BC university students already pay the full cost of their degrees: Tuition reductions justified

January 25, 2012

(Vancouver) A new study by the Canadian Centre for Policy Alternatives challenges the conventional wisdom that the public heavily subsidizes post-secondary education. Paid in Full: Who Pays for University Education in BC calculates the full financial contribution that students make towards their post-secondary degrees in British Columbia, taking into account two ways in which students pay:

  • Upfront through tuition fees; and
  • After graduation through higher income taxes (university graduates generally have higher incomes and therefore pay more taxes).

The study compares students’ total payments for their degrees to the cost of providing undergraduate education in BC and finds that, as a group, university graduates pay the costs of their education — and more:

  • Women with an undergraduate degree contribute, on average, $106,000 more to the public treasury over their working careers than women with only a high school diploma;
  • University-educated men contribute $159,000 more to the public treasury than men with only a high school diploma;
  • In contrast, a four-year undergraduate degree costs $50,630, of which tuition fees make up 40 per cent.

“Despite the current high levels of youth unemployment, the reality is that university graduates are more likely to be employed at full-time jobs, and experience shorter spells of unemployment than their peers with high school diplomas,” says economist and study author Iglika Ivanova. “Graduates earn more and pay higher income taxes as a result. The extra tax revenues are, in effect, a form of payment that students make for their education and should be recognized as such.”

The report calls on the BC government to rethink the current approach to financing higher education, which puts increasing pressure on students and their families to pay upfront through high tuition fees.

“Upfront student payment for education — in the form of tuition fees — should be reduced. Education funding should instead be recouped through the additional taxes paid by university graduates through increases in progressive taxes,” says Zach Crispin, Chairperson of the Canadian Federation of Students – BC. “High tuition fees are unfair and unnecessary, and compromise access to education for those who face financial barriers in their youth.”

“The public treasury reaps a substantial payoff from higher education in terms of extra taxes that graduates pay,” notes Cindy Oliver, president of the Federation of Post-Secondary Educators of BC. “Expanding public investment in university education is economically feasible and it will ensure that our province is well-positioned to succeed in the knowledge economy.”

“It is important to note that while those with post-secondary degrees and certificates earn more on average, some individuals with higher education earn less than the average high school graduate,” cautions Ivanova. “A progressive income tax system is sensitive to these individual differences and will ensure that the cost is pooled over all graduates.” 

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Paid in Full Update: Who Pays for University Education in BC? (full report and brief summary) is available at: http://www.policyalternatives.ca/paidinfull

For more information or to arrange an interview, contact Sarah Leavitt at 604-801-5121 x233 or sarah <at> policyalternatives <dot> ca