Has The Price of University Tuition Really Gone Up? A Comparison From 1990 to 2018

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We are trying answer two simple questions:

  1. How much does a student need to work to pay their Canadian University tuition?
  2. Is it harder today to pay for tuition than is was in the past?

How Are Canadian Universities Funded?

Over the years various Canadian Governments and donations (Corporate and personal) pay between 75% to 90% (round numbers) of the University costs leaving students to pay between 10% to 25% of the costs in tuition.

Canadian-University-Income-By-Source-1992-2010-Inflation-Adjusted-tuition-government-private-funding

What is the Average Price of Tuition and How Much is the Minimum Wage in Canada?

We consider the average Canadian University Tuition and minimum wage as the only factors in this analysis. Further we assume that most students work near minimum wage in the summer and / or during the school year as part time or temporary workers.  Obviously many students are paid more than minimum wage and some cannot work at all (foreign students, handicapped students…)

The graph below compares the Canadian average Minimum Wage against Tuition.

Average-Canadian-University-Tuition-VS-Minimum-Wage-1990-2018

How Many Hours Does The Average Canadian University Student Have To Work To Pay Their Tuition?

If we take the price of University Tuition and divide it by the minimum wage we can see that there was a big jump in effort required for students to pay their tuition between 1990 and 2000 but then it plateaued and has recently decreased because of the recent large increases in minimum wage in most parts of Canada.

Minimum-Wage-Hours-Required-To-Pay-Canadian-University-Tuition-1990-2018

Has The Real Cost of Canadian University Tuition Gone Up?

This graph is the money shot; it sums up the situation.  It tells us how much a student has to work at a Canadian minimum wage job to pay for their tuition.  In 1990, if a student worked just 50 days a year, they would still have more than $450 to go towards books and living expenses and if they worked 100 hours, they would have nearly $2400.  By 2015 average Canadian University Tuition increased to $6200 but minimum wage had skyrocketed to just under $11/hour.  2018 shows similar results with an average tuition of nearly $6600 but a minimum wage of nearly $12.25.

Canadian-Student-Residual-Income-After-Tuition--working-50-75-100-days-year

 

It is clear from the analysis above that the cost of tuition has not changed in a meaningful way since 2000.

How Much Does a Student Need To Work To Pay For Their Canadian University Tuition?

The typical Canadian University school year ends in April and begins in September.  For example the University of Calgary has its LAST exam date on April 27 and its first day of school on August 27th in 2018.  That leaves students with 122 days of possible work.  Obviously it is not expected that students or anyone else will work 7 days per week or start and finish work on the first and last day possible.  This time period leaves a student 19 weeks of work for a total of 95 days (5 days /week) of summer effort.

If we take off the first and last week of their summer break for travel and decompression, plus a TWO weeks vacation, that leaves 75 working practical working days in the summer.  In this scenario the student collects enough money to pay their tuition by working just in the summer.  I think we can all agree that is not too much to ask.

 


Background:

CANADIAN UNIVERSITY TUITION AND MINIMUM WAGE OVER TIME:

The numbers below are taken from Statistics Canada and they can be verified from the SOURCES section below:

Year  Canadian University Average Tuition  Canadian Average Minimum Wage Minimum Wage Hours Required To Pay Tuition  50 Days Income  50 Days Residual  75 Days Income  75 Days Residual 100 Days Income 100 Days Residual
1990  $        1,464  $        4.82 303.73  $      1,928  $         464  $      2,892  $      1,428  $      3,856  $      2,392
2000  $        3,452  $        6.26 551.44  $      2,504 -$         948  $      3,756  $         304  $      5,008  $      1,556
2015  $        6,201  $      10.80 574.17  $      4,320 -$     1,881  $      6,480  $         279  $      8,640  $      2,439
2018  $        6,571  $      12.21 538.17  $      4,884 -$     1,687  $      7,326  $         755  $      9,768  $      3,197

 


OTHER FACTORS:

Other negative cost factors:

  • the cost of living in Vancouver and Toronto in particular has astronomically increased 1990’s
  • there is more to paying for University than tuition;  There are books, gym fees, transportation, rent, food…
  • students often have costs associated with summer work (i.e. lunch, transportation…)
  • there are many students with difficult home situations that are needed to help pay for their parents obligations
  • full time employment is difficult in the modern ‘gig economy’ so many students will need two part time jobs to make full time hours

Other positive cost factors:


SOURCES:

 

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