Tuesday 12 May 1992

Student assistance

Association of Colleges of Applied Arts and Technology of Ontario

Christopher G. Trump, executive director

Wolf-Dieter Klaus, chair, policy committee

Ontario Association of Student Financial Aid Administrators

David Sidebottom, chair

David Stager

Ontario Association of Career Colleges

Hartley Nichol, past-president

Paul Kitchin, executive director

Queen's University

Dr Rod Fraser, vice-principal, resources

J. Andrew Parnaby, academic affairs commissioner, Alma Mater Society


Chair / Président: Beer, Charles (York North/-Nord L)

*Acting Chair /Président suppléant: Brown, Michael A. (Algoma-Manitoulin L)

*Vice-Chair / Vice-Président: Daigeler, Hans (Nepean L)

Drainville, Dennis (Victoria-Haliburton ND)

Fawcett, Joan M. (Northumberland L)

*Martin, Tony (Sault Ste Marie ND)

*Mathyssen, Irene (Middlesex ND)

*O'Neill, Yvonne (Ottawa-Rideau L)

Owens, Stephen (Scarborough Centre ND)

*White, Drummond (Durham Centre ND)

*Wilson, Gary (Kingston and The Islands/Kingston et Les Îles ND)

*Wilson, Jim (Simcoe West/-Ouest PC)

Witmer, Elizabeth (Waterloo North/-Nord PC)

Substitutions / Membres remplaçants:

*Brown, Michael A. (Algoma-Manitoulin L) for Mrs Fawcett

Christopherson, David (Hamilton Centre ND) for Mr Owens

Cunningham, Dianne (London North/-Nord PC) for Mrs Witmer

*MacKinnon, Ellen (Lambton ND) for Mr Drainville

*In attendance / présents

Clerk / Greffière: Mellor, Lynn

Staff: Personnel: Drummond, Alison, research officer, Legislative Research Service

The committee met at 1542 in committee room 2.


Resuming consideration of the designated matter pursuant to standing order 123, relating to student assistance.

The Acting Chair (Mr Michael A. Brown): The standing committee on social development will come to order. The business of the committee today is to consider standing order 123, from the Liberal caucus, relating to OSAP.


The Acting Chair: Our first presenter this afternoon will be from the Association of Colleges of Applied Arts and Technology of Ontario, Chris Trump, executive director, and Wolf-Dieter Klaus, manager, financial aid and awards.

Gentlemen, you have been allocated half an hour by the committee. We always enjoy some opportunity to speak with you after your presentation. If you would introduce yourselves for the purposes of Hansard, you may begin.

Mr Christopher Trump: I'm Christopher Trump, executive director of the Association of Colleges of Applied Arts and Technology of Ontario. My colleague Dieter Klaus will introduce himself very shortly.

Let me introduce the colleges of applied arts and technology. There are 23 of them in Ontario, from Cornwall to Kenora, from Niagara to Moosonee, where we have the James Bay campus of Northern College.

We have at the moment the highest enrolment ever of full-time post-secondary: 114,000 students. The enrolment climbed 10.5% last fall and the fall before by 5% over the previous year, this following on a five-year period of relative stability. As you may have read in the Toronto Star today, the report accurately reflects that we now have an application increase of 20% to 30% over last year. We do not as yet have a system of determining whether these are all individuals or whether they're individuals who, in their desperation to be in a program, have applied to five, six, 10 or 12 programs. We will know that when the time comes to admit students for the coming fall.

Part of this is driven by the fact that we are in a recession. Part of the nature of this recession is that of the layoffs that have taken place. Some 80% of those jobs are gone. What it means is that there is an individual decision being made which, in aggregate, adds up to these numbers -- retrofit, more skills, training, if not the colleges, who? We are in many respects that line of higher education which will see us through this very difficult period.

Financial aid for students is an integral part of that effort. Since 1987, the colleges have been permitted to build dormitories. Prior to that, we were viewed as community colleges and were not allowed to build dormitories. Recognizing the fact that there are areas of specialization, for someone who is interested in ground control, for example, which is safety in the mines, the finest program in Canada is located at Cambrian College. Students come not only from Ontario but from elsewhere to enrol in that program, and there are similar programs in other colleges that specialize.

Once students have left home, their financial needs increase. Once they have dependants, their financial need increases. The average age of the students now is 24, which means that your traditional, full-time, right-out-of-high-school post-secondary student is no more. We have a diversity and a range of needs now, so I think it's very timely that you're holding this hearing to examine ways in which we can, in a system that is strained at the moment -- OSAP is $50 million over budget, I believe, the last time I heard. Yes, we need more money, but perhaps there are different ways of approaching the dilemma. What we would really like to do in our brief introduction and with Dieter Klaus's exposition to you is to outline one approach we're taking at the colleges which we're urging on you. Of course we would then be happy to answer your questions as well.

Mr Wolf-Dieter Klaus: I am a financial aid administrator at Mohawk College. I've been in this job now for eight years, so I've learned to deal with the program, as well as day-to-day contact with the students on the one hand, so it's real grass-roots experience; on the other hand, I've been involved on the provincial level, through our association, with the wider issues and philosophies of OSAP, including last summer's consultation report that you probably are aware of.

In this particular setting I'd like to confine my comments to the more narrow perspective at hand, namely, how and whether there should be a shift from the present grant-loan mix to loan only or whatever combination, although I think it would be of benefit to this committee to examine and discuss student financial aid in a much wider context.

There is no question among college FAAs -- and that's what we call ourselves, financial aid administrators -- that the present student assistance program needs a fundamental overhaul. It's now 27 years old. It was instituted at a time when the typical student was 18 years old, coming straight from high school. Since that time, all kinds of minor adjustments and major adjustments were made and it's now a hodgepodge of programs, rules and regulations which truly do not meet the needs of our present student population.

At the colleges right now, I would guess -- and this is not a researched figure -- that up to 40% of our students do not fit the typical 18-year-old high school leaver. They are sole-support parents, married students, older people who have lost their jobs who are even in their 40s.

The present student assistance program therefore has major deficiencies. There are unrealistically low cost allowances on the one hand; on the other hand there are unrealistically high expectations for contributions from parents and spouses. There are high loan debts, even with the present grant component, and much too rigid a loan repayment requirement, which very often leads to defaults. There is a real lack of options for those needy students who are ineligible for the present grant and subsidized loan assistance.

Any changes to a provincial student assistance program must address these deficiencies at the same time. A simple shifting of grant to loan assistance will only exacerbate some of those deficiencies, not alleviate others and certainly create some more problems. We understand the government is looking for a more efficient and effective use of tax dollars and of course the student assistance program is one of the programs it is looking at. Shifting from grant to loan may look cheaper on the surface, but cheaper is not necessarily better. Cheaper does not necessarily mean more efficient or more effective, especially when you compare to the results and the objectives of the program.

I think the basic objectives are still true today. At first glance, the objectives are to assist students to attend post-secondary education, but obviously it's not just for the individual. Society as a whole benefits and that's why we are willing to put money into such a program. It allows us to tap a pool of talent, ability and resources, especially human resources, that our society would normally not have because these students couldn't go to post-secondary.

It's the education and the training of our workforce for our future and -- this is a motherhood issue nowadays -- to be competitive in the global economy. But it needs to be emphasized that this is the long-term objective of such a program. It is important and it's a very critical objective to be met for the wellbeing of all of us for the long term. Therefore, we need to put society's resources into that direction.

Obviously, affordability and financial feasibility must be an important factor. However, short-term budget considerations really should not prescribe changes to a government program with long-term objectives and results. We need long-term changes. I think a great effort was made last summer when there was a long consultation process of several working groups and all kinds of stakeholders in the program. Colleges, universities, students, labour, all kinds of organizations were represented. There is a very good consultation record of that review. We feel any long-term changes to the program should be guided by these recommendations contained in the Reference Group Consultation Record of last summer's Ontario student financial assistance review.

We feel that an effective assistance program must contain a strong grant component. This is necessary to avoid unnecessary, unreasonable debt loads to our future students. Even with the grant program right now, college students who spend three or four years at the college end up with loan debts of up to $20,000. That's with the present grant program. We have to realize that college graduates differ in some aspects from university graduates; not all of them go into highly lucrative careers.

Sure, our computer systems technologists may make good money. Our early childhood education graduates, however, as you know, have very small incomes once they are finished. If they have high loan debts, they will have problems repaying them. It would be a very unfair burden to them as they provide such an important and critical function in our society.


Second, it's important to have a grant component to ensure that students are not deterred from embarking on post-secondary studies due to a fear of unmanageable debt loads as a perceived barrier. As already mentioned, we would lose a large number of our talent pool and our population. But grant alone is not necessarily the answer; it has to be a fair distribution of the grant assistance. Just to give you an idea of what happens right now, some students get 90% grant, $4,000 or $5,000, and very little loan, while other students get all loan, based on the present rules of the system. We do not feel that is necessarily the way to go.

The grant component should be strong but more fairly distributed so that all students have a reduced debt load at the end and all students have accessibility to some grant assistance. How this is done -- there are many variables possible. It could be done on a fixed amount or a fixed percentage. I think the colleges would prefer a fixed percentage, to be fair within the whole system. The background of the student should be less relevant than what they're doing in their education.

