Free Tuition? Really?

By Watson Scott Swail, President & CEO, Educational Policy Institute/EPI International

As we continue to hear more about free or cheap university programs through MIT and other players, news comes from the province of Alberta of the Liberal party’s platform to reduce tuition gradually until it is free.

To do this, the Liberal Party plans on creating a Post-Secondary Education Fund which would add money and act as an interest-bearing account whose dividends would be used to further reduce the cost of higher education.

In the dream world of politics and education, this sounds good. Very good. But from a rhetoric-free perspective, it won’t happen. Why?

First, the Liberal party (but not the most “liberal” party in Canada; that’s the NDP) won’t get elected. They carry only 11 percent of public support in uber-conservative Alberta. To put this in perspective, the liberals in Alberta are akin to Democrats in Texas. Few and far between (the joke goes: Democrats in Texas are lightly painted Republicans; I guess, Liberals in Alberta are lightly painted Conservatives?, especially since their leader was a member of the Conservative Party?). Because of this placement, the Liberal Party can say whatever it wants to get traction because they never will have to enact their promises. That stated, let’s walk the wonk.

If any province “could” do a tuition free model, it would be Alberta. A very rich geo-political area due to oil sands. And it is only going to get richer once it sells its product either to the US (Keystone) or China and the Pacific Rim (which are salivating right now over the possibility). Alberta could afford a free scheme and not dent the economy.

Of course, at heart is the Alberta PSE-going mentality. Why would a young man or woman in Calgary or Edmonton, let alone Lethbridge or Red Deer, go to college or university if they can go up north to Fort McMurray, about 300 miles north of Edmonton, and make $100k/year? At 18. Yes, it is blue-collar work. Good blue collar work. Readers can see why PSE has been a tough sell, similar to what we have seen in Nevada (why study when you can live well in the gaming industry?).

But the people of Alberta also get the reality behind living in a knowledge economy and they know they need to increase the number of college graduates to keep the economy percolating along. As to do this, they need to keep in mind several fact checks.

Second, free tuition has never worked in the modern era. Ireland did it in the 1990s and now has a major catastrophe on their hands. When Ireland introduced free fees back in 1996, it did so at the crest of a technological tsunami of work. These were they days when your telephone help desk had a nice Irish lilt in his or her voice. Now it has a Mumbai dialect. The problem is that the hot Irish economy completely tanked only a few years later, leaving the government strapped to this policy they cannot retract (think third rail). No one in a fairly liberal country is going to vote in anyone who is going to remove free fees. And that’s too bad, because they can’t afford it.

That’s a potential look into the future for Alberta. Things are hot right now. One massive invention into sustainable resources and oil won’t be as hot and the economy slows. The Saudi’s are equally concerned about this, which is why they are pouring billions into higher education.

Politically, the Liberal Party plans to pay for their tuition plan by increasing taxes on the top 10 percent (and the US can’t even do the top 1 percent!!!). The plan is to increase corporate tax by 2 percent, while also raising personal taxes on those making $100-$150k by 3 percent (to 13 percent), those between $150k and $200k by 5 percent (to 15 percent), and those above $200k by 7 percent (to 17 percent). That’s a pretty hefty tax increase. Who do you think will vote for it?

Normally I would totally trash such a suggestion because it is politically unviable and isn’t necessary the most prudent policy. I give Alberta a partial pass on this because it is the ONE jurisdiction I know that could legitimately afford this and they are in dire need of a knowledge economy. The devil is in the details, and if you do have a free or reduced-fee policy, the government needs to ensure that the appropriate amount of funding flows to the PSE institutions. As we saw in Quebec, flat fees for decades just meant a starved higher education. That doesn’t work. So it isn’t just the reduction of fees (which equals lesser revenue), but the fiscal compliment of those fees to institutions so that quality doesn’t suffer. We don’t want more post-secondary graduates with poor educations, but more with better educations.

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About Educational Policy Institute

The Educational Policy Institute is a Washington, DC-based research think tank on education and the social sciences. EPI conducts evaluation and policy studies on various educational issues from Pre-K to workforce outcomes in the United States, Canada, and beyond. Visit us at educationalpolicy.org.
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