Students walk past the Thompson Engineering Building in London, Ont.Nicole Osborne/The Globe and Mail
John Turley-Ewart is a contributing columnist for The Globe and Mail, a regulatory compliance consultant and a Canadian banking historian.
What is a university degree worth? Ontario Premier Doug Ford wants prospective university students and their parents to ponder that question before committing to any program.
In a province where some of the country’s most important research universities reside, and in a country that boasts one of the most educated populations in the world, such a question may strike some as political buffoonery. It’s anything but.
Trade school and college credentials are more likely to help graduates land work today compared to a bachelor’s degree. Entry-level job postings requiring a bachelor’s degree as a qualification are crashing. What a university degree is worth today is less than it was a decade ago. Universities need to change that equation, if not for the good of students, then for themselves.
Mr. Ford is transforming the Ontario Student Assistance Program, or OSAP. The emphasis is shifting from mostly student grants that don’t have to be repaid to loans that do.
How will Ontario’s tuition changes affect you? It depends on your income
OSAP grants covered up to 85 per cent of student expenses for those in financial need, which includes everything from housing to daycare for students with children. That is changing. Students in financial need will now be on the hook for 75 per cent of those costs, advanced as loans, with Ontario picking up a maximum of 25 per cent through grants.
This is part of broader funding reforms for Ontario’s universities and colleges. They will see an additional $6.4-billion in operating funding from the province over the next four years and the tuition cap they have endured since 2019 lifted. Tuition will be allowed to increase by 2 per cent annually for three years.
In 2024-25 roughly 634,000 full and part-time Ontario university and college students relied on OSAP support, more than half of all students. The reaction from some is instructive. Student comments include: “Ridiculous,” a “burden,” “It actually encourages people to find a job rather than keep studying.” The Canadian Federation of Students complained that the OSAP changes spoiled the funding announcement.
If a university program doesn’t make financial sense to students when they must pay for most of it, it certainly wouldn’t make sense to society more generally to pay for it.
The Labour Market Information Council, a Canadian non-profit that produces evidence-based studies on the state of our labour market, has sobering news in its recent report. Using Statistics Canada data, LMIC reports that “Vacancies for jobs requiring a bachelor’s degree and fewer than three years’ experience have dropped by more than half since early 2024.”
In raw numbers, that represents a decline to about 30,000 from 70,000 in early 2024.
The decline is most pronounced in software engineering and development, which witnessed a 65-per-cent decline in such vacancies, followed by finance and accounting at almost 50 per cent.
Particularly unsettling for those who see university education as a ticket to prosperity is LMIC’s research using Statistics Canada employment data. Starting from 2023, it shows that the “unemployment rate among bachelor’s degree holders aged 15-24 has edged above that of youth with postsecondary certificates or diplomas.”
Opinion: Canada’s universities are in crisis as money gets tighter
This isn’t just a Canadian issue. U.S. National Center for Education Statistics data suggest that, projecting forward, a person who invested in a liberal arts and humanities degree and graduated in 2023 will make little more than a person who went straight into the work force. With no material income gain, and much debt, the degree holder cannot recoup that cost by the time they leave the work force in 2063. Using that data, the Education Data Initiative organization estimates the loss on that educational investment will be 42.78 per cent.
The introduction of artificial intelligence in the workplace is playing an important role in this trend. Not only is using AI a critical skill new hires are expected to possess, it is supplanting entry-level work through automation that new university graduates traditionally rely on to build hard technical skills and career-advancing soft skills.
Universities can’t ignore this reality. Ontario’s new OSAP formula will turn students and parents into watchdogs determining value for program dollar spent. Unless the value proposition is preserved in the labour market, future demand (and the funding it brings) for many bachelor’s degree programs will dry up.
Last week Mr. Ford defended his OSAP reforms, and while sympathetic to students, he noted that a lot of them are “picking basket weaving courses” that offer few job opportunities.
In his usual folksy way, Mr. Ford signaled to students to be selective. The message to universities is to be mindful. Their degree programs need to be worth the money students are investing in them, for their sakes and their students.