Raising university tuition fees does not reduce access

Montreal, June 16, 2010 – The issue of university financing has returned to the centre of discussion on the future of Quebec’s higher education system. A growing number people in the academic world, the business community and the political sphere (including former premier Lucien Bouchard last February) are suggesting that tuition fees be raised. In September, McGill University will be receiving the first MBA students who will have to pay $29, 500 a year for their program, despite opposition from the Quebec Department of Education.

To help in examining this issue, the Montreal Economic Institute (MEI) is publishing today an update of a previous Economic Note as a reminder that the available data for Canadian provinces show no relationship between tuition fee levels and access to university studies.

Access

The most recent data compiled by economist Germain Belzile, the MEI’s director of research, show that, although Quebec has the lowest tuition fees in Canada, averaging $2,180 a year, university attendance is also among the lowest, at 28.8% in 2008-2009. In comparison, 42.2% of young adults attend university in Nova Scotia despite average fees of $5,877 a year. Other causes weigh more heavily in a young person’s decision as to whether or not to continue with studies, such as high school results, for example.

Mr. Belzile believes that a future adjustment in tuition fees could be accompanied by adequate assistance directly targeting those who are less well off. A group of 15 public figures has said they are open to this idea, suggesting that 30% of the additional revenues from an increase in tuition fees be devoted to financial assistance.

Fairness

Education is an investment in human capital that proves to be highly profitable. For example, a recent high school graduate can expect to earn a lifetime pre-tax income of $1,288,438, compared to $2,166,948 for someone holding a bachelor’s degree. University graduates not only have higher incomes than the average worker but also have a substantially lower unemployment rate. Mr. Belzile says raising subsidies for higher education would mean that Quebec taxpayers would be financing the high income-earners of tomorrow. He doubts that this really fits ideas of fairness and solidarity. “By asking MBA students to finance a larger share of the cost of their program, McGill University is targeting those who will benefit directly from their education,” he explains. “At the same time, it aims to deal in part with the recurring problem of university financing.”

The document says each Quebec university should be free to adapt tuition fees to its mission and needs and to its particular competitive environment. Not allowing increases in tuition fees risks substantially compromising the quality of higher education in Quebec without benefiting students who are least well off.

The complete Economic Note prepared by Germain Belzile (an update of the study by Norma Kozhaya published in February 2004), titled Would Higher Tuition Fees Restrict Access to University Studies?, may be consulted free of charge on our website.

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The Montreal Economic Institute (MEI) is an independent, non-partisan, non-profit research and educational organization. Through studies and conferences, the MEI informs public debates in Quebec and Canada by suggesting wealth-generating reforms based on market mechanisms.

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Information and interview requests: Ariane Gauthier, communications coordinator, Montreal Economic Institute, Tel.: 514 273-0969 ext. 2231 / Cell: 514 603-8746 / E-mail: agauthier@iedm.org