Penny for your thoughts

by Paul Wells

The Association of Universities and Colleges of Canada will put out an updated report this autumn called “Momentum,” about all the progress Canadian university research is making. But this week, while I was chasing Maxime Bernier all over Southern Quebec, they put out a report showing that “momentum” might not be the best word to describe the total funding picture for Canadian universities. Two of my colleagues reported on the, er, report when it came out, and their stories captured the essential point: that total funding per university student in Canada is thousands of dollars less today than it was 20 years ago, thanks largely to rampant increases in enrolment. The result is a substantial gap between per-student funding in Canada and in the United States. It’s the next major challenge in our post-secondary education system and I’m going to spend a fair bit of time on the report’s findings, complete with fancy charts and graphs, after the jump.

First, the general situation: total funding per student in public four-year universities in the U.S. has grown fairly steadily, while it has stagnated after steep decline in Canada:

This means that in the U.S., the ratio of profs to students is roughly the same as it was 20 years ago. In Canada, and to some extent in the UK and to a dramatic extent in Australia, enrolment growth has far outstripped faculty growth:

Now, it’s not as though governments have been ignoring universities. Thanks largely but not entirely to the Canada Foundation for Innovation, there’s been a capital revolution on campuses since federal deficits were elminated in the late 1990s:

In all those shiny new buildings with shiny new labs, there’s a lot more research going on. Federal research funding has more than doubled since the late 1990s, although growth has started to flatten out. Provincial and private-sector funding has grown, though not quite as rapidly:

But here’s where the blessing starts to look a little like a burden. Massive new research capacity has become a draw on other university activities: the labs are so costly to run that other budgets — for teaching and other quality-of-student-experience matters — are squeezed:

Which brings us to where we started. Partly due to the new (immensely valuable, but still budget-hungry) research capability on campuses, and partly due to exploding enrolment, funding per student is declining:

There. That’s a 70-page study in a few minutes. What’s to be done? There will always be readers who argue that many tens of thousands of students are going to university who shouldn’t: that they’d be better off in community colleges or skilled trades. Fine, but by now it’s going to take an ambitious program to dissuade all the students who’ve decided they can’t do without a university education. If they’re going to go, it would be good if their education could be well funded. There are a few options here. One is to permit those students who can afford it to bring their own money (or, yes, their parents’), in the form of increased tuition fees (partly compensated, for less affluent students, by substantially improved student aid.) But that’s not the whole answer. Nor is philanthropy, although every bequest helps. Governments are simply going to have to chip in.


Penny for your thoughts

  1. Re: trying to stop or to reverse the growth in enrollment, it’s not that the students are so all fired up about a college education, it’s that credential inflation has been such that employers require a degree. This pertains not so much to skilled trades skills as to generalisable aptitude. So the challenge for governments is also to try and deflate credentialing. They have a powerful tool here in their control over secondary education. If high school were made more difficult, or if Grades 11 and 12 were replaced with a vigorous CÉGEP-style system, employers would be more willing to accept young employees without a college degree or specific skills. This would reduce university enrollment considerably and improve the universities.

  2. I don’t suspect your portrait will be replacing Chairman Mao’s down at the CFS offices thanks to this post, but the end recommendation seems sensible (particularly if you accompany increases in university/post-grad diploma tuition with decreases in tuition for post-secondary college/trade programs).

    I might quibble with some of the indicators though. None of them appear directly tied to either student experience or labour market outcomes, which, if we are speaking about a school’s teaching capacity, seem to me to be the two most important deliverables a university can offer. If we are still meeting the demands of the labour market, and statistics on the quality of student experience are comparable to past decades, then is it fair to say that universities are just fulfilling their teaching goals more efficiently than in the past?

    The downside of this could potentially be found with respect to the increase in contract instructors to do the jobs previously done by tenure-track profs, but I think that assertion requires more evidence to back it up. For instance, will attitudinal changes amongst the new crop of tenure-track profs who replace retiring boomers be helpful (the enthusiasm for teaching amongst certain profs at my previous institution of higher learning were not exactly exemplary)? Is the dedication to teaching of non-full time faculty improving student experience in some way? Or is the dismal living standard of contract instructors pushing PhDs to the private or public sectors instead? This type of qualitative information would be useful to my uninitiated mind, but I suspect you have past data that will render my ramblings moot.

