Population Change and Lifecourse

Research Brief #11 -January 2013

How Costs Affect Student Choice of University

Summary

This study delves into the link between the cost to attain an undergraduate degree and the choice of university among academically stronger students. By looking at Ontario Undergraduate Application Centre data as well as the average family income in the student’s neighbourhood, researchers were able to conclude that the number of strong registrants at a university does not change substantially when there is a change in the net cost (tuition minus entry scholarship) of attending the institution. Entry scholarships usually are granted solely on the basis of high school grades and are guaranteed to any qualified applicant. There are, however, changes in the type of strong student that registers: when net cost rises, more students from high-income neighbourhoods and fewer from low to medium-income neighbourhoods will apply for the Arts and Science programs. There is no discernible difference in professional programs like Commerce and Engineering. The study also concludes that there are only very small differences among university students from low-, medium- and high-income neighborhoods in the likelihood of winning an entry scholarship.

Goals

The paper seeks to answer three questions:

Key Findings 

Box 1. Information Sources

Findings

Table 1. Distribution of University Registrants by Neighbourhood Average Income: Overall and by Grade CategoryStudents from high income neighbourhoods are more likely to attend university than other students. The top row of Table 1 shows that 40 percent of persons age 15 to 24 in the 2001 census lived in low income neighbourhoods and 35 percent lived in high income ones. The next panel demonstrates, however, that only 20 to 23 percent of university entrants come from low income neighbourhoods whereas 42 to 47 percent come from high income ones. The lower two panels of the table show the distribution by average household income of those academically stronger entrants who typically qualify for entrance scholarships. These panels show that only a slightly higher proportion of academically stronger entrants come from high income neighbourhoods compared to all university entrants. Hence, among those who go to university, entrance scholarships do not disproportionately favour entrants from more advantaged areas.

Factors Other Than Net Cost

The authors recognize various factors other than cost that affect a student’s decision of which university to attend, including class size, facilities, athletic and social programs, etc. Higher net cost may allow a university to finance more features and attract a larger share of top students from high-income neighbourhoods. Unfortunately, the data do not contain measures of such factors. A key assumption is that differences in such factors among universities changed less than differences in net cost.

Box 2. Definitions

Box 3. History

Conclusion

With the exception of Science and Engineering students in the 90-100 grade range, the findings indicate no relationship between net cost and the overall share of strong applicants that a university is able to attract. These findings indicate that universities have very little ability to control the number of academically strong students who apply based on tuition levels or scholarships based on merit.

As to whether the impact of net cost varies by the average income of the student’s neighbourhood, the authors found that increased university costs (net) are associated with an increase in the share of students from high income neighbourhoods and a decrease in the shares from middle- and low-income neighbourhoods. This finding is not generally true of students in Commerce and Engineering. This finding deserves more study. University registrants disproportionally come from high income neighbourhoods. Among students who go to university, however, there are only very slight differences in the incidence of entry scholarships among university students from neighbourhoods with different average incomes. Therefore, such scholarships do not seem to favour disproportionately students from more economically advantaged neighbourhoods.

References 

About the study

The research brief is based on: Martin D. Dooley, A. Abigail Payne, and A. Leslie Robb. 2012. The Impact of Cost on the Choice of University: Evidence from Ontario, Canadian Journal of Economics 45 (2):755-783. The brief was written by Gillian Wheatley.

For more information, please contact Martin D. Dooley at dooley@mcmaster.ca.