The Insiders
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Jan
23
Issue Backgrounder: Tuition and Financial Aid
Posted by: Neal Yonson | January 23, 2007 | 18 Comments
It’s become clear, through comments, that most students don’t really know how Universities are funded, and how the financial aid process works. And since it currently ranks highest on our survey as an issue, we’re presenting this backgrounder. It’s wonky, but hopefully in plain English.
1) Government funding
The government funds Universities in many ways. The largest one is its operating grant, which is based on the number of students (full-time equivalents, or FTEs) enrolled. It’s a fixed amount, per student. This translates into a certain percentage of the cost being borne by government. Right now that’s around 72%; most student groups think it should be higher. Right now the University is in deficit, for two reasons. Large increases in faculty salaries, and limited government funding.
2) Tuition
Tuition is one way to cover the difference between gov’t funding, and costs. UBC has differential tuition, though, which means that there are differences based on programs. The lowest (basic undergraduate) is Arts, and it grows up to Commerce. Then there are programs like law (10k) and dentistry (43k). Tuition is set by UBC’s Board of Governors. But the government has limited growth in tuition to inflation, or roughly 2%/year. International students pay much higher tuition; they have to pay 100% of their costs.
So what happens if you can’t cover tuition? UBC passed Policy 72, which says that students who don’t have enough money will have access to UBC. But in order to benefit, students must have exhausted all other options, including parental contributions and loans.
Loans, bursaries, and where the candidates stand, behind the cut.
3) Student loans
The government doesn’t give much money; most of their money is in loan form, which means it has to be re-payed. (They do have loan forgiveness programs, which are after the fact cash awards.) There are some restrictions on eligibility:
- Parental annual income must be below the threshold, OR the student must be 4 years out of high school
- Student income must be below a certain level
- If the student is married, or has assets like a house or car, those are counted against loan levels.
If a student meets all the criteria, the government assesses their need. Need is tuition plus the costs that the gov’t assumes (living, books, rent, food, entertainment, etc.), minus resources. After that, the gov’t will give you as much as meets the need, up to $10,800. This is a loan, split 70-30 between the federal and provincial governments, respectively.
4) Bursaries
If a student’s total costs are greater than the loan amount, then they’re eligible for need-based bursaries from UBC. First, the entire amount of available money (“the envelope”) is calculated. Then, it’s distributed to each student, as a percentage of their unmet need. So if student A has an unmet need of 5k, and B has an unmet need of 2k, and UBC has enough to meet 50%, then A will get 2500, and B will get 1000. Last year, for most undergrad programs, UBC was able to meet 100% of the unmet need. But for other programs, like law, medicine, and dentistry, they didn’t.
So where does the money come from?
- Bursaries donated by individuals. These are part of the endowment, but not the part related to development. They’re where individuals donate a chunk of cash to the University. The University invests it, and the return on the investment goes to students.
- Endowment generally. The entire value of the endowment (including development) is invested, and a portion goes to the bursary fund.
That’s the basic funding regime. There are issues, though:
- What of students whose parents refuse to support them?
- Is putting the primary emphasis on loans helping or hurting students? Is a loan-based system producing the kinds of graduates we want?
- Why is bursary support after loan support; should it be the other way around?
- Should the government fund need-based grants, rather than just loans?
- What’s the impact of loans over grants?
Candidates:
Matthew Naylor argues for a grants system, and an agreement to set the level at which the government funds education.
Jeff Friedrich supports a cap on the tuition level paid by students, more financial aid for international students, and policy control of the endowment.
Joel Koczwarski argues for a 20% cap on tuition, and a return of the grants program.
Maxwell Maxwell stands for lower tuition.
Chris Brush supports a provincial grant program, and a percentage of construction revenues going towards tuition.
Tom Masterson supports grants as a way to alleviate student debt.
Comments
18 Comments so far
Let’s talk about tuition, baby. I realize that just saying I “stand for lower tuition” sounds a bit simplistic compared to everybody else’s platform. Well, I like to make simple statements in the hopes of getting people who don’t really know a lot about the issues to pay attention… the average student can rally behind a message of “lower tuition” more easily, I believe, than they can behind a message of “lobby to increase federal spending on post-secondary education, make financial assistance more readily available for international students, and dedicate funds from the endowment to provide financial assistance.”
In the past 25 years, the Federal government has gotten rid of 2/3 of the money they used to spend on post-secondary education. Politicians were able to feel comfortable doing this because they understood that University students, apathetic as they are, weren’t going to cause a public relations problem, didn’t have the money to finance their political opponents, and weren’t going to show up at the polls.
If we can actively engage students here, we will greatly increase our political leverage. We can’t, however, engage students with lengthy reports. They’re busy studying and don’t have the time or inclination to read up on complex issues. So here’s my plan: get students interested in “cheap tuition.” Inspire students to demonstrate on behalf of “cheap tuition.” Use that backing to negotiate complex solutions to lowering the price of a University education.
