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CAUT Bulletin Archives

September 2002

Fund Justifies Higher Fees

Ian Boyko
Creation of the Millennium Scholarship Foundation was announced in the 1998 budget, a belated acknowledgement by the federal government of the student debt crisis. In the face of average debt levels of $25,000 the foundation was to be the centrepiece of the government's debt reduction strategy.

However, three years after its implementation, the foundation has been an abject failure and a public relations embarrassment for the federal government.

The foundation's mandate and terms of reference, contained in the budget legislation, includes the governance of the foundation as well as the framework under which scholarships are to be disbursed. In theory, the foundation's job is to disburse $250 million annually in student financial assistance.

In reality the foundation has stumbled from one failure to another. For example, in its first year of implementation the foundation sent students misleading letters telling them they had won a scholarship. In fact, students had "won" nothing; they were simply getting a portion of their student financial assistance from another source.

In essence, these non-scholarships left students confused and no better off. Instead of new funding to actually reduce student debt the foundation created a cumbersome and unnecessary formula that has done little to address the crisis of soaring debt levels.

Money transferred to the provinces in the name of the MSF was simply rolled into the coffers of provincial governments. The provinces, in turn, signed non-binding agreements to reinvest the savings in augmentations to student financial assistance. To compound the embarrassment, the foundation included sample news releases and encouraged students to celebrate their winnings and share the news with the local community.

The provincial governments' record of reinvestment has been spotty at best. The hasty and ill-conceived structure of the foundation made some provinces resentful participants in negotiations with the foundation.

Nova Scotia simply ignored the agreement and keeps the annual cheques issued by the foundation. The province has misdirected money intended for students, yet the foundation has done virtually nothing to rectify the situation. The foundation has never criticized the Nova Scotia government publicly and has signalled no willingness to withhold further payments.

In Ontario, where approximately 40 per cent of the foundation funds are dumped, the provincial government has directed less than 15 per cent into student financial assistance. The foundation has refused to speak out on behalf of students.

This record of futility is a far cry from then Finance Minister Paul Martin's brave words to the House of Commons in 1998, when he declared the foundation would help those in greatest need and reduce average student debt by $12,000. Like other promises made in the 1998 budget, this commitment has not been fulfilled and the Millennium Scholarship Foundation stands as a reminder of what happens when public relations stunts trump real commitments to reduce student debt.

Despite the fact (or perhaps because) the foundation has been unable to address the issue of student debt, it has recently embarked on a politically-tainted campaign to downplay the crisis of student debt. Of late, the foundation has taken on the role of partisan think tank in debates about post-secondary education policy.

In appearances before government committees, federal bureaucrats, and university and college presidents, foundation officials are arguing higher student debt and higher tuition fees will not affect accessibility. In other words, a supposedly arms-length, publicly funded foundation has taken the role of an apologist for the federal government's record on post-secondary education.

The foundation's efforts to shroud the student debt crisis are in part a shameless misreading of its own data. To take but one example, the foundation issued a news release on Jan. 22, 2002 with the disingenuous headline "Canada Must Move Beyond Student Financial Assistance." This headline clearly implies, contrary to available evidence, that further financial assistance should not be a priority for the federal government.

This absurd line of thought is inspired by interviews with 60 people who did not go on to college or university. In what is either a disturbing misinterpretation of the data or a politically-motivated fiction, the foundation claims that 77 per cent of those surveyed cited non-financial barriers as reasons for not going on to post-secondary education.

The foundation's executive director, Norman Ridell, has gone so far as to tell the federal Liberal Caucus on Post-Secondary Education that financial assistance for students should no longer be a priority. Yet the foundation's own data tells a very different story. First, more than 23 per cent of participants in their survey list direct financial barriers as the reason for not going on to college or university.

The foundation wilfully ignores the fact that direct financial barriers were the most commonly reported reason for non-attendance. In polling conducted on behalf of the Canadian Federation of Students, 46 per cent of lower-income Canadians cite lack of money as the reason for not attending college or university.

In addition, the foundation rarely acknowledges that the vast majority of those who don't attain a post-secondary education are from lower-income families. Indeed, the dividing line in almost all studies on access to college and university is the financial status of the individual in question. Yet, the foundation claims its research justifies freezing or cutting public loans and grants for post-secondary education.

To justify this position, foundation officials also claim higher tuition fees have little or no effect on accessibility. To cite but one of a myriad of studies that contradict this position, Statistics Canada recently reported that wealthy Canadians are twice as likely to attend university as low-income Canadians.

Despite this startling gap in accessibility the foundation's research project has essentially made the following three points: the federal government should not invest any more money in student financial assistance; non-financial barriers are more important in determining access to college and university than an individual's financial resources; and, $25,000 (or higher) average debt is perfectly acceptable "because it doesn't matter how much debt a student has, what matters is their ability to pay it back."1

These are alarming positions for the foundation to adopt, given its alleged mandate is to alleviate student debt and promote access to post-secondary education. Despite the fact the Millennium Scholarship Foundation has been a miserable failure in the implementation of its own program, it has now begun an aggressive campaign to justify higher student debt and higher tuition fees.

In the end it would seem, despite Paul Martin's promise that the Millennium Scholarship Foundation would reduce student debt, the foundation has made it its business to campaign for increased student debt.

1 Excerpt from a presentation made at the Canadian Public Research Network conference on post-secondary education.

Ian Boyko is national chairperson of the Canadian Federation of Students.

The views expressed are those of the author and not necessarily those of CAUT.