Category: Tuition

  • That Was The Quarter That Was, Summer 2025

    That Was The Quarter That Was, Summer 2025

    Welcome to TWTQTW for June-September. Things were a little slow in July, but with back to school happening in most of the Northern Hemisphere sometime between last August and late September, the stories began pouring in. 

    You might think that “back to school” would deliver up lots of stories about enrolment trends, but you’d mostly be wrong. While few countries are as bad as Canada when it comes to up-to date enrolment data, it’s a rare country that can give you good enrolment information in September. What you tend to get are what I call “mood” pieces looking backwards and forwards on long-term trends: this is particularly true in places like South Korea, where short-term trends are not bad (international students are backfilling domestic losses nicely for the moment) but the long-term looks pretty awful. Taiwan, whose demographic crisis is well known, saw a decline of about 7% in new enrolments, but there were also some shock declines in various parts of the world: Portugal, Denmark, and – most surprisingly – Pakistan

    Another perennial back-to-school story has to do with tuition fees. Lots of stories here. Ghana announced a new “No Fees Stress” policy in which first-year students could get their fees refunded. No doubt it’s a policy which students will enjoy, but this policy seems awfully close in inspiration to New Zealand’s First Year Free policy which famously had no effect whatsoever on access. But, elsewhere, tuition policy seems to be moving in the other direction. In China, rising fees at top universities sparked fears of an access gap and, in Iran, the decision of Islamic Azad University (a sort-of private institution that educates about a quarter of all Iranian youth) to continue raising tuition (partly in response to annual inflation rates now over 40%) has led to widespread dissatisfaction. Finally, tuition rose sharply in Bulgaria after the Higher Education Act was amended to link fees to government spending (i.e. more government spending, more fees). After student protests, the government moved to cut tuition by 25% from its new level, but this still left tuition substantially above where it was the year before.

    On the related issue of Student Aid, three countries stood out. The first was Kazakhstan, where the government increased domestic student grants increased by 61% but also announced a cut in the government’s famous study-abroad scheme which sends high-potential youth to highly-ranked foreign universities. 

    Perhaps the most stunning change occurred in Chile, where two existing student aid programs were replaced by a new system called the Fondo para la Educación Superior (FES), which is arguably unique in the world. The idea is to replace the existing system of student loans with a graduate tax: students who obtain funds through the FES will be required to pay a contribution of 10% of marginal income over about US$515/week for a period of twenty years. In substance, it is a lot like the Yale Tuition Postponement Plan, which has never been replicated at a national level because of the heavy burden placed on high income earners. A team from UCL in London analyzed the plan and suggested that it will be largely self-supporting – but only because high-earning graduates in professional fields will pay in far more than they receive, thus creating a question of potential self-selection out of the program.

    In Colombia, Congress passed a law mandating ICETEX (the country’s student loan agency which mostly services students at private universities) to lower interest rates, offer generous loan forgiveness and adopt an income-contingent repayment system. However, almost simultaneously, the Government of Gustavo Petro actually raised student loan interest rates because it could no longer afford to subsidize them. This story has a ways to run, I think.

    On to the world government cutbacks. In the Netherlands, given the fall of the Schoof government and the call for elections this month, universities might reasonably have expected to avoid trouble in a budget delivered by a caretaker government. Unfortunately, that wasn’t the case: instead, the 2026 imposed significant new cuts on the sector. In Argentina, Congress passed a law that would see higher education spending rise to 1% of GDP (roughly double the current rate). President Milei vetoed the law, but Congress overturned President Milei’s veto. In theory, that means a huge increase in university funding. But given the increasing likelihood of a new economic collapse in Argentina, it’s anyone’s guess how fulfilling this law is going to work out.

    One important debate that keeps popping up in growing higher education systems is the trade-off between quality and quantity with respect to institutions: that is, to focus money on a small number of high-quality institutions or a large number of, well, mediocre ones. Back in August, the Nigerian President, under pressure from the National Assembly to open hundreds of new universities to meet growing demand, announced a seven-year moratorium on the formation of new federal universities (I will eat several articles of clothing if there are no new federal universities before 2032). Conversely, in Peru, a rambunctious Congress passed laws to create 22 new universities in the face of Presidential reluctance to spread funds too thinly. 

