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For an imaginary debt, student debt packs a wallop

There's been a great deal of conversation surrounding 'net-zero' tuition in Canada as of late, causing some incredulity on the part of students who are still waking up every day with an obligation to pay the debt that we are told we do not carry.

What is net zero tuition? It's the idea that, at least in some parts of Canada, the sticker price of tuition has been offset by generous grants that effectively reduce the cost of tuition for students to zero. This, for example, is the case in Newfoundland and for some groups of students, as observers have pointed out. Yet for most students the burden of student debt is far from eliminated.

There are more problems with this argument than the simplification of tuition and debt load, though. First, tuition isn't the only cost of attending university – it's not even the only cost a student pays to the university itself. Take Ontario. On top of the province's high tuition rates, the cost of living, eating, buying books, and paying 'additional' fees totals three to four times the sticker price of tuition. Recent reports and Statistics Canada figures have suggested that the average cost of attending a university can be more than $27,000 dollars a year when one considers expenses beyond just tuition.

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Evidence also suggests that, even if a 'net zero' tuition situation did exist, it would not enhance access to education for low-income or other underrepresented student groups. In fact, the participation rates for first generation, low-income, rural and Aboriginal students are all 10-20 per cent lower than middle– and high-income students, and this trend has only been widening.

This throws a different light on the observation that half of students graduate without debt: Evidence would suggest that it is because those most likely to be able to afford postsecondary education are the ones who are attending.

Pointing to tax credits as a key mechanism for reducing the sticker price of tuition is also disingenuous. It has been demonstrated countless times that tax credits disproportionately benefit higher-income families, as they are able to claim these credits at a higher rate than those from lower-income backgrounds. While a third of students are able to claim some portion of their tax credits during their studies, less than 10 per cent of all students earn enough while studying to claim $500 or more of the nearly $2000 in eligible funding. As such, tax credits do little to increase access to postsecondary education, nor do they meaningfully reduce its sticker price.

Further, tax credits lose their value over time in a number of ways. Because their value is based on the year of issuance, they become less impactful as inflation rises and tuition rates grow, minimizing their utility when they are finally ready to be claimed. Compounding this problem is the fact that many students rely on the tax credits to manage student debt after graduation, applying them toward interest on debt that would not have been there in the first place had the tax credit come in the form of an upfront grant.

The numerous students who worked their way through high school to pay for a postsecondary degree are acquainted with the financial realities of the 'real world' – and they are very concerned about them. The Ontario Undergraduate Student Alliance's November 2013 student survey reflects this, with 66 per cent of just under 9000 respondents indicating they were worried they would not have enough money to complete their studies, while 78 per cent expressed concern regarding their level of debt post-graduation. If we are to ensure the success of our future graduates we have to take these nuanced and lived realities seriously.

Allison Williams is a Steering Committee Member of the Ontario Undergraduate Student Alliance (OUSA).

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