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College and University Baccalaureate Degrees: Another Look at Costs

College and University Baccalaureate Degrees: Another Look at Costs was written by Ken Snowdon.

Expanding Three-year Degrees to Colleges — a look at costs for students, institutions and government

An examination of the cost implications of expanding the offering of three-year undergraduate degrees by Ontario’s colleges finds that additional costs would accrue to students, institutions and government. College and University Baccalaureate Degrees: Another Look at Costs continues the Higher Education Quality Council of Ontario’s (HEQCO) examination of degree granting expansion in the college sector. While college programs are often regarded as more economical, a detailed examination of the factors impacting cost shows this is not always the case.

Comparing college and university costs is a challenge given the fundamental differences between the two sectors and the absence of program-level data. Higher education has many layers of complexity that, when altered, can significantly impact costs. This report outlines the factors that may affect cost to students, institutions and government as degree-granting status is expanded at colleges.

There is little difference in actual student costs between pursuing a four-year degree through an Ontario college or university. Tuition ‘sticker prices’ are similar for most four-year direct-entry programs. Where there are differences in ‘sticker price,’ government and institutional student assistance policies mitigate or eliminate the difference. As three-year degrees are expanded to the colleges — and if annual tuition is set at the same rate as college four-year baccalaureate programs — student cost for a college education will be similar to the university sector and considerably higher than current tuition for three-year Ontario Advanced Diploma (OAD) programs.

The absence of public data at the program level makes determining institutional costs a significant challenge. However, an analysis of the major inputs of institutional cost — salaries, enrolments, workloads and class size — shows that per-student instruction cost for direct-entry baccalaureate programs in colleges and universities is similar. The university undergraduate model of relatively large class sizes in the foundational years and smaller classes in upper years, coupled with the increased use of teaching-stream and part-time academic staff, offset the cost advantages for institutions often attributed to the college sector. As degree granting is expanded to colleges, institutional costs — such as for hiring additional faculty with PhDs, potential increases in research requirements and expenditure on curriculum changes — would increase in the colleges to meet degree requirements.

The college and university sectors have significant differences in their funding formulas. Generally, government operating support is higher for universities than colleges for four-year programs and lower for universities than colleges for three-year programs. As granting of three-year degrees is expanded to the college sector, government support as outlined in the funding formula may need to increase to reflect the additional costs being taken on that accompany degree granting. Also, should degree expansion result in increased tuition, government would incur incremental student assistance costs through OSAP.

Cost considerations are vital when contemplating major changes in postsecondary education, but they are not the only factors to consider. An upcoming HEQCO report will examine the potential alignment or gaps between Ontario’s credential landscape and the labour market.