While doing the research for my recent posts on tuition fees, I came across something from the Canadian Federation of Students called 'Myth or Fact: A guide to common myths about the importance of reducing tuition fees' (9-page pdf). Here's an extract:

MYTH: “Tuition fee freezes unnecessarily subsidise the cost of postsecondary education for those who can afford it.” FACT: Disgraced former Ontario Premier Bob Rae and conservative researcher Alex Usher promote this fallacy in order to popularise the notion that a “one-size-fits-all” tuition fee (also known as regulation) is obsolete. Instead, Rae and Usher champion fully deregulated tuition fees cushioned by a tuition fee waiver for a tiny sliver of the population. The argument is this:

• every student (poor, rich, or in-between) pays roughly the same tuition fee and receives equal benefit from freezes and reductions;

• low-income Canadians are under-represented in universities;

• low-income Canadians pay taxes that support public universities and colleges; therefore

• low-income families are subsidizing the participation of higher income families.

The facts do not support Rae’s and Usher’s tuition fee campaign... [E]conomist Hugh MacKenzie recently examined the issue and found no evidence that low tuition fees result in a net transfer of resources from low-income households to high-income households.

As polemics go, it's not particularly compelling: the 'myth' is ascribed to people who are described as 'disgraced' and 'conservative', and it is countered by an unsupported assertion that someone has disproved it elsewhere.

But I was curious enough to try to track it down, and I eventually came across a paper with the title "The Tuition Trap" (31-page pdf). Chart 5 from this paper presents data that are consistent with the stylised facts from this post:

University students are twice as likely to come from the top income quartile than from the lowest income quartile - which means that twice as much public money will go to tuition subsidies for students from high-income families.

Here is Hugh Mackenzie's explanation for why this is okay:

[T]he fact that young people from high-income families are overrepresented in the student population and young people from low-income families are underrepresented does not mean that subsidizing tuition from general government revenues results in poor families subsidizing rich families. One cannot make that claim without knowing the distribution of the taxes levied to provide the subsidies. We know from other studies that overall, provincial taxes are distributed approximately in proportion to income [see this post - ed]. This means that income groups in Ontario contribute to general revenue roughly in proportion to their share of total income... Referring to chart 5, where an income quartile group’s share of the college and/or university student population is greater than its share of the total income of all families with children, a tuition subsidy paid for from general government revenues amounts to a net income transfer in favour of that group. Where an income quartile group’s share of the college and/or university student population is less than its share of total income, a tuition subsidy paid for from general government revenues amounts to a net income transfer from that group to other groups. The first and second quartile groups (incomes below $56,800) make up a larger proportion of the student population than of family income. Subsidized tuition provides a net transfer in favour of families in the lower half of the income distribution. Families in the third income quartile account for roughly the same share of students and of income. There is essentially no cross-subsidy either in favour of or against families in the third income quartile. The fourth (highest) quartile accounts for a smaller proportion of college and university students than it does of total income, so the highest-income 25 per cent of families in effect subsidizes tuition of the lowest-income half of families, through their contributions to the tax system. Given the overall pattern, one would expect that families in the top half of the third quartile would be underrepresented among students relative to their share of income, and that families in the bottom half of the third quartile would be overrepresented among students relative to their share of income – producing a rough balance within the quartile. This means that, to the extent that tuition does pose an economic barrier to college and university participation by people from lower-income families, substituting tuition for public funding will tend to reduce the net transfer from higher-income families to lower-income families; replacing tuition with increased public funding will tend to increase the net transfer. More than 60 per cent of families with children are net beneficiaries of the transfer inherent in subsidizing tuition from general government revenues. The claim that subsidized tuition amounts to an unfair, regressive income transfer from poor families to middle- and upper-income families is simply not true.

My original point about the regressive nature of the tuition subsidy did not take the tax system into account: I deemed it regressive because it spent more money on students from families with high-incomes than it did on low-income students. To my mind, a progressive system would direct more money to low-income students.

The effect of bringing the tax system into the analysis is to greatly lower the progressive bar. In order for a program to conform with this new standard for progressive policies, all you have to do is make sure that the benefits are distributed in a way that is less unequal than the underlying income distribution. This is a remarkably easy test to pass - even George W. Bush's tax cuts satisfy this criterion.

Although free tuition does satisfy this incredibly weak definition of progressive, it just doesn't pass the smell test: