Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology
Issue 3 - Evidence - April 22, 2010
OTTAWA, Thursday, April 22, 2010
The Standing Senate Committee on Social Affairs, Science and Technology met this day at 10:29 a.m. to study the accessibility of post-secondary education in Canada.
Senator Art Eggleton (Chair) in the chair.
[Translation]
The Chair: Welcome to the Standing Senate Committee on Social Affairs, Science and Technology.
[English]
We are continuing our study on accessibility of post-secondary education, PSE, in Canada. Today, we will focus on the federal support programs for PSE.
We have four panellists to assist us in this and give us the opinions of the various organizations that they are here on behalf of today.
We have Rick Theis, Government Relations Officer, Canadian Alliance of Student Associations. The association was founded in 1995 and has 25 member organizations representing over 300,000 students nationwide. Rick Theis is responsible for relations with government. We have met before in that capacity.
Joshua Mitchell is President of the Canadian Association of Student Financial Aid Administrators, an association formed to represent financial aid administrators and awards officers in universities and colleges across Canada.
Katherine Giroux-Bougard, National Chairperson, Canadian Federation of Students, CFS, was also the former president of the students' union of Memorial University. The CFS was founded in 1981, and today more than half a million students at over 80 universities and colleges in Canada are CFS members.
Finally, we have Louis-Philippe Savoie, Vice-President of University Affairs and Incoming President of the Quebec Federation of University Students. It has 14 member associations, approximately 120,000 student members and was founded in 1989. Its main purpose is to defend the rights and interests of students in relations with governments, education authorities and civil society stakeholders.
Welcome to all four of you. We will now hear from each one of you in opening remarks. Please keep it to no more than seven minutes. We will start with Rick Theis.
Rick Theis, Government Relations Officer, Canadian Alliance of Student Associations: On behalf of the 315,000 students represented by the Canadian Alliance of Student Associations, I would like to express my sincere appreciation to you for providing me with the opportunity to appear before your committee today, and as well for conducting this timely and critically important study into post-secondary education access in Canada.
Like my associates today, I will focus my comments on the federal student financial aid system, outline areas of strength and weakness in the existing regime and perhaps address potential remedies during the course of the question period.
As you are already aware, the federal government invests billions of dollars each year into student financial assistance programs to make post-secondary education affordable and accessible to all qualified students. However, fulfilling those two goals depends not only on investments of appropriate financial resources but also ensuring that said resources are targeted to meet those goals.
The Chair: I am sorry to interrupt; this is almost an impossible situation. I know I have only given you seven minutes, but do not talk too fast because we have to get everything translated.
Mr. Theis: No problem; I will slow down. I apologize.
I will address a few areas where we find some issues exist. First, the level of financial assistance provided must be of sufficient quantity to meet a student's anticipated need. Generally speaking, the funding a student is provided through the Canada Student Loans Program is adequate in meeting average costs, including tuition and fees, books, travel and living expenses, that a student would face in attending post-secondary education.
However, as was pointed out in the 2008 Actuarial Report on the Canada Student Loans Program, an increasing proportion of Canada's students experience unmet needs, whereby their financial need exceeds the amount of assistance available to them through the financial aid system. Several factors, either alone or in combination, contribute to the creation of unmet need: attending high-cost education programs, residing in large urban areas with elevated costs of living, or attending school while caring for dependent children, to name a few. Regardless of its origins, unmet need is a significant issue across the country.
Currently, average unmet need in Canada ranges from a low of $1,191 in Ontario, to a high of $5,214 in Nova Scotia, with the national average sitting at approximately $3,400.
Second, financial assistance programs should be targeted to meet the programs' goals of accessibility and affordability. To this end, our system can boast of several strong programs, in addition to several ineffectual ones. In the former case, two new assistance programs introduced by the federal government in 2009, the Canada Student Grants Program, which provides up-front non-repayable grants to low- and middle-income students, as well as the innovative Repayment Assistance Plan, RAP, which provides meaningful support to students who experience difficulty paying back their loans, represent significant new investments in accessibility and affordability.
In the latter case, however, two issues emerge. Currently, the federal government spends approximately $2.1 billion on education related tax credits each year, making tax credits the largest component of federal spending on student financial assistance each year. However, because these credits are non-refundable, their impact both on access and affordability is negligible. Most often these credits are not used by students during their study terms, rather they are carried over into future years or transferred to parents or spouses, regardless of whether those people helped to pay for a learner's education or not.
Second, while part-time attendance in post-secondary education is on the rise across the country, federal financial assistance to those students remains dismally low. Of the 269,910 part-time students studying in Canada currently, only around 1,400 students, or approximately 0.005 per cent, of all eligible borrowers apply for part-time Canada Student Loans.
A partial explanation for this low uptake is a result of the existence of student lines of credit, which are similar in many regards to federal student loans except that they have lower interest rates and provide a higher level of funding to borrowers. As a result, many part-time students miss out on access to non-repayable grants and repayment assistance programs offered alongside government loans because the cost of borrowing money from the government as a part-time student can be prohibitively high.
Third, potential aid recipients must be suitably aware of the assistance programs that are available to them. In a recent survey conducted by the Canadian Alliance of Student Associations, CASA, in partnership with the Canada Education Project, students were asked series of questions about their understanding of the financial assistance program offered by the government. In almost every question proffered, either large pluralities or outright majorities of students with student loans were unable to correctly answer basic questions surrounding topics such as interest accrual, non-repayable assistance eligibility, needs assessment criteria and the like.
However, most concerning is that students were shockingly unaware of repayment assistance options that were available to them upon graduation, suggesting that those students who might potentially run into issues with paying their loans would lack the information necessary to access the resources available to them.
Finally, the process of applying for student financial assistance cannot act as a barrier to accessing aid resources. This comment may seem rather rudimentary, yet the current structure of the student financial assistance application forms provides unique comprehension barriers for many potential applicants.
According to a 2007 Government of Canada and Province of Manitoba joint consultation on First Nations, Metis post-secondary participation and outcomes, respective First Nation students, particularly those who speak English as a second language, abstained from applying for loans due to language barriers encountered both when filling out the application forms and when speaking to staff at student loan offices.
Similar findings were reported following a review of student aid applications in Alberta, Saskatchewan, Manitoba and Nova Scotia, where the average reading level needed to comprehend these forms well exceeded the levels likely to be exhibited by the average grade 11 or grade 12 student. Naturally CASA has ideas about what can be done to address some of these issues, but I will leave that for the discussion to follow.
In closing, our thanks again to the committee for allowing us to present before you, and I look forward to answering any questions that senators might have.
Joshua Mitchell, President, Canadian Association of Student Financial Aid Administrators: Thank you to the committee for providing myself and the Canadian Association of Student Financial Aid Administrators, CASFAA, with the opportunity to appear before you today.
Over the past five years, I have worked in financial aid at the University of British Columbia and, more recently, at Kwantlen Polytechnic University.
CASFAA is the national professional association representing financial aid administrators at Canada's colleges and universities. Our members administer a large spectrum of student financial aid programs. These include government- sponsored student aid programs, such as the Canada Student Loans Program, various provincial student assistance programs, institutional scholarships and bursaries, and work-study programs. We also provide budgeting and financial counselling assistance to students.
The primary objective of the association is to advocate on behalf of Canadian students. Because of our roles within our educational institutions, we are uniquely positioned to directly witness not only the success of the Canada Student Loans Program but also its gaps.
On the matter of success, while each of us will have suggestions for changes and improvements to the program today, we know thousands of Canadians attend colleges and universities each year because of the assistance provided through the Canada Student Loans Program, and the provincial and territorial financial assistance programs that supplement it.
The Canada Student Loans Program plays an important role in supporting access to post-secondary education for Canadians. On a personal note, my own participation in post-secondary education was supported with federal and provincial student loans. At a minimum, I would not have been able to attend in the same way without that support.
The Standing Senate Committee on Social Affairs, Science and Technology has been authorized to examine a broad range of topics related to the accessibility of post-secondary education in Canada. For the purposes of our time here today, I will centre on the complexity of current financial assistance programs, the introduction of tax measures in lieu of direct financial assistance, and student debt levels.
On the topic of program complexity, each province and territory maintains distinct application processes, program information and administrative processes. The application process and the needs assessment methodology are cumbersome.
The amount of funding and type of funding, loan or grant, can vary considerably from one jurisdiction to another, as can other program elements such as interest rates, resource thresholds and debt-relief measures. As an example, CASFAA produces an annual document for its membership that summarizes the federal and provincial funding that is available through each province and territory.
