Martin Hicks – Stardate 68183.1: Ontarians still do not pay the sticker price

In a recent blog we wrote that Ontario undergraduate tuition was around $4,000. At about the same time, the Canadian Centre for Policy Alternatives said Ontario undergraduate tuition is $8,474. It’s a Star Trek episode with parallel universes. How does that happen?

The Canadian Centre for Policy Alternatives didn’t make its numbers up. Statistics Canada just released its tuition report for the 2014-15 academic year and says Ontario undergraduates will pay an average of $7,539. Add those pesky “additional compulsory fees” that scroll down your tuition invoice (athletics, health services, student government, ivy replacement) and you can quickly get to the centre’s $8,474.

Except that’s not the actual average undergraduate tuition cost in Ontario. That amount is an aggregate of the average sticker prices that Ontario universities post on their websites and in their calendars. Ontarians do not pay the sticker price.

Subtract Ontario’s “30 percent off” program, for which the majority of full-time undergraduate students are eligible. Subtract the tuition-related non-repayable (grant) components of OSAP and tuition “set aside” grants institutions must add to top up OSAP. Subtract tax credits for students or supporting parents or spouses. Result: average undergraduate tuition drops from $7,539 annually to $4,139. Let’s not forget college students, whose average tuition after these deductions is $1,529.

And that’s just the average. More important is the distribution. A small minority of students in high tuition programs pay considerably more than the average. Examples: the sticker price for medicine at U of T is $21,130; dental hygiene at Fanshawe College is $11,670. Many pay less than the average. OSAP grants are needs tested, so those with less pay the least. The graphic below reveals the distribution of actual tuition paid, for Ontario undergraduate university students and for college students. It uses 2012-13 information, because this level of data is only compiled after each year is done and the dust has settled. (To project the current year actual average tuition we added 8%).

The complexity of actual tuition is a communications disaster for government. In communications, simple wins over complex every time, which is why simple statements like “Ontario tuition is $7,539” carry the day. But let’s set the record straight: the (hidden but actual) average Ontario university tuition cost is $4,139 and for college is $1,529.

For completeness, you can add to that those compulsory fees – that’s up to about $1,000 dollars, less if you get OSAP because they too are OSAP-eligible costs. We also disclose that we have netted both the tuition amount and the “education” amount of tax credits. And we regret that we could not deduct institutional tuition-related grants and bursaries beyond the “set aside” grants above (couldn’t isolate them, but they comprise a material chunk of the over $800 million in annual overall college and university expenditures on scholarships and bursaries).

We at HEQCO aren’t saying that tuition is too low or too high or just right. That’s a bigger discussion for some other day. We’re just saying there’s more than one way to run the numbers.
Distribution_Tuition_cost_U_C_12-13_EN

Optional Additional Graphics for Geeks … same data, more information:

ON_Un_Domestic_Tuition_12-13_ENON_Coll_Domestic_Tuition_12-13_EN

THE FINE PRINT: Students / graduates are responsible for applying to OSAP and/or 30% off, filing taxes, and tolerating a degree of deferred gratification. Student aid and tax credits very from province to province – illustration is for Ontario students. Excludes international students (they pay more) graduate students (they generally pay more) and apprenticeship students (they pay very little). Higher education may lead to improved income for life, less risk of unemployment, enhanced fulfillment and happiness. Further discounts not shown include institutional scholarships and bursaries. HEQCO thanks the Ontario Ministry of Training, Colleges and Universities for access to the data.

-Martin Hicks, Executive Director, Data & Statistics

3 responses to “Martin Hicks – Stardate 68183.1: Ontarians still do not pay the sticker price”

  1. Daniel Lang says:

    First, this is the sort of evidence-based research on which policy should be based. Second, to Ontario into a broader comparative context, we could say that $4139 is what in other jurisdictions is called “net tuition.” Then, depending on how we regard the “tuition set aside,” some students — those with no financial need –would be seen to be paying more than the announced tuition fee. Finally, many of the ancillary fees are a different sort of set aside in the sense that government policy restrict them to cost recovery and to specific student services of which students approve. In other words they do not cross-subsidize instruction, with which “tuition” is normally associated. Martin Hicks is right: this is a communications disaster. It is also a public policy disaster. Consumer Reports would do a better job on this issue than either the Centre for Policy Alternatives or Stats Can have so far done, which have the effect of discouraging participation by over-reporting the cost of attendance. HEQCO is going in the right direction.

  2. […] example, Ontario has the highest list price tuition in Canada, but most students pay considerably less due to grants, scholarships, tax credits and government discount programs. As the report notes, […]

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