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Students burdened by rising cost of university education
A look at one Ontario university shows tuitions skyrocketing when compared to asset investment and inflation
As student fees rise across the country, being able to afford university is increasingly difficult.
All students should be know where their fees and tuition payments go, instead of paying what’s needed and then forgetting about it.
However, financial statements aren’t always easy for the average student to understand, especially if they’re not a business student.
So at OneClass, we decided to conduct a financial analysis on a Canadian school in hopes of helping students be more aware of their expenses and the financial workings of their school.
We analyzed the past five years of financial statements at Queen’s University in Kingston, Ont., (2014 to 2018) and a few findings might besurprising. (When a year is stated, it refers to the end of the school year, so 2014 refers to the 2013-2014 school year).
First, fees per student (including tuition, health, recreation and athletics fees) at Queen’s increased 3.4 time more than inflation from 2014 to 2018. Fees per student increased almost 22 per cent while the inflation rate in that period was only 6.5 per cent.
We looked at fees per student instead of total student fees paid to the university because an increase in total student fees could be directly attributable to higher enrolment.
Second, the annual increases in fees per student outpaced both the maximum allowed tuition increase in Ontario and the annual inflation rate until 2017.
Aggregate tuition increases in Ontario were capped at three per cent as of the 2013 school year. The average annual inflation rate from 2014 to 2018 was 1.58 per cent.
Fees per student increased 5.54 per cent, 5.75 per cent and 6.57 per cent in 2014-2015, 2015-2016, 2016-2017 and respectively, by far outpacing both the maximum allowed tuition increase and inflation.
Third, total student fees increased three times more than financial aid for students from 2014-2018.
Total student fees increased from $245.8 million in 2014 to $354 million in 2018 (an increase of $108.2 million), while student assistance only increased $8.6 million, from $55.4 million in 2014 to $64 million in 2018.
Fourth, student fees grew 1,518 per cent greater than capital asset investment (into such things as land and building) from 2014 to 2018.
In 2014, total student fees and capital asset investment amounted to $245.8 million and $236.5 million, respectively, a difference of just $9.3 million. However, by 2018 total student fees amounted to $354 million and capital asset investment totalled $203 million, a difference of $151 million.
Fifth, total endowments have steadily increased each year.
Endowments are essentially money or other financial assets donated to the university. The total includes contributions from donors, how much the investment of endowments earned and how much was in the endowment at the start of the year.
From $800.2 million in 2014 to $1.086 billion in 2018, total endowments have grown steadily each year. That indicates positive returns on the investment income and healthy contributions each year.
The analysis offers other insights but what’s contained here summarizes the key findings. To see the full report, go to Queen’s University by the Numbers: An Intuitive Financial Analysis For Students.
A university’s financial statements contain plenty of jargon and dense details that the average student could miss. That’s why we created a report that’s easy to understand and will help students stay informed.
The Ontario government is set to make major changes to post-secondary education for the 2019-2020 year, such as eliminating free tuition for low-income students and decreasing tuition by 10 per cent.
It will be interesting to see how Ontario universities’ bottom lines are impacted and what they’ll do to change, adapt and innovate. -TROYMEDIA
Troy Media columnist Gerry Chidiac is an award-winning high school teacher specializing in languages, genocide studies and work with at-risk students.