From his Eye on Higher Ed blog at the Globe and Mail's "Globe Campus" website, Alex Usher, president of the Higher Education Strategy Associates, posted a review of Free to Learn. As a commentator on higher education for 15 years, he knows a thing or two about university funding. Moreover, in November 2009 he authored a report for Indian and Northern Affairs Canada (INAC) looking at options for reform to the Post-Secondary Student Support Program (PSSSP), the topic of our paper. Indeed, Free to Learn devoted considerable space to Usher's proposals.

Usher's familiarity with higher education generally and the PSSSP specifically makes him well situated to review our paper. Perhaps this fact more than anything makes the elementary errors in his review so surprising. Usher is highly critical of Free to Learn. Yet the substance of his argument is surprisingly weak for such a knowledgeable critic. At best, it seems as if Usher has not even read the report; at worst, it appears he has not understood it. Either way, such a clear misreading of the content in our proposal is disappointing from someone with Usher's experience, and it invites a careful response. This reply addresses each of his claims in turn.

1.  Our evidence of favouritism and nepotism in the PSSSP is "thin." This is a familiar claim, also made by AFN National Chief Shawn Atleo and Cindy Fisher. As we said in response to their claims, the INAC Audit unearthed evidence about the lack of accountability built into the PSSSP, and a report commissioned by the Canadian Millennium Scholarship Foundation interviewed many students who said PSSSP funding depended on relationships with band leadership, and was virtually non-existent for off-reserve Indian students. One of us (Calvin Helin) has seen such practices first hand in his own band, as have the many of the students and Aboriginal community leaders and educators who signed our statement of support. From a comfy Toronto office, Usher may not see evidence that the PSSSP is not working. However, countless Aboriginals, many of whom are afraid to be publicly identified for fear of reprisal within their own band, have come forward to us with stories about how the current system is not working for them and the young people they care about.

Usher says it's "striking how few demonstrated instances" of abuse we have brought to light. But for a program that requires zero accountability with respect to reporting how funds are used, it's striking how much information we have found. With even the National Chief of the AFN agreeing that there are as many as 10,000 students waiting for money to pursue their postsecondary education today when, as we argue, the money now available could theoretically fund $25,000 for every Registered Indian student, the onus remains on the defenders of the PSSSP to demonstrate that the current system can eliminate nepotism and favouritism in a way other than relying on the "good will" of the administrators. So far, no one has made such a case.

2. Transition Costs. For Usher, there is "huge balloon of a transition cost associated with this project, which the authors mention but prefer not to dwell upon." Evidently, he was not paying attention when we wrote that "costs would rise, temporarily but substantially, during the transition period" (page 20). Nothing in our proposal precludes a temporary rise in federal funding if the demand for post-secondary education among Indian students is high. Building on a study from the Centre for the Study of Living Standards, we suggest high transition costs would make a long-term investment. Usher suggests high PSE enrolment during a ten-year transition period would cost $200 million additional dollars per year. Is he really arguing that it is not worth an additional $200 million/year to ensure every member of our most vulnerable population is able to access post-secondary education?

Usher does not dwell on this point, because after telling us that the transition costs would be very high, he then tells us that the transition period would likely cost us very little. Why? If a "substantial proportion" of Indian students were to forgo their funding opportunity, "one could easily imagine between 40% and 50% of the fund's annual expenditures going back to government over the medium term." Thus, says Usher, our proposal would result in a mere $120-$150 million per year, less than half the current funding level.

There are so many things wrong with this analysis it is difficult to know where to begin. First, under our proposal, unused funds would not simply go "back to government": On page 20 of Free to Learn, we say that unused funds "would lapse and be redistributed to other students' accounts and/or be used to deal with transition costs." Money from lapsed accounts could indeed pay for transition costs, if those costs were over and above current levels of funding. However, the transition money itself would have gone to students, and only money not actually used by students would go toward repaying these costs. The transition costs are not administrative costs, but the costs associated with ensuring that every potential Registered Indian student receives at least $25,000 for post-secondary education. If the government chooses to use lapsed account money to finance the transition, the cost would gradually be recovered over a number of years; once the transition costs were recovered, all the money from the program would go to students.

Finally, under our proposal it is not necessary to claw back the transition costs. It is merely an option if the government does not want to confront the cost of the transition as an additional expense. If the government were willing to fully fund the transition – which nothing in our proposal precludes – every dollar would go to students, and a high number of "lapsed" funds in the future would mean more money for the students who do choose to pursue post-secondary education.

