News  New B.C. study finds students pay full cost of degree

Progressive taxation after graduation can help reduce upfront costs

As tuition fees continue to rise across the country, a study published last month examining post-secondary education funding in British Columbia states that students are already paying the full cost of their degree – despite government subsidization – through taxes after graduation.

The Canadian Centre for Policy Alternatives (CCPA) published the study by economist Iglika Ivanova, which updates a 1998 CCPA report by former UBC economist Robert Allen.

“In British Columbia, 30 years ago…government funding used to be 88 per cent of university operating expenditure, and now its 57 per cent,” said Ivanova. “[Universities] used to be funded a lot by taxpayers, and now they’re funded more by tuition and private funding.”

This altered funding was part of the motivation behind the CCPA study. Ivanova said she wanted to see if students then paid the government-subsidized university costs through taxes after they graduate.

Ivanova found that trends similar to those found in the 1998 CCPA study still apply over a decade later. “Students still pay two or three times more than their tuition costs to the public treasury through taxes,” said Ivanova.

“People focus on upfront cost, and, because tuition doesn’t cover the full cost of education, [they believe education is] subsidized,” said Ivanova. “In all of Canada, it’s true that students pay back this subsidy through taxes after graduation.”

Ivanova said the study raises the question of how post-secondary education should be financed.

“Do we want to do it collectively through taxes and then recoup the benefits, or do we want to ask individuals to pay up front through high tuition fees which can create financial barriers and…have an impact on peoples financial situations long after education?” she asked.

SSMU President Maggie Knight said she found the data useful, even though it was exclusive to British Columbia.

“[The data] really makes the case that it just makes more sense to have more public financing of post-secondary education though progressive taxation on university graduates, to prevent the front loading of costs on people who don’t have the same financial security,” she said.

While the study focuses on undergraduate education, the trend applies to graduate studies as well. Professional graduate education is relatively more expensive than undergraduate, a factor that impacts students’ career choices. Ivanova gave the example of law students.

“There is clear evidence that if you charge more upfront…fewer people go into public interest law. More people go into more lucrative forms of law,” said Ivanova. “That’s problematic because it means that we don’t have enough public interest careers.”

Knight pointed out that, despite the study’s focus on British Columbia, there are similar studies regarding Quebec. “This [study shows] that it’s a general trend of tuition increasing. It provides an analysis that does bear out with the ideas that SSMU is mandated to fight for in terms of accessible education and public sector financing,” said Knight.

Ivanova favors the idea of a similar study being conducted to integrate nationwide statistics and to account for provincial differences, despite the difficulties that would involve such an expansive study.

“There’s a lot we don’t know in education, and that’s why it’s difficult to do a nationwide study,” she said.