The Canadian Federation of Students (CFS) says the NDP’s plan to cap student debt won’t do much to help Nova Scotia post-secondary students. The debt-cap scheme was outlined in the provincial budget introduced today at the legislature.
“The best way to cut debt for students is to reduce tuition fees,” says Elise Graham, chair of the Nova Scotia branch of the CFS. “Students have been asking for lower tuition fees, more grants for students and more funding for university,” she adds.
The NDP budget, introduced today, promises to forgive the Nova Scotia portion of any student loans above $28,560 beginning in four years time. The province estimates the measure would cost just over $8 million in the first year. At the same time, however, the government is raising tuition fees by three percent in each of the next three years. It’s also reducing its grants to universities in the coming year by $14 million.
“Right now Nova Scotian students have the highest debt load on average in Canada,” Graham says. “We’re very disappointed with the decisions that the NDP government is making.”
Today’s budget claims that the government is “fixing Canada’s weakest student assistance system” partly by continuing a $30 million bursary program that reduces tuitions for Nova Scotia post-secondary students by $1,283 per year and offering up to $612 in additional grants.
“When not in power the NDP were allies and now we’re kind of battling with the NDP,” Graham says. A CFS fact sheet points out that since 1991, tuition fees in Nova Scotia have almost tripled. It says that average student debt is $31,000 for those who earn an undergraduate degree.
Teacher’s union warns of job cuts
Today’s provincial budget freezes health care spending while reducing grants to school boards by $17.6 million. In addition to the overall cut, the boards will be required to absorb cost increases, including wage hikes.
The President of the Nova Scotia Teachers Union warns the cuts will mean the loss of about 300 teachers in the public school system.
“It looks like around $35 million that will be reduced in public education,” Alexis Allen says. “I see that as a very regressive thing for public education in Nova Scotia.”
The province justifies its cuts by pointing out that the student population has declined sharply over the last 10 years and is expected to decline further by 7.1 percent over the next three. However, Allen points to education’s declining share of provincial spending.
“We’re only nine percent of the total budget,” she says. “We used to be close to 20. We’re nine now and we’re going in reverse.”
Modest help for welfare recipients
Meantime, the director of the provincial branch of the Canadian Centre for Policy Alternatives says today’s budget does little to raise welfare recipients to the Statistics Canada poverty line. In its Alternative Budget released last week, the CCPA recommended a five-year program to eliminate what it calls the poverty gap. But Christine Saulnier says measures outlined in today’s budget fall far short. They include plans to allow welfare recipients to keep $150 more of any monthly income they earn. That money would be in addition to the 30 percent of income they’re already allowed to keep. The budget also provides a $15 monthly increase in personal allowances for those on welfare.
“The government recognizes that people who they’re helping on government assistance do need additional funds, but we’re still looking at a pretty huge poverty gap for those people,” Saulnier says.
She predicts that next year’s budget will also show a large surplus even though the provincial finance minister is projecting a deficit of almost $390 million. In his 2010 budget, Graham Steele projected a $222 million deficit, but ended up recording a $447 million surplus.
“What we’ve called previous governments on is underestimating revenue, overestimating expenses and keeping a lot of that money out of the budget cycle,” Saulner says. She adds that such faulty financial projections prevent the legislature from debating how best to spend provincial revenues.
“These surprises at the end of the year, while it might make the NDP and any government really look good, it’s not democratic,” she says.
This article appears in Mar 31 – Apr 6, 2011.
Alexis Allen points to education’s declining share of public spending: “We’re only nine percent of the total budget. We used to be close to 20. We’re nine now and we’re going in reverse.”
Given that the number of students has been dropping for a few decades, why exactly is it that Allen expects or wants the education slice to rise in lockstep with the rest of spending? Since provincial revenues& expenditures have roughly doubled over the past 20 years, if the education spending held steady (as it should) then we’ll observe exactly what Allen points to. Which is no surprise.
It does *not* mean that the education budget has been cut by 50 percent, which of course is what Allen hopes to (mis)convey.
It’s disappointing but not unexpected that students believe they should come out of university with no debt. Forgive me but I went away to school and worked hard every summer since I was 15 to save all my money and get loans etc to pay for school. My parents and family sent me spending money only – to the tune of $20 a week. I still came out with debt but then I worked equally hard to pay it off when I got out. I was not nor am I now entitled to more than anyone else.
Suck it up and take a degree that will actually get you a job – make a plan for your life and not just to spend as long as possible in school on someone else’s dime. The cap will only encourage those who take 7 years to complete a 4 year degree to continue to use the resources of the universities and make it more expensive for those who come after them.
So… I’m first year university now, almost done the first year of my four year program. Does this cap still apply to me?
Response to Naugler1138:
The student debt cap would apply to debt accumulated during your second, third and fourth year of studies.