Let’s talk about tuition, baby. I realize that just saying I “stand for lower tuition” sounds a bit simplistic compared to everybody else’s platform. Well, I like to make simple statements in the hopes of getting people who don’t really know a lot about the issues to pay attention… the average student can rally behind a message of “lower tuition” more easily, I believe, than they can behind a message of “lobby to increase federal spending on post-secondary education, make financial assistance more readily available for international students, and dedicate funds from the endowment to provide financial assistance.”
In the past 25 years, the Federal government has gotten rid of 2/3 of the money they used to spend on post-secondary education. Politicians were able to feel comfortable doing this because they understood that University students, apathetic as they are, weren’t going to cause a public relations problem, didn’t have the money to finance their political opponents, and weren’t going to show up at the polls.
If we can actively engage students here, we will greatly increase our political leverage. We can’t, however, engage students with lengthy reports. They’re busy studying and don’t have the time or inclination to read up on complex issues. So here’s my plan: get students interested in “cheap tuition.” Inspire students to demonstrate on behalf of “cheap tuition.” Use that backing to negotiate complex solutions to lowering the price of a University education.
Maxwell:
I disagree. I don’t like messaging of “lower tuition” for two reasons.
1) It’s bad policy. In a perfect world tuition would go down and those who can’t afford it would have theirs covered. However, that’s not the case. And I believe very strongly that we need to target aid to those who need it. Across the board tuition cuts would only slightly help those who need it most, while targeted financial aid will make a difference.
2) People don’t listen, and tune it out. Ask anybody who’s ever sat with a UBC/gov’t administrator and ask them to describe the eye-rolling that accompanies a cry to “reduce tuition now.” It’s a simplistic argument, and politicians etc get that, and reject it.
Moreover, they like the lobbying priorities of targeted financial aid because it lets them say they’re helping the poor. Which they are.
And the CFS has their days of action for tuition, their reduce tuition now letter campaigns… and that ain’t got nowhere.
Maxwell:
I disagree. I don’t like messaging of “lower tuition” for two reasons.
1) It’s bad policy. In a perfect world tuition would go down and those who can’t afford it would have theirs covered. However, that’s not the case. And I believe very strongly that we need to target aid to those who need it. Across the board tuition cuts would only slightly help those who need it most, while targeted financial aid will make a difference.
2) People don’t listen, and tune it out. Ask anybody who’s ever sat with a UBC/gov’t administrator and ask them to describe the eye-rolling that accompanies a cry to “reduce tuition now.” It’s a simplistic argument, and politicians etc get that, and reject it.
Moreover, they like the lobbying priorities of targeted financial aid because it lets them say they’re helping the poor. Which they are.
And the CFS has their days of action for tuition, their reduce tuition now letter campaigns… and that ain’t got nowhere.
but surely there’s an economic incentive to universal low tuition.
making education by default more widely avaliable, and thereby increasing the opportunity for the best candidate (as opposed to the wealthiest one) isn’t an impotent political principle just because UBC rolls their eyes. we just need to make a better case. i’m not that person. somebody might be. but just because UBC always says no doesn’t mean you should stop asking. sure, noone stopped the tuition hikes yet. it doesn’t mean we should stop trying, and i think there is a palpable frustration with AMS 2005-present for getting along a little too friendly with the administration.
it’s a 20,000$ job. get ready to argue.
as someone who’s gone through the bursary and financial assistance route, i can attest that the burdens of interacting with provincial, federal, and big bank lenders – and i haven’t even mentioned Student Financial Assistance and Awards – are a significant barrier to success. of course there are success stories. that’s the triumph of the human spirit. it doesn’t change the fact that loans suck.
targeted aid by default singles out low-income students and is really just a stop-gap measure. it’s great, and i need it to get through, but surely there’s something better. it’s a strange world when the politicians are the realists and the students are the dreamers. it’s supposed to appear the other way around.
why, in the 21st century, am i borrowing money from the federal government to pay UBC, which also recieves money from the federal government. why all those stupid forms? why only two people on desk at Brock Hall.
fuck, they can’t get more people to process forms? why not have the global citizen models come in and get their hands dirty. do they have loans? Financial Aid is UBC’s dirty dark sort of secret. B-Sull gets testy when you call him on it.
but surely there’s an economic incentive to universal low tuition.
making education by default more widely avaliable, and thereby increasing the opportunity for the best candidate (as opposed to the wealthiest one) isn’t an impotent political principle just because UBC rolls their eyes. we just need to make a better case. i’m not that person. somebody might be. but just because UBC always says no doesn’t mean you should stop asking. sure, noone stopped the tuition hikes yet. it doesn’t mean we should stop trying, and i think there is a palpable frustration with AMS 2005-present for getting along a little too friendly with the administration.
it’s a 20,000$ job. get ready to argue.
