Willingness to Pay for Postsecondary Education Among Under-represented Groups

Research Summary:

Price concerns and loan aversion pose barriers to post-secondary education 

Concerns about the costs of post-secondary education (PSE) and a reluctance to pursue educational loans may be discouraging some students from pursuing a post-secondary education, according to a new research report released today by the Social Research and Demonstration Corporation (SRDC), sponsored by the Higher Education Quality Council of Ontario (HEQCO). 

Project Description 

The study, Willingness to Pay for Post-secondary Education Among Underrepresented Groups, investigates the roles that financial barriers might play in the underrepresentation of certain groups in PSE. Just over 1,200 students from 12 different schools in four provinces (Québec, Ontario, Manitoba, and Saskatchewan) participated in the study.  All were in their final year of high school or first year of CÉGEP.  They were asked to make choices between various combinations of grants and loans for full-time PSE and significant but smaller amounts of cash. The study varied the amounts of cash participants had to give up to secure varying amounts of grants. 


The results of the study show that students from lower-income families, those with less educated parents, Aboriginal students, and boys are more likely to take cost into account when considering PSE.  The research also indicates that between 10 and 30 per cent of students participating may be unwilling to finance their post-secondary education with loans.   Under-represented groups are slightly more reluctant to pursue loans, which may be more a function of a tendency to underestimate the future benefits of PSE.  Given the relatively high degree of loan aversion overall, a number of individuals, especially those who have few alternative funding sources other than student loans, may find PSE to be unaffordable and thus not enroll. 

“Despite the current climate of rising student fees, living expenses and debt loads, student aid programs are not reaching many of those who might benefit from them most,” says Ken Norrie, Vice-President, Research for HEQCO.  “Canada’s ability to meet future demands for skilled workers depends on higher PSE participation rates, and the best opportunity for growth may be to focus on increasing access for groups that are currently under-represented in PSE, such as those from lower-income families, those with no family history of PSE participation and Aboriginal students.”

Policy Implications

To address concerns about costs, the report suggests that higher levels of targeted grants could encourage more students from lower-income backgrounds and those with less educated parents to pursue PSE.  As well, implementing initiatives that show low-income students the value of a postsecondary education (i.e. how much they could earn with a credential as opposed to without, access to job/career opportunities, etc) could increase their likelihood of participating in PSE.

Loan aversion could be addressed through a wider range of options for students to finance their PSE, such as cooperative learn-and-earn education programs.  Enhanced information and marketing efforts could also dispel misperceptions some students may have about student loans. Consideration could also be given to decoupling grants from the need-based aid application system. 

​Conducted by SRDC researchers Boris Palameta and Jean-Pierre Voyer, the study was funded by the Canadian Millennium Scholarship Foundation and the Higher Education Quality Council of Ontario.  It builds on an experimental approach developed and implemented by CIRANO (Centre interuniversitaire de recherche en analyse des organizations) and SRDC.