Judging from some of the ruminating going on in the media lately, it would appear that Canadian universities will soon be facing a new assault under the mantra of sustainability. Some of this is a spillover from the United States where rising tuition fees have exceeded the general inflation rate fostering a view that higher education in the United States is another “bubble” waiting to burst and that once it does universities will be forced to close programs. Canada is not the United States, but the discussion here can be summarized by Tuesday’s editorial in the Globe and Mail “Reform or Perish” which among other things states:
“Classes of 500 students or more taught by an emerging cohort of indentured PhDs who carry a growing share of teaching ‘burden’ but have little hope of long-term employment. Professors who get ‘relief’ from teaching obligations to pursue research. Classes and courses of study that prize particular academic disciplines rather than make the connections among disciplines that are so crucial to learning. For students, its unacceptable; for taxpayers and families who spend tens of billions of dollars each year, it’s unsustainable.”
The hard evidence offered in the Globe’s editorial is that we are getting less for more and that the quality of the undergraduate experience has suffered. In particular, they cite the increase of the ratio of full-time students to full-time faculty, the reduction in faculty teaching loads and that faculty income growth has outpaced the rate of inflation. In essence, they have offered what can be interpreted as a faculty- centered explanation of fiscal sustainability in post-secondary education.
We of course are familiar with the sustainability debate in health care, where health spending growth rates in excess of growth rates in the resource base are seen as a sign of lack of sustainability. If post-secondary education is not fiscally sustainable, then one would expect to see a similar type of measure. Saying the health care system is not sustainable simply because the number of patients per physician has increased, doctors serve fewer ER hours and their income growth outpaced the inflation rate would ignore the fact that health care is a system with multiple expenditure categories and players. Similarly, one needs a broader picture of sustainability for post-secondary education.
I decided to dig up some statistics on post-secondary education in Canada. I found university and college revenue and expenditures, for fiscal year ending closest to March 31, annually (Dollars) in Statistics Canada for the period 1989 to 2009 (See below for the Series numbers). The data include colleges as well as universities but given the growing integration between colleges and universities I am not sure how concerned I should be by the statistical lack of separation. Along with the total annual expenditures for universities and colleges, there is also provided data for tuition revenues, administration expenditures, education expenditures, support to student expenditures, other post-secondary education expenditures, and debt charges. I was not able to dig up too much detail on the composition of these categories but perhaps WCI readers will have some insights. I decided to calculate the annual growth rates for these categories for the period 1990 to 2009. As well, annual growth rates for total provincial-territorial (PT) government sector revenue and GDP were also calculated to provide a comparison. All growth rates are nominal. The results?
Well, like health, the system of post-secondary education spending in Canada is “unsustainable” given that the average annual growth rate for the period 1990 to 2009 for total post-secondary education spending (at 5.7 percent) exceeds the growth rate for GDP (4.3 percent), provincial-territorial government revenues (4.7 percent) and total provincial-territorial government expenditures (4.3 percent). Actually, post-secondary education spending is growing almost as fast as public health spending. As well, the average annual growth rate of tuition revenues exceed the post-secondary education spending growth rates which lends support to the argument that students are paying more but not getting full value. However, it should be noted that sustainability requires revenue growth to exceed or match expenditure growth and one can also argue that rising tuition fees have been an effort to make the system “more sustainable”. However, when you break it down by the categories provided, it would appear that some categories of post-secondary education spending are more unsustainable than others.
The “Education Expenditure” category while growing faster than total provincial-territorial government revenues and expenditures is the slowest growing of the university-college expenditure categories. Indeed, between 1990 and 2009, this category has fallen from 57 percent of post-secondary spending to 49 percent. The all other category (which contains the two categories of support to students and other post-secondary education expenditures) has exhibited the highest growth rate and reflects the shift towards spending more on student support services. As well, administration expenditures and debt charges have also grown faster than “Education”.
This should not be a surprise. Hiring more sessionals and packing more students into a class has allowed universities and colleges to restrain expenditure growth in the “Education” category. Some of the resources freed from these practices may indeed have gone into faculty incomes, but they have also gone into administration and student support services and the incomes of the people employed in those categories. As well, there is the growth of debt servicing costs. The debt servicing is especially galling given that universities since 2000 have accumulated substantial amounts of debt in order to increase capacity to do what the Globe advocates in its editorial – “ bring the values and practices of liberal arts and science education to the masses – and create the kind of citizens and future workers essential to a free and democratic society.” Hopefully, most of this university debt is locked in for a long time at current low interest rates because otherwise, there will be another budgetary squeeze when interest rates rise.
The fact is that improving the quality of the undergraduate post-secondary experience is going to be a complex undertaking that will require more and not fewer resources especially given the push to expand university education even further among “the masses”. The Globe’s lament that dumping information from a professor’s head onto a student’s notebook isn’t education may be correct but it can be extremely cost-effective especially if there are 1,000 students in the class. The Globe’s analysis of the problems of the post-secondary reduces it simply to faculty doing too much research and not enough teaching. It ignores the other players in the system – governments, university administrators and special interest groups – who have also influenced the situation and promoted their own agendas. In its editorial, the Globe states: “If you can’t explain it, you shouldn’t be allowed to teach it.” To that, I would add, if you do not fully understand the dynamics of a situation, you probably should not be so sweeping in your policy recommendations.
University and college revenue and expenditures, for fiscal year ending closest to March 31, annually (Dollars).
v156385 Canada; Total revenue
v156388 Canada; Tuition fees
v156398 Canada; Total, postsecondary education expenditures
v156399 Canada; Administration, postsecondary education expenditures
v156400 Canada; Education, postsecondary expenditures
v156401 Canada; Support to students expenditures
v156402 Canada; Other postsecondary education expenditures
v156403 Canada; Debt charges