This year's publication requires just over one page to summarize the new Canada Student Grants Program, but 16 pages to describe the mix of funding available to students in each province or territory. To be clear, this document only goes as far as to summarize basic program elements, such as the maximum amount of funding available, the type of funding — loan or grant — interest rates and repayment assistance information, yet requires 16 pages because of the vast differences in what is available to students in each jurisdiction.
It is because of the differences of provincial and territorial resources, cost of living, political factors, and social and demographic factors that provincial and territorial governments have supplemented the Canada Student Loans Program with such a vast array of provincially funded financial aid programs. That said, the Canada Student Loans Program has historically updated its needs assessment thresholds infrequently and with little accounting for regional differences.
With respect to the issue of tax measures, the government has increasingly allocated resources toward student financial support in the form of fiscal measures introduced through the tax system. These include items such as credits for tuition fees and full-time enrolment, as well as contributions to RESP plans.
Our concern here is that these measures are distributed without regard to financial need or family income, and studies have shown that they disproportionately benefit families with higher incomes. This is not to say that the programs are not of any benefit, but it calls into question their objective. They do not provide for timely financial assistance, nor do they assist high-needs students and under-represented groups; for example, students from low- income families, students with disabilities or Aboriginal students.
To put this in perspective, the 2009 Canada Millennium Scholarship Foundation publication, The Price of Knowledge: Access and Student Finance in Canada, reported that in 2007-08, the Canadian government provided $4.4 billion in student financial aid while providing $3 billion over the same period in education-related tax measures.
With respect to student debt levels, growing evidence suggests that those who are most at risk with post-secondary participation, in particular students from low-income families, first generation students and Aboriginal students, will abandon post-secondary education if their loan debt is too high. At the same time, more students are qualifying for higher amounts of student loans with a corresponding increase in the number of students whose financial need exceeds the amount of financial assistance available — unmet need.
Where the gap between financial resources and the cost of education is too vast, students will abandon their educational pursuits. The danger here is an important one to consider: Not only does this create the potential for students to be stepping out from their studies with large amounts of debt, but studies have indicated that students in this position are most likely to look back at post-secondary education as a negative experience, and they are the group who is most likely to default on the repayment of student loans.
In response to the items that I have outlined here today, CASFAA has the following recommendations: Means- tested student financial assistance should be accessible through a simplified application process; the weekly assistance limits for the Canada Student Loans Program should be increased via an annual indexing or, at minimum, be reviewed on a three-year basis; funding limits should take regional differences into account.
We also recommend that the needs assessment methodology undergo a comprehensive review; the federal government review its education-related tax credits and give serious consideration to redirecting a portion of the funding toward means-tested programs that support low-income and under-represented groups; use of non-repayable grant assistance be expanded as a means of providing timely financial assistance, promoting access, promoting persistence and reducing student debt levels; the Canada Student Loans Program reinstate interest-free status for students during the six months following the completion of their studies; and the Canada Student Loans Program reduce interest rates charged on student loans to a maximum of prime.
In conclusion, I want to thank the committee once again for this opportunity. CASFAA strongly believes that investing in post-secondary education will help to ensure that all citizens, as individuals in Canada, as a nation, can compete effectively in the global economy.
Also, I have one last recommendation: In addition to other measures that CASFAA and others will present today, the federal government should continue to invest in research that both provides critical analysis on the effectiveness of financial assistance programs and help to facilitate and foster continued engagement with a national conversation on this topic.
[Translation]
Katherine Giroux-Bougard, National Chairperson, Canadian Federation of Students: Mr. Chair, I would like to thank the Committee for giving me this opportunity to discuss the accessibility of post-secondary education in Canada. The Canadian Federation of Students is the largest student organization in Canada, representing more than half a million students in all the provinces.
The Canadian Federation of Students and the organizations which preceded it have been representing students in Canada since 1927. It is particularly appropriate for this Committee to be studying the accessibility of post-secondary education in Canada, because our future as a society and as a country depends on it.
More than 70 per cent of new jobs require at least two years of post-secondary education, which means that a college or university diploma is quickly becoming a prerequisite for full participation in our economy.
[English]
Although Canada prides itself on being a fair and equitable society, current enrolment data suggest that students from the highest income quintile are more than twice as likely to participate in post-secondary education as those from the lowest quintile.
When discussing participation rates between Aboriginal and non-Aboriginal Canadians, the gap is even more pronounced. Of those who are able to access post-secondary studies, students who have to borrow the most to participate and, as a result, carry more debt are twice as likely to drop out of their studies as students with little to no debt.
This is an embarrassment for a country as rich as Canada. Ensuring a just society means developing a system where no one is left behind, regardless of income, race, gender, ability or social status. The federal government's main policy focus should be on how to close the gap in participation and create an equitable and high-quality system of post- secondary education.
The Canadian Federation of Students has long advocated that post-secondary education should be paid through a progressive system of taxation rather than through up-front fees. Without creating financial barriers and burning students with massive student debt, progressive income taxes recover the cost of an individual's education many times over while also supporting the post-secondary system for the upcoming generation.
However, in little over a decade, the funding of post-secondary education has increasingly shifted from a collective responsibility to an individual responsibility. Federal cuts to cash-transfer payments to the provinces in the mid-1990s have caused tuition fees to nearly triple, and student debt loads have more than doubled as a result. In fact, tuition fees are currently the single largest expense for most college and university students, and are increasing more rapidly than any other cost faced by students.
We have also noticed that a student's place of residency is increasingly becoming an important factor in determining whether a student can afford to attend college and university. Because there is no national vision for post-secondary education, a student from Nova Scotia pays almost three times as much as a student from neighbouring Newfoundland and Labrador.
We have seen, in the past few years, substantial investments in post-secondary education. However, without a national vision, there is no guarantee that these investments make it into the hands of students and their families.
I speak today about tuition fees because it is an important discussion to have at the federal level when we are talking about student financial assistance. Any tuition fee increases devalue any federal investments in student financial assistance.
[Translation]
The sharp rise in tuition fees and student loans has pushed student debt levels to historic highs. Students enrolled in a four-year program will finish with an average debt between $21,000 and $28,000, depending on the province and the program.
In the fall of 2009, 386,000 students in Canada were forced to go into debt to finance their post-secondary education. Last month, national student debt reached a record high of $13.5 billion, and it continues to rise by $1.2 million a day. That debt only reflects amounts owed under the Canada Student Loans Program and does not include debts contracted through provincial aid programs or private student programs.
[English]
Canada currently has a confusing patchwork of student financial aid programs, many of which focus on debt management rather than debt reduction.
The federal government currently spends substantial amounts on expensive tax credits that predominantly benefit those who need it the least. These non-refundable education and tuition-fee tax credits cost the federal government over $2 billion a year. Tax credits are a poor instrument to improve access or reduce student debt, and they are not available when students are required to pay tuition fees or living expenses.
A much more effective way to ensure federal funding and improve student financial assistance would be to shift all funding from back-ended measures, such as tax credits, to upfront grants. Just doing that would be a cost-neutral measure for the federal government and would reduce student debt by 75 per cent.
I will end my presentation there and look forward to providing more in-depth information during the question period. Thank you for the opportunity to speak to you.
[Translation]
Louis-Philippe Savoie, Vice-President of University Affairs and Incoming President, Fédération étudiante universitaire du Québec: Mr. Chair, on behalf of the Fédération étudiante du Québec, I would like to thank you for the invitation to appear today.
My name is Louis-Philippe Savoie and I am Vice-President, Academic, for the Federation. I will assume the position of President of the Federation on May 1. I am accompanied today by Lysiane Boucher, who is Coordinator of International and Federal Affairs, as well as Olivier Beaulieu-Mathurin, Chair of the National Graduate Studies Council.
First let me tell you a little bit about the Federation. For about 20 years, the FEUQ has been defending the interests of Quebec university students through its relations with all governments, both federal and provincial. Our approach involves examining the various issues facing students with a view to developing concrete and pragmatic solutions. For example, we are currently carrying out a comprehensive study of funding sources and methods for undergraduate studies in Quebec. This is the first time such a study has been conducted in relation to the undergraduate level. It has been done twice in the past for graduate studies.
Our presentation today will be somewhat special. We are a group representing primarily Quebec university students. Quebec students have access to a program which is different from the one aimed at students in the rest of the country. We have had the right to opt out of federal financial aid programs since the 1960s. That being the case, our comments will be somewhat different. We have made a point of emphasizing the need to provide some flexibility to the provinces, other than Quebec, to ensure that programs are geared to the different circumstances of each province.
In our presentation, we will be addressing four major points. First, we will be looking at access to education, and particularly how access to a university education should be defined. Then we will discuss direct student funding programs. We will provide a brief overview of federal transfers, and conclude with comments on subsidized research.