  3. JM: Credential inflation can only be reduced by lower unemployment. As long as employers can be picky, they will be picky. They will ask for degrees if there are enough degree-holders without jobs to pick from.
    Credential-creep will go out the window when profits are at stake.

    Of course, in some professions (doctors and lawyers for instance) credential-creep is a tool to reduce competition and increase profits, and in such cases competition and regulation is key, but that’s another story.

    Frankly, I think that we should allow public and private universities to co-exist. Funding will not improve when ideology trumps results. In other words, while the government is obsessed with the ideology of stuffing as many students into university as possible, they will continue to ignore the reality of whether productivity or living standards improve. Private institutions force all parties (public, private, students) to focus on the bottom line, whether students are getting any bang for their buck, because that is ultimately what really matters.

  4. Re: “There are a few options here. One is to permit those students who can afford it to bring their own money (or, yes, their parents’), in the form of increased tuition fees (partly compensated, for less affluent students, by substantially improved student aid.)”

    This is frankly a stupid idea. And it has been proven as such by the current mess that many Australian universities find themselves in. To compensate for severe federal government funding cutbacks in the last decade Australian universities started recruiting affluent, foreign students to help pay the bills (where many are not qualified for university level courses but, hey, they come up with the cash so what’s the problem?). When the foreign student market started to dry up (as it does occasionally) a couple of years ago Australian universities find themselves in even more dire financial straits since they have become so dependent on the “diplomas for cash” crowd.

    As you kind of point out (your tuition increasing fixation aside), universities, colleges and trades schools should all be well funded by the government. Period. That means hiring more tenure track professors (not short term contracts) for the long term than is currently being done in Canada. Having shiny new research facilities and buildings with rich people’s names on them is all well and good, but you need people to do the research work and teaching. If you don’t invest in people Canadian universities will stagnate even more than they already have.

  5. One of the issues with rising tuition is the feeling of entitlement. If parents are paying more for the education of their children, they may put pressure on teachers or administrators should their grades suffer. Read Ivory Tower Blues: A University System in Crisis, where they talk about the amount of complaints that professors get from students and teachers about grades.

    This comes down to student engagement. I think D makes good case for increasing the amount of tenured track professors, their stability will and engagement will also increase student engagement.

    Back to the main point though, raising tuition provides money for the universities it may ease some of the pressure but I think the fundamental problem is that too many students are going to university. I really think that the only longer term solution is decreasing this pressure. How else do you shrink classroom size, and increase funding per student without large increases coming from other sources? The gap in per student funding is large, 8,000 per student!

  6. Just to be clear I meant the gap in funding between the U.S and Canada.

  7. D I have no idea if your Australian example is accurate, lets say it is, but I don’t see why it leads to your belief that we need more government funding.

    Government only has so much money and there are many interests who want a piece of the pie. What are we going to reduce in order to pay more to universities.

    Why not stop government funding entirely. The top universities in the world are all private American institutions that have enormous scholarship endowments that pay for people who are bright but can’t afford tuition. Soak the rich, use some of it to pay for students who don’t have the cash and people who don’t have children attending uni aren’t forced to pay for those that do.

  8. Here’s an excellent discussion of Australia’s “broad structural dependency” on fee-paying foreign students, which goes some way toward validating D’s argument even though he called me a bad word:

    I’d say, however, that Australia’s original sin was to try to milk foreign students for exaggerated differential fees, only to discover it was a hard habit to break.

    Db, one of the charts I didn’t swipe from the AUCC report seems to partially address your own concern: are Canadian universities declining or simply becoming more dollar-efficient? The chart (number 3.3 if you look in the report) compares Canadian and American responses on parts of the National Survey of Student Engagement, a fairly sophisticated how-do-you-feel questionnaire. Canadian freshmen are much less persuaded than their American peers that they’re getting a flexible learning environment with student-faculty interaction. Obviously a subjective measure but there you go.

