Free Tuition – Ontario’s Wynne-Lose Proposition

There was much rejoicing in Ontario streets when the Good Fairy of Postsecondary Education announced that university and college tuition would soon be free?for some.

Ontario premier Kathleen Wynne’s government announced last week that college and university tuition for low-income students will soon be free. Beginning with the 2017-2018 school year, students whose family income is less than $50,000 annually will be eligible for grants to cover their tuition.

The media immediately went into an uncharacteristic froth of jubilation. Uncharacteristic because most media coverage involving Wynne seems to be scathingly negative. But now, here she is giving money away for education. Isn’t she swell.

A look at the fine print, however, reveals that this money will not be growing on trees. In order to finance the new free tuition scheme, the Ontario government is digging into the pockets of all Ontario students?the majority of whom will not benefit from Wynne’s largesse.

The Improving Access to Postsecondary Education handout that accompanied the 2016 Ontario Budget outlines the new plan. The new Ontario Student Grant (OSG) “will make average college or university tuition free for students with financial need from families with incomes of $50,000 or less.” Additionally, some students “from families with incomes of $83,000 or less will receive non-repayable grants that will exceed average college or university tuition.” So, That’s all good, right?

Well, sort of. The document goes on to demonstrate several scenarios in which students will be better off under the new OSG. The scenarios compare what some students receive now?through grants and loans?under the Ontario Student Assistance Program (OSAP) and other student assistance to what they may get under OSG. I say “may” because of the little note at the bottom of each scenario: “Funding reflects full rollout of OSAP transformation (2018-19) and implementation of the 2015 federal Liberal platform commitments regarding Canada Student Grants.” No word on what will happen if those “platform commitments” don’t translate into action. Never mind, though, because I’m confident the federal Liberals would never make a promise ahead of an election and then not follow through.

The province also says it will “increase access to interest-free and low-cost loans for middle-and upper-income families” as well as “expand financial support for mature and married students.” It’s not clear how the province will achieve those pledges.

The new Ontario Student Grant will replace previous provincial student funding schemes. All the funding from current OSAP grants, including the Ontario Tuition Grant, the Ontario Student Opportunity Grant, and the Ontario Access Grants, will be redirected to the OSG. Does that sound like the province will be helping more students with the same amount of money? It’s a miracle!

Haha! No. Buried in the full 408-page 2016 Ontario Budget papers is the fine print to this OSG dream scheme. On page 103, we discover a hint of where the post-secondary education fairy found the rest of the money: “The government proposes to discontinue the tuition and education tax credits” beginning in fall, 2017. You have to jump to page 329 of the budget for the whole story.

Tuition and education tax credits are currently available to all Ontario students. Similar to the federal Tuition, Education, and Textbook credits, these amounts are claimed on students’ annual income tax return. Claiming these credits reduces the income tax payable for students (unused credits can be transferred to the student’s parents or spouse, or carried forward to future tax years.)

The Ontario government expects the cancellation of the tuition and education tax credits will increase its revenues by $335 million annually by 2018-19. This revenue will be redirected to the new OSG and other education programs. So all students?including those supposedly benefiting from the new OSG program?will be paying more so that tuition can be free for some.

Many Ontario students studying at AU don’t qualify for educational grants under the current OSAP system, and may not qualify under the new OSG system. For starters, at least one current Ontario grant applies only to Ontario (not Alberta) tuition; It’s not clear if the OSG will have a similar restriction. Secondly, the Ontario grants system takes into account amounts that your family (or your spouse) might contribute to your education, regardless of whether they actually can or do contribute. Finally, mature students balancing a career and studies are often shut out of grants because their household income exceeds the threshold or because they are accumulating assets like a home, car, or retirement savings. The grant system doesn’t reflect each student’s struggle, It’s just a general numbers exercise. If you make less than x, you must be needy; if you make more, you are not.

However, all students, whatever their financial position, will lose the much-appreciated?and, often, much-needed?Ontario tax credit for tuition and education. Each student, regardless of their financial situation, will have to give up hundreds of dollars annually in order to finance the PSE fairy’s generosity to the minority of students. Some students can afford the loss, but many can’t.

So any dancing in the streets is premature. The 2016 Ontario budget has good news?maybe?for some students, but bad news?definitely?for the majority. It’s not a win-win, It’s a win-lose.

Barbara Lehtiniemi is a writer, photographer, and AU student. She lives on a windswept rural road in Eastern Ontario. Follow Barbara on twitter @ThereGoesBarb.