Access to education is a relatively complex dynamic in which several factors are at play. There are non-financial factors, such as the educational attainment of parents, age and gender. Other factors, of a financial nature, are extremely important. Tuition fees and student debt have an impact on the accessibility of education. Both the literature and practical experience have shown that this remains an important lever for governments. In order to enhance the accessibility of education, we should be investing in tuition fees, to make them relatively affordable. There is also a need to invest in financial assistance programs that will limit student debt levels.
Access to education should not be examined only in relation to the period during which a person is pursuing his or her studies. It should also be considered in relation to the period that precedes and follows these studies. In the pre- study period, the focus is on the diploma and upstream success. During the study period, it is the actual program. And once studies have been completed, the focus is social integration and the school-to-work transition. If that integration fails, for whatever reason, particularly if the program is not suited to the student's needs, then it can hardly be said that education is accessible.
With respect to education funding — in other words, direct financial assistance for students enrolled in a post- secondary program of study — Quebec's situation is relatively unique, in that it has the right to opt out. Quebec has its own financial assistance program, which includes the aid component and the loans and grants component. That structure, which is quite generous and effective, limits student debt levels.
In 2009, the data show an average student debt level among Quebec graduates of approximately $15,102, compared to $26,680 on average for Canadian students.
Financial assistance programs, such as the Canada Student Grants Program, with respect to which Quebec has had the right to opt out since January, are now in place. When these kinds of programs are established, the FEUQ believes it is very important that all provinces have the right to opt out with full compensation, if they do not wish to participate. Quebec is not alone in that regard. Some territories have also chosen to exercise their right to opt out and manage their own financial assistance program, to ensure that the program they offer is geared to the specific needs and realities of their population.
Therefore, accessibility is something that occurs before, during and after. An important issue with respect to what happens after studies have been completed has to do with students from remote areas.
An interesting idea was proposed in Bill C-288, which actually picks up on legislation that has been in effect in Quebec for several years now. It allows graduates who return to a remote area to receive a tax credit during the first few years of the transition from school to work, in order to help them get settled in that area. In Quebec, this measure has proven effective. In 2004, 9,000 graduates availed themselves of the tax credit program to return to the regions. This is particularly attractive to universities in the regions, which often have trouble attracting students. It is also an attractive idea for students from more remote areas who wish to pursue a particular program of study in one of the major urban centres that is not offered in their region. Those students are then supported if they decide to go back to that region to live and work. The FEUQ believes the federal government should introduce a similar program to encourage students to go back to the regions.
Our third point has to do with federal transfers. The provinces, and particularly Quebec, are still feeling the effects of budget cuts that were made in the mid-1990s. Those budget cuts had important repercussions for universities. In most provinces, the decision was made to increase tuition fees and change university funding structures, so that students would receive a larger share of the funding.
In Quebec, the decision was made to maintain tuition fees at more affordable levels. However, the situation which has resulted is problematic. According to our estimates, there is still a $3.5 billion shortfall in federal transfers, particularly as regards the Canada Social Transfer. Quebec's share is $820 million.
Of course, we commend the federal government for its recent efforts to increase funding for post-secondary education. However, a great deal remains to be done in terms of restoring federal transfers to 1994 levels.
Furthermore, the FEUQ feels it is important that transfers be unconditional. Every province has its own realities. Quebec has its own university system, which is also the case for other Canadian provinces. So, it is important that those special characteristics be preserved. In Quebec, tuition fees are much lower. They currently stand at an average of $1,968 a year, compared to $4,917 in the rest of Canada. As mentioned, the debt level in Quebec is lower. It is currently approximately $15,000 per graduate, compared to about $27,000 for graduates in the rest of Canada.
In terms of research, access to education continues at the graduate level. It is therefore important to provide appropriate funding for graduate students, in order to create a solid knowledge society.
Since 2005, we have noted a funding increase of about $367 million for the various federal granting agencies.
However, many students who apply to granting agencies do not receive any, even through funding has been recommended. That is a serious issue. Students with excellent records end up not receiving funding for their graduate studies. The FEUQ is therefore recommending that the budgets of granting agencies be adjusted to allow them to meet their requirements, as expressed by the three granting councils, and thereby ensure that university-recommended applicants receive funding.
Thank you for your attention. We are now available to take your questions.
[English]
The Chair: We have quite a wide range of federal programs: the Canada Student Loans Program; the student loan Repayment Assistance Plan; the Canada Student Grants Program; the Registered Education Saving Plan; grants; the Canada Learning Bond; the tax measures; the Canada Social Transfer, where we transfer to the provinces; and the various student employment programs, particularly for summer student employment.
Of those programs, what do you think works, what does not work, what could use improvement and what do we need to completely redo? I recognize that some of you — I am thinking of Ms. Giroux-Bougard — come more from a position of major revamping. However, I would like to zero in on those programs and get some sense of what works, what does not and what you would fix or change.
Mr. Theis: One of the things that Ms. Giroux-Bougard mentioned, and that we would agree with, is the absence of a national strategy. Those resources tend to operate without much connection to one another.
The first thing that needs to be done is to define what exactly you want the system to achieve, then ensure that those programs that exist are all working to that purpose. It seems to me that the one thing that is identified overwhelmingly that we do not do particularly well is not increasing the representation of under-represented groups — Aboriginal students, low-income students — in our system. Not only is there a moral issue involved in that but also an economic imperative. We simply must have more people in our economy and our workforce to survive, economically speaking, over the next few years.
In doing that, the one thing that I would point out as a singular lever that you could pull, is that more information must be made available to students and at a much younger age, in terms of what they can expect and what resources will be made available to them. Then we start to deal with some of the aspirational goals that we know provide some significant barriers to attending post-secondary education.
That spans all things, not just university. We do not do a particularly good job of letting young people know about trades and what pathways they can follow in that regard.
Quite generally, you need to ensure that the resources you provide — this is something you heard about from everyone on this panel — simply must meet the costs that a student can expect to face.
Mr. Mitchell: To hear some of the themes coming from the four of us, you would think that we went for coffee together this morning, and I can assure you we did not. Mr. Theis took the words out of my mouth, quite frankly.
It is difficult to achieve and support a national strategy on post-secondary education through a financial assistance program that has such a myriad and complex mosaic of programs supporting it. CASFAA is also participating in the Task Force on Financial Literacy. One of our executive members presented in Moncton yesterday. The issue with respect to awareness amongst our youth — and I mean younger than university age, early on in high school — is a serious one. The programs are complex and difficult to understand. Frankly, it is easier for me to understand and file my taxes every year than it is to understand and complete a student loan application. I brought a package with me if you want to see it.
That is a serious challenge. Studies have indicated that if the intent of the Canada Student Loans Program is to address access for under-represented groups and low-income groups, it is not doing its job. That is not an indictment necessarily of the program. It is that, in particular, low-income groups may not be aware of it, or frankly may be scared of the notion of taking on debt.
For me, that is the biggest single problem. I will leave it at that.
Ms. Giroux-Bougard: In your question, you mentioned a number of programs that currently exist in Canada around post-secondary education, so I will comment on a few.
I would not necessarily recommend a full overhaul of our current system. Some aspects work very well, and those should be improved. For example, as I mentioned earlier, federal investments go to the provinces in the form of social transfers that help finance both universities and colleges and programs to improve accessibility to post-secondary education.
One of the proposals that the Canadian Federation of Students has been putting forward for a number of years is to have a dedicated transfer payment specifically for post-secondary education. Then we can ensure that we do not end up in a similar same situation to a few years ago where investments such as the $800 million was supposed to go to the Government of British Columbia, and a few weeks later that same government cut $50 million to universities and colleges. Without a framework for the Canada Social Transfer, we can anticipate similar situations in the future. We recommend a post-secondary education act that would outline what our vision is for post-secondary education nationally.
On the Canada Student Loans Program, CFS was very excited a few years ago with the announcement of the new Canada Student Grants Program and the investments in ensuring that students would receive upfront grants when they need it the most, when they are paying tuition fees, books and rent at the beginning of the year.
My colleagues here have mentioned several times the ineffectiveness of certain tax credits. Therefore, simply phasing out some of these tax credits and enrolling in this program that already has a solid foundation would substantially improve the accessibility of post-secondary education.
[Translation]
Mr. Savoie: There are three main points to be made with respect to the various federal programs. First of all, under the new programs, the provinces must have the right to opt out with full compensation. That was the case for the Canada Student Grants Program. However, negotiations between governments proved to be quite difficult, which meant that the transfer was made late, thereby placing the Government of Quebec and students in a difficult position, as it was not known whether funding of more than $115 million would be there for Quebec students. That is a significant amount of money for a financial assistance program.
There were significant delays during the negotiations, which meant that, at one point, we were not sure whether the money would be transferred at the appropriate time. This caused some concerns, as $115 million for the Quebec financial assistance program is a great deal of money.
