Sask Party: If Re-elected, Will Continue To Subsidize The Education Bubble

If the Sask Party gets re-elected, they will implement two initiatives in regards to post secondary education: From the Sask Party website

Beginning in 2012, the new Saskatchewan Advantage Scholarship will provide every new Saskatchewan high school graduate with up to $2,000 which can be applied to reduce tuition fees at any Saskatchewan post-secondary institution or any recognized training course in the province. The student can use the scholarship to reduce his or her tuition cost by as much as $500 in any single year.

The Saskatchewan Advantage Grant for Education Savings builds on the popular Registered Education Savings Plan (RESP) program. To assist parents with saving for their children's education, a re-elected Saskatchewan Party government will match 10 per cent of contributions to a child's RESP account, to a maximum of $250 each year. That's on top of the 20 per cent grant already provided by the federal government.

Now this is terrific...for parents who can actually save for the child's schooling.  Which happens to be less every year.  What this will do is push the cost of education even higher.  And because the majority of students need student loans to access higher education, student debt will get pushed up higher.  I wouldn't be surprised to see tuition increase by $500, wiping out the scholarship money.

This is how Education costs have spiralled out of control over the last 30 years at the U of S.

In 1980, a full year of arts and science cost $655.00
In 1990, a full year of arts and science cost $1344.00
In 2010, a full year of arts and science cost $4900.00
That is an increase of almost 650%.  To put that into perspective, housing inflation since 1980 has increased by 350%, while inflation has increased just over 150%.

This chart shows tuition fees across Canada versus inflation between 1990 and 2005.

 

From Education is a Right

According to Statistics Canada’s Youth in Transition Survey, 70 per cent of high school graduates who do not go on to post-secondary education cite financial reasons as the main factor...Monies owed to the federal government alone for student loans will surpass $15 billion this fall.

The average University graduate is leaving school with a debt load past $30,000.  But it is not uncommon for a couple of recent grads to have a debt load of over $75,000. 

So what should be done?
From Mish:

Student loans have done four things, all of them bad.

1. Jack up the cost of education
2. Make students debt slaves for the rest of their lives
3. Unjustly hand over huge profits to schools like the University of Phoenix at taxpayer expense
4. Add to the national debt

The best thing to do with student loans would be scrap the program entirely.

The biggest need is more competition. The free market would work and work well if there was not a monopoly on accreditation.

Except for lab work, most classes could easily be taught online, for a song. Let's accredit a wide variety of classes taught from India over the internet. Fraud would not be an issue if the mid-term and final exams are in person. Lab courses have to stay here, but I am quite sure there are numerous ways to drastically lower costs of those courses.

More on the Education Bubble
First time buyers are loaded with debt before they buy a home
The Education Bubble: How will it impact the housing bubble
Student loans are bankrupting a generation