The marketplace, not government planning bodies, will drive university reform both in Nova Scotia and across Canada, concludes an AIMS paper on higher education. This means that in the future Canadian universities will be forced to act more like private corporations — meeting customer pressures for product quality, efficiency and customer service.

University students will propel the reform process. In the years ahead, they will pay a rising share of the real cost of their education and, as they do, they will demand full value for each dollar spent.
In Reforming the Universities: The Coming Upheaval in Higher Education in Nova Scotia and Elsewhere, Edwin G. West, Professor Emeritus, Carleton University, contrasts the dynamics of the marketplace with a government planning process which would be unable to foresee all challenges to the system or respond to the constantly changing needs of the primary users of post-secondary education and research.

Nova Scotia’s post-secondary education sector is now under review, and Prof. West’s conclusions imply that Nova Scotia universities themselves should be given full flexibility to respond to the marketplace, including the right to merge, establish joint ventures or even fail if they are unable to meet the needs of consumers — students and other consumers of university services.

Rising student fees will be the catalyst for increased competition in the university sector, Prof. West argues. Student fees have been growing as a proportion of university income and will continue to increase as governments are less able to fund universities. This will put pressure on students to get full value for their dollar, and on universities to compete for students and meet their need for a reasonably priced education which equips them with the skills required for the emerging economy.
Thus a new class of powerful and discerning consumers of post-secondary education is emerging, and it is this group that will drive reform of the system, not education bureaucracies or planning commissions.

Private, for-profit universities have already gained a firm foothold in North America even though tuition at these universities covers well over 90 per cent of the full costs, the paper notes. Compared to other institutions, these universities respond to student needs more quickly, provide their courses at less cost, and enable students to complete programs in a shorter period of time.

Canada’s student loan system will have to respond to students’ need to fund an increasing share of the full cost of their education, the paper notes.

Prof. West argues that an income contingent loan system — with a fairly long payback time and payments adjusted to the income of borrower — better meets students’ needs than the current mortgage-type loan system. Students must now repay their loans over a relatively short time through fixed monthly payments.

For more information, contact:

Brian Lee Crowley, President, AIMS,
Fred McMahon, Senior Analyst
(902) 429-1143