So, in terms of the right to opt out, some may recall the very difficult negotiations that preceded the creation of the Canada Millennium Scholarship Foundation. The federation played an important role in that context, ensuring that there would be an agreement allowing Quebec students to avail themselves of the program, and new monies were injected at that time.
The second point relates to federal transfers. We believe federal transfers should be restored to a level equivalent to what they were in 1994. That means that federal transfers must be unconditional. Governments must be accountable to their electorate. Education is a provincial area of jurisdiction and it is up to the provinces to take charge of their university system. Having said that, when new federal programs are introduced, the provinces must have a guaranteed right to opt out.
We did not mention tax credits in our presentation. We are currently reviewing this at the federation. We do have some data, but they are starting to be dated. However, it is clear that certain tax credits, which are not necessarily very effective, would benefit from a review, particularly the RESP, which does not target the right people. At the same time, some tax measures are helpful — for example, the scholarship income tax exemption introduced by the federal government in 2006 which, in practical terms, means students have more money. It is important to maintain these kinds of measures.
[English]
Senator Cordy: Mr. Theis, you were speaking about how student loans are designed to meet the average needs of a student, and you talked a great deal about unmet costs. I was trying to jot down your figures but did not get them down fast enough; you spoke of a low in Ontario. I am from Nova Scotia. You talk about a high of over $5,000 in Nova Scotia for student unmet costs. Is that specifically related to tuition costs?
Ms. Giroux-Bougard talked about tuition costs in Nova Scotia being three times higher than Newfound and Labrador. Is that specifically related to tuition costs? I ask specifically for Nova Scotia, but perhaps you will give a more generalized answer. Is it specifically related to tuition costs, or are other things involved, such as where students live and so on?
Mr. Theis: A large percentage of that comes from tuition costs. It is important to understand that those numbers, when you look at unmet need, not every single person who borrows will have unmet need. It is sort of titrated, but tuition, especially in Nova Scotia, certainly will drive that. As Ms. Giroux-Bougard mentioned in her presentation, tuition has become a larger percentage of overall costs that students have.
The chief problem that walks concomitantly with that — and Mr. Mitchell mentioned this, and it is something we deal with — is that the limit on loans and the amount of grants provided are not keeping pace. Therefore, tuition fees rise rather quickly in Nova Scotia, but loan limits and so on have simply not kept pace with the rate of inflation on those costs; so acceleration is seen in a province such as Nova Scotia.
Simply, the places many people go to school in Nova Scotia tend to be the most expensive places you could live. We have two fine universities in Halifax, but the cost of living in Halifax as opposed to living in some of the more rural communities is quite different.
Senator Cordy: In Nova Scotia, we do have the top undergraduate universities in the country. I would make that plug before the committee.
I have three questions all related to communication — and I mean communication by the federal government or by provincial governments — and how we can change it. You talked about part-time student loans, and I think you said 0.0005 per cent of people studying part-time actually apply for a student loan. In one way, that is good news because they are struggling to make the payments as they are working, or for whatever reason. However, you made a valid point that people are missing out on grants when they do not apply.
You also talked about people being unaware of the reasonable repayment assistance. Are we not communicating?
I was struck by the reading level for student application forms being grade 11 and 12. I know you mentioned this earlier, Mr. Mitchell, but we need to make some changes if we are to promote post-secondary education in — I do not know if the right term — underutilized groups, groups of people within our society who are not going on to post- secondary education; you talked about Aboriginals and those from low-income families.
I remember getting help from my parents to fill out application forms for student loans or other things when I was in high school because that is what teenagers do. However, if the forms are at that high of a reading level and that complicated, it does not seem to make sense.
If we consider part-time students not applying and missing out on grants, people unaware of repayment assistance and application forms being so complicated that one would have to go to a lawyer to fill them out, it does not seem to make much sense to me. Could you comment on those things?
I put it under the umbrella of communication. You might put it under something else. ``User-friendly'' is a better term.
The Chair: You can all jump in on any of these unless it is a directed question.
Mr. Mitchell: I have a short comment on the part-time assistance issue. One of the issues, from our perspective, is that the program certainly appears to possibly be underutilized. The other issue that CASFAA and its members have focused on recently is that the amount of assistance that is available through that program was just increased, in the last program year if I recall correctly. However, a corresponding increase to the grant portion of that program did not occur. It is also a program that typically I do not feel has been promoted well.
On the complicated nature of the applications, it could be clearer. I have had the experience you described as well as a 17-, 18-, 19-year-old sitting down with my mom and dad to fill out those forms. That part of it is fine. The difficulty is a student understanding, first, what they are signing up for and, second, as part of that, their obligations.
The third and perhaps most important issue, from my perspective, is that, as someone who may or may not be thinking about post-secondary education as something to do after high school or at whatever point in your life, you have to wait until very close to the start of your studies to determine how much assistance you will be eligible for.
It is a difficult position to be in for a low-income family to find out in July or August how much assistance will be available for studies that start in the first week of September. That is probably their focus. Their focus is not necessarily repayment assistance, interest rates, interest-free status, et cetera, which are also important program elements.
Mr. Theis: To follow up on the point about part-time students, it is also important to consider that a part-time student loan is not subsidized in the same way as a full-time student loan. As a full-time student, when you are studying, the interest on your loan is paid by the government. In the case of a part-time student loan — even this is a change — the interest accrues although you are not expected to pay it. Before these changes were made last summer, a student was expected to pay monthly the interest accruing on their part-time loan. That really does keep people away because, in comparison, you are dealing with a much lower interest rate through a line of credit.
The issue with forms we see as being a significant issue. Some interesting studies have been done in the United States about whether or not all the information necessary in an application could fit on the size of a postcard. Something a little more robust than that would probably be necessary, but certainly the evidence suggests that that very complicated information can be provided in very plain language. We have been pushing for those improvements.
To follow up on Mr. Mitchell's important point about families knowing what levels of assistance they can expect to receive, we need to discuss providing families with an idea of a package over the course of studies that might go up or down. Families would know exactly what they would have to save, what they would have to contribute and how much work a student would conceivably have to do. However, it would be predictable and in front of you before you ventured out in your studies.
Senator Cordy: None of you talked about summer employment for students today. I know you are dealing with finances, but students are expected to have a certain portion saved, and last year was the lowest student employment rate on record since statistics have been kept. Fewer dollars than ever were available; since we started keeping statistics for summer students. Has that had a major effect on students enrolling in universities because they have not been able to find summer employment?
Ms. Giroux-Bougard: As a result of the high unemployment numbers last summer, we have seen an increase in the number of students who have applied for the Canada Student Loans Program. Students in the past who were able to save money for the school year are now applying for the first time, and those who have applied in the past are now applying for greater sums of money to be able to make it through the year.
Mr. Mitchell: We have seen a corresponding increase in applications to Canada Student Loans Program or federal- provincial assistance. We have seen an increase in unmet need over this past academic year as well.
The notion of student income is a complicated one, at least from my perspective, when we take into account particularly some of the cultural issues around that. In the region where my university is and where I live, student income is part of the family and household income. When you take into account regional differences in the cost of living — I live in Vancouver, and it is extremely expensive to live there — it is a very practical issue. Students may be generating income, and the family may need it to get by.
The Chair: Does anyone else have anything to add?
[Translation]
Mr. Savoie: We have seen some impact in terms of participation in the loans and grants program. We have also noted a lengthening of the study period. Given the weakness of the labour market, students have been choosing to pursue their studies for longer periods. This year in Quebec, the graduate studies participation rate went up. A partial explanation for that is the fact that students completing a bachelor's program had the option of extending their studies, by completing a certificate or enrolling in a graduate program, when they could in fact have decided simply to enter the labour market. That is an additional factor that should be considered.
[English]
Mr. Theis: When students do not make enough money over the summer, they will try to work more during the year. For students with loans, there is a perverse disincentive to work, namely, if you make more than $50 a week, you suffer a clawback. You lose earnings, and the student loan system expects that you will have made a minimum contribution from summer earnings anyway, regardless of your situation. When you go into the school year and attempt to work to compensate for that, you cannot over a certain amount. That $50 a week has not been changed since 2001.
Senator Keon: I want you to zero in on the tax credits. This has been kicked around and abused for a very long time. Two billion dollars is a large amount of money if it is targeted. In my own career, I exploited tax credits a great deal in my relationship with industry, but I also felt that they were not effective compared to targeted funding.
I would like to have an in-depth discussion of what really should be done about this. I would like to see it dealt with in the report, even though I will have moved on before the report comes out. It does not matter who wants to start first, but I would like an in-depth discussion of whether this phenomenon should continue, how it could be improved and what you could do with $2 billion if it was targeted.