as someone who’s gone through the bursary and financial assistance route, i can attest that the burdens of interacting with provincial, federal, and big bank lenders – and i haven’t even mentioned Student Financial Assistance and Awards – are a significant barrier to success. of course there are success stories. that’s the triumph of the human spirit. it doesn’t change the fact that loans suck.
targeted aid by default singles out low-income students and is really just a stop-gap measure. it’s great, and i need it to get through, but surely there’s something better. it’s a strange world when the politicians are the realists and the students are the dreamers. it’s supposed to appear the other way around.
why, in the 21st century, am i borrowing money from the federal government to pay UBC, which also recieves money from the federal government. why all those stupid forms? why only two people on desk at Brock Hall.
fuck, they can’t get more people to process forms? why not have the global citizen models come in and get their hands dirty. do they have loans? Financial Aid is UBC’s dirty dark sort of secret. B-Sull gets testy when you call him on it.
Anon:
A loan-based financial aid system sucks. It really sucks. I agree. That’s why the current aid regime sucks. (I’m also on loans from every which source, and bursaries. I’ve gone through the same run-arounds you have.)
But given a choice between allocating ten million dollars to up-front grants, and ten million dollars to across-the-board tuition, I’m gonna take the financial aid.
Anon:
A loan-based financial aid system sucks. It really sucks. I agree. That’s why the current aid regime sucks. (I’m also on loans from every which source, and bursaries. I’ve gone through the same run-arounds you have.)
But given a choice between allocating ten million dollars to up-front grants, and ten million dollars to across-the-board tuition, I’m gonna take the financial aid.
God bless Policy 72!
Oh wait.
Even though Mommy gambled away my college fund it still counts toward her gross income from the previous year so UBC won’t help.
Or me and my Pop are estranged but I don’t have a regular therapist to write me a note to explain the situation to UBC in the manner it wants. The employee at Brock Hall just shrugs. Oh well.
Try this: I changed my religion and now my legal guardians hate me. I’m only 18 so I’m supposed to get funding from my parents if I can. Or I can enter the workforce for a year or so, because only then will I be considered an independent student. Guess it’s time to deal more drugs!
God bless Policy 72!
Oh wait.
Even though Mommy gambled away my college fund it still counts toward her gross income from the previous year so UBC won’t help.
Or me and my Pop are estranged but I don’t have a regular therapist to write me a note to explain the situation to UBC in the manner it wants. The employee at Brock Hall just shrugs. Oh well.
Try this: I changed my religion and now my legal guardians hate me. I’m only 18 so I’m supposed to get funding from my parents if I can. Or I can enter the workforce for a year or so, because only then will I be considered an independent student. Guess it’s time to deal more drugs!
My personal favorite story was the person who had to co-sign a mortgage for family/religious reasons, even though they didn’t have any real assets to speak of, so that made them completely ineligible for loans and, by extension, UBC financial aid.
We’re not fans of P72.
My personal favorite story was the person who had to co-sign a mortgage for family/religious reasons, even though they didn’t have any real assets to speak of, so that made them completely ineligible for loans and, by extension, UBC financial aid.
We’re not fans of P72.
LOL “lets talk about tuition baby”
MXMX 4eva!!!!!
LOL “lets talk about tuition baby”
MXMX 4eva!!!!!
tim, i see your point. given those two options, i’d make the same choice that you insinuated.
but to me that’s the kind of pragmatism that’s common sense to any occupation, whether VP External or line chef. anyone could make that choice. obviously in a zero-sum game the money should go where it’s most needed.
politics is also about, well, politicking. jeff’s experience helps him, of course. but i like to think that anyone could be AMS President with the proper training blitz. the president is the figurehead. in an ideal world, we could imagine the AMS president in the pivotal scene from mr. smith goes to washington. you know. being smart and skilled enough to rattle toope et al. a street fighter with a secret love for policy, instead of the other way around.
i love policy or else i wouldn’t post so much.
but this campaign needs more fightin’ words! or rocky balboa. when did student politics become so civilised?
obviously keys is right to mock the “macaroni incident” that sounds decidedly uncool
tim, i see your point. given those two options, i’d make the same choice that you insinuated.
but to me that’s the kind of pragmatism that’s common sense to any occupation, whether VP External or line chef. anyone could make that choice. obviously in a zero-sum game the money should go where it’s most needed.
politics is also about, well, politicking. jeff’s experience helps him, of course. but i like to think that anyone could be AMS President with the proper training blitz. the president is the figurehead. in an ideal world, we could imagine the AMS president in the pivotal scene from mr. smith goes to washington. you know. being smart and skilled enough to rattle toope et al. a street fighter with a secret love for policy, instead of the other way around.
i love policy or else i wouldn’t post so much.
but this campaign needs more fightin’ words! or rocky balboa. when did student politics become so civilised?
obviously keys is right to mock the “macaroni incident” that sounds decidedly uncool
P72 is the only thing I really hold against B.Sull
P72 is the only thing I really hold against B.Sull