    The newson Graduate Outcomes is not very good, particularly in Asia. In South Korea, youth employment rates are lower than they have been in a quarter-century, and the unemployment rate among bachelor’s grads is now higher than for middle-school grads. This is leading many to delay graduation. The situation in Singapore is not quite as serious but is still bad enough to make undergraduates fight for spots in elite “business cubs”. In China, the government was sufficiently worried about the employment prospects of the spring 2025 graduating class that it ordered some unprecedented measures to find them jobs, but while youth employment stayed low (that is, about 14%) at the start of the summer, the rate was back up to 19% by August. Some think these high levels of unemployment are changing Chinese society for good. Over in North America, the situation is not quite as dire, but the sudden inability of computer science graduates to find jobs seems deeply unfair to a generation that was told “just learn how to code”. 

    Withrespect to Research Funding and Policy, the most gobsmacking news came from Switzerland where the federal government decided to slash the budget of the Swiss National Science Foundation (SNSF) by 20%. In Australia, the group handling the Government’s Strategic Examination of Research and Development released six more “issue” papers which, amongst other things, suggested forcing institutions to choose particular areas of specialization in areas of government “priority”, a suggestion which was echoed in the UK both by the new head of UK Research and Innovation and the President of Universities UK.     

    But, of course, in terms of the politicization of research, very little can match the United States. In July, President Trump issued an Executive Order which explicitly handed oversight of research grants at the many agencies which fund extramural research to political appointees who would vet projects to ensure that they were in line with Trump administration priorities. Then, on the 1st of October (technically not Q3, but it’s too big a story to omit), the White House floated the idea of a “compact” with universities, under which institutions would agree to a number of conditions including shutting down departments that “punish, belittle” or “spark violence against conservative ideas” in return for various types of funding. Descriptions of the compact from academics ranged from “rotten” to “extortion”. At the time of writing, none of the nine institutions to which this had initially been floated had given the government an answer.

    And that was the quarter that was.

     

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  • Turning the Corner | HESA

    Turning the Corner | HESA

    Things have been bleak in higher education the last couple of years, and no doubt they will remain bleak for a while. But it recently became clear to me how we’ll know that we are turning the corner: it will be the moment when provincial governments start allowing significant rises in domestic tuition.

    This became clear to me when I was having a discussion with a senior provincial official (in a province I shall not name) about tuition. I was arguing that with provincial budgets flat and declining international enrolment, domestic tuition needed to increase – and that there was plenty of room to do so given the affordability trends of the last couple of decades.

    What affordability trends, you ask? I’m glad you asked. Affordability is a ratio where the cost of a good or service is the numerator and some measure of ability to pay is the denominator. So, let’s look at what it takes to pay average tuition and fees. Figure 1 shows average tuition as a percentage of the median income of couple families and lone-parent families aged 45-54.  As you can see, for the average two-couple household, average tuition (which – recall last Wednesday’s blog – is an overestimate for most students) has never been more affordable in the twenty-first century. For lone-parent families, current levels of tuition are at a twenty-year low.

    Figure 1: Average Undergraduate Tuition and Fees as a Percentage of Median Family Income, Couple Family and Lone-Parent Families aged 45-54, Canada, 2000-2024

    Ah, you say, but that’s tuition as a function of parental ability-to-pay – what about students? Well, it’s basically the same story – calculated as a percentage of the average student wage, tuition has not been this cheap since the turn of the century, and in Ontario, it has dropped by 27% since 2017. And yes, the national story is to a large degree a function of what’s been going on in Ontario, but over the past decade or so, this ratio has been declining in all provinces except Manitoba, Saskatchewan and Alberta.

    Figure 2: Number of Hours Worked at Median Hourly Income for Canadians Aged 15-24 Required to pay Average Undergraduate Tuition and Fees, Canada and Ontario, 1997-2024

    And that’s before we even touch the issue of student aid, which as you all know is way up this century even after we take student population growth into account. In real dollars, we’ve gone from a $10B/year student aid system to a $20B/year system with the vast majority of growth coming on the non-repayable side, rather than from loans.

    Figure 3: Total Student Financial Assistance by Type, Selected years, 1993-94 to 2023-2024, in Millions, in $2023

    In fact, student aid expenditures are so high nowadays that across both universities and colleges we spend about $3 billion more in student aid than we take in from tuition fees. That’s NEGATIVE NET TUITION, PEOPLE.

    Figure 4: Aggregate Non-Repayable Aid vs Aggregate Domestic Tuition fees, 2007-08 to 2023-24, in Billions, in $2023

    So, yeah, affordability trends. They are much more favorable to students than most people think.

    Anyway, the provincial official seemed a bit nonplussed by my reply: my sense is that they had never been briefed on the degree to which tuition increases have been thrown into reverse these past few years, and he certainly didn’t know about the huge increase in non-repayable aid over the past few decades. They didn’t push back on any of this evidence, BUT, they insisted, tuition fees weren’t going up because doing so is hard and it’s unpopular.