3. $25,000 is not enough money for education, particularly considering cost of living. A simple response is that $25,000 is substantially more than the zero dollars being received by the ten thousand students whose dreams, according to Shawn Atleo, "have been delayed or denied." A similar argument was made by Thomas Benjoe, the vice-president of finance at the student association at the First Nations University of Canada, on Wednesday's edition of The Current (Benjoe suggested $25,000 was not enough for university, before admitting that his own tuition costs were $24,000). For his part, Usher suggests students require much more than $25,000 for four years, saying that $13,000 per year ($52,000 for a four-year degree) would be better. Obviously, this would require a huge increase in program spending, which Usher himself does not expressly advocate (indeed, he criticizes our proposal for potentially increasing funding during the transition period). Thus, it seems he would prefer a system that gives $52,000 to some students and nothing to others than one which gives at least $25,000 to all students, yet he seems unwilling to call for such an increase in funding over the status quo. We leave it to him to defend this position.

Moreover, simply stating funding would "only" be $25,000 ignores the substantial interest that would accrue on the account (one commenter on Usher's blog put the total amount (principal plus interest) at $31,486 at a conservative 4% return); it ignores "lapsed funds" that would be redistributed to students' accounts (see above); it ignores any grants, scholarships, bursaries, other savings, and student loans that could be put toward post-secondary education; it ignores the possibility of private or non-profit organizations "topping up" the accounts; and it ignores the possibility of part-time and/or summer employment to supplement living expenses, as most students do now. If Usher wants to make the case for increased federal funding for Aboriginal PSE, let him make it; in the absence of increased funding, our proposal sought to demonstrate how we can use current funding levels in an equal, fair, and transparent manner. More than four years' tuition for every Registered Indian is a good start.

4. The administration of money for living expenses. Our proposal seeks to create savings accounts for all Registered Indians students. Money for tuition would go directly to the institution, and students would receive a living allowance that would be drawn from the rest. This leaves Usher nonplussed: "Who exactly is supposed to set those up and police them - and I can guarantee that institutions won't want the job - is a question left unanswered." But universities already administer scholarships given by the federal granting agencies (SSHRC, CIHR, NSERC), for example, with monthly student funding contingent on tuition payment. Why would institutions be unwilling or incapable of such administration for Aboriginal Post-Secondary Savings Accounts, which would have already been set up years in advance at a registered financial institution?

Alternatively, these financial institutions could be authorized to release a certain amount of money per month to students who have demonstrated their registration at a recognized post-secondary institution. There are a number of entirely legitimate ways to disburse funds from accounts set up for special purposes in the names of individuals. Our goal was to lay out a conceptualized framework rather than a fully fleshed out program design, and our proposal is open to suggestions as to which formal mechanism would work best. We are confident, however, that any of the options mentioned above would be a significant improvement on the status quo.

5. Need Assessment. Usher says we "wave away the idea of need assessment systems." Yet our entire proposal is a need assessment system: it has identified the population most in need of higher education (Aboriginals), and proposes a way to ensure funding to every student within that population. Nothing in the PSSSP mandates any "need assessment," and the denial of funding to thousands of Canada's poorest individuals suggests that we are already failing those who need the money the most. We believe that a system that removes arbitrary discretion from unaccountable decision makers subject to perverse incentives, and ensures every eligible Aboriginal student is guaranteed a substantial amount toward their post-secondary education, is a far fairer system, and one that meets the needs of young Aboriginals on average far better than one that is essentially a lottery where a favoured few get a great deal and too many get nothing.

At the moment, we have no idea how much money under the PSSSP is actually spent on post-secondary education. We do know that internal audits have unearthed evidence of surplus funds being used for other purposes, and we know that thousands upon thousands of Aboriginal students are being denied the money to which they are entitled. We have put forward a serious proposal to eliminate disparities in the program in order to empower every Registered Indian student to pursue the opportunity of post-secondary education. Moreover, it does so in a transparent, accountable manner whereby money intended for post-secondary education will actually be spent on post-secondary education. We are glad that the proposal has garnered substantial public discussion, but we invite readers to actually read what we have proposed rather than relying on second hand accounts that do not fairly represent the case we have made.

Dave Snow and Calvin Helin

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2 Comments, RSS

  • Alex Usher

    says on:
    March 24, 2010 at 10:54 am

    Hi guys. Glad to have a chance to continue the discussion.

    First, let's be clear that I am not a huge fan of the PSSSP as currently constituted and I think you guys have done everyone a service by kicking off a discussion of funding for Aboriginal students.

    On the issue of whether there is a lot of political favouritism in the administration of the plan, I think we just have different empirical standards. The Millennium paper did report that some people in some focus groups said they had trouble getting funding and blamed it on politics. To me this is simply not hard evidence.

