NB needs a better funding formula for low-income students

The experience across Canada suggests little correlation between tuition rates and post-secondary education participation among low-income persons

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New BrunswickHALIFAX, N.S., April 26, 2017 /Troy Media/ – New Brunswick needs to look for better options to improve access to post-secondary education.

Last year, the provincial government launched the Tuition Access Bursary (TAB). The bursary provides funding for up to the full cost of tuition at public universities and community colleges. It’s available to students from households earning less than $60,000 per year.

While not technically a free tuition initiative, TAB is promoted as a tool for those from low incomes to better access post-secondary education.

But the program won’t substantially increase low-income participation rates.

The program is the subject of my latest paper, Post-Secondary Tuition and Low-Income Access, published by the Atlantic Institute for Market Studies.

The experience across Canada suggests little correlation between tuition rates and post-secondary education participation among low-income persons.

For instance, a 2011 study by Ben Eisen and Jonathan Wensveen found that low-income youth participation rates were lowest in Newfoundland and Labrador, and Quebec, despite these provinces having the lowest tuition rates. Low-income youth were most likely to attend university in Nova Scotia and Ontario, where tuition was the highest.

International comparisons show a similar relationship between tuition rates and university attendance. Other factors, including whether one’s parents attended university, are more determining than income levels. Above all, performance in high school matters most for university enrolment.

It follows that upfront financial aid risks becoming money poorly spent. This problem is compounded by a 2014 survey that found the overall New Brunswick-based graduation rate was only 64 per cent.

TAB, then, could be an inefficient use of tax dollars.

There remains a role for government in improving post-secondary access. But policies are needed to make effective use of government dollars in achieving these aims.

My report makes four recommendations:

  • Upfront financial assistance should be based on merit, instead of income levels alone. For instance, there’s a correlation between high school performance and the likelihood of pursuing post-secondary education and completing a degree. A report by Andrew Parkin and Noel Baldwin found that only seven per cent of high-school graduates with a 90-to-100 grade average dropped out of their studies by age 26, compared to 30 per cent of those who were in the 60-to-69 grade range.
  • In 2010, New Brunswick and Nova Scotia had the highest share of university graduates with debts above $25,000 in Canada. These two provinces also had the highest tuition in the country. It follows that putting money toward easing debt burdens, after graduation, would be more effective. This policy would also ensure that aid goes to those who have completed their degrees.
  • Given the relationship between high school grades and post-secondary attendance and performance, governments should focus more on improving outcomes before students pursue post-secondary education. The kindergarten-to-Grade-12 school system demands improvements, which should include experimenting with alternative models of delivery, such as the charter school system in Alberta, Britain and many U.S. states.
  • A better system to prepare people for the workforce would put greater emphasis on trades and skills training. Governments should fund training for vocations with a labour demand in their jurisdictions to ensure that those taking advantage of government assistance could stay and work in the province. This would also recognize the reality that many workers will need regular retraining throughout their working lives.

Given its budget challenges, evidence-based policy is vital in New Brunswick. Governments always need to make the best use of tax dollars in the service of public policy, but especially when money is tight.

The Tuition Access Bursary doesn’t satisfy these considerations. For New Brunswick, more effective options exist to improve post-secondary access.

Patrick Webber is a research associate at the Atlantic Institute for Market Studies. He is the author of Post-Secondary Tuition and Low-Income Access (AIMS.ca/tuition).


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