Thank you.
I agree with you. We have two problems. We have to keep the participation of the middle class in higher education where it is, and it's already very high. The government recently introduced measures to allow them to borrow more, but there's a tipping point on borrowing. Our research shows that if a student is borrowing $10,000 a year, and some do, the chance of their getting a diploma for which they are borrowing drops to around 30%. You can borrow a certain amount of money and have a reasonable chance of completion, but annual accumulation of debt does have an effect on persistence. That's for the middle class.
For the people who aren't there, we're going to have to start targeting money to them. In Canada we've had a rather strange system for a very long time, whereby we provide interest free loans to middle class people as well as grants. We provide interest free loans to poor people, not grants. That's because we provide the grants to the people who have “the highest need”, which is the cost of the attendance minus the resources at your disposition. The poor aren't stupid. They minimize their cost by going to college, by continuing to work, by staying at home. Then they don't get the great big loans and as a result they don't get the grants. Grants in Canada have traditionally gone to people who got the biggest loans.
What the foundation has done recently is to start putting money in the hands of people on the basis of family income. What we find is that the needs level of the people who are getting the access bursaries--these are the low-income people--is $3,000 lower than the people who are getting the needs-based awards based on how much is borrowed. It shows there's a problem.
There are three ways by which we could proceed--