Kevin Finch
Communications Advisor
Department of Labour and Advanced Education
I’m trying to wrap my head around how this changes incentives… I admit upfront I don’t have any direct knowledge of Canadian student loans. But, before the cap, wouldn’t a student try to keep borrowing levels as low as possible, because they have to pay the money back, with interest? And, doesn’t the cap take that incentive away? I mean, if the government is going to pay the extra, once you hit the $28,560 level, why not just borrow as much as possible?
Hey Realist,
I’m not sure where you’re coming from with your math, but let me share mine with you and see if you agree.
I checked the spending side in the NS budget of 1991-92 and the official government estimate for total spending amounted to $4.25 billion [$4,254,415,000]. The official budget estimate for education then was just over $723 million [$723,043,900]. The proportion of total spending devoted to education in 91-92 by my calculation was 17%.
The official estimate of total spending for 2011-12 is $9.33 billion [$9,336,952,000]. The budget estimate for education is $1.13 billion [$1,135,237,000]. Therefore, by my calculation, the proportion of total spending devoted to education now is 12% which, although higher than Alexis Allen’s figure of 9%, is still significantly lower than 20 years ago. (I haven’t talked to her about how she calculates her 9% figure and there may well be wrinkles in the budgeting that I’m not aware of.)
Using the Bank of Canada inflation calculator, http://www.bankofcanada.ca/en/rates/inflat…, I adjusted for inflation. In 2011 dollars, the $723 million education budget in 91-92 amounts to $1.04 billion [$1,041,359,568.17]. If my math is correct, over those 20 years, the education budget has risen in real, adjusted-for-inflation terms by $93.8 million [$93,877,432] or almost 8.3%.
But what has happened to overall government spending? Once again, using the Bank of Canada inflation calculator, I find that in 2011 dollars, total spending in 91-92 amounted to about $6.12 billion [$6,127,395,262.20]. In real, adjusted-for-inflation terms therefore, total provincial spending over the period has increased in real terms by $3.2 billion [$3,209,556,738] or by about 52%. This clearly dwarfs the increase in education spending.
At least one further fact has to be taken into consideration in putting these figures in context. According to economics professor Michael Bradfield, real Nova Scotia GDP per capita has increased over the last 20 years by a whopping 70%. Simply put, that means that the Nova Scotia economy has grown much faster than overall government expenditures which increased by 52% and much, much, much faster than P-12 education spending which increased by just under 8.3%.
I admit that my math is somewhat shaky, but I have tried to take care with these calculations. In the end I guess, it all comes down to how we value public education. Or in other words, how much of our wealth should we devote to young people’s learning? I would argue that these figures show — as Alexis Allen argues — that we’ve been moving backwards in our commitment to public education.
Hey Tim:
The student debt cap perplexed a lot of reporters in the locked room at Province House yesterday where we had the privilege of studying the budget before it was actually introduced in the legislature. In all the detailed background documents, we could find no clear explanation of how this scheme would work. However, a government official did try to explain it to us and according to my notes, here’s how it went:
1. The first thing to know is that student loans are income tested. Students qualify on the basis of their incomes and their parents’ incomes. In other words, the income or means testing determines who qualifies for loans and for how much. Therefore, students can’t simply borrow as much as they want.
2. There are two sets of loans: Canada Student Loans financed by the feds and Nova Scotia Student Loans financed by the province. This debt-cap scheme applies to four-year undergrad programs. The maximum a student can borrow is as follows: $5,440 per yr. X 4 = $21,760 for NS Student Loans and $7,140 per yr. X 4 = $28,560 for Canada Student Loans. The total maximum loan therefore is $50,320. So, if a student borrowed that maximum amount, the Nova Scotia portion would be forgiven or written off, i.e. the amount above $28,560.
3. According to the CFS, students borrow on average $31,000 to earn a four-year degree. Therefore, under the new debt-cap scheme, the average amount of a loan that would be written off or forgiven would be $2,440.
4. The debt-cap scheme does not apply to loans already taken out, only to money borrowed from now on.
Bruce: I don’t disagree with your math, we’re working towards the same answer at different levels of detail. I didn’t adjust for inflation because I don’t know that Allen did. The basic point can be made (over a 20 year period given our low inflation) by just looking at unadjusted numbers; it is clear from those that provincial spending has increased a great deal. This then indicates that there should be every expectation that, with a declining enrolment, that the percentage of the budget that is devoted to education should be decreasing.
I don’t see from these numbers that our commitment to education has been decreasing at all. You yourself showed that in *real* terms the education budget has gone up, and this with less students. Where’s the lack of commitment there?
Every government program and service has the right (and the responsibility) to argue for a fair share of public monies based on *real* needs. No program has the right to a fixed percentage just because.