At the same time, it allows for increased loan assistance because there is more bang for the buck in the loan area than in the grant area. If there is an increase, this increased loan assistance must result in adjustments of allowable costs to realistic levels, and in the consultation record we described a market basket approach. On the other hand, the parental-spousal contribution tables have to be adjusted to realistic levels. Right now the personal living allowance for all students is substantially lower than general welfare assistance payments.

As we have such a new student mix of married and single students, we cannot expect the traditional student who is 18 years old and can handle being below the poverty line for two or three years or more. As this will result in a higher student loan debt, it must be balanced by a flexible repayment option, by debt counselling and forgiveness, in the case of the student unable to repay the loan. The debt counselling should happen before the student starts accumulating debt, during the student having the debt so they know how much to take, and of course also after, how to manage that debt load. That is not the case at all with the present system.

The major part of how to manage that debt should be an income-contingent repayment plan. We feel the present rigid system of paying back at a set amount does disadvantage those students who do not have the lucrative earnings later. An income-contingent repayment plan, and that has to be stressed, is in itself first of all just a concept about paying according to your ability to repay the loan.

There are many permutations of how such a plan would function. It would have to be a very fine balance between subsidy on the one hand with the government and the ability of the student to pay. One can make it very steep, one can make it low with high costs to the government, or low costs. It depends totally on the various numbers.

The obvious case to show how this would work: If you talk about a dental student who has maybe accumulated $30,000 but has an income very quickly of over $100,000, that student could pay his or her loan back very quickly with a high rising percentage of his or her income, as opposed to an ECE student who probably would need a very low repayment percentage of his or her income in order to be fair. We leave it to the challenge of the government's financial expert to find these balances.

Last, I would like to talk of a group of students who are presently totally excluded from this system. There are many students who, for the rules of the present program or because their parents arbitrarily refuse to assist them or whose appeals are not accepted for sometimes not very logical reasons, have the option of acquiring the assistance of a student loan with total cost recovery. What that means is that it's a loan that is not subsidized but provided to a student who can then, once he's finished with his education, repay it, including all the interest the loan bears for the time.

To summarize the main points of my presentation, Ontario's community colleges support a major change to the present student financial assistance in Ontario. The development of a new program must be guided by the recommendations of the 1991 review consultation record and include a strong grant component, adjustments of allowable expenses and contribution tables for parents and spouses to realistic levels, a subsidized loan program with a flexible income-contingent loan repayment plan, and as a third component, a full-cost recovery loan program with income-contingent loan repayment.

The Acting Chair: Members have expressed an interest. We have about four and a half minutes for each party.

Mr Drummond White (Durham Centre): Thank you very much for your presentation, and nice meeting you again, Mr Trump. It was only last weekend when we chatted about this same issue.

The issue you brought forth was a grant component as part of what's being referred to as an ICRP, an income-contingent repayment plan. What portion of the grant-loan would be the grant?

Mr Klaus: We're really talking about a three-level program. The grant would of course be non-repayable. We're not talking about income repayment at all. That would be one part of the component.

Mr White: You spoke about a fixed percentage of the total package being the grant.

Mr Klaus: Right. I have no fixed percentage in mind, but the minimum we would be looking at would be what I call pure educational costs -- fees, incidental fees, book and equipment costs, local travel -- sort of the core costs any student has, whether he lives at home or not, which probably would amount -- this is just a guess at this point -- to maybe anywhere between 25% and 35% of the overall costs. That depends on the student's program etc, because as you know, the real costs can be -- I'm not talking about the costs as they are allowed by the program. With the college program, if you live at home you're talking of at least $3,500 to $4,000 in costs, and if you live away from home you're talking of around $8,000 to $10,000, depending on what the program is.

Mr White: So what you're saying is that a fixed percentage of the amount as being grant will be a fixed percentage, which would vary, a variable fixed percentage?

Mr Klaus: That's correct. If a student is eligible for $5,000, a third of that should be given in grant, the rest in subsidized loan with income-contingent repayment.

Mr White: If the student is eligible for $2,000, it would still be one third?

Mr Klaus: I would consider that fair. Otherwise you're talking about a fixed amount.


Mr White: Okay. When you talk about a variable repayment plan based upon income and the type of program involved, how would you be sure that while you might set up a fairly decent, fair system right now, in five years' time, in 10 years' time some future ministry or bureaucrat might change that in a way that just totally eliminates the fairness of that contingency repayment? How could you be sure that there's an ongoing expectation of fairness for those students?

Mr Klaus: I could not ensure that, because any Legislature that legislates something can change that, obviously. It is up to the fairness of the government and the Legislature to keep it fair. Obviously I cannot ensure that at all. Even on the original setup, I cannot ensure it is fair. Hopefully it is fair if one looks at the real costs and the real incomes and sees how much of a loan a person in that income range can bear.

Obviously, you have to adjust such levels and percentages on a yearly review; you cannot just let it sit for ever. This is part of the problem of the present program. Some of the amounts we are talking about in the present program have been set or fixed years ago and not adjusted, and therefore it has fallen back so that now many of our students receive -- are allowed -- only 70% of the real costs, and I'm talking of minimum costs, which means they all have to work.

Most students have no problems working. However, there are many programs where you cannot work as much as you should to just survive, because some programs are very, very tight and the hours spent at school or in labs or whatever it might be do not allow the extra work. I don't think any of our students can survive nowadays on OSAP alone, even if they get the full shot.

Mr White: That's certainly true, but when a student enters --

The Acting Chair: Excuse me, Mr White. We appreciate it. Mr Daigler.

Mr Hans Daigeler (Nepean): Thank you for making a presentation today. You're presenting for two organizations, I presume.

Mr Klaus: I represent the college financial aid administrators today, who are within the ACAATO structure.

Mr Daigeler: Okay. I'm asking that because I was wondering, on the review committee that the ministry still has in place that prepared the report to which you referred, I presume ACAATO was represented and still is, and is it financially represented as well?

Mr Klaus: Yes, we are.

Mr Daigeler: I think we kind of found out that this income contingency idea is a relatively recent thought that has come to the fore and is perhaps being pushed in particular by the Council of Ontario Universities. Since you have been involved in this review, do you agree that this idea has, all of a sudden, come up? What are the reasons for this coming up so quickly? Second, are you actively involved in the campaign by the COU to move forward on this income contingency thought?

Mr Klaus: Are you addressing me?

Mr Daigeler: Whomever.

Mr Klaus: The reason it has come to the fore among financial administrators is the reality that our students have problems repaying the present loans the way they're structured. That is where we are coming from. There have been a high number of defaults, as you're probably aware, I think at the federal government level -- we are talking of close to $1 billion in receivables -- and the repayment of loans right now is totally rigid. Whether you make $100,000 or $15,000, you pay the same amount. That would alleviate that and adjust it to ability to repay.

I cannot talk for COU; I'm not involved with COU whatsoever. My understanding, and this is my interpretation, is that they're probably coming from a little bit of a different point of view. While I have talked about a mix and match of grant, subsidized loan and cost-recovery loan, if I understand their position correctly, they're leaning more towards a total loan system with total cost recovery, which probably would allow very high loans and would probably be quite an effective use for university students.

However, the college population has very different groups in terms of (a) where they're coming from and (b) where they're going. You cannot compare, and that's why I always talk about early childhood education grads, because they're at the bottom. They have three years of education behind them and end up earning $20,000 a year. They just are not in the same ballpark, and therefore a flexible repayment program is essential for these people to manage the loans.

Mr Daigeler: So really what you are interested in is more flexibility in their repayment.

Mr Klaus: Correct.

Mr Daigeler: I was just a little bit struck by your presentation, because you seemed to be arguing at first -- I'm referring to this written presentation -- that the high loan debt load is one of the serious problems with the existing system.

Mr Klaus: Right.

Mr Daigeler: On the other hand then, at the end you're saying you support the principle of an income-contingent repayment plan which could increase even further that high debt load, so that's why I'm kind of wondering where you're coming from.

Mr Klaus: Right now you have a flat repayment. Whether you make $20,000 or $100,000, you pay X dollars, if there's a schedule. Income contingency means the same people at a low end pay a lower level, and the curve goes up. The $100,000 person pays maybe $20,000 a year, while the other pays $2,000 on the same debt.

Mr Daigeler: On the current --

Mr Klaus: No, that's income-contingent.

Acting Chair: Mr Wilson.

Mr Jim Wilson (Simcoe West): Thank you, Mr Chairman. If Mr Daigeler would like an extra minute, he can have mine.

Mr Daigeler: Okay, thanks very much. I seem to sense that you are using a somewhat different definition for the income contingency plan than what we've been talking about so far. I think that what you seem to be concerned about, and I think it's a very legitimate concern, is that under the existing loan structure there should be more flexibility according to one's income to pay back that loan, whereas the income contingency plan, the way we've been talking about it up to now, is to move that whole load into loans only.