Mr. Theis: That is an excellent question. My colleagues here have made several suggestions about what you can do. You could become inventive with what you can do. The chief problem for students is that the money is not available to them, if at all, until after they actually incur costs.
Could you tweak the system to provide some of that money perhaps upfront, to put against the loan? Could you use some of those credits against your debt instead of cash and reimbursement? Some things can be done about that.
Mr. Savoie made a good point that I am amiss I did not make, which is that the government fairly recently allowed for grants and things of that nature to be tax-free. That did some wonderful things toward putting more money into students' pockets. I think you do have to draw some circles around areas of the tax code that actually work in favour of students because they benefit everyone.
I think there is some real strength in taking some of that money and providing grants. Let us understand what happened with the grant system. There was this great, new low-income grant that benefited low- and middle-income students, but students with high need are left out of the mix, students who would have received grants under the Canada Millennium Scholarship Foundation that would have reduced their overall debt, and we know debt is an issue. Therefore, there is an opportunity to take some of that funding and put it toward a non-repayable grant for students who exhibit extremely high need.
[Translation]
Mr. Savoie: With respect to tax credits, this is a relatively complex issue that warrants further study. One example would be tax credits through Registered Education Savings Plans, which are well intentioned, but do not tend to help the students most in need.
In fact, they tend to do exactly the opposite — to help families who are already saving to save even more. Saving money is a good thing. However, in a context where a lot of students are not able to access university because their parents simply cannot pay the fees, and where programs are not effective enough or are created specifically to encourage savings that are probably not occurring in many cases, this is obviously an issue.
Another issue has also been noted with respect to tax credits for various educational expenses. I am thinking of tax credits for tuition fees, which tend to disadvantage those provinces that choose to have lower tuitions.
That is Quebec's case. For example, it suffers significant losses because tax credits are more generous when tuition fees are higher. This tends to create an odd situation, in that we have a tax credit helping those jurisdictions where tuition fees are higher. That is a rather unusual way of doing things.
[English]
Ms. Giroux-Bougard: If the discussion here is about how to improve accessibility of post-secondary education, tax credits are a pretty poor policy tool to achieve that goal. I can name a few tax credits from which students can benefit. We have a number of them, which does not help with the complexity of the current system. We have a textbook tax credit, a scholarship tax credit, the Registered Education Savings Plan, the Canada Education Savings Grant, tuition fees and education tax credits. All these different tax credits have a pretty high price tag for the federal government. Again, as my peers mentioned, not everyone benefits from those tax credits, and those that do benefit do so later on in their studies. Therefore, they do not help with debt reduction, which I think should be our main goal.
Mr. Mitchell: I have similar comments. As a parent, I contribute to RESPs, but that is a financial planning tool. In my opening remarks, I alluded to benefiting from the federal and provincial student loan program in pursuing my own studies. The important distinction there is that I was almost predestined to go anyway. It may have been in a different way, but I was going. The reason for this is because my mom and dad went.
With respect to RESPs specifically, I will say that to some degree they have stimulated conversation amongst groups such as this but also amongst the population with respect to the cost of post-secondary education and the need to save for it. To some degree, it has achieved that.
I share the same concerns you have heard expressed from the three other witnesses beside me, that those funds could be directed toward funding the full cost of education for those students who need it and reducing overall student debt. We have seen debt start to creep up once again. In 2005, the average debt for a university graduate was just under $25,000. In 2009, that has crept up to just under $27,000.
Senator Keon: The point is, you have all addressed the subject, but there is no real solution. What could this committee do to move this agenda, find a solution and define whether they are in fact useful, where they are useful and where this process should be abandoned? Have you any idea how the committee could access that type of information?
Mr. Mitchell: To touch on a potentially sensitive topic, without touching on the issue of the funding programs that the Canada Millennium Scholarship Foundation, which was disbanded recently, provided, CASFAA has been a strong supporter of the research the Canada Millennium Scholarship Foundation was doing. That was the final point in my opening remarks. An ongoing effort with respect to analysis of the effectiveness of targeted programs, new ideas and new initiatives needs to be continued. I am worried that the work of the Canada Millennium Scholarship Foundation has been lost or will be lost as a result of the sunsetting of that group. Not everyone agreed unanimously with their positions or with some of their research, but, at a minimum, they facilitated a very good conversation from coast to coast on the types of funding programs offered and the issue of access to post-secondary education generally.
Senator Ogilvie: I have a couple of overall observations, including a specific example and a specific question.
The issue of access that we are hearing about, in particular from student leaders, is focused nearly entirely on the issue of cost, which is not at all surprising. I also understand why you do not get into some of the other aspects because the resident time in a university environment does not give you time to deal with some of the more substantial issues. One of the critical aspects to access is what we are accessing and the quality of the programs that the students with debt loads tend to gravitate toward. Student leaders rarely address that. I am not diminishing the importance of student deb. However, the average debt load is the average debt of students who have debt, which is roughly 50 per cent of the students who graduate from post-secondary education.
The other observation is the issue of comprehension of programs and forms. I am no fan of government forms, so that is not what I am defending. I know this form particularly well, and it is an issue that reflects on other aspects of student success in university; and I will come back to that.
I would like to give you a specific example, followed by my question. There was a time when I had the opportunity to deal with some of these issues directly in a specific university. We determined that we would set up a situation where no student was denied access on the basis of financial need. In order to do that, we set up a deliberate effort. I would like to tell you about three things that we observed.
First, many of the students who had significant financial debt had access to sufficient funding but had poor financial management skills. This was a substantial issue that we were dealing with. By the way, we set up a financial adviser, but they came to us with student debt and these poor skills.
Second, we found that the students had very poor time management skills. Studies show that if a full-time student becomes involved in part-time work, a point is reached where additional part-time work has a decreasing net value to the student relative to their accomplishments and their financial needs.
Third, and most striking, we found that the student leaders at the time recognized that any money that the university was putting into financial aid, portions of it came from university revenues. Therefore, they determined that they had the right to a clear interest in how the funds were being dispensed. That is a reasonable point of view, and so we worked carefully with them. I found it fascinating that they were concerned with not wanting their money being spent in the way that government money was spent on financial aid. In other words, there is a clear recognition among students as to how a large anount of financial aid is expended. They worked with us to develop a substantial set of requirements to deal with this. I should say that the real issue arose when a student had to submit to a full analysis of what they were doing.
The observation was that many of the students gravitated increasingly toward programs because their study skills and time management skills were not good. They gravitated to programs of study that were less likely to give them an opportunity to benefit from the ``knowledge-based economy'' in the end. We identified a major deficiency once students had accessed post-secondary education, namely, that counselling or information advice to students in this category in particular was of enormous importance and potential value.
Do you see a similar need for such advice? If so, would you see that as a requirement for those students attempting to access such funding?
Mr. Mitchell: Thank you for the questions. To be succinct, I can say that, absolutely, I would support that. It is a complicated issue. That is a period in the life of most young adults when they will start managing their own finances. Some of them trip and fall, and, to some degree as a society, we allow them to do so. It is easy to access bank loans, credit cards and other forms of credit. For a young adult accessing those resources for the first time, it is easy to make some mistakes and to regret some of their choices later. The financial counselling component is absolutely important. Some schools in the U.S. have tried mandatory entrance and exit counselling. I do not have the data with me today, and I do not know what level of success they experienced.
Mr. Theis: I will state at the outset that many of the issues you pose are very Canadian in that not any one level of government is responsible but rather multiple levels. You need everyone with their hands on the lever pulling simultaneously. Whether we are talking about quality or about information, it is about what is happening from the youngest of ages and up throughout the system. That is important to note.
To your specific questions, I agree that counselling is fundamentally important. How we do it becomes interesting. Perhaps it is time to create a new granting agency whose responsibility is to provide funding for those organizations that can do some of these things well in terms of pathway projects. Government would not direct what should be done but would provide incentive money to put programs in place that are based on best practice.
Tangential to another point, the counsellors need to pull the data together so they know what labour markets are suggesting as the best pathways and how to get there. They are feeders of information. I suggest that, along with that, you cannot have a cookie-cutter approach because the needs of those in an Aboriginal community will be different than the needs of those in another community. You need someone in a community on the ground whose sole function is to connect those students with the opportunities. You have to allow people to establish that, and you have to provide the funding to allow them to do that.
Ms. Giroux-Bougard: Your question raised a number of issues of student experience on campus. We have more solid data around students who are borrowing from the Canada Student Loans Program in terms of repayment and their financial management. However, the issue you raise is more about ensuring good student service and support programs on campus for all students not only those who need to borrow.
You raise an interesting point about what programs people decide to direct themselves toward based on their level of debt. Actually, some interesting work is being done in Ontario, particularly around the deregulation of tuition fees in professional programs, on who, following the deregulation of fees, starts attending programs in medicine and law, for example.