    To which I responded: well, sure. But was raising tuition any easier or less unpopular in 1989 when the Quebec Liberal government more than doubled tuition? Than in the mid-90s when both the NDP and Conservative governments allowed tuition to rise? Than in 2001 when the BC Liberals allowed tuition to increase by 50%? This has been done before. There’s absolutely no reason it can’t be done again. The only thing it will take is the courage to put the requirements of institutions that actually build economies and societies ahead of the cheap, short-term sugar highs of chasing things like “affordability”. 

    Now, to be fair, I don’t for the moment see any provincial governments prepared to do this. If there is one thing that seems to unite provincial governments these days, it is an inability to make hard decisions. But this particular political moment won’t last forever. It might take a serious, long-term recession to knock it into various heads that no matter how much money we sink into them, natural resources and construction alone won’t run this economy. Eventually, we’re going to have to re-build the great college and university system we’re in the middle of trashing. 

    And we’ll know that moment has come when provincial governments agree that domestic tuition should rise again.

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  • Fun with Tuition Data | HESA

    Fun with Tuition Data | HESA

    I want to show you something kind of intriguing about how tuition is changing in Canada.

    By now you might be familiar with a chart that looks like Figure 1, which shows average tuition, exclusive of ancillary fees (which would tack another $900-1000 on to the total), in constant $2024. The story it shows is one of persistent real increases from up until 2017-18, at which point, mainly thanks to policy changes in Ontario, tuition falls sharply and continues to fall as tuition increases across the country failed to keep up with inflation in the COVID years. Result: average tuition today, in real terms, is about where it was in 2012-13.  

    Figure 1: Average Undergraduate Tuition Fee, Canada, in $2024, 2006-07 to 2024-25

    Simple story, right? Boring, even.  

    But then, just for fun, I decided to look at tuition at the level of individual fields of study. And what I found was kind of interesting. Take a look at Figure 2, which shows average tuition in what you might call the university’s three “core” areas: social science, humanities, and physical/life sciences. It’s quite a different story. The pre-2018 rise was never as pronounced as it was for tuition overall, and the drop in tuition post-2018 was more pronounced. As a result, tuition in the humanities is about even with where it was in 2006 and in the sciences is now three percent lower than it was in 2006.

    Figure 2: Average Undergraduate Tuition Fee by Field of Study, Canada, in $2024, 2006-07 to 2024-25

    This got me thinking: how is it possible that the overall average tuition is rising so quickly when so many big disciplines are showing so little change? So I looked at the change in each discipline from 2006-07 to 2024-25. Figures 3 and 4 show the 18-year change in tuition for direct- and second-entry programs (and yes, this is an admittedly English Canadian distinction, since the programs in Figure 4 are also at least partially direct entry in Quebec).

    Figure 3: Change in Real Tuition Levels, direct-entry undergraduate programs, Canada, 2006-07 to 2024-25

    Figure 4: Change in Real Tuition Levels, second-entry undergraduate programs, Canada, 2006-07 to 2024-25

    Two very different pictures, right? Quite clearly, second-entry degrees – which are a tiny fraction of overall enrolments – are nevertheless dragging the overall average up quite a bit. Unfortunately, it’s not easy to work out exactly how much because – inexplicably – Statscan does not use the same field of study boundaries for enrolment and tuition. But, near as I can figure out, there are about 15,000 students in law in Canada, 5,000 in pharmacy, 3,000 in dentistry and 2,000 in veterinary science. So that’s 25,000 students (or 2% of the undergraduate total) in fields with very high tuition increases, and a little back-of-the-envelope math suggests that these increases for just 2% of the student body were responsible for about 15% of all tuition growth.  

    Now, there is one other thing you have to look at and that is what is going on in engineering. This field has the fastest-growing real tuition over the period (26%) but is also the fastest-growing field in terms of domestic student enrolments (up 56% over the same period, compared to 16% for universities as a whole). So, compared with a world where engineering enrolments stayed steady between 2006-07 and 2024-25, an extra 22,000 people voluntarily enrolled in a field of study which was both more expensive (compared to science, average engineering tuition is about $2500 higher) and increasingly so every year. Again, a little back-of-the-envelope math shows that this phenomenon was responsible for between 10 and 11% of the growth in overall average tuition.  

    So, let’s add all that up: about a quarter of all the real growth in tuition over the past 20 years (which, as we noted at the outset wasn’t all that much to begin with) was due to tuition growth in the country’s most expensive programs. These are programs which are either growing rapidly or have long waiting lists, so I think the argument that these tuition increases have deterred enrolment is a bit far-fetched. And it means that the vast majority of students are seeing tuition fees which are well below the “average”. In fact, by my calculations, the actual increase in real dollars for that portion of the student body in first-degree programs – bar engineering – is somewhere around $625 in eighteen years.

