Canada's student financial aid system in 'crisis' by 2010: think tank

The Canadian branch of the Educational Policy Institute (EPI) has released a new report, entitled "Student Aid Time Bomb: The Coming Crisis in Canada’s Financial Aid System" (PDF document). The report claims that by 2010, Canada's student financial aid system may be underfunded by as much as $800 million. The report suggests that there are four pressures being placed on the system:

1. By increasingly devoting funds towards the subsidization of advanced education without targetting those funds to low-income students, governments (both federal and provincial) are left without money to put towards means-tested financial aid. This sort of subsidization includes direct government subsidization of the costs of education; tuition tax credits; and the subsidization of individual savings (i.e. the Canada Education Savings Grant).
   
2. The Canada Student Loans Program (CSLP) is increasing its costs dramatically due to increasing student demand and increasing interest rates, but there does not appear to be much political will to increase funding for the program.
3. The Canadian Millenium Scholarship Foundation (CMSF) is due to 'expire' in 2009, and political pressures may mean that this foundation might not be renewed.
4. The Conservative government, due to its 'open federalism' (re: means of gaining the support of the Bloc Quebecois), may be transferring responsability for student financial aid to the provinces. The report does not disparage this idea in principle, but warns that such an upheaval would be a "distraction" from the real issue: the need to increase student financial aid funding.

Sifted into the report one will find jabs directed (primarily) against the Canadian Federation of Students. In the report's commentary on the "distraction" that would be caused by transferring responsibility for student financial aid to the provinces, it is suggested that much of the opposition to such a move on the part of national post-secondary student organizations would be pure self-preservation: "[CFS and CASA] would be left with precious little to do if student aid policy were decisively dispersed to the ten provincial capitals" (p. 28). More bluntly, the report complains that provincial intiatives to freeze or regulation tuition fees came due to their decision to heed "the ill-conceived and transparently self-interested advice of student groups" (p. 12).

The CFS responded with a press release declaring that the report was "misleading," that it "distort[ed] the legitimate pressures placed on Canada's student financial aid system to justify tuition fee increases," and that was intended to influence the upcoming meeting of the Council of the Federation. "This isn’t research. This is a public relations campaign against affordable public education," said Amanda Aziz, National Chairperson of the Canadian Federation of Students. CASA had no response (on its website, at least).

All this in spite of the fact that the CFS and the EPI report actually agree on a number of issues. First, "Student Aid Time Bomb" (p. 12) and the CFS both question the merits of the Canada Education Savings Grant. Second, "Student Aid Time Bomb" (p. 17-18 et al.) and the CFS both agree that tuition tax credits are a poor way of expanding access to post-secondary education. Third, the primary argument of "Student Aid Time Bomb" - that Canada's student financial aid system needs more money in order to assist low-income students effectively - is one that the Federation would likely readily agree to.

That said, there are clear ideological differences at play here. "Student Aid Time Bomb" describes the trend towards tuition fee regulation, tuition tax credits, and other non-means-tested subsidizations of students' education as "Sleepwalking Towards Universality" - "universality" being held in a rather dim light.

But ideological differences are not the only reasons for this quarrel. One of the author's of the EPI report is Alex Usher, Vice-President of EPI and the original National Director of the Canadian Alliance of Student Associations (CASA). He has also written for EPI "Much Ado About a Very Small Idea" (PDF), concerning Income-Continent Loan Repayment schemes. This report was throughly savaged by then-CFS National Director of Research (and current CAUT employee) Michael Conlon in his report, "Income Contingent Loans: Inequity and Injustice on the Installment Plan" (PDF). Conlon devoted an entire three-paragraph footnote (p. 12, footnote 10) detailing Usher's involvement in CASA and suggesting that Usher and CASA were formed as pawns of the Canadian Liberal government. In particular, Conlon claims that Lloyd Axworthy (then Human Resources and Social Development minister) sought to undermine the CFS by establishing "an unrepresentative minority voice opposing the Canadian Federation of Students' call for lower tuition fees and a national system of grants." Axworthy currently sits on the Board of Directors of the Educational Policy Institute.

Personally, I agree with the proposal of Spencer Keys (PDF) that governments should agree to set student tuition fees as a set percentage of the total cost of a student's post-secondary education, and then allowing fees to rise (or fall) provided that government funding also rises (or falls) proportionately. I also believe that it is important for our various lobbyists to present a united front on those issues where there is a strong policy consensus: that the Canada Educational Savings Grant should probably be scrapped (or at least seriously reformed), that tuition tax credits are a bad idea, and that there is a very substantial need to overhaul and renew the financial aid system.
..........
UPDATE (2006-07-25): The Canadian Alliance of Student Associations (CASA) has issued a press release in response to "Student Aid Time Bomb", essentially agreeing with the Federation's press release but using softer language and placing a greater emphasis on the need for more direct institutional funding.