We saw, despite enrolment numbers remaining the same or slightly increasing, a pretty substantial shift in who was deciding to attend. Those from lower-income backgrounds were less likely to pursue studies in medicine, and those from rural areas were less likely to pursue those studies, as well as those from more marginalized groups. We could spend the day discussing the other issues around the table, but I will stop there.
Senator Seidman: We have some really interesting issues here. I would like to go back to the basic premise of all your presentations, namely, that tuition is the primary barrier or certainly a major barrier to accessing post-secondary education.
I would like to imagine what outcomes we could look at that would help us evaluate the extent of this. Perhaps it follows well from the question we just focused on. Ms. Giroux-Bougard started to touch on where I am going with it, and all of you may have comments about this.
If I tried to think about this and look at the outcomes we might consider, it is very complicated. Roughly, I can imagine the number of years it takes to complete a degree or the dropout rate or various other things that you already started talking about.
Given that provinces control factors that affect tuition, the first part of the question would be whether there is any data, for example from Statistics Canada, that might provide provincial breakdowns; very simple cross tabulations that might help us understand the effects of tuition costs on university attendance. We could look at the academic program, university dropout rates and completion rates.
Then, to get beyond that, is there any real research that addresses these issues?
[Translation]
Mr. Savoie: I would like to comment on that. Two things have generally been acknowledged in terms of the impact of tuition fees on access to education. It is a relatively complex area and access to education, as we pointed out, is a complex dynamic where a number of different factors are in play. However, tuition fees do have an impact on accessibility, since upfront costs tend to discourage students. To a certain point, that is a normal result, because when you raise the cost of a service, fewer people will use it. Having said that, there are a number of Canadian, Quebec and American studies that deal with this. What was acknowledged in a publication by the Council of Ministers of Education for Canada is that when those studies are fleshed out, and when they consider a number of factors, they tend to demonstrate that yes, tuition fees do have an impact on access to education and tend to reduce access. Studies that consider few factors often arrive at the opposite conclusion.
There is a need to exercise caution when looking at accessibility, because it is complex. It tends to disrupt the other factors that are all part of the system. From the federal standpoint, in terms of tuition fees, there is an odd coincidence: hikes in tuition fees coincided with significant cuts to federal transfers in the mid-1990s. The best way for the federal government to limit increases in tuition fees is to provide adequate basic funding for post-secondary education; otherwise, there is a strong risk that this responsibility will again fall to students, whose funding sources are often saturated.
[English]
Mr. Mitchell: To follow up on Mr. Savoie's comments around complexity, we potentially open a can of worms here as well. The issue of tuition is also directly tied to the ability of colleges and universities to be able to maintain their operations and run.
As you all know, serious cuts are happening presently at universities and colleges. There are mandatory furloughs and losses of entire programs and faculties at some of our universities across this country right now.
Tuition is a very real and important revenue source for universities and colleges. I think it is important to introduce that into the conversation.
I will leave it at that for now.
Ms. Giroux-Bougard: I will address the point of Mr. Mitchell and then touch on the senator's questions.
Sometimes we hear this myth that when we see increases in tuition fees, we see a corresponding increase in the quality of universities and colleges. However, that is not what we have seen, particularly in the case of Ontario. Ontario finally beat Nova Scotia in having the highest tuition fees in the country this year, but Ontario has the lowest funding level per student. We have not seen a corresponding increase in quality at universities and colleges in Ontario.
On your question about research on tuition fees, Statistics Canada has done some research around tuition fees and the impact of debt, but comprehensive research has not been done by Statistics Canada. The federation has been recommending an increase in the level of funding for Statistics Canada, particularly to do research on tuition fees and the impact of debt.
One province that is interesting to look at is the province where I study, Newfoundland and Labrador. The province has been doing some very different things in comparison to other provinces. In that province, we have actually seen a reduction and freezes in tuition fees since 1999. We have seen the introduction of a grants program, and the amount of grants for students increase yearly. We also have seen an increase of funding for both the universities and colleges.
Newfoundland and Labrador is one of the only provinces where we have seen the level of student debt decrease, instead of increase, on a yearly basis. We have seen a number of Nova Scotian students increase at a rapid rate as well. Enrolment of Nova Scotian students has increased over 1,000 per cent. We have also seen an increase in enrolment of Newfoundland and Labrador students attending colleges and universities as a result of measures now in place. Interesting work happening in that province is having the results that the government was hoping to have with these policy measures.
Senator Seidman: I had one quick additional question, if I might.
The Chair: I can put you down for a second round, but we are running out of time now.
[Translation]
Senator Champagne: Thank you very much. At the beginning of the meeting, when you were making your presentations, and each of you seemed to be in a contest to see who could speak the fastest, I know that one of you mentioned at one point that the educational attainment of the parents could be a factor in terms of access to different programs. I am wondering what the parents' educational attainment has to do with that decision. If they have a higher educational level, will they need less money?
I was trying to understand what you meant, and it really surprised me. I believe it was you, Mr. Savoie, who mentioned this at the beginning.
Mr. Savoie: Yes, I believe I was the one who raised this. It is generally acknowledged that when the parents have a post-secondary education, they will encourage their children to do the same. That is something that can be seen in the literature. There are many reasons for this, if only that parents who have post-secondary education have a higher income. There is also the sociological component. If parents have previous experience with a university education, they will have an additional incentive to encourage their own children to go to university.
Senator Champagne: I see the other side of the coin, in the sense that parents who did not have an opportunity to pursue post-secondary studies but want their children to go further and do better than they did, may have less money — it seems to me that their children are the ones who should be given access to loans and grants ahead of the others, rather than saying that the other ones are okay and will have a greater desire to go to university because their parent did. Do you not think that children whose parents did not attend university should have priority access to loans and grants?
[English]
Mr. Theis: I think you are right about some things. However, to clarify a point, when a parent goes to university, they also serve as a very powerful beacon to their children about opportunities, and they create motivational goals for that learner, not just in encouraging them to go but the child sees what is possible. If you remove that, you do not have the socialization process, and that has a very powerful effect. It is important to make that distinction.
Mr. Mitchell: I think some of the research on this probably requires some further regression or analysis. Some research has been showing that the value of a post-secondary education sustains itself. In other words, over the long term, it still pays to get a university degree; you will make more money over your lifetime. Following from that, it is assumed that you will have a better quality of life.
The Youth in Transition Survey — I believe, in 2008 — by Statistics Canada showed that, in the 10-year period between 1996 and 2006, participation from students from families with high-income levels hovered between 75 per cent and 80 per cent, and participation from students with incomes in the lowest quartile hovered between 45 per cent and 50 per cent. Therefore, we see a disparity there.
However, some research shows that the children of especially new Canadians who may or may not have had a post- secondary education experience themselves are very likely to attend post-secondary education. That is among new Canadians and not necessarily among second-, third- or fourth-generation Canadian citizens.
[Translation]
Senator Champagne: In my own mind, parents who were unable to go to university will be saying, ``Look at the way we ended up, but if you go to university you will go further.'' That is the way I see it.
Mr. Savoie, you were saying that last year or in recent years, a lot of people who were completing their studies tended to want to continue studying for a Ph.D. or Master's degree, rather than entering the labour market. Do you think that is really due to the recent problems caused by the recession, or is this something that our young people are going to continue to want to do, always going further? Should we be acknowledging that access to the world of work is becoming increasingly difficult?
Mr. Savoie: Clearly, a major factor is the fact that the labour market is less dynamic during a recession, which has a very detrimental effect on young people. When the labour market is more difficult to access, it becomes more difficult to secure a first job. Thus, there is therefore an incentive to remain in school longer.
Having said that, the phenomenon of students going on to do graduate studies is a trend we have been seeing for a number of years now — in Quebec, since the year 2000 at least, there has been a significant increase in the graduate study participation rate. The number of programs offered at the graduate level has also increased. There are more and more short programs being offered at the Master's or Ph.D. levels, to provide additional training or to meet new labour market requirements that often mean greater specialization than what is available at the undergraduate level.
This is a significant trend that has been noted and that is likely to continue. At the same time, having more graduates pursue Masters and Ph.D. level studies is necessary to develop the knowledge society in Canada. This is becoming more and more of a necessity for an innovative economic system and for developing research.
[English]
Senator Merchant: Thank you very much for your presentations. You alluded to malaise in our system in that students are not given the tools to be able to access and know about the programs and the monies that are available to them. We have a general culture. I know when my children were in school, for instance, that I could never really find out how their performance measured against others' in the school system. You were not allowed to ask this question. You were supposed to just look at your own child and how they performed relevant to the expectations you might have of them. You did not really prepare them to be a little more understanding of the competitiveness and the world for which you were preparing them.