    Affordability crisis? Not really.

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  • The End of Participation Growth

    The End of Participation Growth

    One of the things that I find extremely worrying about higher education policy these days is that we’ve simply stopped talking about increasing access to the system. Oh, sure, you will hear lots of talk about affordability, that is, making the system cheaper—and hence arguments about the correct level of tuition fees—but that’s not the same. Even to the extent that these things did meaningfully affect accessibility (and it’s not at all clear that they do), no one phrases their case in terms of access anymore. We don’t care about outcomes. And I do mean no one. Not students, not governments, not institutions. They care about money, cost, all sorts of things—but actual outcomes with respect to participation rates of low-income students? At best, they are a rhetorical excuse to mask regressive spending policies which benefit the rich.

    This is a problem because it now seems as though the process of widening access, a project which began after World War II and has been proceeding for seven decades. And yet, as some recently-released Statistics Canada data shows, participation rates are now actually in decline in Canada. And it’s mainly because growth at the bottom has stalled.

    Below is the chart StatsCan released last month. It shows the post-secondary enrolment rate for 19-year-olds, which I will henceforth refer to as the “part rate” or “participation rate,” both for the entire population (the dotted red line) and by income quintile.

    Now, the first thing you may notice is that there are some pretty big gaps between the participation rates of youth from rich and poor families; the top quintile does not quite attend at double the rate of the lowest quintile, but it’s close. And you might be tempted to say, “Hey, I’ve taken Econ 101—That must be because of tuition fees!” Except, no. These kinds of part-rate disparities are pretty common internationally, regardless of tuition fees. Here are postsecondary enrolment rates by income quintile from the United States, which, on the whole, has higher fees than Canada:

    And here’s a similar chart from Poland, which mostly offers education tuition-free:

    And here’s one from France, where public universities are tuition-free but students are increasingly heading to the fee-paying private sector:

    I could go on, country-by-country, but I will spare you and instead point you to this rather good paper doing a cross-national analysis across over 100 countries by OISE’s Elizabeth Buckner. Trust me, it’s the same story everywhere.

    But let me point out what I think are the two important points in that chart. The first is that the red dotted line, which represents the participation rate of all 19-year-olds, basically plateaued back in about 2014, the first year it broke the 59% and is currently headed downwards. This is a huge change from the previous period, 2000-2014, when overall participation rates rose from 46% to 59%. First growth, now stagnation.

    The second is that during the growth period, the biggest strides were being made at the bottom end of the income scale. The part rate gap between top and bottom quintiles fell from 38 percentage points in the early 2000s to about 32 percentage points in 2014, even as part rates for the wealthiest quintile increased. That is to say, more of our growth came from the bottom than from the top. That’s good! But the growth stopped across all income quintiles and went gently into reverse for the top four income quintiles.

    Now, you might think that it’s not a bad thing that participation rates peaked, that maybe we were in a situation where we were overproducing postsecondary graduates, etc. Who knows, it’s possible. I don’t know of any evidence that would suggest that 57-59% of the youth population is some kind of hard maximum, but if stipulating that such a maximum exists, then it might well be in this range.

    But since it’s quite clear that this overall plateauing of participation is happening entirely by way of freezing educational inequality at substantial levels, being OK with the present situation means being OK with major inequalities, and in any democracy which wishes to remain a democracy, that’s not really OK. It is true that, as I noted earlier, disparities are the global norm, but that doesn’t mean you don’t keep up the struggle against stasis. It might be the case that there is some kind of “natural barrier” to keep the country’s PSE part rate at 57-59%, but in what world does a “natural barrier” keep those rates at 75% for rich kids and 43% for poor kids?

    Increasing access overall and narrowing rich-poor access gaps is incredibly difficult. If it were as simple as making tuition free, we’d have it licked in no time, but countries with free tuition don’t have noticeably narrower part rate gaps than those that charge fees. Achieving these gaps requires a whole suite of policies to narrow educational achievement gaps as well as financial ones, to offer young people a variety of flexible program types rather than an inflexible academic monoculture and to ensure that advice and support exist for students not lucky enough to be able to access the kinds of cultural capital available to the top quintile.

    As I say, achieving success in this area is very difficult: solutions are neither easy nor quick. But what makes the problem even more intractable is ignoring it the way we are doing right now. Are we a country that actually cares about equal opportunity? Or is that just a myth to which we genuflect when we wish to pretend to be more socially progressive than Americans? I lean towards option #2 but would be overjoyed to be proven wrong.

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