Mr Klaus: Yes, but that is not really what income-contingent is about. That is only the end phase. You have two phases: the front end, what do you give in assistance? then the second phase, how do you pay it back? So if you talk of more loan, you're talking -- if you approve only loan, yes, the debt will rise higher and a solution to some of the problems would be income contingency as opposed to a rigid payment. But even the present system can use an income-contingent repayment, so you're talking front end and back end.

Mr Jim Wilson: I just want to thank Mr Trump and Mr Klaus for appearing today. I think I thoroughly understood your presentation. It's been very consistent with what we've been hearing to date and I really have no questions at this time.

The Acting Chair: Thank you, gentlemen, for taking the time to come down and see us today.

Mr Klaus: It's our pleasure; thank you.


The Acting Chair: Our next presentation will come from the Ontario Association of Student Financial Aid Administrators, David Sidebottom. Good afternoon. The committee has allotted you 20 minutes for your presentation. The members always appreciate a few minutes to discuss your presentation with you. You may begin by introducing yourself for the purposes of Hansard.

Mr David Sidebottom: Good afternoon. My name is David Sidebottom. I'm the chair of the Ontario Association of Student Financial Aid Administrators. The other hat I wear is as the financial aid manager at the office of admissions and awards of the University of Toronto.

I would like to thank the committee for giving me the opportunity to come here today to address you on these very important issues. I'd like to begin by sharing with you a bit of information on the role we currently play in the promotion of accessibility to post-secondary education.

Every college, every university in Ontario has an office of student awards or an office of financial aid on campus. We're employed by that institution to assist our students, and some of the different activities we're involved in are scholarships and bursaries. Bursaries are awards that are based on financial need. They could come from internal or external sources. We help students with financial planning, with budgeting, with debt load counselling. We go out to high schools and talk to students and parents about financial aid.

While OSAP and work study form a great deal of our responsibilities, we also have to be cognizant of other provincial aid programs. One of the things you'll probably learn through this is that every province in Canada has a different student aid program; they have different theories.

We also have to be familiar with United States guaranteed student loans, especially in the university community where we have American citizens coming up to study at our graduate schools.

By and large, the largest volume of students we see in our offices are students applying for OSAP, and our role, just to sketch that out for you, is that students apply through us. They're submitting their applications to our offices. We're preparing them and forwarding them to the government. We then receive the funds back for the students. We notify the students of their awards and we counsel the students about appeals.

I think, if you asked a student what is the face of OSAP, he would say it's the financial aid office.

Our professional association is OASFAA, to use the acronym, and it consists of 47 member institutions here in Ontario. In the realm of post-secondary education, we're somewhat of a unique group in that we comprise membership from the universities and the community colleges as well as some of the larger private vocational schools. I'm not aware of any other organization that combines a membership from these different realms.


Over the years we've been very active in advocating changes to the OSAP program, both in policy and procedure. OSAP policy reviews come around about once every 15 years; we do policy reviews every year with the government. I've arranged to have you receive a discussion paper that we've produced on the future role of financial assistance in Ontario. Some of the things I mention today are obviously going to be included in there.

Let me begin by stating that it's no secret that the present OSAP program is in need of an overhaul. The present structure of a grant-first program dates back to 1978. The policy review that was started last May is the first major review of that program since 1978, and we were certainly very pleased to see that initiative.

I think the reference group consultation record, which was put together in September, is a good summary of some of the inadequacies in the present program. We can look at things like unrealistic cost allowances and recognize regional differences. It's long been known that your OSAP dollars go farther if you're studying outside of Toronto than in Toronto.

The assumption of family support is a major problem for quite a few students, with arbitrary limits on grant eligibility. We can look at the discriminatory ceilings on grant assistance for different types of students. We can look at the low ceilings on loan assistance. Other areas include lack of coordination with other government programs like social assistance, family benefits, vocational rehab -- the list goes on and on. Finally, after graduation, there are the problematic repayment provisions.

I thought the reference group consultation record did a very good job in identifying a lot of the inadequacies of the program, but let's look at the issue of an all-loan program. That's what we're here to talk about today.

I'm sure you've heard or you're going to hear presentations that grants do not increase accessibility to post-secondary education. I'm sure you're going to get statistics that freezing tuition fees does not improve accessibility. Those statistics are correct.

Funding alone is not going to ensure accessibility to post-secondary education. You can look at that from a commonsense point of view. What determines whether someone goes on to post-secondary studies? For a large majority of our students here in Ontario, it's your family background, your family values, your ambition. A lot of these factors impact on who goes on to post-secondary education. Student aid certainly helps. It plays a large role, but I would say that's not the prime motivator.

I think, though, we have to look at the history of grant funding here in Ontario and the fact that since 1978, Ontario has been the only province in Canada that awards grant moneys first. The move from a situation like that to an all-loan program would, I think, be a bad move. I think it would have tremendous repercussions with the message the province would be sending out to students here in Ontario.

I feel, and we as an association feel, that grants should be retained as part of the Ontario student assistance program. I'm going to talk a bit more about that in a few moments.

One of the things we see on our campus is that the post-secondary student population has undergone vast changes in the past 15 years. It is obviously a much more diverse student population out there, many people from different backgrounds, many people with different needs.

One of the most astounding statistics I've heard, if we look at Ryerson's first-year enrolment, is that 50% of its students do not come directly from secondary school. We've also witnessed over the past few years a tremendous increase in program diversity both at the colleges and the universities, as well as in the private sector.

What we as financial aid administrators feel is that we need a program here in Ontario that is flexible enough to respond to the wide diversity out there. That is why we're recommending a broad range of student aid that can be tailored or packaged to meet student needs.

Some of the things we would see in this package of student aid would be grant moneys, and we would certainly support the issue of tuition grants for students from low-income backgrounds. We would also look at the continuation of interest-free student loans. We've actively promoted for years the concept of interest-bearing student loans. These are loans that our friends south of the border have; they're used for students who have unusual circumstances. Parents can borrow these loans. We feel there's definitely a place in the post-secondary sector for interest-bearing student loans.

A program that doesn't get enough attention but is probably one of the best programs the Ontario government funds is the Ontario work/study plan. This is a program of part-time jobs on campus, where students can earn money. It helps to supplement what they don't have from OSAP and what they're not getting from their families. It's also something you can use to reduce your debt load. We would certainly like to see an expansion of work/study.

We take some of these components and put them together with some of the funding we have at our institutions: scholarships, bursaries. What we would like to do is put a package together for students -- again, I'm copying this from our friends south of the border -- packaged student aid.

Along with all these, of course, we have to look at what the long-term implications are. I've talked about tuition bursaries. Right now that would be a reduction in grant funding from what is currently offered. We would like to see some of this money channelled towards some of these other possibilities so that students would have better funding or so that more students could access the program.

That would obviously increase debt load. I think we would have to look at the repayment obligations, and as we certainly have already discussed today -- I'm sure you've heard -- the current repayment situation is not very flexible. Students begin paying back their student loans at the same rate as they will five or 10 years after graduation. Students need a break in those first few years after graduation.

We would certainly be interested in supporting some of the initiatives that come out of income-contingent repayment. Again, we're supporting those more for the features and the flexibility those offer students.

I'd also like to address the issue of whether there should be a linkage to merit in OSAP. OSAP has been a needs-based program, and we would like to see OSAP continue to be a needs-based program. If merit is a consideration, if we are looking at ways of rewarding academic excellence or if we're looking at ways of promoting enrolment in certain programs, then I would say there are other measures that can be taken through scholarships in that direction; so keep OSAP a needs-based program.

I'd also like to mention a bit about loan remission. Loan remission is used quite extensively by some of the other provinces in Canada. It would forgive a percentage of a student's loans upon successful completion of his or her studies. We have some concerns about loan remission in that students really don't know what they owe, what their final debt load will be, until after they've graduated and they find out what percentage of loan would be remitted.

One issue that I think needs to be stressed again and again is communication. Students need to be informed when they're borrowing money; they need to know what the implications are. They need to know what the interest rate will be. They should be informed borrowers. Currently they don't have this information up front, so we would have very strong reservations against the introduction of a loan remission program here in Ontario.

In closing, what I would like to say, I guess, is that in any review of the Ontario student assistance program let's look to the long term. Let's not have our vision diminished by short-term considerations.

The Acting Chair: Just for the information of members, each caucus has about two and a half minutes, with Mr Daigeler, Mr Wilson and Mr Martin on my list. Mr Daigeler.

Mr Daigeler: Thank you for what I think is a very useful description of the concerns and problems you are experiencing. Perhaps one of the side products of these hearings is that we're getting an excellent view of the OSAP program at large. I think your written remarks, with the Hansard record, will form a useful basis for further study and action by all of us. Thank you for putting this together.

Yesterday a representative of the college community put forward one major complaint about OSAP. I just wondered, from your experience, whether it's confirmed that it takes too long, once they've made the application, to get any money, even if they're approved for a loan, a grant or whatever and that simply living in that interim is extremely difficult for the students. Is that a common occurrence? Is that a common complaint? What do you think could be done about it?


Mr Sidebottom: I would say probably the most common question we get about OSAP in our office isn't "I'm not getting enough funding"; it's "When will my funds be in?" There have been major problems over the years in the delivery system related to OSAP. We've been working with the student support branch to try and improve some of these.

