Feeling the crunch
Amid falling oil prices, rising unemployment and reduced investment, the Alberta government forecast a $39.9 billion revenue with diminutive resources for funding part of college revenues leaving lobbyists abysmally little wiggle room to negotiate lower tuition fees.
Despite such a significant figure in Canada’s cash-constrained economy, Alberta’s revenue has proven to have its limitations. The Students’ Association of Mount Royal College became aware of just how restricted when their lobby efforts to reduce tuition fees met slight disappointment.
The forecast resulted in a $6.7 billion downfall from the first quarter prediction of $46.6 billion in part due to plummeting oil prices. With oil royalties being Alberta’s predominant source of revenue, the province felt the effects when prices fell below $40 US per barrel from nearly $147 US last July. Officials say in reality revenue will be even lower at $36.5 billion.
Since Mount Royal College derives their revenue from student tuition and provincial grants, the institution will most likely be keeping the title of having the third-highest post-secondary tuition cost in the province. The current amount sits below the University of Calgary and above the University of Lethbridge.
At the moment 30 per cent is made up through student tuition fees while 70 per cent is received from government grants. Last year that meant the government granted the college $71 million, while tuition made up the remaining per cent with about $34.5 million.
Two years ago education institutions’ tuition fees in Alberta were capped at the consumer price index (CPI), which is directly linked to inflation. This year, CPI stood at 4.1 per cent, which means Alberta institutions were allowed to increase tuition by that amount from last year’s figures. As a result, the costs of the college increase or decrease relative to the rate of inflation and the cost of tuition fees follow the same rate.
Currently Mount Royal College tuition fees are running at the maximum rate of 4.1 per cent and will remain unchanged in the year to come. With five new university level degrees in communications, science, business administration, arts and criminal justice, the college was able to charge students university fees.
“It’s hard working within an institution because we want to have a good quality of education here and a lot of time the institution is already struggling to pay all of its bills and ensure that students have a good quality of education so any kind of work that we do with regards to tuition is targeted at the provincial government,” Koczkur said. “If students pay less then that means the institution will get less money and there has to be money coming in to maintain the quality of services. So we want the government to ante up and cover that room so that students aren’t paying more.”
On top of paying the $376.50 course fee, students are paying a supplementary course fee of $80. That amount is said to increase to $391.95 in 2009-2010 with a supplementary course fee of $83.25. Two years ago the college implemented a policy that all students in all areas of study pay an equal amount for course fees.
The new degrees require 50 more faculty members, additional classrooms, offices and equipment. With students extending their education at the college, more professors are required to cover class time, while time will be made available for research and scholarships.
“Typically because the cost of the institution are going up, (the board) would have to find some way of funding those cost increases other than tuition fees,” explained Richard Roberts, VP of administrative services at Mount Royal. “It’s really important to us that government continues to support us … we’re not having to make any changes or adjustments, and so far we’ve been able to do that so that’s the good news.”
According to Roberts, the college received aid last year for the new degrees to the tune of $1.1 billion in grants for the first year and a one-time grant of $10.9 million for the additional infrastructure.
Despite what Koczkur describes as a healthy relationship between the Students’ Association and the Minister of Advanced Education and Technology, Doug Horner, he sees little hope of grants flowing to Mount Royal towards tuition costs within the next year. He adds the minister has hinted of the condition becoming worse within the next couple years, compared to 2008 when Alberta was well off in the first half.
“Students play a vital role in any of the planning, they have an important voice and the minister is committed to listen to those concerns and comments ad suggestions,” said Rachel Bouska, a spokesperson for Advanced Education and Technology. “So I think going forward it’s important to keep that open dialogue, but realizing that this is a different economic time.”
Even though it will have considerably negative side effects as far as job prospects and financial struggles are concerned, students may benefit from the nose-diving economy.
Koczkur and Roberts both agree that when the economy takes a turn for the worse, it will most likely result in a drop in interest rates on loans and a lower CPI, since CPI is linked to the inflation rate. Because CPI controls tuition costs it would most likely result in lower tuition fees. On the flip side, there would also be a definite drop in scholarship funds, because not enough money is coming in to be distributed.
For now, the college has reached its maximum student capacity for its physical space at roughly 12,000 students, which is an equivalent of 8,000 full-time participants. However, the college is looking to make room for 3,000 additional students by September 2010.
“I think if you talk to a student and you explain the situation on how the college has a budget too just like you do and you don’t want them to start taking all this money out on credit cards because it’s not going to be good for their future.
If the college goes bankrupt it’s not going to look good for you as a graduate with a Mount Royal credential if Mount Royal can’t even keep it’s doors open,” Koczkur started. “I think most students understand the difficult situation the college is in, and I would imagine that most students would also support going directly to the government and lobbying them.”