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The great tuition debate

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I posted an intemperate comment on Twitter about this article by economist Stephen Gordon, who supports tuition fees for post-secondary education. He challenged me to defend my position — a no-tuition policy — in a blogpost. So here we go.

More technical versions of Gordon's arguments appear in his blog, here and here. His bottom line is that free post-secondary education is essentially a gift to the rich. Worse, it would do little to improve over-all access for the less well-off, although it would have some marginal effect, but at a considerable cost. Hike tuition, he says, save the government money, establish a system of grants for students from low-income families. The result? Anyone qualified can go to college or university, and look at the redistribution of wealth achieved: the well-to-do would be subsidizing the poor.

I won't say that this approach lacks appeal, and to dismiss it out of hand as I did was wrong. But his argument rests upon some faulty assumptions, and is not borne out in real-world experience elsewhere.

Gordon appears to assume that the current demographic snapshot of university students is fixed. As he says, university enrollment is dominated by upper-class students: "people from the top quarter of the income distribution are roughly twice as likely to go to university as those from the bottom quarter." There are, of course, a lot of reasons for this besides the costs. The class system generates sets of values and practical discouragements that limit the horizons of less-well-off students; the pedagogical supports in our schools for encouraging an expansion of those horizons is lacking; and streaming, still very much alive, reinforces practical and attitudinal barriers to higher learning for working class kids.

But let us not minimize the obvious barrier that high tuition in itself presents. It's a lot of money, and graduating students face a mountain of debt through the student loan system. Others are simply discouraged from attending at all.

By contrast, the European experience is worth looking at. Germany has just returned to free post-secondary education, after apparently noticing the effects that tuition fees — modest by Canadian standards — were having on young people from disadvantaged backgrounds.

At present, France, Denmark, Finland, Norway and now Germany have free post-secondary education. Tuition is free in Scotland -- in the rest of the UK, by contrast, raising tuition fees has ended up costing more than it brings in, because of high levels of default on student loans. It has also resulted in a significant drop in enrollment, with particularly high numbers among part-time students and mature students —w ho are more likely to come from the lower end of the socioeconomic scale.

Tuition increases have also been shown to adversely affect visible minorities.

Free education? The naysayers are already at the mic in Canada. Wouldn't work here, harrumphs Colin Busby of the C.D. Howe Institute. We have no history of it. Taxes would increase. Lots of financial supports already there anyhow. No proof more young people from poorer families would attend anyway.

The first argument is the "we've never done it before, won't work" stuff that we get from the usual cane-shakers. No doubt there would be tax increases in the short term, but given the increased incomes (and therefore income taxes) earned by those with a post-secondary credential, there would be a continuing future offset. Nor is the increased tax revenue the only return here. If education is seen as a public investment, as indeed it should, then we should look at the play of analytical, synthetic and communicative skills of graduates in problem-solving, productivity and innovation, all of which contribute to our community life and the progress of our country, not just the GDP.

Financial support to students these days is primarily in the form of student loans. It is not surprising at all that young people from a background of relative disadvantage will be more reluctant to acquire large debts, essentially mortgaging their futures. Even those who manage to cover the costs and become students are more likely to choose specializations that lead directly to jobs (engineering, vocational training, pharmacy, etc.) instead of studies in the liberal arts, for example. Yet the latter are also social investments, if largely impossible to quantify in dollar terms, and so waved away as a kind of indulgence by the "hard-headed" types. We have seen the invidious effects of this type of thinking at the National Research Council, which has moved away from theoretical investigations into applied research of direct value to business. Do we want our society to become so narrowly focused on mere profit and loss?

In any case, we are wasting the potential of too many young people who might have made significant contributions to scientific theory, the arts and the humanities, but for reasons already discussed will be denied that opportunity.

Perhaps a system of outright grants, which Gordon is proposing, would -- ideally -- have a similar effect to universal free access. But there are sound arguments for the latter, nevertheless. Gordon is right that the immediate effects of abolishing tuition would be a windfall for better-off students. But universal access based upon merit would have the effect of changing the student demographics over time (we have, after all, already seen the reverse effects flowing from tuition increases). Combined with educational reform at the secondary level (no streaming, for example, and more attentive pedagogy), we could see a significant shift. In such a case, young people from all classes would share more proportionately in the windfall.

Would Gordon's alternative be a better one in the long term? Here two progressive social principles are brought into conflict: redistribution of wealth versus universality. Gordon wants grants that are effectively paid by rich students or their families to poor ones, through high tuition fees. But looking at the wider progressive agenda, narrowing the gap between rich and poor (contrary to current trends) is a core objective. In this context, universal programs are to be preferred over the long haul.

Primary and secondary education have been universal for quite some time. Why not return to fee-paying for those earlier levels of education? Would the same arguments not apply? It's true that in that instance the education is largely mandatory, and besides (as the C.D. Howe spokesperson might say) we have a history of it, but higher levels of education do benefit society, and disproportionately so in comparison to grade school, given the specialized skills and knowledge acquired. Why wouldn’t it be sound public policy to treat tertiary education the same as primary and secondary, developing the capacities of our citizens to their fullest without regard to their socioeconomic status?

Education, in brief, is a public good. It should not be means-tested, any more than medicare or our highway system should be. It should be available on an equal-opportunity basis to all citizens, as a sound investment in the future of our country. An alternative to Gordon's alternative, raising the income tax (which is, after all, progressive and redistributive), seems far preferable from a policy standpoint than a privatized redistribution of wealth — if a more equitable society with egalitarian values is truly our aim.

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