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Our universities offer top-flight education on the cheap, compared to global competitors

As soon as Talia Varoglu first stepped foot on the University of British Columbia campus two summers ago, she fell in love. She pictured herself devouring literature on UBC's sprawling grounds, exploring beaches and mountains and pursuing her favourite hobby, horseback riding, at nearby stables. Vancouver seemed a world apart from her hometown in Colorado where she was about to start Grade 12. Wisely, her parents scheduled a second campus tour in January 2011, so that she experienced Vancouver at its worst (and wettest). But for Varoglu, the trip was a mere formality; she was so set on UBC, she didn't apply to any other school.

That UBC offered high-quality education at what for Americans is a cut-rate price was the icing on the cake. Even with international student fees (which, at $22,000 a year, are nearly five times higher than what domestic students are charged), first-year arts student Varoglu paid around the same amount as her older brother who enrolled in his home state at the University of Colorado in Boulder.

Intellectually ambitious and with strong high-school marks, Varoglu wanted the academic challenge of attending a leading school but didn't want to go to an exclusive liberal arts college with its somewhat homogeneous student body. For a fraction of the tuition, UBC offered her an education that consistently ranked among the top three in Canada and top 40 in the world. "Whenever I tell my [Canadian]friends what I'm paying, they are shocked at how expensive it is for international students," she says. "But UBC is actually a total bargain."

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Although it may not seem like it to those students and parents who have just finished digging deep into their pockets to pay this semester's tuition, Varoglu has a point. When compared to countries around the world, post-secondary education in Canada is a great value. Not only is tuition here dirt cheap compared to American, Japanese or British schools, but the quality of education delivered by Canada's publicly-funded universities is consistently excellent.

However, cheap tuition doesn't necessarily guarantee quality education. Policy makers have long debated this tricky balancing act. Charge too much tuition and higher education becomes inaccessible for low-income students; charge too little and resource-starved schools struggle to maintain quality. "If you look at what our universities actually spend per student, the value is extraordinary," says Alex Usher, president of the consulting firm Higher Education Strategy Associates. According to a September report from the Organization for Economic Co-operation and Development (OECD), Canada spends more than $20,000 (U.S.) a year on each post-secondary student, 50% above the OECD average, ranking us third among OECD countries in per-student expenditures after the United States and Switzerland.

Of course, tuition isn't the only expense students struggle to pay. Sarah Klain, a master's student in environmental science at UBC, was shocked by the cost of living when she moved to Vancouver from Falmouth, Maine. But after crunching the numbers, she came to the conclusion that Canada's affordable tuition and health care made up for more expensive groceries. She estimates that she would have needed a $50,000 loan to go to graduate school at the University of California, Santa Barbara.

Canada's generous financial aid programs, such as the Canada Grant Program and student loans, also make education here a steal. "We have to remember that although we charge everyone tuition up front, a lot of that is given back right away in tax rebates," says Usher, noting that tax credits range from 20% to 30% of tuition depending on the province.

Financial aid was a significant contributing factor to Klain's decision to study in Canada. Scholarship programs designed to attract talented graduate students allowed her to access funding she may not have received in the United States. As an international student, she isn't eligible for research funding through the federal research funding bodies, but she was offered funding from an external grant in her first year, and later received a highly competitive Vanier Scholarship. When discounts to tuition such as student loans, need-based grants, scholarships and tax breaks are taken into consideration, Canada starts to look even more affordable. In a ranking of the education affordability in 15 countries authored by Usher and his colleague Jon Medow, Canada rose to seventh place once indirect subsidies were included. "When it comes to affordability, we are solidly in the middle of the pack," says Usher. "But we can hold our head up high because the quality is there. We may be one of the best-funded public education systems in the world, up there with the Scandinavians."

For Olivia Freeman, it was Canada or bust. Without the luxury of über-rich parents, the Washington-state native simply couldn't afford to go to college in the U.S. "I quickly realized that UBC and Simon Fraser University were my only financially viable options," she says. Like Varoglu, she believes she has gotten great value for her tuition dollars at UBC.

The aim of the relatively affordable Canadian system is accessibility. By contrast, the U.S. has approached the accessibility challenge by offering post-secondary education at various price-points, from the exclusive $50,000 a year liberal arts college to the much cheaper state university. "But the problem is, of course, that when you provide different price points, you also get different quality points," says Usher. Canada, for the most part, offers high quality across all of its publicly-funded institutions. "This makes us genuinely open, not exclusive." Klain has experienced UBC's openness firsthand through the diverse student body. Having completed her undergraduate degree at the prestigious Reed College in Portland, Oregon, she noticed immediately how her new classmates differed from her former college peers. "Half of the students at Reed College were on financial aid, like me, and the other half came from extremely wealthy families," she explains. "At UBC, I'm exposed to a much more diverse group of students and it's really positive. It has contributed so much to my thinking."

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Forget about tuition and the cost of books—the hidden cost of a university education doesn't start adding up until after convocation, when student-loan interest kicks in. Take for example Jack, who graduated with $20,000 in student loan debt. His friend Jill racked up $30,000 in debt. After graduating they both scored decent jobs and were able to pay $4,000 annually against their loans. But because the government began charging 10% interest as soon as they graduated, it took Jack seven years to pay off his $20,000 in principal, which cost him an additional $9,128 in interest. Jill who only borrowed $10,000 more than Jack made loan payments for more than twice as long as he did and forked over $28,228 in interest.

Here are 10 tips for minimizing student loan debt:

Start saving early Ask your parents if they have contributed to a RESP. Put aside a portion from your summer job income—saving even $500 can save you hundreds in interest.

Consider alternatives Can you start your degree at a college where tuition is usually cheaper? Is there a school closer to home so you can live with your parents for the first year or two?

Plan your education carefully Over 50% of undergrads change their major or university. Plan ahead so you don't end up paying for unnecessary classes.

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Maximize awards Research scholarships and bursaries, keep an organized application folder containing essays, references and your résumé and apply for as many awards as possible.

Create a reasonable budget Monthly budgets will help you make informed choices about your expenses. But make it realistic; if you pledge never to spend a dime on going out for a beer or other indulgences you're sure to blow the budget.

Save on textbooks Hit up cheaper alternatives to the campus bookstore such as online sellers, used book stores, libraries, friends, or your student union. Some unis even rent textbooks.

Work part-time Ask around campus about student-friendly jobs or look for casual gigs like tutoring.

Quit your car Most universities offer cheap transit deals. The reality is that cars might be meant for people richer than you.

Learn about cash flow Avoid wasting money on credit-card interest, phone-bill penalties, or tuition late-fees by understanding your flow of expenses and income.

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Be a stingy gourmet Working on your cooking skills can save you loads of money. Experiment on cheap dishes and bring leftovers to school to avoid pricey cafeteria lunches.

Editor's note: This is a corrected version. A previous version had incorrect information for Sarah Klain's original location, and the source of her funding.

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