    To give some examples - a student might find herself at the bottom of the waiting list because a band followed a transparent procedure. The outcome might seem unfair, but it's not "politics". A student might be denied funding because they wanted to go to a private training institution - that might seem capricious, but the rules issued from Ottawa give a pretty hard steer against awarding funds to go to these might seem like band politics but it's actually an intended policy outcome. They might be examples of poor policy development (and as I said, I'm not a big defender of PSSSP), but that doesn't make them examples of favouritism.

    To be clear, I'm not saying that favouritism and dirty politics in the administration don't exist...but people simply alleging that it is happening doesn't count as evidence in my book and it shouldn't in yours, either. If stronger and more direct evidence exists, collect it and publish it - you'd be doing everyone a favour by bringing a murky issue to light. As it is, this is no more than "he said, she said".

    On the issue of transition costs, you seem to think I am criticizing your proposal because there are such costs. I am not - obviously they are an intrinsic feature of the plan. I am merely saying that you guys play coy about them by not actually making the calculations and amounts explicit. My guess is that this is because you guys are aware that while the spirit of your proposals might be attractive to the current government, the short-term price tag might not be. Fair enough, that's your calculation about how best to sell your idea. But you can't expect not to get called on it.

    On the issue of scholarships and institutional management. yes, institutions manage lots of scholarships already. But they don't set up and manage accounts with restricted monthly withdrawls for living expenses, which is what I was talking about.

    I think the other major area where we seem to be at cross-purposes is with respect to need assessment. It's absolutely not true to say that there is no need assesssment in the existing PSSSP. It's built right in through using CSLP cost-of-living guidelines and by paying the actual amount of tuition. Students who have dependent children and go to university far away are eligible for substantially more funds than students who go to a nearby college - as is the case in CSLP. And, frankly, is as it should be. Need assessment is not (or need not) be arbitrary and unaccountable. The Canada Student Loans Porgrams is based on these principles and it has helped millions of Canadians since its inception. I defend those principles.

    I'm not making any case for a "right" amount of funding per student, or saying that every student should get $52,000 for a degree, as you imply. What I am saying is that currently a lot of students *do* get this money, and your proposal for them would represent a significant loss of welfare and in a lot of cases would likely lead to people dropping out or not going to PSE. You guys simply sidestep the distributional impact of your proposals and I can't see how that's good approach to public policy.

    The way I read your paper, you seem to have come to the conclusion that any administration is an evil to be avoided at all costs - even if it means ditching need assessment and even if it makes many high-need students worse off. I don't think that trade-off is acceptable. And I think you did your readers a disservice by failing to make clear that the trade-off even existed.

    Could a scheme like yours form a *part* of a new system? Sure, I could see that - make an entitlement based on secondary school achievement available to everyone, and re-distribute the money from lapsed accounts into some kind of need assessment fund (not necessarily at the band level) which could help those with higher costs.

    (Here I must admit that I did miss your suggestion that lapsed account money could be redistributed into other accounts - but, to be fair, you never suggested a distribution mechanism and I read your document as being pretty firm on $25K as a maximum).

    Don't read any of the foregoing as a defense of the existing PSSSP, by the way. Though I am sceptical about some of the specifics of your critique, there are plenty of aspects of the present system which could benefit from a re-think.

    I appreciate you guys taking the time to respond to my critique and would be happy to continue the discussion if you wish. I do think there your proposal has significant merits worth pursuing - I just don't think that it could stand alone as a replacement to the existing system.


    Alex Usher

  • Max

    says on:
    May 22, 2010 at 1:49 am

    One common point of leadership shared between the leaders of the two separate countries of the U.S. and Mexico is that often they will talk about the "dreams" of their peoples. They don't talk about this in a cult of exclusivity, as if by mere virtue of their vaunted positions as Presidents they had the power to shut the door on the aspirations of those they serve. I mention this because under the leadership of our country Canada, our elected leader does not have the commonality and tone of either Mexico or America. We share nothing more than trade and borders? As if it were to say that Canada has no dreams left, or we have no ambitions left, all has been achieved and the number one goal and priority in life now is to have a utopian guilt-free for all capitalistic driven society that prizes government run like a ruthless corporation all in the name of an end game to achieve a balanced budget. Well heres a major jigsaw puzzle piece ready to be put in place to aid in that very goal and so therefore it must be stingily held onto outmoded, outdated precepts that keeps him from latching on to the visionary ideals from our true leaders. The millions if not billions of dollars spent on prisons,health care,welfare dole,drug treatment programs...would multiply exponentially if only people like Mr. Harper were not blind to the presently inert potential that could be such a benefit to the country and indeed the world once invested in. I guess some people only think in terms of investment as money when the wider definition of investment includes a lot more.