Higher tuition may not hurt your grades - Macleans.ca

Higher tuition may not hurt your grades

Students work more to pay for tuition increases, but it is limited to the summer

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Concerns that rising tuition, by forcing students to work more, will compromise academic performance are unwarranted, according to a new study published in the Canadian Journal of Higher Education.

Authored by Ryerson economist Amy Peng and independent researcher Ling Yang, the paper challenges previous theories and assumptions about the relationship between tuition fees and labour force participation. Consistent with other research, Peng and Yang do find that on an annual basis students work more when tuition increases. However, their study goes further than previous research by analyzing student labour force participation on a monthly basis. They conclude that the  increase is limited to the summer months, suggesting minimal impact on student performance.

“If students participated more and worked more in summer periods than during in-school periods due to higher tuition fees, the effect on their educational experience during their in-school period was less and their success in university (persistence) did not seem to be compromised,” the study reads.

The researchers took labour force participation rates from Statistics Canada’s Youth in Transition Survey and focused on the years 1999, 2001 and 2003 where student loan and other financial data was available. In total, the paper considers survey results from 8,490 students. Tuition data was drawn from the Survey of Tuition and Living Accommodation Costs. Sixty-three universities, and 13 disciplines comprising 1,140 different tuition fee rates, were included in the study. Peng and Yang then controlled for factors such as parental education, the local unemployment rate and whether students studied while living at home or moved away.

When tuition increased by $1,000, Peng and Yang found that students worked an average of 38 hours more over the course of the year. Of those extra hours, 36.6 were concentrated during the summer months. “When the analysis was limited to only those periods in which individual students were registered in a university, tuition fees no longer had a significant impact on working hours,” the paper read.

Peng and Yang further argue that the fact that there is a correlation between higher tuition fees and increased hours worked, even in the summer months, suggests that there are inefficiencies in the credit market. “An increase in tuition should not have a large effect even on summer working hours, since it would be more efficient for students to borrow additional funds during the year and pay back their loans after graduation,” they write.

In an interview with On Campus, Peng explained that one of the inefficiencies in the credit market may be the difficulty in applying for a loan in the summer, when students are more likely to study part-time. “If you want to take courses in the summer, you have to fund yourself,” she said. “Instead of just enjoying their summer, taking extra courses, taking up a hobby or doing something else . . . [students] are devoting more time to working.”

The findings also show that students are not likely to work in fields related to their studies, with approximately 50 per cent working in the service industry at $7/hr, implying that working while in school does not typically contribute to post-graduation earnings.