Mr Daigeler: Did you say over the year or over the years?

Mr Sidebottom: Over the years. We have funds in our offices in the form of emergency loans that we lend students to tide them over. We defer tuition fees if someone's award has been delayed unreasonably and we waive interest charges on fees. So, as I mentioned, probably the most significant problem I've seen over the years is that it's simply taken too long to get student funding.

The student support branch has taken some significant initiatives in this regard. They'll now be processing applications directly out of Thunder Bay using their own computer system. Previously they bought time on the central computer here. There will be a large number of advantages that will certainly accrue from that.

Mr Jim Wilson: As Mr Daigeler has pointed out, in addition to your comments about the package of student aid, which I very much appreciate -- and in fact I agree with much of what you said -- in your written brief you touch on information, the timeliness of the application process and disbursement, technical capabilities and coordination concerning the administration. What do you figure, in your experience, is the cost of these administrative hurdles right now in the system?

Mr Sidebottom: What I have heard in terms of administrative costs -- and I'm getting this at second hand from the branch -- is that it will ultimately save money by having control of its own hardware in Thunder Bay and the advantages of that will accrue. If you cost that over a period of years --

Mr Jim Wilson: You mean the government office.

Mr Sidebottom: Yes.

Mr Jim Wilson: But your paper mentions there should be software available to the institutions also and on-line capability and direct deposit, I assume.

Mr Sidebottom: Yes.

Mr Jim Wilson: Are you making any progress with successive governments on that?

Mr Sidebottom: I would say with the student support branch we are doing much better than we were. There are new people there and they certainly seem more responsive than some of the people in the past. If we wanted to look at the federal government and the Canada student loan program, we have real problems there. There are major problems in communication between the Canada student loan program and institutions, banks. One of the things people often don't realize is that when you look at the amount of OSAP funds awarded, a good chunk, probably 50%, are moneys from the federal government in the form of Canada student loans.

Mr Tony Martin (Sault Ste Marie): I appreciate the fact that you come from a place where you deal with this directly every day in your job, and the knowledge and understanding you bring. Two or three questions in one, if you don't mind: Are you part of the review that's ongoing now?

Mr Sidebottom: Yes.

Mr Martin: How satisfied are you with that process? Number two, you talked about a package; what would be in that package? Number three, it seems to me there is a philosophic difference of opinion beginning to evolve here. Some feel that the institution and the government collectively should be responsible for providing opportunity to the populace out there for education. Then there's the other side that more and more we might count on the individual himself or herself to be responsible for coming up with a greater part of the cost of doing that. The bottom line for me is how do we get a chunk of money into the system, whether we bring it this way or that way or up from underneath? Anyway, I leave that with you.

Mr Sidebottom: Policy review: I think we've been relatively pleased with the way it's gone. We've been, I guess, happy that the government has undertaken this major review of OSAP. As I said, it's the first since 1978.

Your second question was, how would we go about packaging student aid?

Mr Martin: What would be the components of the package that you spoke of?

Mr Sidebottom: That would vary depending on the individual student, the program he's in. It could possibly consist of something of each. It could consist of a tuition bursary if it's a low-income individual. It could consist of an interest-free loan. They may be able, if they wish, to access an interest-bearing loan. There could be a work-study job on campus for that student. There could be a bursary.

In a sense we're doing that, maybe by a more informal process, right at the moment in that we look at institutional moneys in the form of bursaries for students who don't get enough funding from OSAP or run into unexpected expenses. We allow the students to work at work-study positions. In a sense we're doing that. I'd like to see it a bit more formalized.

And your final --

Mr Martin: Was the bigger one. It was the philosophic stance of who should be paying for education -- the system or the individual himself?

The Acting Chair: The final one is going to have to wait, unfortunately, to another time. The time has expired. Thank you very much for appearing before us.

Mr Martin, when you're asking questions, it's helpful if you speak more closely into the microphone.



The Acting Chair: Next we have David Stager, professor of economics, the University of Toronto. Good afternoon and welcome to the committee. As you're aware, the committee has allocated 20 minutes. We always appreciate some of that time to have a discussion with you. You may begin.

Dr David Stager: Because of the limited time I will do the unusual, and that is read from a prepared text, but try to do it as informally as possible so that we will have time for discussion.

I certainly welcome this invitation to make a presentation to you because the topic covers several issues that have been central to my research and teaching in the last many years, if not decades. I enclosed with my material a brief biography and you'll see some of the articles, books and so on that I have written on this set of issues.

First, with respect to accessibility, which is of course a major term in your mandate at the moment, each successive Ontario government has affirmed its commitment to increasing accessibility to post-secondary education. Efforts to do this have been based principally on low tuition fees and student grants, especially since the 1960s. But various studies have concluded that programs of this kind have very little effect on the size and socioeconomic composition of the student population, whether this is in Ontario, other provinces or other countries.

In Australia, for example, when they abolished fees in 1974 they found that there was very little effect on the size and composition of their enrolment. It's led them very recently to adopt a very different financing scheme, which we can come back to if time permits. One of the previous speakers already has mentioned that the tuition fee freeze for two decades in Quebec had less effect on enrolment than the continuation of the tuition fee policy did in Ontario.

Student grants based on parental income have also been found to be inefficient for increasing accessibility. Many students who benefit would have enrolled anyway, so there is very little measurable impact, and we are paying a very high price for the additional. Moreover, as you've heard many times from previous speakers, the means tests based on parental income are increasingly inappropriate for the changing family structure and relationships of the 1990s.

Several other factors have a much stronger impact, rather than lower fees or higher grants, on the probability that a student will pursue university education. These other factors, principally parents' education, ethnic origin, peer groups and school environment, are all very important and I have summarized them in a figure which appears on the second page of the material I've presented to you.

We can see just by looking casually that accessibility really consists of three factors: eligibility, the motivation of the student and the availability of the educational opportunity. All of these trace back ultimately to family and social conditions, parents' education, occupation, home environment, ethnicity, age, sex and school environment. This is the outcome, really, of a massive survey of the literature on accessibility I had undertaken a few years ago.

I would suggest that accessibility can be improved through more effective and less costly means than have been used in the past. The low tuition fee policy in Ontario is maintained at a cost to the taxpayers of about $100 million a year and, as you now well know, the grants program costs about $235 million a year.

Combining these for $335 million, I would suggest we could use that money much more effectively by a targeted accessibility program where we target specific groups. Blacks, native people, disabled persons, single parents and francophones are among those who are usually indicated as the groups that are most in need of encouragement and support to pursue post-secondary education.

Because of the increasing realization that grants and low fees have not been effective, student loans are now replacing grants in many countries. Although it's sometimes argued -- and I've heard it each time I have listened to previous speakers here, both today and earlier in your session -- that students as graduates are carrying an excessive debt load, I would encourage you to get the facts, if you don't already have them, directly from the Canada student loan administrators in Ottawa.

Just yesterday I got an update from them and every couple of years I try to keep tabs on this. If we look at the average debt load of graduates of Ontario universities, 1989-90, the most recent year for which data are complete and reliable, who graduated with an undergraduate degree and who borrowed from the Canada student loan in their final year, they had an average accumulated Canada student loan of approximately $7,600. This is far below the kinds of averages we hear quoted rather casually in some of the other briefs.

I would suggest that the ability to repay this loan is not an onerous problem. In fact, you can work it out and it represents in the order of 2% to 4% of the graduate's annual income. None the less, for other reasons, the Canada student loan program of course is being reviewed: major difficulties with the size of defaults and interest subsidies.

I was interested to hear Mr Daigeler suggest that the income-contingent plan was a new idea. A number of these topics, issues and problems indeed have been around for at least the last three decades I've been working on it. All of this has come together, in my mind, in the last year, to lead me to propose something which I'm calling a universal bursary fund for post-secondary students.

This universal or revolving bursary fund is described more fully in a short magazine article which is attached in the material that was distributed to you. It appeared in the University of Toronto graduate magazine last fall and went to about 185,000 U of T graduates. So there are perhaps some of your own constituents who are now familiar with this notion.

There are two essential elements in such a bursary fund. First of all, any student at an approved institution, regardless of the financial means of the student or his or her parents, would be eligible for a bursary equal to the value of the tuition fee and required books in any undergraduate program. Second, this bursary would be repaid to the fund in proportion to the student's future annual income.

This arrangement is the basis for the revolving bursary fund. Repayments could gradually replenish most or even all of the fund. Relatively small amounts would be required each year to top it up. These top-up amounts would represent the public subsidy to the scheme.

The bursary program would free students from financial dependence on their parents, means-tested grants and loans could gradually be replaced by an expansion of this program and, most important, any public subsidy would be related to the future income level of the graduates rather than to the current level of their parents. In other words, we would treat students as independent adults for purposes of financial assistance, just as we do in so many other programs and legislation.

