Sunday, June 17, 2012

Free Post-Secondary Education Makes Money

Free post-secondary education would increase incomes, and income taxes would not just recover the initial cost to government but would actually generate additional public revenue.
This paper from the Canadian Centre of Policy Alternatives compares incomes from higher education and the subsequent increased government revenue from income taxes, and finds the return of post-secondary education would outweigh the cost of its public provision.

"This paper also finds that undergraduate education stands out as a profitable investment for the public treasury when all students’ payments for their education — both up-front tuition fees and additional income taxes paid over their careers — are compared with the costs of providing university education. What this means is that BC university students as a group are not subsidized by taxpayers. On the contrary, graduates contribute considerably more to the government coffers over their working lives than their education costs.

The finding that students pay much more for their education in additional income taxes throughout their working careers than they pay in tuition fees has important implications for rethinking how we fund post-secondary education in BC and Canada. Two broad policy recommendations follow from this analysis.

First, public investment in university education should be expanded, knowing that the investment would more than pay off in both monetary and non-monetary future benefits for all of BC (such as lower unemployment, higher income taxes, and reduced social and economic inequality).

Second, up-front student payment for education should be reduced and higher government funding for education should be recouped through the additional taxes paid by university graduates. The current policy approach to higher education financing, which puts increasing pressure on individual students and their families to pay for their university education up-front is both unfair and unnecessary. High tuition fees simply overcharge students and, in the process, compromise access to education for those who face financial barriers in their youth."

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