Pearson's policy

Former prime minister Lester B. Pearson may be best known for winning the Nobel Peace Prize in 1957, adopting the Canadian flag and introducing the Canadian Assistance Plan and Medicare. Foreign policy pundits may remember him for sending UN peacekeepers to the Suez Canal to avert a potential third World War. For good measure, he also introduced bilingualism and biculturalism to Canada.

What often gets overlooked, however, is that the former Liberal prime minister, elected in 1963, is also responsible for the inception of the Canada Student Loans rogram in 1964. For many current and prospective post-secondary students, that program stands as the jewel in Pearson's crown. Cash-strapped students from sea to sea eagerly anticipated this breakthrough because it promised to make higher education both more accessible and financially viable.

Introduced some 35 years ago, the student loan program has provided approximately $15 billion in loans to more than 2.7 million post-secondary students.  This year, nearly 400,000 students are using the program, which by design is intended to supplement personal earnings and family contributions. Even more students benefit from  provincial student loan programs created after Pearson's education financing initiative.

Getting the ball rolling

Financial assistance for higher education is a relatively new phenomenon.  Following the Second World War, post-secondary education became a popular option and expanded rapidly for the next 20 years. For the first time this century, the war pushed higher education into the limelight -- just one of the positive spin-offs from the war. Universities were looked at as agents of socialization and as the producers of skilled workers.

Enrolment skyrocketed after the end of the war. Increased demand forced the federal government to take a more prominent role in financing post-secondary study. Returning veterans had their tuition fully subsidized under this new scheme.

Baby Boomers also fueled demand for spaces in post-secondary institutions.

The demand for post-secondary education continued to increase, and, as people took out loans to pay for it, so did student debt.

QUICK TAKE

"The loan is not enough to pay for tuition.  Books are expensive.  Sometimes we have to buy extra reference books.  The cost for residence is too expensive.  You pay $5,800 for room and board, but you still have to share your room." –– Alex Fung, 21, first-year computers and math

And rolling, and rolling, and rolling...

Men and women from all walks of life have come to see the Canada Student Loans Program as a common means toward an end. And with the cost of tuition, books and fees consistently growing, the amount of debt saddling students has kept up.

According to a Statistics Canada report released a day after the 1998 "students' budget," students are paying more than ever for their university education.

After inflation, tuition fees have leapt 62 per cent since the beginning of the decade, while family incomes have dropped by 5 per cent. Fees for undergraduate arts students increased in all provinces but Quebec. With yet another rise slated for the 1999-2000 academic session, students can prepare themselves for fee hikes well into the 21st century.

The sharpest rise in costs occurred in Newfoundland where, on average, students paid 18 per cent more than in earlier years. By comparison, Ontario had a jump of 10.1 per cent. In other provinces, the tuition surge ranged between 1.7 per cent in British Columbia and 8.3 per cent in Alberta. The national average was 9 per cent.

Employment incomes of those aged 20 to 24 have fallen by 21 per cent during this period.

At the same time, average loans from the Canada Student Loans Program remained constant. Because it has not kept pace with changing realities, students are left having to do much more with less.

But youth aren't exactly foregoing the post-secondary option due to the fee hikes. The proportion of 19- to 24-year-olds enrolled in university grew consistently from 1975 to 1995. That growth stalled in 1993 and then dropped slightly in 1996, but it is once again on the rise.

So who is paying for these changes? Check out the numbers: the average undergraduate debt after graduation in 1982 - $5,260; in 1990 - $8,690; in 1995 - $17,000; in 1998 - $25,000.

Government cutbacks

Over the years, the federal government has reduced transfer payments to the provinces. This shortfall – some of which had been ear-marked for education – means universities are now allotted less resources.

In 1980, for example, universities received $6.44 in government grants for every dollar collected from students. This plummeted to $2.97 to the dollar in 1995. As universities fight tooth and nail to defray their operating costs, the buck is eventually passed to students who are stuck with increased tuition fees.

The tunnel is long and dark

The ball was set in motion in Ontario in 1997 when Ottawa gave the Mike Harris government its blessing to raise tuition fees. Harris then announced that universities could raise tuition fees for undergraduate programs by as much as 20 per cent over the next two years.

Critics point to this as one more step toward the day when tuition fees in Canada are entirely deregulated for graduate and professional programs.

But the Tories don't deserve all the blame for the status quo. Fees were going up before they stormed Queens Park. And, if they lose in the next election, costs may still rise.

The Conservatives are responsible for a 30-per cent increase, whereas their predecessors, the NDP, racked up a lofty total of 20 per cent.

Ontario now has the second highest tuition fees of any province. In terms of grants, however, it offers its universities the least in the country.

But cheer up. Things could be a lot worse. Students still pay for only about a quarter of the total cost of their education.

How many people use Canada Student Loans?*


*Many students have taken out provincial student loans as well. This graph does not reflect their numbers.

I want to read more!

Capital News Online is a project run by students in the Journalism program at Carleton University in Ottawa, Canada.  Students in both the graduate and undergraduate program work together to find, develop, research, write and produce stories about the affairs of the Canadian government including, but not restricted to, Parliament Hill.

Capital News Online is supported by Canada's SchoolNet, an initiative of Industry Canada.