My proposal is certainly not original. Some countries, including Australia, Sweden and the United Kingdom, have already incorporated this income-contingent repayment concept into their student assistance plans. Various commissions, both federal and provincial, and task forces have proposed contingent repayment student loan programs, but many people seem not to understand the contingent aspect of the repayments because they focus on the word "loan." It may be that the concept is more easily understood and accepted if we think of repayable bursaries rather than forgivable loans. Certainly I've had a number of people, including a number of politicians, say that there is no way we should develop a culture that depends on forgivable loans but that somehow repayable bursaries seem more acceptable.

A repayable bursary program based on the contingent repayment concept would include the following features. The program would be administered by a government-sponsored but arm's-length agency that would establish a fund from which it made advances directly to students. The funds would be raised initially by issuing government-guaranteed bonds. Later, in the order of 10 to 15 years, depending on the arrangements for the startup, the major source of the funding would be the payments received from graduates through the income tax system and forwarded to the bursary agency.

Any eligible student could receive a bursary equal to, as I suggested, the tuition fee and the cost of books, for example. A student's contract with the agency would state the conditions of repayment, including the percentage of annual income to be paid, the maximum number of years during which payments would be required and the interest to be applied. Payments would not be required in any year that an individual's taxable income -- and presumably we'd focus on taxable income as the best measure of ability to pay -- was below a certain level, and I've suggested the average income of the taxpayers in Ontario.

Finally, an individual who, because of low earnings, had not repaid an amount equal to the advance plus accumulated interest by the end of the repayment period would not be required to make further payments. The outstanding debt would be paid to the agency by the government. This provision -- and I think it's important to see it this way -- reduces the risks for student borrowers just as the government's guarantee reduces the risk for the lender. It's a double-sided reduction of the risk. If it's fair for government to reduce the risk to the lender, then it seems that a parallel, symmetrical case can be made for reducing the risk for the borrower.

This outline obviously raises questions about the financial magnitudes involved, and I think this is a fairly new contribution to the discussion. Certainly I have written about income-contingent plans for many years, but have not had the opportunity to be able to work through the financial numbers we could expect. How much would the fund need to borrow annually? How long would it take the average student to make the repayments? What would the government's costs be for the forgiven debt and for the annual subsidy if that was part of the program?

These questions can be addressed by testing various policy options in a simulation model based on the flow of funds for each annual cohort of students entering the post-secondary system. In the program simulated here I make the following assumptions. They are simply for illustration. What is marvellous about this program is its considerable flexibility. You can plug in all kinds of "what ifs" to test the results.

First, the bursaries would be available only to Ontario residents who are enrolled in undergraduate programs at Ontario institutions. All eligible students would participate in the program. We'd have 100% participation, and obviously that takes us to the maximum size of the program. The bursary would be equal to the program tuition fee. The fund's borrowing rate -- and here I'm using real interest rates, because since inflation is affecting both the inflow and the outflow in the same way, the simplest way to deal with that is to net out inflation to begin with and deal with things in real terms or constant dollars. So if we're dealing with a real interest rate to the fund of 3%, for example, and assume in this case an interest subsidy to the student of 2%, the student's rate is then 1%.

I'm assuming a growth in the economy in real income on a per capita basis of 1%, which, I hope, is fairly conservative for the coming future. Also, I'm assuming an income threshold, as I said, average to the taxable income for all Ontario taxpayers for 1989, the most recent data available, and that happens to come to $20,118. I'm also assuming a maximum repayment period of 25 years.

When we plug all those numbers into the simulation model, we get the numbers that come out on table 1. I wouldn't expect you to be able to absorb all of that quickly. Let me simply highlight the outcome.

Table 1 indicates that through the initial startup phase, the annual outflow to students for the bursaries or the advances rises to $315 million. This is with all of the something like 180,000 full-time-student equivalents in the Ontario universities. Annual payments from graduates to the fund exceed the outflow of advances by the year 2009, really not that far away, and in the following years.


The debt level for the fund when repayments exceed outflows -- in other words, when this becomes in that sense a self-financing fund, when repayments from graduates are equal to or greater than the payments out to students -- at that level, the debt has reached a level of $3 billion. The agency thereafter would need to borrow only the funds required to refinance the debt and to pay any interest costs that were not being subsidized. The annual subsidy payments from the government reach $60 million in that year, 2009, and then rise annually by less than $1 million as the fund reaches this plateau.

We have the cost of forgiving the outstanding debts, which I've estimated from a supplementary model, a very complex one because it has to take into account the variation in incomes for every age and gender and program group. The estimate from that is that the cost of forgiven debts -- which, of course, don't begin until the end of the repayment period in 25 years, or 2016 -- would amount to about $120 million annually. In other words, with the full-blown operation of this fund, we are still looking at something less than the cost of the current accessibility program in Ontario.

In order to emphasize that the results are based on several specific assumptions, I then present in table 2 the simulation results for the case with no interest subsidy and a maximum repayment period reduced to 15 years, so really an extreme opposite, all other values unchanged.

One difference is that the repayments increase more quickly, because of course the higher-income graduates are now paying interest as well as their advance and are staying in longer and paying back more. More important, the government has no annual cost for the subsidy. Its costs are postponed for 15 years in this case, until the cost of forgiven debt commences at about $200 million.

I also want to emphasize that the forgiven-debt estimates are based on labour force participation rates and employment income levels for men and women, but especially for women, as we see them now, whereas in fact the labour force participation rate, especially of post-secondary graduate women, has been rising quite dramatically and continues to rise. So again, this is in a sense a worst-case scenario. I would not say this for wide publicity because I don't think it's fair, but as it happens, the great bulk of the forgiven debt is from women graduates, only because we are necessarily relying on the data for the existing labour force participation rates. I would expect to see this forgiven debt drop considerably as women participate even more, and I think it's up to about 85% for young female university graduates.

For the sake of completeness, table 3 then presents the results for the community college sector, based on the same values that are used in table 1, but with the annual advance in this case set equal to the college tuition fee.

Let me say as emphatically as I can, and by way of conclusion, that other combinations of policy parameters could of course be tested, but this little exercise should illustrate the "What if?" experiments that your own committee can undertake. In fact, this model is so user-friendly, I can almost imagine replacing the Nintendo games around Queen's Park with your own little sort of hand-held policymaking tool.

The most important conclusion, however, is that the concept is financially feasible. The essential contribution required from the government of Ontario is the establishment of a student funding agency and the government's guarantee for bonds that would be sold to the major lending institutions. Preliminary discussions I've had with bond dealers indicate that annual borrowing of these magnitudes is quite feasible, especially because the flow of repayments is so stable and reliable when compared with many other investments. Indeed, it's an investment in Ontario's graduates, and I would hope that has to be the strongest, most reliable investment we can make.

The Acting Chair: Thank you. Mr Wilson, for a minute, including the answer.

Mr Jim Wilson: Professor Stager, I very much appreciate your comments on accessibility. When I served on the governing council of the University of Toronto and on the student council, certainly my firsthand experience was exactly that. We undertook a four-year program to tour around kids from inner-city schools, and the fact was that it wasn't that they couldn't afford to go to university; for the most part, it was just that they had never thought of it. I know the studies you refer to there and would recommend the committee also read those.

You've circulated the magazine article concerning your model. What was the feedback, both from the academic community and the student community?

Dr Stager: The academic community, by and large, informally, was very supportive. You may be referring particularly to the faculty organization and the student organization.

Mr Jim Wilson: I was thinking of real students and real faculty.

Dr Stager: Well, let me deal with the other one quickly first, because I've dealt with them for three decades. I love the ironies of history, again referring to Mr Daigeler's comment.

It was in 1969 that OCUFA, the Ontario Confederation of University Faculty Associations, asked me to undertake a study financed by the Ontario government of the contingent repayment scheme, so it's been sitting in the college library and the ministry library since 1969. Briefly, it didn't fly at that time because Ontario and the other provinces saw it as a federal scheme, particularly because the federal government was just newly into Canada student loans. We tried to get the feds interested; the feds weren't interested. Several years later when the feds became interested, the provinces weren't interested, and we've been back and forth since. That's why I think there's increasing evidence for Ontario to go it alone.

The student federation, I think understandably, has always said, "We don't want anything that would in any way allow the government off the hook for further grants and lower tuition." That's politics, but I don't think it's a very rational answer to a scheme of this sort.

I teach in the economics of education; there may be some selection bias in the group, but they strongly support it. Of course, I emphatically tell them, "I will find the course interesting only if you challenge me," and some do. One of the questions on the final exam was, "What would you do about tuition fee policy?"

The Acting Chair: And with that, Mr Martin will ask something.

Mr Martin: Again, you certainly make some very well-thought-out arguments for this particular route. However, we've had in front of us over the last few days and last week some folks who talked very sincerely about the challenges that will be faced by the poverty community, particularly as they try to access higher learning. You speak a bit here about rechannelling some of the money into education programs so that people actually think about going to university or college. However, Richard Johnston, John Clarke yesterday and the student group who came, said that in spite of all of that there's still the fear of debt, of actually putting yourself in debt for something as nebulous as education in people's perception. How do you see us getting beyond that one with this particular model?