    More generally, on the my-God-let’s-keep-our-kids-out-of-universities instinct: is that really our best solution to a problem — to announce that it shouldn’t exist? It’s a pretty high-class problem, after all: a stampede of Canadian high-school students into a challenging, stimulating extension of their educational experience. You’ll note that, one way or other, the Americans were able to grow their faculties about 50% faster than we were, and if the Australians have done even worse, I’d say it’s because for 11 years they had a national government that said things like, “Kids don’t need to go to university anyway.”

    I’m often intrigued by how vague the keep-students-out-of-universities answer is anyway. Your own young teen, for instance? Hands up. Or let’s concentrate it geographically. Who’s in favour of forbidding, say, Saskatchewan’s teenagers from attending university, since there are many excellent opportunities in technical colleges for those great kids?

    Personally, I’d rather argue that the enrolment explosion in Canada is (a) probably supposed to happen (b) certainly going to happen whether it’s inherently a good thing or not (c) therefore worth the serious attention of our governments.

  9. All the enrollment explosion means is that people who don’t go to university are further marginalized. Do we really have an enormous amount of smart kids all of a sudden, evidence would suggest not, or is public education so dire we feel need to continue our education in order to illustrate we are not half-wits.

    How about public education between grades 1-12 doing a better job of educating kids and the only people who go to university are those who need further/specialized education like doctors, nurses, lawyers, engineers and the like.

  10. OECD reports show a 3% increase in GDP for every year of post-secondary education a population has on average.

    Other reports show that the public benefit of a post-secondary education is $4 for every $1 invested, at a minimum. It may be as high as $21 for every $1.

    Statistics Canada has shown that people with a post-secondary education use less health care than their non-post-secondary counterparts, are unemployed with less frequency and for shorter periods, donate more in both time and money to volunteer and charitable causes, and are more likely to start and succeed at running their own business. Oh.. and because of all that, they tend to be happier and less stressed too, but that’s probably elitist to say in this day and age.

    Nobody questions the value of wholly publically funded primary and secondary education. If someone was to suggest that we stop publically funding grades 10-12 to save public money, people would say the plan is crazy and will hurt the economy. Why is it that we see education as a public good until grade 12 or so, but not thereafter?

  11. Paul, I understand where you’re coming from, but I feel that what’s happening is that as a university becomes “mandatory” we’re just delivering a crappier product and forcing the more committed and smarter kids to get more education. Reducing the value of the experience in the process.

    I think getting more kids to go to college/technical schools is the real the answer.

    You have to look at it from as part of an education system. Looking at universities alone can give you a distorted picture.

    I think both my brothers would be better off not having gone to university and having gone to college. It’s expensive for them and also for society as a whole to have these young people with huge debts and who could be more productive if they went to a technical institute instead.

    You’re ending up with no plumbers or tradespeople, and with all sorts of people with university degrees and either no jobs, or severely underemployed.

    As for T.Thwim’s point, those stats are for PSE which includes Cegeps/colleges/technical institutes, not just universities.

  12. I do think it’s fair to say there is too little variety in Canada’s university system. Some schools could concentrate on being big, pleasant, sociable places to get an undergrad degree, others could be wee liberal-arts colleges, some of the big research schools could try to reduce their undergrad streams and concentrate more on grad studies and research (David Naylor at UofT has been talking like that), others could blur the line between technical schools and universities… There was useful thinking on a lot of these subjects in the BC government’s Campus 2020 report, which Gordon Campbell seems to have hidden here:

  13. Re: credential inflation, which has come up again,
    sf writes:

    “Credential inflation can only be reduced by lower unemployment. As long as employers can be picky, they will be picky. They will ask for degrees if there are enough degree-holders without jobs to pick from. Credential-creep will go out the window when profits are at stake.”

