CANADA: Recession's impact on post-secondary education

Governments could assist universities to survive the recession - and perhaps be in a position to thrive once the recovery arrives - by helping to pay for salary restructuring, not letting enrolment formulas constrain institutions from meeting shifting demand, allowing tuition to increase while protecting effective student aid programmes, and funding brains not buildings. This is according to a new report from Canada's Educational Policy Institute, On the Brink: How the recession of 2009 will affect post-secondary education, which looks at "profound effects the recession will have on both revenues and expenditures in the post-school sector".

On the Brink warns that post-secondary education in Canada is "about to head back towards conditions last seen in the mid-1990s", according to a release from the Educational Policy Institute, or EPI, an international and independent think-tank with offices in Toronto, Virginia Beach in the US and Melbourne, Australia.

"It is clear that post-secondary education is facing difficult times as a result of this recession," said report co-author and EPI Vice-President Alex Usher. "There is, however, still time to save the system from decline if university and college presidents and premiers react quickly and make wise choices on policy and budgeting."

The report briefly outlines key effects of the recession on Canadian post-secondary education. These, according to the EPI statement, are:

* "The collapse in equities affects institutions' endowments and pension liabilities thus reducing income and increasing expenditure in the short-term.
* The real-economy recession will create new patterns of post-secondary attendance (rising college and graduate school enrolment; falling apprenticeship registrations) which will both raise institutional costs.
* Worsening labour market conditions will affect student income and cause student aid budgets to balloon.
* Two or three years out, significant cuts in government operating grants to institutions can be expected as governments try to bring budgets out of deficit which, in turn, will result in a number of challenging financial years ahead for universities and colleges."

Usher said that while it might be too late to respond with upcoming provincial budgets, "governments have an opportunity in the 2010 budget cycle to make the right choices. It will still be a hard few years for institutions, but if governments do not respond appropriately, it could be even worse."

Institutions faced with rising costs and shrinking budgets will "need help in the short-term to reduce their cost-base and diversify their revenues", according to the EPI release. It lists ways identified by On the Brink that government can help institutions achieve this, including:

* "Pay for salary-restructuring: governments should assist institutions in making one-time buy-out offers to staff to reduce the salary base. Spending a little bit of extra money in this way in the 2009 and 2010 budget cycles could save a tremendous amount of money later.
* Do not let enrolment formulas constrain institutions from meeting the shifting demand: sudden enrolment increases in college and graduate programmes could be unfunded if traditionally slow-to-respond government funding formulae do not keep pace with rapidly changing enrolment patterns.
* Allow tuition to increase while protecting and improving student aid programmes that matter, and chop the ones that do not: institutions are likely to look at increased tuition fees as the most obvious place to start to offset declining revenues. If governments permit tuition increases, the temptation to cut back on soon-to-explode student aid budgets has to be resisted. Only the programmes that most effectively target resources to those who need it the most should be maintained or increased, but governments should not be afraid to cut ineffective, universal programmes like tuition tax credits.
* Fund brains, not buildings: the recent rash of government funding on infrastructure is welcome, but should not come at the expense of base research funding which keeps researchers in the country in the first place."

In the longer term, On the Brink says, the recession would likely coincide with broader demographic shifts - "most notably, the retirement of large numbers of baby boomers - that will squeeze government budgets in ways that prevent governments from re-investing in post-secondary education. As a result, it is possible that we are now entering a state of permanently declining per-student revenues, or 'Peak Post-Secondary Education'.

This is not inevitable but it is possible, "and governments and institutions need to be prepared to respond in a number of ways including increasing internationalisation and thinking seriously about the methods through which learning is delivered at the institutional level."

Comment:
All said and done, it is important to make student visa issuance easier. Right now, visas are rejected on petty and rather filmsy grounds, which cannot and does not serve Canada's interest. Give due importance to international students and be broad-minded.

Rajinder Mehta