A while back, the Trimark mutual fund company sent us press material by courier. The missive warned: "In the year 2014, they say it will cost over $65,000 for an undergraduate degree." The fee took me aback, and the company hopes it will. Yet the cost is not quite as bad as it looks. Trimark arrived at $65,000 assuming three percent inflation on $8,890, the estimated yearly cost for books, rent, tuition, and food. The calculation did not take into account how salaries might rise during the same period, or consider that tuition expenses might not increase as dramatically as they have been lately. Will a $16,000 yearly burden in 2014 be any more than the $8,954 is now?
What is more interesting about the campaign is the assumption that parents should save for their children's university education, and the proof that many do not. According to an Angus Reid poll commissioned by Trimark in September 1996, only one-third of parents with children in university provide all or most of their educational expenses. Only 53 to 63 percent say they plan to help their children in the future. Saving priorities were first mortgage, then pension, and lastly kid's education. This seems to be borne out in a 1994 study by Arnaud Sales, a Université de Montréal sociologist. He studied 2,400 Quebec university students and found that 37.3 percent of of them received less than $2,000 per year of support from their parents, and another one-third got less than $4,000. Only 16 percent got support of $6,000 or more. In talking with students, it appears that some parents can't make contributions, while others feel it teaches responsibility for students to finance themselves. Many students, however, are now finding that it takes longer to find a job after graduation. Consequently, there is $1 billion in unpaid and defaulted student loans. At McGill, 35 to 45 percent of the student body receives financial aid. Judy Stymest, McGill's financial aid director, has heard many money woes, and recently worked with a national group that successfully lobbied the federal government for changes making it easier for parents to save. The Registered Education Saving Plan (RESP) will continue to grow tax free, but can now be rolled into retirement savings if the child doesn't go on to university. There will be more loans with longer grace periods to begin repayment as well as more favourable tax breaks for charitable donations, which can benefit university in house scholarships. (The proposal for more outright grants was rejected.) According to Stymest, "The mindset in the United States is that the first degree is funded by the parents and they're committed to it; things are fuzzier in Canada because social programs have provided backup." In Canada, the majority look to the government for help. Some 62 percent of university students qualify for loans and grants based on a complicated calculation of parents' income.
So, when all is said and done, who gets to university? In this issue, one McGill student said the coolest thing about McGill is that there are rich and poor on campus (page 21). But we really don't know to what extent this is true. McGill has no family income data. "McGill has never thought it useful to have marketing information about itself, which is a mistake in my point of view," Principal Bernard Shapiro said in an interview. Governments don't require the data so McGill doesn't ask as a rule. (A voluntary McGill study of the incoming 1996 class asks such questions, but results were not tabulated at press time.)
The crux of the issue is accessibility, and a 1996 study of incoming students at 10 Canadian universities by a University of Guelph researcher shows wide representation. One-third of students are from family incomes of $40,000 or lower, one-third from $40,000 to $70,000, and one-third from more than $70,000. While students are from Canada's top income groups, they're not only from the top groups. Even though the cost of going to university has gone up, the participation rate for 18 to 21 year olds has increased from 10.5 percent in 1980 to to 17.5 percent in 1996. There's good reason for young Canadians to attend universityuniversity graduates have a better chance of being employed and make more money than high school graduates. Trimark might motivate parents to save by using the image of an empty nest, in addition to the $65,000 price tag.