    Surely it’s a question of minimum qualification and salaries. If employers felt they could trust a high school diploma to qualify a new employee, they would hire that person at a lower salary. In our current climate of credential inflation, there is no assurance that a high school graduate can write a coherent sentence, understand a difficult text, do simple math, meet a tough deadline, etc. Compare this to 80 years ago. Anyway, if fewer people graduated from high school (or CÉGEP), fewer still would graduate from college, which means employers would have no choice but to hire from the pool available.

  14. Well, let’s be realistic. The credential inflation / everyone goes to university ship has sailed… in large part because in the end it will be rich people who have gone to university arguing the side that students should be encouraged to go elsewhere. This is even though a lot of university graduates are now taking additional vocational training in order to get jobs that probably didn’t need the degree in the first place. Arguably, done right, credential inflation is a good thing if it leads to students being exposed to non-vocational subjects for long periods of time (though done wrong, you end up with Europe’s disastrous university system and high levels of unemployment among students with degrees).

    That said, the problem is less Canada having higher tiers of education in the US – Canada will never have a Harvard or MIT with its endowment, years of tradition, ability to select among a massive population here and abroad, etc. U of T is nothing like Harvard – it is a lot like UC Berkeley or U of Michigan, and it should be encouraged along those lines. There is something much more powerful about a world-class university that has a heavily subsidized tuition and is accessible to all meritorious students.

    The real problem is that Canada lacks mid-tier private universities and low-tier public universities. Pennsylvania has a massive network of former teacher colleges that are now primarily undergraduate universities (this is Pennsylvania’s true state system, since Penn State isn’t conventionally public) – there’s one in every town of 50,000 people or more, largely serving the surrounding area and mostly training teachers, nurses, and people who get degrees but work in jobs that don’t necessarily require them, as well as occasionally sending a student to a far-off grad school. Almost any university like this in Canada has now established PhD programs and aspires to at least some level of research. Similar universities – a lot of them – exist in just about every state (North Dakota has at least a half dozen public university campuses, compared to Saskatchewan with twice the population and only 2 institutions).

    The other kind of institution the US has is the mid-tier private – not the Ivy League, but universities like Drexel (my institution), or the University of Miami, or Boston University, etc. These are smaller than large public universities but have similar academic rankings, and they charge tuition very close to Ivies (or more now that some of the high-endowment places are giving out breaks). These universities allow students who can’t get to a high-ranking public in their state but want access to good programs (like in Engineering or Liberal Arts) that are weak at lower-tier publics or who want smaller class sizes, or want to go live in a different state, but couldn’t get into Harvard or MIT to have a place to go. As far as I can tell, these universities are in a precarious financial state – they lack the large endowments and research funding of the top-tier universities, so they rely from 70-90% on tuition – so I don’t think they represent a sustainable model to introduce to Canada.

    So what you’re left with is that the way to reduce the pressure on Canada’s current roster of universities is to open up lots of universities that are basically a step up from 2 year colleges – do what BC is doing, basically – and reduce student-faculty ratios that way. And that gets back to funding, because the problem in BC is that the province wants to do that but also cut funding at the same time, and that’s not going to work at all. There will be a quality dropoff of course – but that’s a fact of life, and it’s what you see in the US too. Something I’ve learned since moving here is that Canadians tend to look at the best or worst of the US to make our point about domestic politics, ignoring the more mundane reality in the middle.

  15. Jack Mitchell: “If employers felt they could trust a high school diploma to qualify a new employee, they would hire that person at a lower salary”

    “In our current climate of credential inflation, there is no assurance that a high school graduate can write a coherent sentence, understand a difficult text, do simple math, meet a tough deadline, etc”

    I think you are putting the cart before the horse.

    Because of high unemployment, no sane high-schooler who is capable of writing a coherent sentence will even attempt to enter the work force. They will all go to university. In today’s world, Einstein and Edison would not get their foot in the door for an interview anywhere without having the stamp of a university degree on the resume. It does not matter what you do at university. All that matter is that you stepped onto the campus often enough to get that piece of paper they call a diploma. It does not matter whether you have a cure for cancer when you exit high school – no drug company will even listen until they see that stamp of a university degree on the resume. So it is not a matter of trust, because if trust were the issue, you might see the odd exception of a high-schooler being hired because he single-handedly sent a rocket to the moon.

