Reallocating Scarce Funds for the Public Good

Algonquin College School of Advanced Technology

Cost and Affordability

 In recent years, there has been much discussion about the notion of higher education affordability.  On one side of the argument are those who simply believe that the taxpayer should underwrite all education; that higher education is a human right.  In fact, some of these low/no tuition advocates believe free tuition is simply an entitlement.

On the other side of this discussion are scholars such as Richard Vetter[1] (Ohio University and the Center for College Affordability and Productivity) and Robert Zemsky[2] (University of Pennsylvania and The Learning Alliance).  These iconic thought leaders have challenged many aspects of higher education including productivity, learning and market–mission challenges.   In addition, they both seem to believe that higher education is getting more expensive yet remains affordable (for most).

So where might all this go?  The reality is that public funding is scarce and in most cases, there is little hope of any significant new funding for most public colleges and universities.  In Ontario, perhaps the situation is worse than many jurisdictions.  To the credit of the current government, new funding is being allocated to colleges and universities. Unfortunately, after years of under-funding, the Province remains the lowest funded post secondary system in the Country, tuition is artificially regulated and grants/FTE students have been frozen for the next five years.

Reallocation of Public Investment

Therefore, assuming there will be no increase in public investment in higher education, how will existing scarce funding be allocated for the greater good?  I would suggest that one approach is to redistribute existing funding from universities to community colleges. This approach can be implemented in the UC / Cal State / CC system in California to the post secondary system in Nova Scotia.  My rationale is this:

  1. Students who attend university are disproportionately more wealthy that those who attend college.
  2. Students attending university are typically better prepared academically for success.  That is, many will graduate regardless of the quality of the learning experience and most often leave university without any need for additional support services.
  3. University graduates earn a higher wage.  In other words, their ability to earn (and pay back debt) is disproportionately higher compared to a college student.

As communities need more post secondary graduates, it is the community college that is best positioned to lead this objective; in fact, community colleges in North American have been the institutions that have been most able to democratize higher education to the masses for over 100 years.

Recognizing that college tuition is typically lower than that of a university, there are still simple questions that must be answered.  That is, if universities attract students from more wealthy families… If universities have students more academically prepared…  If universities have graduates who are more able to earn higher wages and therefore are more able to pay back debt (in this case taxpayer-subsidized education)… Then why is it that universities are also receiving a disproportionately higher amount of public funding compared to colleges?

The Solution

This is not a simple situation, however all jurisdictions require more graduates coming from their colleges and universities.   Therefore, over the next two years, I would recommend a reallocation of 25-35% of public funding from universities to colleges.  Thereafter, allow universities to de-regulate tuition to recoup this financial adjustment.  The reality is, demand will not be reduced and the university graduating class is best positioned to repay this modest increase in debt (if there is any debt at all).

As an ardent supporter and benefactor of our colleges and universities, I believe that this decision would be of benefit to both the community and to those students who we most need to enter and graduate from our systems of higher education.   A reallocation of public funding would be a tangible reminder that the higher education system has been established not for the private good but rather for the public good.   In the end, universities remain viable and strong; students (in particular non-traditional students) access and graduate at a greater rate; and the taxpayer receives a greater return on their investment.


Note:  As an example, should this redistribution be applied in Ontario, allocation / student for universities is approximately $6521 (compared to $9534 at Canadian peer universities).   A reduction of 25% would equate to $1630 being reallocated to Ontario colleges (increasing the allocation / student to Ontario colleges from $4358 to $5988).  The increase in Ontario university tuition (on average) would increase the same $1630.  That is, on average Ontario university students would assume greater responsibility for the private benefit of their public education and their tuition in Ontario would increase from $6307 to $7937.
1.  To read more provocative thoughts from Dr. Vedder, please see: or read Vedder (2004). Going Broke by Degree: Why Colleges Cost too Much (AEI Press).
2.  To read more from one of America’s higher education thought leaders, please visit: or read Zemsky (2006) Remaking the American University (Rutgers University Press).

About kentmacdonald

President and Vice Chancellor Professor, Faculty of Education St. Francis Xavier University
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