Two federal programs that reach back more than 40 years were established to improve access to post-secondary education for the lower and middle classes. A recent report from Employment and Social Development Canada concludes they have failed to achieve that goal.
The Registered Education Savings Plan (RESP) program was introduced in 1972 as a way for families to put money aside for a child’s post-secondary education. Yet it wasn’t until the Canadian Education Savings Grant (CESG) was introduced in 1998 that the program really took off.
In 2007, the CESG program was sweetened to include grants of up to $500 annually to make it easier for families to save for post-secondary education.
Anti-poverty advocates have long argued that affordable post-secondary education is the best way for a child to achieve greater social mobility and financial stability. This premise follows that well educated individuals have better access to higher paying jobs.
That is not how the programs have played out.
In 2013, approximately $883 million in CESG grants were given out by the federal government. The vast majority of these grants went to children living in families with household incomes exceeding $125,000. In fact, more than 70 per cent of all CESG grants were given to families who would be described as “well off.”
If one of the goals of the RESP and CESG programs was to help lower and middle class families afford college or university for their children, then these programs have missed their mark. It seems that predominantly wealthier families are receiving the greatest share of grants.
Wealthy people don’t need help to save for their kids’ tuition; but families living from paycheque to paycheque do. There are limited funds available to support those in need of the financial support the CESG provides, but when 70 per cent of those funds are misdirected to wealthier families, then the program can only be considered a failure.
Of course, $883 million is no small sum of money. It’s time to take a look at the CESG grants and consider finding a more effective, far reaching way to use them.
Much has been written about Ontario Premier Kathleen Wynne’s mis-named “free” tuition for low income families. While applicants to the Ontario program will still be expected to cover approximately half of the “free tuition” that a university charges, the idea of using non-repayable grants to tailor tuition expenses to what the family can afford has merit.
Perhaps the federal government could consider replacing the current CESG grant program with opportunity scholarships, targeting lower income families based on the academic performance of the student.
The idea of an opportunity scholarship program is not new. Governments across North America have used these scholarships to complement other subsidies in an effort to make post-secondary education more affordable.
The concept is simply to make scholarships available to eligible families where the only hurdle to post-secondary schooling is financial. Students must show that they have the marks and the personal motivation required to succeed.
There are many appealing advantages to a scholarship program; first among them is ensuring that grant money reaches the right people.
Where there is a critical employment shortage and need for graduates, opportunity scholarships could help make certain careers more attractive. For example, a shortage of skilled trades or technology sector workers could be addressed by opportunity scholarships that are non-repayable for qualified graduates.
Without question, higher education has a critical role to play in helping a young person escape the cycle of poverty, and most Canadians would agree that there is a way for our government to help. The flawed CESG grant program, however, fails to target specifically those who are in need.
A more purposeful approach, such as an opportunity scholarship program, may be exactly the kind of support lower income families are looking for.
Maddie Di Muccio is a former town councillor in Newmarket, Ont., and former columnist with the Toronto Sun.