Realist: I think you’re not giving full weight to the main point I was trying to make. How much of our economic wealth should we devote to public education? When I researched and expanded the Wikipedia entry on Angus L. Macdonald, I wrote the following paragraph:
“Aside from his role as a national spokesman for provincial rights, Macdonald presided over an administration that invested heavily in education. His government financed the building of rural high schools and extended financial assistance to Dalhousie University’s schools of medicine and law. Macdonald also appointed Nova Scotia’s first minister of education, Henry Hicks, in 1949 to oversee $7.6 million in spending, about a fifth of the provincial budget.”
Throughout the 20th century, Canadian governments of all stripes invested heavily in public education. The old three Rs, rote-learning approach was long ago superseded by more sophisticated teaching methods and curricula designed to serve students from a much wider variety of cultural backgrounds and with widely varying abilities. To quote from the recent CCPA Alternative Budget:
“There is a misleading debate in Nova Scotia about the effects of declining enrolment on the school system. The conclusion is that given declining enrolments, the system is over-funded. Determining the appropriate funding for the public education system requires a much more complex analysis that recognizes what the current system is funded to do.” http://www.policyalternatives.ca/sites/def…
In other words, aside from the quantitative aspects of public education, there are qualitative ones. Declining enrolment is only one variable and it alone should not determine how much we decide to invest in public education.
Bruce: I agree that education funding is complex, and declining enrolment is one variable among many. Having said that, let me make two points.
One, in order to accurately track education funding I think we need to identify what actually *is* education funding and what isn’t. For example, if society is no longer preparing students as well as it did many decades ago, I believe that funding related to addressing these social problems should be marked against community services, not education. Even if the programs partially occur in schools. Similarly, I’m not convinced that costs of the entire bloated Department of Education bureaucracy – a largely immaterial and wasteful entity – should be considered essential. I’d like to see an accurate breakdown of how much school board funding goes towards teaching and materials, and how much supports the school boards themselves. And I’d like to have a better idea of how much school construction has been wasteful.
Two, I know for a fact – because this is when I was educated – that P-12 in the ’60’s and ’70’s was perfectly adequate. No computers, no calculators, no A/V electronics: just books, pencils, scribblers and chalkboards, globes and atlases, proper supplies in the labs. Nothing fancy, but everything was there that would *still* be more than sufficient in the year 2011 to properly prepare a kid graduating Grade 12. In fact I’d expect costs to drop now, since with eBooks you should have lower costs for texts. Under the circumstances, and excluding the non-core-education factors I listed above, I really do expect real education costs to drop with declining enrolment.
Hey Realist: You make a number of points in your latest response that seem to be based on your impressions, but you haven’t presented any hard evidence. For example, you mention what you call the “bloated Department of Education bureaucracy.” To prove that it’s “bloated”, you need numbers, salaries etc. You also need to show what percentage of the education budget is going to departmental spending and depending on what you find, you might also need to compare that spending with the totals from other provinces or from jurisdictions where public education is considered to be functioning effectively.
Similarly, you say you’d “like to see an accurate breakdown of how much school board funding goes towards teaching and materials, and how much supports the school boards themselves.” Yes, that would be nice, but how are you going to “see” that information without doing some research?
In the last round of this online debate, I responded to your comments by actually digging out education spending numbers from 20 years ago. I then based my arguments on them just as a few editorials back I compiled rough estimates of what we spend on our cars vs. what we spend on social programs including education. You rightly questioned some of my figures, but at least we had something more definite than words and impressions to go on. I’ve said before that in logic, he who asserts must prove. Otherwise, you’re just blowing smoke.
Bruce: for showing that the Department of Education is “bloated”, I definitely don’t need numbers and salaries. Going down that nickel-and-dime road is exactly why the politicians in the States are having a hard time cutting under $100 billion from the US federal budget when the situation demands cutting many, many times that amount.
No, my evidence for bloat is provided by the NS Department of Education website:
Organizational Structure at http://www.ednet.ns.ca/overview.shtml
Public Schools Branch at http://www.ednet.ns.ca/publicschools.shtml
Corporate Policy at http://www.ednet.ns.ca/corporatepolicy.sht…
etc.
Whether there is bloat or not depends on your political bent. If you believe, as I do, that the school boards and the teachers in schools, between them, can actually do the job of educating students, the first question ought to be why is there a provincial department of education at all?If your (this is a third-party “your”) mindset and philosophy is such that you just can’t comprehend how there could not be bureaucrats higher up to “advise”, “plan”, “coordinate”, “provide support”, “communicate” and “manage”, amongst other nice-sounding things, then I guess there’s no question of convincing you that there’s any bloat at all.
See, Bruce, when you phrased a statement as “you need numbers, salaries etc.”, you are already thinking the wrong way. The right way is, you need to explain exactly what demonstrably essential jobs cannot be done by school boards and teachers, and get rid of the majority of people currently in the Department of Education that don’t do any of that.