How Low-Income Students Are Affected by Costs of Post-Secondary Education in Canada

Article Written By: Kritanjali Battig

It is no secret that Post-Secondary Education has become increasingly expensive in Canada, with sharp increases in tuition fees since the 1990’s. According to CityNews, the average cost of post-secondary education was $19,498.75 in 2017. The highest estimated cost of education for students living off-campus was in Toronto, with a whopping $23,485 each year. These estimates include living expenses, cost of books as well as rent. Keep in mind that these results were obtained in 2017, and every year brings a percentage rise in annual fees. In fact, Statistics Canada states that undergraduate programs saw a spike of 3.1 percent on average in the 2017-2018 academic year. 

Sharp increases in Canadian university fees have disadvantaged lower-income students in fulfilling the expectation of pursuing post-secondary education. 85% of Canadian parents hoped their children would pursue further education, and a large majority of parents who earned less than $30,000 shared those aspirations. Yet, a Canadian study found that students in lowest income households, with annual incomes under $25,000 are 24 percent less likely to accurately estimate costs than high-income households with annual incomes in excess of $75,000. Financial illiteracy combined with high tuition fees have become a pervading issue, as the number of students from low-income families enrolling in post-secondary institutions have remained static for the last two decades in Ontario. The same results appear to be recurring in other provinces across the country. 

The Canada Students Loan Plan (CSLP) has been the official solution to high tuition fees since 1964. The student loan and grant programs provide needs-based aid and make student debt more manageable through the Repayment Assistance Plan (RAP). These efforts have been established to make higher education universally accessible. However, only a minority of students from low-income families participate in student aid programs. Data from Statistics Canada’s Youth in Transition Survey and Post-Secondary Education Participation Survey indicate that less than half of all students from families earning less than $50,000 per year receive student financial aid. The majority of low-income students do not borrow from government student aid programs. 

The results point towards financial illiteracy. Financial literacy initiatives should include student knowledge of costs and benefits of university, student awareness of financial aid opportunities and student loan aversion. The Financial Literacy Program by the FCAC has improved certain areas related to retirement planning or maintaining a budget, but there aren’t any current large scale initiatives that directly address student financial literacy. This issue must be confronted, since the perception of post-secondary costs is much higher than actual costs among low-income families and the value of the university degree is underestimated when evaluating lifetime returns. 

In conclusion, more initiatives such as ‘The Social Research and Demonstration Corporation’s Life After High School’ pilot project in British Columbia could be developed. Although spanning a brief period between 2010-2011, it is an exemplary financial literacy initiative. Students received information about post-secondary education and financial aid, as well as guided assistance in completing their applications. Having had insufficient success in changing enrollment rates for years, there is still a long way to go before existing policies for equitable education become a reality for low-income students. 

• canada
• low income
• post-secondary
• students
• university