Dr Stager: First of all, I think we have to discount the political rhetoric; there is a lot of political rhetoric, and you would expect that in a context of this sort. But beyond that, it's simply not the case that most students fear the debt. In fact, the evidence -- again, it's American evidence, partly because we don't do studies and partly because we don't have as many experiments in a sense -- is that as soon as you raise the debt level students will fill in the gap, not because it's needed but because it's a good deal. In fact, anybody would be foolish in Ontario not to take up the Canada student loan program as soon as they became independent. I've counselled students to do that, whether or not they needed it, because it is irrational not to do so and students understand that.

I know the fear of debt is greatly exaggerated. Any kind of study has indicated that. Indeed, students from low-income families -- there's a person in the United Kingdom who has done extensive writing on student loans, drawing on experience, on empirical evidence from all over the world, and has argued that low-income, single-family mothers are quite prepared to take it on if they understand the arrangements and if there is a feasible repayment program. That, in fact, is why the contingent repayment scheme is developing a lot of momentum, because the very short repayment period in the Canada student loan, especially with our recent experience with recession, has worried people. But under another arrangement, I certainly wouldn't expect to see any fear of debt. I think it's rhetoric.


Mr Daigeler: Professor Stager, I'm certainly aware that the income contingency plan has been around for a long time, but as you said yourself, it hasn't really gone anywhere since its inception. I find it really ironic, to somewhat the ultimate degree, that we should be considering the serious possibility of an income contingency repayment plan under a government that, when it was in opposition, was moving, at least in terms of its policy, towards a grants-only OSAP. I think that's what the problem is.

I also must say that I do take exception a bit when you say it's political rhetoric when people -- for example, last night the representative of the Ontario Coalition Against Poverty was practically pleading with us not to move in this direction. He was speaking from his personal experience with the people he is in touch with, perhaps student leaders -- you can use those words -- but I think the --

Dr Stager: The poverty group is different; I think that is different.

Mr Daigeler: Okay, I accept that, then. I don't have any quarrel with your model. As long as we have the assumptions, I think it's well presented, but I think it's basically the philosophical or political assumption. Why should the government move in this direction rather than the opposite one it used to support when they were in opposition, and that's a grants-only?

Dr Stager: I think this is the only direction in which we will get some increase in accessibility and do it in a way which is financially feasible given the budgetary constraints of the government. When we look at Australia, the United Kingdom and Sweden already doing it -- these are three very different political and economic systems -- I think we can learn something from that. We certainly ought to be considering that evidence pretty seriously.

The Acting Chair: Thank you for your presentation today. I am sure we could use quite a bit more time, but we don't have it.


The Acting Chair: The next presentation is from the Ontario Association of Career Colleges, Paul Kitchin and Hartley Nichol. Good afternoon, gentlemen. Would you introduce yourselves for the purposes of Hansard. You have been allocated 20 minutes by the committee. We always appreciate it if there's some time for questions and answers with the members.

Mr Hartley Nichol: Thank you very much. My name is Hartley Nichol and I am president of Radio College of Canada, or RCC School of Electronics Technology, and past president of the Ontario Association of Career Colleges. Today with me from Brantford is Paul Kitchin, who is the executive director of the National Association of Career Colleges and also the Ontario Association of Career Colleges. There will be two of us speaking today. Paul is first going to give a broad-brush overview of the clients who choose to attend private career colleges in Ontario and a broad-brush overview of our industry in Ontario today.

Mr Paul Kitchin: Thank you for the opportunity to speak to this group today. As Hartley has said, I am the executive director of the National Association of Career Colleges. This is an organization comprised of a membership of privately owned post-secondary career colleges throughout the country and, with my hat as the executive director of the Ontario association, also schools in the same position in Ontario, the oldest of which began operation in the mid-1800s. Our own organization has been in existence since 1896, so we're approaching 100 years.

We wanted to give you a sense of what these private career colleges are and who the students are so you will better understand the presentation that we're going to make. Currently in Ontario there are close to 300 private vocational schools. At least 100 of those are designated for student loan purposes. They employ more than 3,000 employees, with a total payroll of more than $75 million, and enrol annually in this province 37,000 students. Over half of those are full-time students.

To characterize the schools, there are three main characteristics that are common to the schools: For the most part, they are single-purpose institutions that concentrate very much on placement of students; the second factor is the schools recognize that probably the greatest expense to students in terms of training is the loss of forgone income; a third is that these schools are very much consumer-driven, consumer-oriented in that the success of these institutions depends on satisfied clientele and consumers.

We've managed to gather some data recently on a profile of students who attend private career colleges. Some of the information has come to us from the Ministry of Colleges and Universities and some of the information we've gathered ourselves.

Through the Ministry of Colleges and Universities, we have established there are approximately 60 career programs being offered currently through career colleges. Broken down in very broad terms, we're looking at business programs being about 37%; trades and technology being roughly 28%; health care and community services, 20%; fashion and personal care at 13%, and hospitality and travel, 9%. That gives you a breakdown of the kinds of programs that are available. The Ministry of Colleges and Universities has determined that approximately 60% of the clientele, the students attending, are female at this particular time.

I mentioned that we'd gathered some of our own statistics. During the fall of last year, we did a student census. We surveyed over one third of the full-time students attending private career colleges in Ontario to look at specific characteristics.

We determined the age breakdown of people being served by the career colleges. Where approximately 80% of the students in the community colleges are under the age of 25, we found that only 55% of the students were under the age of 25, and whereas the community colleges were serving 5% of their students over the age of 35, ours was more in the neighbourhood of 20% of the students being over the age of 35, so a little broader range of people being served.

The status of the people attending: We determined that the largest percentage, 37%, were people who were single and dependent. We determined that the number of people who were single and independent was 21%. Twenty-eight per cent of our students were married, about 11% of our students were sole-support parents and we determined 18% of the students had dependants of their own.

We took a look at topics like whether they were international students. We determined that 5% of our clientele are visa students; 5% of the people who responded described themselves as being disabled students; 24% of the students we're serving were not born in Canada, they're first generation here.

We took a look also at past educational history and, when we looked at high school performance, we determined that 50% of the students had achieved a general level of education in high school, which would then entitle them or make them eligible to enrol in community college. We found that 40% of our students had taken advanced courses in high school and therefore would be eligible to move on to university courses and only 10% of the students has studied at a basic level at high school.

When we looked at past history in terms of universities and community colleges, in the sample we took there were about 16% of students who had attended university at some point in their previous careers. In fact, 10% of those had actually completed university. We found 24% of our students had attended community college in the past and at this point 15% identified themselves as people who had completed community college. We see there is a continuum there. Although students are being served at the university or community college level, there is also a certain percentage who go on to an alternative method of education.


In work history, we determined that 50% of our students had a full-time job before enrolling in the schools and that 50% of those people had at some point been laid off and had collected unemployment insurance benefits.

Finally, we took a look at why students chose career colleges. Again, taking a look at the loss of forgone income, the career colleges offer programs that are in length anywhere from six months up to 18 months. We found that 67% of our courses are six to 11 months in length and that 25% of our courses are 12 months and longer. So the number one reason for students was that they were looking for quality education that would allow them to get back out into the workforce really quickly.

The reputation of the school was important, the small class size was important to the students and the quality and the emphasis on placement was very important in career colleges.

It's from this kind of background, with the types of students we're dealing with, that Hartley is going to respond in terms of our recommendations for student loans.

Mr Nichol: I wanted Paul, who was involved with the student census, to give that broad-brush overview because we are not a well-known industry and not a well-known partner in the training sector, but we are a fundamental unit of the total educational resource of the province.

This government has made large efforts to establish partnerships and has indeed involved private trainers in the consultation with respect to OSAP, and other consultations with respect to the Ontario Training and Adjustment Board, our regulations and other matters that are important in the training community to both public and private trainers. We welcome and are pleased to have the opportunity to be here.

Private career schools in Ontario were made almost full partners with traditional higher-education institutions in the receipt of student aid in Ontario in 1978, although most private training institution students had access to Canada student loans from the beginning of that program about 26 years ago. Governments recognized that a student is a student is a student. Today's student who is attending a private career school is considered to be almost on an equal footing with college students with respect to access to the loans program in this province.

This government, like previous governments, shows leadership in recognizing the importance of choice, and choice is the number one concern of the private trainer and of course the students who would choose his educational services. Private career colleges provide choice in this province. They do not compete with as much as complement the college system in the province. We are a fundamental unit of the total resource, and Paul has given that broad-brush of our industry and our clients.

But with respect to the current OSAP program that exists, this gives more of a bird's-eye view of the client base that is served by private career colleges. Of university students receiving OSAP funding, 60% are dependent and single individuals. At community colleges, 58% of the people receiving funding through OSAP are single, dependent people. At private career colleges in Ontario it drops to 32%, or less than half. Independent, single students at universities comprise 32% of OSAP recipients, at the colleges it's 23% and at private career colleges it's 34%. The bottom line on those dependent or independent single people is that in fact 92% of university recipients of OSAP are single and 81% of students attending college programs are single. At private career colleges, only 66% are single.

Our client base is different in that when we look at married and sole-support people, we find that 13% of students attending private colleges and receiving OSAP are married; 21% of the OSAP recipients at private career colleges today in Ontario are sole-support parents. That compares to 12% of the students attending community colleges, and 3% of the students attending universities, who are receiving OSAP assistance.

