Who borrows, and how much? Student borrowing across post-secondary pathways in Ontario, Canada

ABSTRACT

The development of cost-efficient pathways is a topic of increasing political and scholarly interest across many North American jurisdictions. It has been suggested that ‘seamless’ transfer pathways can provide financial savings to both students and taxpayers. However, such claims are typically based on hypothetical cost calculations, as opposed to empirical analysis. Through this study, we model the relationship between student pathways and borrowing behavior in Ontario, Canada – the country’s most populous province – using Statistics Canada’s novel Education and Labour Market Linkage Platform (ELMLP). Our models produce little evidence that touted transfer pathways systematically reduce either (i) students’ propensity to borrow from the Canada Student Loans Program (CSLP), or (ii) the total amount that graduates end up borrowing from the program. We identify the implications of these findings for both policymakers and scholars of social stratification.

KEYWORDS:

• Loans
• borrowing
• transfer
• pathways
• Ontario
• Canada

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 This research was funded by the Ontario Council on Articulation and Transfer (ONCAT). The opinions expressed within are those of the authors and do not necessarily reflect those of either ONCAT, the Government of Ontario, or Statistics Canada. Early findings from this research project were shared in draft form through an ONCAT policy brief published in the Fall of 2020.

2 The total amount owing for each student in the dataset at the end of their program is adjusted to 2017 dollars using the consumer price index (CPI).

3 Borrowing behavior has been repeatedly used within the existing academic and policy literature as a proxy for pathway costs (see González Canché and Manuel 2014, 2020; Hu, Ortagus, and Kramer 2018). It is hypothesized that if transfer is a more cost-efficient option, “then all else equal, 2-year students who obtained a 4-year degree would be expected to have acquired less student loan debt” (González Canché and Manuel 2014, 723).

4 We refitted Model 2, including an interaction between the PSE pathway variable and field of study. This exercise revealed some expected heterogeneity in the propensity to borrow within each pathway group. The results of this exercise are available upon request. An in-depth exploration of these disaggregated dynamics is outside the scope of this piece, but should be pursued in future research.

5 We refitted this model including an interaction between the pathway variable and parental income. There was – as would be expected – considerable heterogeneity in borrowing amounts within pathway groups. Generally, we observed that, within each pathway category, predicted borrowing amounts increase alongside parental income before falling. These results are available upon request.

Additional information

Funding

This work was supported by Ontario Council on Articulation and Transfer (ONCAT), grant number R2003.