Apart from not being able to follow the forms and all the things that you have alluded to, is there a performance requirement once you get to university and once you can access these loans? Is there then an onus on the student to perform to a certain degree — I do not know how you set the standard — before they can continue to have access to the monies?
In that way, apart from the type of program you are directed to go into, which should also play a role, the people who are serious about their studies perhaps could get more help than those who are just there because that is what you do; you go to university, that is how you fill in the time. Of course, it is always of value to further your education.
The amount of money that you can access is limited, so I am wondering whether a performance requirement exists once the student progresses along or whether that is anathema; you do not talk about those things?
Mr. Mitchell: Speaking broadly, because some variances exist across the country, some measures are in place. They typically have to do with unsuccessful periods of studies or withdrawal from study. If you are asking about a benchmark performance based on a letter grade or things of that nature, no, I am not aware of a program — certainly not the Canada Student Loans Program — where that is required.
The only performance measures in place are limits with respect to timely completion of your studies; the fact that you are only able to borrow so much money over your lifetime; et cetera.
Senator Merchant: Would you, as student bodies, approve of having some performance measures; do you discuss that? Are you fearful that, at some point, the taxpayer and the government might demand something more from the students themselves?
Mr. Mitchell: I am fearful of it in the sense that it may prove to be more of disincentive to participate than it would be an incentive to persist and persist well. Research across North America clearly shows that many students show up at college and university who sometimes take two or three years to figure out what they are there to do. That is normal, and that is part of the process. In the end, for those who graduate, it has still been a worthwhile and valuable experience.
From personal experience in the institution where I currently work, we see many students struggle through their first or second year, not perform well in terms of their grades, and through counselling and other types of support find what they are best suited to. Therefore, they can turn that performance around remarkably.
They may have been accessing government-funded programs in that process. In the end, society is probably better off to try to shepherd them through that than to close the door on them.
Senator Merchant: I would like some clarification. When you talked about the program complexity, one recommendation was to simplify the application process. You spent a great deal of time discussing forms. Therefore, are you only talking about forms, or are there other ways that we can help?
Mr. Theis: We spent time talking about forms because it is an easy thing to improve upon at a low cost, and it is a significant barrier for some people. I see changes to forms working in lockstep with several other things. We encourage harmonization between the federal and provincial governments so that only one application is needed instead of two. In determining when aid packages go out — and we touched on this earlier — if you can provide information about the available resources as early as possible and try to predict that over time, you lower the complexity of the process the student will go through. This is especially true for someone coming from a background where this is a very new experience.
Senator Dyck: When I was a student, we looked at income versus expenses. We wanted to increase our income and decrease our expenses. The way to increase my income was through summer employment. There may be limits to what can be done for summer employment.
Is there a way to increase opportunities for students to find summer employment both within and outside of the university? Employment within the university in the program I was in was a definite asset. It helped me to train in the field that I chose to study.
With respect to expenses, we talked about tuition. However, the other big expense is housing. Is there any subsidized housing, particularly for students with low incomes? We used to have four or five students live in a one- or two- bedroom house crammed in similar to sardines. Is there a way to decrease housing expenses, and should that be part of a national strategy?
Mr. Mitchell: On your question about work, I did not include in my opening remarks today that CASFAA has long advocated a federal work-study program. I do not know that it is the solution, but it accomplishes a couple of things.
The more students are engaged with the university or college that they are attending, the more likely they are to be successful and to persist with their studies. Some institutions and jurisdictions maintain a work-study program. British Columbia had a provincially funded program until 2002. It was a fantastic way to engage learners in the university community, campus life and to provide them with help toward the means required for the cost of their education.
Ms. Giroux-Bougard: A current federal program, the Canada Summer Jobs program, helps fund small- to medium- sized businesses and not-for-profit organizations, often outside of big cities, to hire students for the summer. Those often provide good opportunities for students to gain experience outside of the service industry in places closer to home. We have been very supportive of that program.
It is difficult to address subsidized housing, in some ways, because it is more difficult to regulate the housing market than it is for the federal government and provinces to regulate tuition fees. One measure that students have advocated locally is to increase funding for residences and ensure residence costs are kept at a minimum to assist students.
In terms of a national strategy, it is much easier to talk about tuition fees and to address tuition fees than it is to talk about housing prices and the cost of living.
Mr. Theis: If you change some of the earning rules, you allow students who have loans to access many interesting projects that happen on campus, such as working in close collaboration with professors as research assistants, et cetera. Those experiences are helpful in the mid-part of your studies to open doors to what you can achieve and the connections you need with people inside the institution to get you to that next level, whether it is a master's degree or a professional certification. Many of those opportunities are probably closed to students because they will earn more money than they are allowed, and they suffer a net negative effect for doing that.
I am not qualified to talk about housing, but many of the houses that I lived in during university, which you described, are being knocked down — and thankfully so. The organization taking their place is the universities. That is good because you have safe and modern housing that students can live in, but we all know where the price will go for those accommodations. Universities have costs to meet. Affordable but awful housing is being replaced by very nice but rather expensive housing.
Senator Martin: My colleagues have asked many good questions, and you have touched on some of the areas I was curious about. Your contemporaries are well served by you, your organizations and the advocacy work that you do.
As I was listening, I was also reminded of my university experience, as I am sure everyone around this table was. I am also a University of British Columbia, UBC, graduate. I benefited from the provincial work-study program. I received a portion of my funding and was able to work for the rest of it, which was very helpful. That is an excellent point.
I would like to go beyond the discussion about financial barriers or needs, although I see why we must talk about that. Your recommendations that analyze what we are doing well and what we can improve on are very important and noted.
However, the barriers you mentioned were similar to my own experience. I want to ask you if the list I generated, if I go back to those days, is the same. What other barriers have been added in this 21st century where we live in a global economy, a global village?
My 14-year-old daughter interacts, does homework and lives in a very different digital age than I could ever have imagined for her. I know the pressures on her are different. What are some of the additional barriers to which you alluded?
The barriers that I personally faced or witnessed others facing were, first, hat the entry requirements for some programs were very stringent. I also had 21 years of teaching experience where I saw students limited in their access because of the competition.
We can talk about accessing university, but I witnessed a 60-per-cent failure rate in that first year. I remember the people who were not with us in the second year. I had a very tough first year myself. Sometimes it is because you may be in the wrong program because of external pressures or whatever the case may be. Also depression is a reality, the emotional strain on students, especially for someone such as me, going from a small, private school to a university such as UBC. The sense of isolation, the academic pressures because of the expectations from home, the gap between high school life and university campus life are all factors. The sudden independence that you gain in university compared to the structures that are in high school and what students are not able to handle as a result has an effect.
In terms of tuition, I come from a culture and the old-school experience where my father had to feed his entire family after a war. He worked three jobs to do that. Sometimes you cannot go into university right away; you have to work a few summers or a year or two. It is not about being unable to access but rather a question of timing. The reality for those individuals is that it may take longer to access education. That is okay. We should not measure success by how quickly we enter university, how quickly we get our degree or how many degrees we get because it could be that, in trades, people can be equally successful.
These are some of my own experiences. Can you identify new, emerging barriers from the members to whom you have spoken, as well as perhaps confirming the list that I have given? I am sure that the more things change, the more things stay the same.
Mr. Theis: In terms of when a student gets there, what happens in the system is that we tend to treat every student exactly the same. We have this discussion about whether or not a large class or a small class is better for the individual learning experience. It is a more complicated answer. The answer is that it depends. We lack a very good sorting mechanism to identify students who are coming into the system who will need the extra help that you identified and to ensure that we connect them to it, as opposed to those people who can sit in a 500-person class and do just fine because they have the motivation necessary to seek out information that will make them successful. I would put a pin in that point.
[Translation]
Mr. Savoie: One of the barriers worth exploring which we have pointed to is the fact that students may live in more remote areas. In order to pursue their studies, some have to leave the family home, which can have both a psychological impact, in terms of being away from the family, and a financial impact. This results in additional costs for the student, who has to completely change his environment, as well as getting used to university life.
There is also the issue of social integration and the school-to-work transition when people return to their regions. It is possible to help out those students who are anxious to work in their home area. That factor has an impact.
A researcher by the name of Marc Frenette from Statistics Canada has done a great deal of work in the area of geographical access to education, and he concluded that it has a significant impact. For example, a student from Abitibi who wants to undertake a program of study that is not offered at UQAT will have to leave his environment and go and study in Montreal, Quebec, Sherbrooke or even another Canadian province. He may even decide not to go through with his educational plans because it is simply too far away or he cannot afford it. That is something that should be looked at.