The mission statement for the Canada student loan and OSAP is to provide financial assistance to enhance access to post-secondary education. It's a program that's more than 26 years old in Canada. Through CSL, it has done well to date. Indeed, we believe it to be the most effective program in encouraging young people and giving them access to further education.

In the private sector, we do not believe that free is the answer. We believe in fact that the government's hard look at enlarging and enhancing a loan program versus a bursary program is timely and can work well. We believe access can be enhanced with an all-loans program, even loans with accrued interest from the start of a student's program. But, and there is a large "but," this will be true only if (a) a much larger client group is served, (b) the amount of loan assistance is increased at least to replace the grant loss and (c) for all students, but especially students choosing private career colleges, that access to larger loan funds is increased.

I say that private clients, attending private colleges, have an almost equal footing. That is true in that they have access to the loans and grants programs that exist in this province. But I emphasize the word "almost" because the tuition differences in a totally unsubsidized private career school are not taken into consideration, so the amounts of loans and grants to date that a student attending a private college can receive does not reflect the fact that the taxpayer does not support in any way the full tuition load, as the government does in a public institution.

We believe in the full-loans program with (a) the larger group being assured access, (b) the amount of loan assistance being increased and (c) enhancements being available for those students who are truly in need. The two enhancements that our community of private trainers believes are most important are (a) a partial loan forgiveness geared to income and Revenue Canada and (b) an extended loan repayment, again geared to income and Revenue Canada.

We have the sole-support parents who graduate as dental chairside assistants who, with the starting salaries in Ontario at $18,000 to $21,000 a year, are hardly able to repay the loan funds that the graduate lawyer starting at $25,000 or even $35,000 a year is able to repay. That kind of a person, we believe, deserves a partial loan forgiveness, geared to her or his income at graduation.

I have emphasized so far that we are a sector where the sole-support parent versus the WASP is likely to attend. Again I would emphasize that an extended loan repayment geared to income and a partial loan forgiveness are enhancements that would be, we feel, very important with an all-loans program. From a personal standpoint, I believe the general loan limits should be between two thirds and 100% of a person's first year's salary, because debt load would obviously be a concern.

We believe opening up to loans would lessen the need for a front-end needs analysis or needs assessment, and shift the needs assessment to the completion of a person's program. Even now, we all know of the anecdotal evidence and screwups of the person who is attending a school on full OSAP funding and driving a Corvette. We also know of the appeal cases of the student who has not been given assistance, but the day he starts classes both mom and dad have been laid off from their jobs.


Outside of funding for students attending private career schools, we believe this government should look at a parental loan program. There are middle-class and lower-middle-class people who have not, as many of us in this room have not, saved their children's allowance cheques as we might have intelligently done to send our 18-, 19- and 20-year-olds off to school. A parental loan program, again tied to Revenue Canada, is something we believe this government should look at. It would be a loan program that would not be as difficult as having to produce the collateral that must produce at a local bank, and a parental loan program could further increase access for many students whose parents are most willing to give them assistance.

I finish by emphasizing again that the private career colleges are interested, number one, in choice for clients choosing post-secondary education and, second, in access. We must remember that a student is a student is a student. He or she must be treated the same whether choosing public or private training.

We require partnerships and partnering in the training and education in Ontario. We need to mobilize to address our training crisis in this new global economy. With the taxpayer in mind, we can still more fully utilize our education resources in this province and we can improve access with OSAP financial assistance to Ontario citizens seeking post-secondary education and training.

The Acting Chair: Thank you. We appreciated your comments. I'm at the committee's direction. I have a minute and a half. We can get one small question in from one party, I assume.

Mrs Yvonne O'Neill (Ottawa-Rideau): You were suggesting that access to the loan funds does not take into consideration the length of program that your colleges provide and/or the higher tuition fee because of non-subsidized education.

First of all, I'd like to ask you how you feel. Are you being heard? You said in the beginning of your statement, I think, that you have been involved in consultations both on the Ontario Training and Adjustment Board and on the OSAP, and I'm wondering how you feel that concern you're bringing is being accepted.

Also, I don't think you said anything about the need for a changed repayment plan that perhaps would flow from some of the comments you made. Would you like to say a little bit more about that? From your remarks, I certainly think that's a real need of many individuals.

Mr Nichol: I could speak about my own school, because it's an apples-to-apples program that's offered. In some of the better colleges than my own we would offer a 1,600-hour technician-level program in one year, one calendar year, versus two academic years at a public institution. We would offer a technologist level, and these are fully accredited programs, in a year and a half versus three years.

Our students are funded on a single academic year versus two, and they're funded on a year-and-a-half academic year versus three. It is apples to apples in terms of the number of hours and certainly in terms of accreditation and, consequently, the debt load that my students would carry is substantial because of the full tuition amount that they would pay. There's no question that some would not have access.

Many programs in private career schools very often deliver the same number of hours. The duration of the program is always shorter because full summers are utilized. And, yes, there is reduced access because of that factor.

The Acting Chair: Thank you.

Mr Nichol: And I have forgotten your second question.

The Acting Chair: There isn't time to pursue it. The tyranny of the clock strikes again. Thank you very much for coming today.


The Acting Chair: The next presentation will be from Rod Fraser, vice-principal, resources, Queen's University. I believe Mr Fraser has Mr Parnaby with him; Andy? If you would like to introduce yourselves for the purposes of our Hansard. You've been allocated 20 minutes by the committee to make your presentation.

Dr Rod Fraser: Thank you very much. May I introduce Andy Parnaby, who is the academic affairs commissioner of the newly elected alma mater students society at Queen's University, and I am Rod Fraser, doing a tour of duty as a vice-principal of resources.

I would like to just briefly introduce the subject and a little history of it and then Andy will speak to the partnership funding proposal, of which I believe you have just had a copy delivered to you. Let me say that we are very happy to have been able to make this presentation to you. We realize that it's a very hot room and that some of you have suffered through, I guess, a fair bit of time.

A Blueprint for Action was an attempt, back in 1988-89, to develop a proposal that united students, university administrators and private sector persons, as well as government, for the refinancing of universities. It had a series of principles associated with it. One of them was partnership, the second that there should be a concern for accessibility and the third that there should be accountability of university administrators to the students and government.

In 1989 at the Ontario Federation of Students convention the Blueprint for Action was hotly debated and was not supported by the majority of the undergraduate students there. There was a second motion put, however, and that motion was, "Deep-six the blueprint; don't take our time talking about partnership funding proposals any more." The vote on that was, in the majority: "No, don't deep-six it; work on it. As students we're concerned with the quality of our learning environment and we want to be part of the development of a proposal."

From the blueprint's start, then, we have gone through a couple of further iterations, including a multi-year plan which added to those basic principles of partnership, concern for accessibility and accountability a concern for government's current fiscal reality and suggested that there could be a tilt in government's contribution: little in today's world, more in tomorrow's.

This last year, however, has been one where, rather than people like myself being principal drafters and workers-up of the ideas, we have had a group of students from nine universities -- Toronto, Waterloo, Western, McMaster and Queen's on the one hand; Brock, Ryerson, Laurentian and Wilfrid Laurier on the other hand -- and over the course of the last 12 months they have put together their version of a partnership funding proposal. That is what you've had distributed to you. I might ask Andy if he would speak to it and then perhaps after that we'd be pleased to answer any questions you might have.

Mr Andy Parnaby: You have an executive summary. It outlines the salient points of the fuller proposal. I'll address each section in turn, beginning with accountability, proceeding to accessibility and, finally, sources of funding. I'll hit them one after the other and then I'll conclude. Then Dr Fraser and I will be glad to take some questions on the partnership funding proposal.

This proposal aims to address the continued deterioration of the quality of, and accessibility to, the Ontario university system. These two issues, together with improved accountability, constitute the central elements of the partnership funding proposal. The foundation is a partnership funding solution between government, students and the private sector.

Accountability: If the public is expected to maintain its contribution to the post-secondary system it is clear that a method of gauging the return on its investment is necessary. In this respect, internal and external accountability are fundamental to our proposal. As addressed by the Smith report, since members of the public at large are the university consumers, it is absolutely crucial that they be kept informed. Therefore we recommend the following:

1. The creation of mechanisms, outlined in full in the proposal that you have, to convey clear mission statements, spending priorities and measurable objectives, such as the progress of students and the quality of education received;

2. Support for the creation of community outreach or access programs like those in Manitoba and Alberta. Such programs would challenge the popular perception that universities are élitist institutions by providing information and targeting traditionally underrepresented groups. These recommendations would reinforce the substantial benefits available to all through investment and participation in the post-secondary education system.


Accessibility: Our recommendations in this area are based on four fundamental premises: (1) a desperate need for a long-term funding solution for post-secondary schools; (2) an understanding of the present financial realities constraining all levels of government, the private sector and students themselves; (3) the quality of education and accessibility are not mutually exclusive notions, and (4) a partnership-type philosophy.