    Many people, when graduating from high school, have all the skills they need to succeed in the employment world in many fields. In fact, there are lots of success stories about people who built business empires and very succesful careers with no university background at all, although this is less common today than it used to be, because to do it today, you have to do it completely on your own, since no company will hire you.

    So there are various possibilities.

    Is it because of a lack of trust in the high school diploma that employers demand a university education?

    Is it because there are no longer any good students who enter the work force without first getting the university education?

    Or is it simply because employers can afford to weed out students with no university education because there are 500 resumes in the pile?

    From my own experience and those of my friends, I say the latter is the truth – the toughest moments in any job are getting the interview and then getting through the interview process. Everything else is easy in comparison.

  16. So you’re saying companies are willingly hiring people with university degrees when they don’t need them, knowing full well that they’ll either have to rapidly increase the wages to match that person’s expectation, or be re-hiring for the position again in a year?

    Sounds like companies that are looking to go belly-up to me.

  17. I think sf’s point is valid. The fact of the matter is that to be a bank teller [or other such occupations] today, they are looking for someone with a university degree, that doesn’t mean that only people with university degrees will be hired, what it means is that that shiny new degree puts you at the top of the pile and gives you an advantage.

    I think the wages issue that T. Thwim points out is actually the opposite of what he suggests. Employers are not offering higher wages to bank tellers simply because they have university degrees.

    In fact that’s one of the reasons this is causing so many problems is that university grads expect more money, but can’t find it, and end up in deep trouble paying off their loans because they can’t find a job that will enable to them to pay off the loans quickly.

    The real problem is one of access, and the fact of that matter is, is in an era of credentialism, the fact that you have completed university is the requirement. Not any particular skill you may have acquired during that time.

    Actually Thwim it’s funny that you mention the retention issue, because at least here in Ottawa, which tends to have a fairly educated population that is the problem. Retention is a huge issue, because people are taking on service jobs only until they find something that matches their skills.

  18. Um…what high unemployment? Unemployment is lowest in 30 years, and very close to half what it was in 1993, before the enrolment boom …

  19. Canada’s average unemployment is about 6.1% at this time. In Ontario and Quebec it is about 7 or 8%. Looking at Alberta, we can see what is achievable in a string economy, where unemployment sits at 3%.

    Looking at the United States, the media pundits are acting as if falling to an unemployment rate of 6% would be a disaster. Unemployment above 6% (averaged over a country of 300 million people) last occurred there in 1993. It was about 4% in the late ’90s. So it is all relative.

    Here is a nice chart:

    Perhaps if Canada could maintain a rate close to 6% for a few years or longer, this might have an effect on credential creep.

    I’ve read few news items lately about proposals to allow nurses to do more work currently reserved for doctors. Private individuals now handle work formerly done by lawyers (eg ex-cops representing people in traffic court). Teaching assistants and sessional lecturers teach university courses that were once reserved for professors. So I think there may be some changes going on, but these sorts of changes take a while.

    Meanwhile, as Justin points out, bank tellers often need a bachelor’s degree to get in the door. Yet the reading/writing/math and other skills required for the job are all taught in high school. You do not need calculus or linear algebra to be an effective bank teller.

    When considering unemnployment, it is necessary to consider the participation rate as well, because high unemployment causes low participation rates, so unemployment is underestimated for larger values, when unemployment approaches 10% or more.

    So what are the chances that a youth in today’s Canada might end up getting his resume to the top of the pile, if he has no university degree?

    Canada’s youth unemplyment rate (ages 15-24) is 12.4%. It is 11.3% in the US, so we are getting closer to US in this regard as well. When you consider the participation rate of youth, which is generally low, this is not a job-seeker’s market, this remains a market where the resumes at entry level arrive in piles.

    But this is an improvement from recent years. The following paper is quite striking, showing how youth (ages 20-24) share of unemployment rose from 2% in the 1970s to 15% in 1997:

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