust all ancillary fees is a practical request based on the principles of accountability and sound fiscal management. Student leaders have a responsibility to ensure their constituentsâ&#x20AC;&#x2122; scarce funds are allocated to meet current needs and priorities. As such, to be truly responsive and accountable to their peers, student leaders must have the ability to adjust all ancillary fees regardless of their date of implementation. CONCLUSION When many students first learn of compulsory non-tuition related ancillary fees their initial reaction is occasionally â&#x20AC;&#x153;we need to get rid of those fees!â&#x20AC;? However, once students recognize that they have a significant amount of control over these fees, and that the bulk of the fees have been endorsed by a majority of the students on their campus through a referendum, they begin to understand the important role the fees play in their education, and the importance of keeping them in student control. This control is particularly important in a system where the threat of tuition deregulation looms large. If such a system were introduced, and if ancillary fees were removed from student control, administrations would no doubt find a way to pay for the services they wish to provide without meaningfully consulting students. Essentially, fees could rise without student approval, and with little knowledge of how student money was being spent. Ancillary fees provide students with day-to-day services that contribute to their academic and social development. These fees have steadily increased in recent years, placing some students in the unfortunate position of not being able to afford the cost of attending university because OSAP has not been responsive to the rising costs of tuition, and does not recognize many legitimate costs, including ancillary fees. Students must continue to be the primary decision-makers in the approval of ancillary fees, and they must play an increased role on university governing boards. Increased student perspectives in decision making will ensure universities use student funds to demonstrably improve the student experience.

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ancillary fees policy statement WHEREAS all willing and qualified students must be able to access higher education in Ontario; WHEREAS compulsory fees associated with post-secondary education in Ontario must contribute to a system of responsible cost-sharing; WHEREAS students must be active partners in determining Ontario’s fee structure; WHEREAS the administration of all compulsory fees must be accountable, and transparent; WHEREAS for the interests of students to be protected, the ability to implement and change compulsory non-tuition related ancillary fees must remain in the hands of students; WHEREAS the level of compulsory, non-tuition related ancillary fees must not deter students from pursuing higher education in Ontario; WHEREAS compulsory, non-tuition related ancillary fees have been used as alternative sources of operating revenue for universities in Ontario; WHEREAS students in Ontario fund a significantly larger proportion of the cost of their education than the national average; WHEREAS extra costs that are not part of the assessment formula for grants and loans contribute to the high levels of unmet need experienced by university students in Ontario; WHEREAS students are underrepresented on university governing bodies; WHEREAS compulsory non-tuition related ancillary fees have increased substantially over the past 10 years; WHEREAS calls have been made to remove control over compulsory non-tuition related ancillary fees from students; BIRT the level of fees institutions charge for “costs of items which are not normally paid for out of operating or capital revenue” should remain in student control; BIFRT compulsory non-tuition related ancillary fees must be included during assessments for government funded financial assistance; BIFRT the provincial government must amend university charter legislation so that students hold at least 25 per cent of seats on governing bodies of each institution; BIFRT all compulsory non-tuition related ancillary fees should be in student control, regardless of the date they were initially implemented; BIFRT provincial government legislation and protocol policies must affirm the right of students to assess and collect compulsory, non-tuition related ancillary fees; BIFRT the provincial government must continue to increase operating grants so that institutions’ reliance on compulsory non-tuition related ancillary fees is reduced.

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345-26 soho street toronto, ontario M5T 1Z7 tel. 416.341.9948 fax. 416.341.0358 www.ousa.ca