In this respect we recommend the following:

1. The implementation of an income contingency loan repayment plan financed by government, the private sector and students. This is the core of the partnership funding solution.

2. The creation of a task force by the Ministry of Colleges and Universities to study its implementation. Such a study would address such issues as its impact on the current Ontario student assistance programs.

3. Recognizing that the major barriers to post-secondary education have their impact long before the ton of applications to university, in tandem with the income contingency loan repayment plan we also recommend the following: the creation of special accessibility programs, again using Alberta and Manitoba models as a guide, and the creation of an integrated student support network to ensure equality of access and equality of success of students in post-secondary education.

We feel it is crucial that parents and students at all levels be exposed as early as possible to all elements of post-secondary education, with special emphasis on long-term financial planning.

Finally, section 3, the last section in the partnership funding proposal: Funding will be provided by the public sector, post-secondary education students and the private sector.

The responsibilities of the public sector: (1) first and foremost, a commitment to the implementation of the income contingency loan repayment plan; (2) increased government transfers above the current level of 1%, combined with an additional capital allocation for deferred maintenance projects and library acquisitions.

Post-secondary education students: Their responsibility will be fulfilled through an injection of $200 million over five years. This injection would be achieved through an increase in tuition fees to a level that would cover approximately 25% of the total cost it takes to educate one student. Such an injection would utilize differential fees to recognize the different costs associated with various academic programs. Finally, the initiation of a Ministry of Colleges and Universities task force to study the implementation of this plan.

At this juncture, I'd like to stress that this is, in its most basic philosophy, a partnership funding proposal. Therefore we feel no tuition increase will be acceptable without the implementation of the income contingency plan. As a basic philosophy, contributions of one partner are contingent upon the contributions of the other two.

Finally, the private sector: (1) that the private sector affirm its commitment to the income contingency plan, and (2) the initiation of an MCU task force to study the contribution of the private sector and methods to increase such investment in the post-secondary school system.

Those are the three main sections of the partnership funding proposal, and this has been just a brief précis. The nuances are fleshed out more fully in the proposal you all have.

I'd like to conclude by saying that this proposal, if distilled, could come down to perhaps three or four fundamental tenets, and they might be the following:

The benefits of a university education flow to both the individual and society. Therefore it is reasonable to expect funding from the government and students, combined with a substantial investment from the private sector.

The removal of tuition fees as a financial barrier is facilitated through the implementation of the income contingency scheme. Broader representation will be created through outreach-like programs.

This proposal is intended to represent the starting point in the process of implementing a long-term funding solution and as such is open to amendment and obviously debate.

The year-end transition conference held just recently at Ryerson -- Terri Lohnes is my predecessor as academic affairs commissioner at Queen's University -- held several workshops about the underinvestment crisis. Eleven universities have expressed their support for the partnership funding proposal and they include Queen's, Waterloo, Western, Wilfrid Laurier, Laurentian, Brock, the University of Toronto, Ryerson, Carleton, Windsor and McMaster. All the executives-elect expressed support for the plan and gave their commitment to take it back to their schools for further discussion.

To conclude, I'd just like to say that this is an integrated long-term plan which demonstrates our willingness as students to bear our fair share of the cost it takes to educate us. It also represents our deep concerns about the deteriorating quality of education we are receiving.

That's all I have to say about the partnership funding proposal. Dr Fraser and I will be more than willing to take questions.

The Acting Chair: I'm sure we have some questions to be asked.

Mrs Irene Mathyssen (Middlesex): I want some clarification. I believe you said there would be a shared increase. Do you address the question about whether tuition fees should be regulated? Would you favour the continued regulation of tuition fees or should they be deregulated in your plan?

Mr Parnaby: I think the fundamental philosophy of this proposal, while it does not address specifically the issue of regulation versus deregulation, is a regulated tuition fee increase of $125 to reach that 25% plateau. While we don't address it specifically, I think the implicit philosophy is a continued regulation of tuition fees, but a regulated increase, to facilitate the $200-million injection we think students are capable of contributing.

Dr Fraser: Could I add to that? From the very start the blueprint has been a proposal for a publicly supported system of universities in Ontario, so as Andy has said, there would indeed be some maximum fee. I think the proposal would be, though, that if the community that exists at a given university didn't want to charge the full maximum, there would be the freedom to charge less, as there currently is; so a maximum fee but with the freedom to charge less if that seemed appropriate.

Mr Martin: A couple of questions. First, to explore briefly the philosophical underpinnings of your argument, is it your perception that a university should be funded by the government to be accessible and thereby accessible to everybody or that individuals should be asked to contribute ever-increasing amounts of money to continue the education system?

I guess, flowing from that, while we might have a government in this day and age that is sensitive to the issue of people in poverty, the inability of people to pay and the question of the fear of debt load in people's minds, another government in another day might in fact take advantage of this system to simply increase tuition fees till they're out in orbit, and then nobody can access the system. Could you comment on that line of thinking?

Dr Fraser: Could I take a first shot at it? A fundamental objective with the blueprint and with every other proposal was that we would at least preserve the access that currently exists in Ontario and, if we could, enhance it. A fundamental tenet has always been that of the additional tuition fee revenues gathered, some 30% or more would be encumbered to help out those students who couldn't pay the increased tuition fee level and hopefully some left over to help those who couldn't even pay the tuition fee level before you increased it.

Mr Martin: By way of grant?

Dr Fraser: By way of grant and/or loan. I know you're dealing with that issue: Should it all be grant or should it all be loan? In the initial blueprint, and I think to this date, there has been the sense that there should be a pluralistic system for the funding of students. The income contingent loan repayment scheme is clearly an important component of that, but having a grant system, especially one that has the potential for targeted grants to specially designated groups, probably gives you much more leverage in providing access.

This has all been done in the framework of knowing that just under 70% of all of a given age group stream out of high schools and are not eligible to enter universities. We've been thinking principally about the 30% or so who are eligible for universities or colleges, the vast majority of whom go to either a university or a college. Then we've also been thinking about the outreach programs for those who stream out. Actually, that's one of the major improvements in the partnership funding proposal the students have put together. They have seen student groups in Manitoba and Alberta that have volunteer effort by students who are allocated to talk to junior high and high school students who seem like they're about to stream out of high school, and have encouraged them to stick with their high school in order to have the chance to decide to go to university or not.


Mrs O'Neill: As you likely know, I've heard your presentation before; I think that was about two years ago.

Andy stated that there were several universities -- at least their executive-elect, as you call them, had made some commitment to the plan. I'd like an update on the post-secondary institutions you mentioned. I also wonder if you have new commitments from the private sector that you could tell us about. I know those two components are very important. I know this plan is very closely tied to Queen's. I have another question, but I'd like you to give me a brief response on that, if you could.

Mr Parnaby: Okay. First I'll address the issue of the executive-elects and their support. At the transition conference it was a workshop, and we had a chance to discuss with the executives afterwards. Most of the new people who came on board said, "Yes, we support the philosophy of income contingent programs and a partnership funding solution, but we do have problems with X, Y and Z" -- certain sections of the proposal they were hedging on. At that point they said they would have support, such that on June 4, 5 and 6 the University of Toronto is convening a conference of I guess the original nine plus two that we managed to meet at the conference, to discuss it more fully. These are schools that have come forth and said, "Based on the options presented to us, this is the one we think we want to go with but let's sit down, get down to brass tacks and bang this out and see where we want to go."

As far as the private sector is concerned, I'll be quite honest. I'm not entirely sure how much private sector support there is, but I do know that beforehand my predecessor had addressed the Queen's board of trustees to quite a favourable response. If that's any kind of indicator, I'm sure Dr Fraser could comment more on the private sector support, that there is willingness out there to do so.

Dr Fraser: Just briefly on that, the chairs of boards did vote unanimously in support of these basic principles that have actually been in the blueprint, in the multi-year plan, and now in the partnership funding proposal. The chair of the chair of boards sent the same material that you have to all the chairs of boards of governors or trustees about three weeks ago, asking them to consider it and to see whether they support this new proposal. There's just not enough time to hear back from that but, as Andy said, a testing of that with our board of trustees would suggest that as it was in favour of the principles before, so it would be now.

I think the Blueprint for Action was clearly identified with Queen's, because the students and myself and Ken Snowdon at Queen's worked so hard to put that together and then to try to share it and get people to buy into it. In this partnership funding proposal, I think it's fair to say there are three or four students who have been principal drivers of it. Andy mentioned Terri Lohnes, who was his predecessor. There was a student from Waterloo who was a key drafter. There were people at Brock who were key participants in this, as well as somebody at Ryerson. They were kind of a key group. Whereas it started as you say, I think it began to spread as early as June 1989, but now it has really become a more university system-wide proposal.

Mrs O'Neill: I just wonder, Andy --

The Acting Chair: Thank you, Mrs O'Neill, and thank you, gentlemen, for coming today. The tyranny of the clock strikes again.

I would note that several of our members have had to go upstairs to participate in the debate; it's unusual for one particular committee to have that much participation in the House at this time. Thank you very much for coming. We appreciate all the presentations that were made to us today.

The committee is adjourned. The committee will meet at the call of the Chair.

The committee adjourned at 1735.