TARGETED FREE TUITION: A GLOBAL ANALYSIS
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Good morning, all. Today, HESA is publishing (jointly, with the Higher Education Policy Institute in London, England) a paper entitled, Targeted Free Tuition: A Global Analysis. This paper is the product of months of surveying an emerging trend in government-financed student aid and what is arguably the most important new idea in higher education financing currently floating around the world. We posit that Targeted Free Tuition (TFT) might be the most progressive student aid policy, simultaneously eliminating tuition-based financial barriers for lower-income students while allowing institutions to generate revenues through user fees.
To oversimplify somewhat, there are two camps regarding the issue of tuition fees and accessibility. One argues that fees—any fees—act as a deterrent to access, and that in order to ensure democratic access to higher education, fees must never be introduced. The other argues that most students can afford to pay, and it is most efficient to take their money to improve quality and access while at the same time ensuring equity by using loans and grants to offset the effect of fees for those who cannot afford it. Mostly, the partisans of these two positions have mostly talked past one another even though both have valid points.
Over the past couple of years, though, a new policy phenomenon which to some extent bridges the gap between the ‘no fees’ and ‘fees plus aid’ partisans, namely: Targeted Free Tuition (TFT). We’ve seen the primary principle guiding TFT before under the guise of needs-based, means-tested, or income-contingent aid. In this model, governments no longer set fees and student aid policies separately; instead, they are effectively combined. Furthermore, TFT allows governments and institutions to better communicate the financial offer and overcome any lingering doubts students might have about cost.
The attraction for both sides in the fees debate is obvious: TFT creates ‘free tuition’ for some, but it also retains the principle of charging user fees to those who can afford it. The vulnerable are protected, with the proceeds going to institutions to increase either the quantity of seats or the quality of education. Each side can claim a victory for principles if they so choose and neither side has to veer into the indefensible—subsidizing the rich in one case, deterring the poor in the other—in order to do so.
The new TFT movement began in Chile after the election of Michelle Bachelet to a second term of office as President in 2013; in 2016 it continued to spread across North America with versions of it appearing in Ontario, New Brunswick, and New York. Over the past eighteen months it has spread still further, to Italy, Japan, and South Africa. But, oddly, this is a movement without proselytisers. Few, it seems, even remember that the world had already seen a TFT regime in England and Wales from 1998 to 2006. With the exception of New Brunswick (which copied Ontario’s model), it is not even clear that policymakers in different countries are actually watching what each other are doing: there is no evidence that policymakers in Ontario or Japan were inspired by the Chileans, for instance, or that Governor Cuomo in New York had the slightest notion of what was going on in Canada when he came up with the Excelsior Scholarship Programme. Rather, it seems to be a sensible piece of policy upon which many jurisdictions are converging independently.
Our paper out today chronicles the spread of these policies, points out their similarities and differences, and looks at the design decisions involved in developing these policies. Our main aim is to kick-start an international analysis of these programs, and encourage people to keep an eye on the effects of these policies (for the most part it is too early to tell what they are, but data should start trickling in soon). But another aim is to encourage jurisdictions who don’t currently have such a program to start thinking about how to design one. By our calculations, six other Canadian provinces could implement these with very little investment just by repurposing current commitments (Nova Scotia and British Columbia are the outliers).
For example, take Newfoundland and Labrador. This is a province with a very expensive higher education system (not least because the provincial community college has at least about eight campuses more than it probably should) which also charges the lowest tuition fees in the country. To maintain this “low fees for all” approach—even amidst an oil price collapse—has not only meant cutting institutional budgets; as of this spring, it has also started to mean cuts to the student aid budget. At some point, tuition is going to have to go up (indeed, this is believed to be the main point of the province’s recently-announced post-secondary education review panel, which is being set up in such a way as to conveniently report after the next fall’s general election.)
Now, keeping Newfoundland education affordable is an important goal. Despite the huge increase in the number of BMWs in St. John’s over the past decade (the average quality of automobiles on the roads there is really striking), most of the province still suffers from endemic low income. That makes the political path forward for the review difficult. But TFT suggests a simple way forward: make tuition free for students from below-median income families by re-targeting existing funds (including tax credits) while introducing substantial tuition fees for those from wealthier families (mainly from St. John’s) who can afford it. Introducing targeted free tuition at the same time as introducing higher fees sure makes such an announcement a whole lot more palatable, and it leaves opponents in the position of having to argue for why (especially such limited) public money should be spent specifically to help the better-off.
Anyways, read the paper. We’re pretty proud of it and hope it will be a catalyst for a lot more policy analysis and development on this important issue.
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