[English]
Senator Eaton: Minister Flaherty made the remark that high schools would do a better job to prepare students to be competent financially. All of you have addressed that. The more I hear on this committee, the more it seems that we have to start before university. We have to go back to high school.
I watched guidance counsellors help my children, as we all do as parents. Would it be possible to get guidance counsellors to start in grades 9, 10 and 11 to direct students to a university and help them with whatever examinations they need to get to university? Could they not also be an excellent source to help to fill out those forms?
Several of you have made the remark that many times parents if they have not gone to university themselves, perhaps are not financially sophisticated because they have not had to take out big loans or run businesses. Therefore, maybe the best place to teach financial skills is in high school.
Mr. Mitchell: Thank you for the question. It builds nicely on the comments and discussions around the last series of questions.
This is an issue that starts before university or college. In British Columbia, we have a Planning 10 course as part of our curriculum for kindergarten to grade 12. That is probably a good place to start. I would argue that it needs to be expanded on. As part of that curriculum, grade 10 students are learning about post-secondary options. They are learning about entrance requirements and funding options. I would argue that it needs to happen sooner than that.
Senator Eaton: Should they not also learn to become financially competent? In other words, they can learn to read a loan agreement and know what they are getting into.
Mr. Mitchell: Yes, they should, and that is part of that curriculum. It probably needs to be extended in some capacity beyond the student himself or herself to incorporate the rest of the family. If it is not being supported in the home, it will not be as effective.
In certain parts of the world, which direction you are headed, whether it is college, university or a technical institute, is determined as early as grade 8. I am not suggesting we do the same, but we can do a better job of helping students understand their options and what is required earlier on. Something similar to the Planning 10 course in British Columbia is a good place to start or a good program to look at as a potential launching pad for some initiatives that go beyond what it already accomplishes.
Mr. Theis: It seems to be the case this afternoon that I agree with everything that Mr. Mitchell says.
If you are talking about giving that responsibility — and it is an important one — to our guidance councillors, it is important to be aware of the workloads that guidance councillors-gym teachers, in my case, have in terms of responsibilities. How do you resource that to ensure it is not just one more task that gets put into a list of growing tasks so that they can do effectively?
Senator Eaton: Part of this report is looking at how we can make access easier for students. We have discussed what systems should be put perhaps in high schools, such as mentoring, especially for boys. Maybe that is a recommendation that can go in the report, not just to pile it on to the high schools but rather something that is added.
Mr. Theis: I agree. That is a fantastic recommendation.
Ms. Giroux-Bougard: Though I do not disagree about the importance of financial literacy, we need to look at it in conjunction with the fact that increasingly we are expecting students to take on incredible levels of debt. As people have mentioned, for a four-year degree, we are expecting students at a young age to be taking on close to $27,000 in debt. Carrying that level of debt at that young an age has long-term repercussions.
Senator Eaton: Ms. Giroux-Bougard, you have brought it up now. Have you looked at a country or jurisdiction that does a better job, and if so, what country or jurisdiction does a better job or does the best job?
Ms. Giroux-Bougard: I just want to clarify; do you mean a better job in terms of access or something else?
Senator Eaton: Giving students loans, whether it is tax breaks, whether it is incentives, grants, scholarships, is there a better way than what we are doing now?
Ms. Giroux-Bougard: Scandinavian countries have done an incredible job of ensuring access to post-secondary education. In Sweden, for example, not only are there no tuition fees for students but there are also living expense grants for students to ensure they are fully supported throughout their studies. Actually, many countries employ a different model from Canada to ensure access to post-secondary education.
Senator Eaton: I suppose I might have a long argument — and we do not have time — that tuition is not the only barrier to higher education.
Senator Callbeck: In view of time, I will be very specific with my questions. We have talked extensively about these tax credits and have heard before from other witnesses that they are ineffective. This morning, we heard that they tend to benefit those who need it the least and that some of these tax credits are ineffective. We have a long list of tax credits, and Ms. Giroux-Bougard read out some of them.
If you had to decide which ones are ineffective, which would they be in your view? Maybe you are not prepared to do that this morning, but I think it would be helpful to the committee if we could really get specific about this because it is $2 billion. That is a large amount of money. If they are ineffective, why do we have them?
Ms. Giroux-Bougard: I am not in a position at this point to rate them on their levels of effectiveness. I think, overall, the idea of tax credits serve a certain purpose, but they are not the most effective way to provide student financial assistance when they need it the most. For example, with a textbook tax credit, the idea was to help with increasing costs of textbooks, so in itself it is not necessarily a bad idea. However, students pay for the textbooks usually in August or September and can only apply for this tax credit starting in the following March.
Mr. Mitchell: It is important that the question is being asked and is receiving some attention. It requires further analysis. At least from my perspective, that is the recommendation. What is the intent of any of the tax credits that we have talked about today? If it is to promote access to groups who typically do not participate and low-income families, then a serious question is on the table of whether or not it is accomplishing that.
It is not that it is accomplishing nothing; it is serving some purposes. However, if the focus is to be on under-represented groups and low-income families, then the question has been raised of whether it is accomplishing that, and I would argue that it is not.
[Translation]
Mr. Savoie: I tend to agree that, as a general rule, there should be a much more in-depth analysis of the federal tax credits that are currently in place.
Having said that, I would like to come back to the example of Registered Education Savings Plans, because investments in programs like this tend not to be effective. For example, in households with an income of less than $30,000, only 20 per cent of families save money for their children's education, and in households with an income of $80,000 or more, it is 50 per cent. It is commendable to want to create an incentive. And it is a good idea to help parents save for their children's education. However, this is not necessarily the most effective investment.
One investment that is effective, however — and I want to repeat this, because it is an important measure that should be introduced and maintained, even though changes were brought in in the last federal budget — is the scholarship income tax exemption which has had a real and practical impact on students, in terms of the funding available for university students across the country.
[English]
Senator Callbeck: If you have further thoughts, certainly I would be happy if you would send them to the committee. As I say, it is a large amount of money, and we hear that it is ineffective. You are the people who should be helpful in telling us what to do about it.
I was interested in Quebec. They have a tax credit there if you return to rural areas. How long has that been in effect? Is that universities, colleges or trade schools?
[Translation]
Mr. Savoie: I am not sure whom it is aimed at exactly. It has been in place since 2004. At a minimum, it is aimed at university graduates and allows students who decide to return to a remote region to receive an $8,000 tax credit for the first three years they remain in their home area. In 2004, almost 9,000 people took advantage of that credit. It is an extremely valuable measure. For example, students who return to their home area are then able to more easily repay their accumulated student debt, since their debt will not be as high. And, coming back to the example of the student in Abitibi who wants to go and study in Montreal, that student needs a place to live and will have to travel, because one can assume that he will want to go back to Abitibi once in a while, which is a good 12-hour drive. So, those are all expenses he will incur just in order to pursue his studies.
In all these cases, because the debt level is higher, a program aimed at students who choose to return to their home area is extremely beneficial.
[English]
Senator Callbeck: I agree with you. There is such a concern about rural Canada today that I think this would be a very good idea, but you say it only covers universities. Does it not cover community colleges?
[Translation]
Mr. Savoie: I am not sure. I will have to check to see exactly how it works. Because we are a group of university students, unfortunately, we sometimes tend to forget about our colleagues at other educational levels. But I am sure they are affected by this.
[English]
Senator Callbeck: I have a question on the Canada Summer Jobs program. It has been said that last year there were 128,000 fewer jobs for students. This year more money has gone into the budget for that program, but it will only provide roughly 3,500 new jobs.
Are you happy with that program as it is, or are there any changes you would like to make? I know you would like to have more money, but are there any other changes?
Ms. Giroux-Bougard: From what we have heard about it, generally students seemed to be satisfied with that program in that it does give them the opportunity to move back closer to home, especially if it is in rural areas where there is not a multitude of jobs to pick from throughout the summer. It provides opportunities to work in not-for- profit organizations or in small and medium-sized businesses. Therefore, it is a win-win situation because it provides jobs for students and also helps out community groups, and smaller businesses benefit from the experience of having a student around for the summer.
Mr. Theis: The one thing you need to perhaps look at is the speed with which funding announcements actually happen. Students want to know if they will have a job when they are finished school. In some circumstances that happens, where funding announcements go out to NGOs, and they can start to hire. However, something should be done to expedite that process so that students have the peace of mind when they have written their final exam and have packed up their stuff for the year to know there is funding and a job waiting there for them. I would identify that.
The Chair: Okay, that brings us to the end of the meeting, and it brings me to a point of thanking our four panellists. Thank you very much. You have engaged in terrific dialogue with many of the committee members and much good information has come our way; appreciate that.
With that, I will say that this meeting is adjourned.
(The committee adjourned.)