Melting Newfoundland’s Tuition Freeze

Recent comments by the Auditor General of Newfoundland and Labrador have sparked debate throughout the province surrounding public investment in post-secondary education. Specifically, the Auditor General suggested the need to review the existing tuition freeze and evaluate whether it has been effective. By considering the high costs of the tuition freeze and the lack of significant benefits, however, it is clear that ensuring fairness for provincial taxpayers requires some form of change. Thus, the provincial government should consider removing the tuition freeze in the upcoming provincial budget.

In 2001, the Government of Newfoundland and Labrador announced a program to freeze tuition in an effort to keep post-secondary education affordable in the province and encourage enrolment. This program focused primarily on increasing core funding to two post-secondary institutions in the province, namely College of the North Atlantic (CNA) and Memorial University of Newfoundland (MUN), including spending over $282 million since 2005. Further, tuition was lowered every year from 2002 to 2005 for a total decrease of 22.7 per cent at the cost of over $50 million. Now, provincial tuition rates are second only to Quebec for affordability, yet the question remains: has this investment been worth it?

To consider whether it has been, it is important to evaluate how effective the tuition freeze has been in meeting the goals that the policy was to address. The provincial government implemented a tuition freeze for two reasons: 1) encouraging university enrolment in a province that has an ageing population and substantial outmigration in the last half-century and 2) helping ensure that post-secondary education for residents of the province is affordable. An appeal to the evidence, however, shows that this policy has not effectively met these goals.

While there are serious demographic issues set to face the province over the coming decade, including severe labour shortages due to a lack of young skilled workers in an ageing workforce, the tuition freeze has not been successful in attracting skilled young people to enrol in provincial institutions or to stay in the province after graduation. Instead, we have seen increased enrolment from out-of-province Canadian students who pay the same discounted rate. Out of province enrolment has increased by 64 per cent, however, less than half of them (43 per cent) are staying in the province after graduation to work and live. Further, enrolment for provincial residents has actually decreased by 13 per cent in the same period. This development should signal to the provincial government that the policy is not working. It also shows massive inequity for provincial taxpayers who subsidize students from other provinces to earn a post-secondary education.

Furthermore, while the tuition freeze was put in place to ensure that provincial residents can afford to earn a post-secondary education, the existing policy ignores recent reforms made to the provincial student aid program that already ensures this possibility. Over the last decade, the Government of Newfoundland and Labrador has invested over a $100 million in their existing student aid program and has modified the program criteria to ensure more students are able to access Student Aid services. Most notably, the Government has announced the conversion of provincial student loans to non-repayable grants to take effect this fall. These reforms have significantly reduced the barriers for provincial residents to earn a post-secondary education and would continue to assist students in earning an education without the continued implementation of a tuition freeze.

As indicated in my last blog post, faltering oil prices means severe consequences for the government of Newfoundland and Labrador and illustrates a need to curb spending in risk of a near-billion dollar deficit. By cutting the tuition freeze, Newfoundlanders and Labradoreans would no longer be subsidizing the tuition rates of out-of-province students, nor be on the hook for an ineffective public policy.

Devin Drover is an AIMS on Campus Student Fellow who is pursuing an undergraduate degree in economics at Memorial University. The views expressed are the opinion of the author and not necessarily that of the Atlantic Institute for Market Studies

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