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An education “grab bag”

Dion’s PSE platform is a move in the right direction, but seems expensive and unfocused


 

Although usually a provincial matter that barely gets a nod during federal elections, post-secondary education has so far made a strong showing in this year’s campaign. Green Party leader Elizabeth May chose the topic as her first announcement after her inclusion in the televised debate, and on Monday NDP leader Jack Layton promised big money for medical education. Today, at a campaign stop at the University of Western Ontario in London, Liberal leader Stéphane Dion unveiled a sweeping post-secondary education platform that promises the biggest investment in student financial aid since the creation of the soon-to-be-defunct Canadian Millennium Scholarship Foundation. Dion proposes to add 100,000 “access” grants for under-represented students and 200,000 “needs-based” grants for lower income students, scrap education tax credits in favour of a grant worth up to $1,000 for all students, and make student loans cheaper for students.

READ Joey Coleman’s coverage of the story here.

While the emphasis on needs-based aid seems to be a move in the right direction, the price tag is an eyebrow-raiser. In addition to a 20-year, $25-billion endowment fund to bankroll the 300,000 new grants, the Liberals would slash the interest rate on student loans, extend the grace period before the first payment is due from six months to two years, and guarantee $5,000 in loans to all students regardless of family income—moves that would cost another $500 million.

To Alex Usher, vice-president (research) and director (Canada) of the Educational Policy Institute, today’s announcement reads like a “grab bag” of initiatives aimed at addressing accessibility to post-secondary education. “What they’ve done is plucked out headlines from a number of research reports,” he says. The result is a platform that, not having been discussed with the civil service, seems very much that of an opposition party and not a ruling party.

One of the items in Dion’s grab bag is 100,000 “access grants” of up to $4,000 each that would go to students in under-represented groups, such as Aboriginal students. The platform also includes an unspecific promise to “work with provinces to design new student loan programs that will increase access to for under-represented groups such as Aboriginal Canadians.” The repeated reference to Aboriginal students is odd, says Usher, because “there are treaty provisions for this,” noting that $110 million a year is going to bands to fund Aboriginal students’ post-secondary education. Dion’s proposals seem to duplicate this preexisting treaty funding.

It’s also unclear how these access grants would combine with another 200,000 “needs-based grants” that would give up to $3,500 a year to low-income students. It seems excessive (and expensive) to award upwards of $7,500 in grants annually to a student who qualifies for both new initiatives.

A noteworthy difference between this platform and what the Conservatives have done in government is the Liberal proposal to scrap education tax credits, which have been criticized as offering little help to students who need assistance most. “Increasing amounts of money have been directed towards tax credits that are available to anyone,” says Glen Jones, a University of Toronto professor and Ontario Research Chair in post-secondary policy. “The question is whether or not the government had moved too far in that direction and not far enough in providing money directly to those in need. The platform the Liberals have announced today is really an attempt to rebalance some of that activity.”

But Usher points out that under the Liberal proposal, the funds currently going to tax credits would simply be put into up-front grants to all students, not specifically to high-need students. “I think what they’re saying is that ‘we’re going to change the way we deliver a universal [education] credit.’ But the financial implications of that are almost identical.” It’s a change in timing, in other words, not money. Although students would get an extra cheque in the mail from the government (approximately $1,000 per year), it would be the same money that they or their parents would have saved on their taxes.

Nonetheless, Dion has obviously been listening to post-secondary researchers who have called for more aid targeted at those who really need it. And, if his plan was implemented, the average family with university-bound children would surely notice the assistance. Yet, the enormous cost and unfocused nature of the platform suggests these promises were made without the expectation of being in the position to actually put them into effect.


 
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An education “grab bag”

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  2. It is no suprise to see Alex Usher criticize the Liberal’s funding for secondary education, as the Conservatives and Liberals have quite different views toward the role of universities in society, but it would have been nice to see some independent commentary. Why the “grab bag” title? Because there are a number of different initiatives proposed to tackle the issue of accessibility and accountability? Sometimes a single program, such as the Liberal’s Canada Research Chair, Canadian Foundation for Innovation or Millenium Scholarships, to name just a few, are what is needed, but it strikes me that affordability and accessibility in general probably does benefit from multiple initiatives.

    I hope you will present more than just the Conservative outlook here — or are the other views left to other columnists?

  3. “But Usher points out that under the Liberal proposal, the funds currently going to tax credits would simply be put into up-front grants to all students, not specifically to high-need students. “I think what they’re saying is that ‘we’re going to change the way we deliver a universal [education] credit.’ But the financial implications of that are almost identical.” It’s a change in timing, in other words, not money. Although students would get an extra cheque in the mail from the government (approximately $1,000 per year), it would be the same money that they or their parents would have saved on their taxes.”

    It’s true that this point was unclear in the original announcement. Regardless, I think Usher is wrong that a universal grant is equivalent to a universal tax credit. From what I understand, these are tax credits that reduce your taxable income, thus the higher your income is, the more tax credits matter to you (because of the progressive income tax rate).

  4. Furthermore, in a previous conversation on this website Alex Usher himself made the argument that money right now is worth more than money in one year.

  5. I think Usher’s argument is more against the universal nature of the plan than the “upfront” nature of the plan.

    Where do we put limited resources?

    This change is an improvement of a flawed allocation of resources. Students from low-income or independent status will benefit from this change. I know I have plenty of tax credits that I keep rolling forward as I continue my degree.

    I will not see this “support” until I’m in the workforce and making enough money that I actually can cash them in. The present system doesn’t help me when I need the assistance.

    The new system will.

  6. CTV with Mike Duffy Live got a variety of views on this, first from CASA and then from partisan NDP, Liberal and Conservative students. CASA welcomed the increased support and thought it addressed two key issues, accessibility and student debt.

  7. Philippe –

    Tax *deductions* (e.g. RRSP contributions) reduce taxable income and are worth more to the wealthy than the poor; tax credits are worth the same to everyone, regardless of income. And I think you over-interpreted my remark about “identical” – I didn’t say the *value* of the new payment would be identical to the present credit (there isn’t nearly enough information in the Liberal plan to determine whether or not this is the case); my point was that they would be distributionally identical (no deliberate bias based on need or income, and an aggregate bias in favour of wealthier families, because they’re the ones who send their kids to university).

    Sable, I’m not sure why you think that speculating about someone’s political leanings on the basis of absolutely zero evidence is a valid way to challenge an argument. I run a consultancy which provides independent analysis on public policy in education – if I were aligned with one party or another, I simply would not get business. Personally, I vote for different parties in different elections (and have voted Liberal more recently than I have voted Conservative), based on the issues. Professionally, I am not biased about these issues.

    When EPI issues a platform analysis (as we have done for the past two elections and will be publishing for this election in about a week), we hold everyone to the same standards: we evaluate whether the stated goals of the proposed policies match up with what the best available research says are the important goals, we ask whether or not the policies are implementable, we ask whether they are likely to achieve the stated goals, and we ask whether the same goals could be achieved more efficiently at lower cost.

    Now, if you think that’s “conservative”, that’s your prerogative. But I think it’s a serious disservice to the left to suggest that concern about efficiency in the use of public funds is exclusively a right-wing preoccupation.

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