Translating anger over student debt across bordersPosted on February 7, 2013 | by Robin Huang
In March 2011, Quebec Finance Minister Raymond Bachand announced that tuition in the Canadian province would be raised by $325 a year over five years for a total increase of $1,625 by 2017. This represented a 75 percent increase. However, this did not sit well with students, and what began as a necessary raise sparked a year of heated student protests.
Over the next 14 months, Quebec saw an explosion of student strikes, an education minister resign and a massive rally that included over 250,000 people in downtown Montreal and was heralded as “the single act of civil obedience in Canadian history.” The incumbent government was soon replaced by Parti Quebecois and tuition hikes were canceled. In a little over a year, the students won.
Clearly they take tuition really seriously in Quebec. But in the United States, a raise of $2,000 over five years appears rather commonplace. As a Canadian citizen myself, I was shocked by the tuition at NYU: $43,204.
Tuition tends to be more expensive south of the Canadia border. The average tuition in the United States was $22,092 for the 2010-2011 school year. In Canada, the average tuition was $5,146. Assuming dollar parity, the result is an almost four-fold difference. It’s true: Canadians do pay a high percentage in taxes. But we do not pay four times as much. And while more private schools exist in the United States than in Canada, there appears to be another lurking factor.
To put the situation in perspective, here are some statistics from College Board: over the last four years, tuition has risen by $4,000 in America. But there have been no protests. There was hardly any backlash at all. One could imagine a similar situation causing utter anarchy in Quebec.
One reason for this is that federal aid has outpaced tuition in gains for the last two years and actually lowered the net costs for students in public universities. In the United States, two-thirds of students obtain some form of aid, while one-third pays for college without aid. However, the gap between the two is growing.
President Obama has recently addressed an issue that was brought up many times in the last decade: Universities must keep costs low to keep higher education affordable. It seems that tuition hikes have consumed increases in federal aid.
This raises the question: Is the rise in financial aid grants causing tuition to soar? This topic stirred up controversy in a Washington Post article that said there is no empirical evidence to support the claim.
Whether that is true or not, let me present to you an extended analogy: I attended a private high school with a student body composed primarily of foreigners who were sent there by particular companies that also covered their tuition. Coincidentally, my high school had the highest tuition in the city — or is it really a coincidence? If the company will cover the costs anyway, the school has no incentive to control costs. It will not lose customers for that. And the parents have no incentive to protest cost increases — they are not the ones paying.
A similar environment exists in higher education. If the government will increase aid every time tuition is raised, colleges have no incentive to control costs because net costs remains similar.
But what about the students who don’t qualify for aid? In my eyes, this is a system that is designed to harm the middle class in America. While low-income families qualify for federal aid and high-income families can afford tuition costs, middle-class families are left floundering alone in the pool of student debt.
Students in America would be better served with an aid program that keeps colleges interested in keeping tuition costs down. Yes, we have it good in America, with our freedom and all. But we should also have low-cost universities. Maybe it’s time to hit the streets before we hit our books.
Robin Huang is a contributing columnist. Email him at email@example.com.