Finding ways to help pay soaring university fees

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When students at the University of Montreal and Université du Québec à Montreal took to the streets last spring banging pots and soup ladles to denounce the Liberal government's plans to raise tuition substantially, the questions they raised echoed across the country.

What should the price tag of a university education be, and who should pay it?

Proponents of higher tuition fees argue that because university graduates can expect to earn $1-million more over their lifetime than people who have only a high-school diploma, they should bear the costs. In Canada's publicly funded system, however, society helps pay. Even so, in two decades, parents will face a bill of more than $70,000 to put each child through a four-year program.

Why should it matter, asks Alex Usher, president of the consulting firm Higher Education Strategy Associates, when access for today's students is not out of reach? "If these increasing costs have absolutely no effect on access, if no one is being dissuaded from attending [university] – and none of the data suggests that there is – why should anyone care?" Mr. Usher said.

The large debt students carry affects everyone, said Zach Dayler, national director of the Canadian Alliance of Student Associations. Heavily indebted graduates, for example, are less likely to make big home purchases. "We're graduating people 10 years behind where they probably need to be financially."

In response, provinces have turned to plans that offer loans and rebates while allowing tuition to rise. Manitoba last month reduced the interest rate on its student loans to prime from prime plus 1.5 per cent, and Ontario gives eligible students a 30-per-cent rebate on tuition.

Innovative approaches south of the border are looking beyond strictly governmental or individual solutions and providing a third way that often brings private donors into the funding equation.

A promise

In Kalamazoo, Mich., Trenton Beamon is nominated for homecoming king at Loy Norrix High School. Mr. Beamon is applying to the colleges he wants to attend next year, a choice he would not have without the Kalamazoo Promise. Described as one of the most generous scholarship programs in North America, the Promise will pay post-secondary tuition for any graduate of its public high schools.

"I get to pick the college I want to go to. I don't have to not go to a certain college because of financial reasons," said Mr. Beamon, 17.

In Kalamazoo, the Promise can change students' expectations and their future. Forty per cent of students live below the national poverty level, and almost 70 per cent qualify to get lunch for free or at a reduced cost.

The only requirements of the Promise, founded in 2005 and funded by anonymous donors, are that students attend Kalamazoo public schools and enroll in one of the state's universities or colleges. Students who start in the local school district at kindergarten receive enough money to cover their tuition; those who enter in later grades get less, based on a sliding scale.

"It's about the simplest scholarship that you will find across America," said Janice Brown, the program's executive director and former superintendent of schools.

In a typical U.S. Midwest manufacturing community, hit by high unemployment, the Promise has created a college-going culture: About 95 per cent of high-school graduates go on to post-secondary education. As many as 2,400 students have received money from the Promise, at a cost of $35-million (U.S.).

Alexis Rumph, 17, will graduate from the same high school as Mr. Beamon. She hopes to study to be a physician's assistant at Grand Valley State University. Her tuition, about $10,000 (U.S.) for the year, will be fully paid by the Promise. If successful, she will be the first in her family to graduate college. "I've always planned on going. But if I didn't have the Promise, I'm not sure I would be able to afford it," Ms. Rumph said.

Go now, pay later

A student organization at the University of California earlier this year proposed a program to mitigate the state's steep incline in tuition fees: free schooling in exchange for a percentage of graduates' salary for two decades.

The man behind the proposal, Chris LoCascio, a fourth-year English and political science student at the University of California Riverside, said his tuition has doubled since he started.

Students now contribute to almost half the university's operating budget. Tuition, on average, is about $12,000 annually.

Mr. LoCascio is president of FixUC.org, the student group that proposed that if students pay 5 per cent of their salary for 20 years (with exemptions for anyone earning less than $30,000 and an annual cap for high-income earners), it could not only help alleviate the tuition burden, but give the university enough money to stay in business even if government funding were to dry up. So far, the university is skeptical, pointing to the logistical difficulties of tracking individuals' income after graduation.

Moving house to pay off loans

When rural Kansas began losing huge swaths of its population to urban centres, the government decided to lure in recent graduates with a radical offer: Help them pay off their student debt.

Census data showed that at least 50 counties had lost about 10 per cent of their residents over a decade. The legislature approved a plan last year to pay down the university or college loans of any new resident in those counties by $15,000 over five years. "It's proven to be a compelling incentive," said Chris Harris, program manager for the Kansas Rural Opportunity Zones program.

Mr. Harris said the reception for the program has been overwhelming. He has received more than 530 applications, mostly from people under the age of 35 who have studied in fields such as engineering, health services and education.

Christina MacFarlane, 37, is among them. She grew up in Kansas, but moved to Colorado after her graduate studies. She returned in October to the rural county of Hodgeman, where she is a program supervisor for the Area Mental Health Centre, to be close to family, but also because of the help in paying off her student debt.

"Having those kinds of programs helps to give some incentive to be in these areas and provide services," she said. "It does make a difference."