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This article was published 28/11/2014 (2124 days ago), so information in it may no longer be current.

Opinion

Greg Selinger has an idea: interest-free student loans. He insists the cost of this idea is a modest $1 million a year.

For the first time in his premiership, Selinger is showing an interest in doing something beyond blaming the opposition and funding overhyped megaprojects. His idea is such a perfect example of broken policy-making, it only reinforces why conservatives and progressives alike should be demanding new leadership on Broadway.

In principle, Selinger's plan cuts the total cost of college or university -- but only in principle. That's because the real cost barrier to advanced education isn't the sticker price. It's the burden of upfront tuition and cost of living, all payable at a point when students forgo income-earning potential to devote their days to study. For students who are also parents, "forgone income" also includes the burden of additional daycare.

With this in mind, attacking the upfront cost barrier has almost always been the focus of progressive student-aid reforms. Hell, it's even been the focus of conservative student-aid reforms; my first op-ed for the Free Press argued for one such reform -- income-contingent loans -- as a way for more students to access loans in the early 1990s. Two things have changed since then. First, upfront tuition barriers have grown. Second, the cost of student-loan interest has plummeted. Today's prime rate is three per cent. Compare that to 13.25 per cent in November 1990.

Selinger and his allies will pretend otherwise, but cutting out loan interest after graduation won't improve access to education, because it doesn't address the upfront barrier. By focusing on loan interest, Selinger is also foregrounding a problem debt markets have already largely contained on their own.

Look at this from the standpoint of outcomes. The premier is budgeting $1 million (or more -- let's not kid ourselves). This money could be used to hire dozens of sessional instructors or offer real student aid to hundreds of needy students. Instead, he'll use it to make life fractionally cheaper for students who were already going to get the same education. The aid will come at the moment when it's least useful -- but he's announcing it at the moment when it's most useful to Greg Selinger.

So, ask yourself: Can you name one student who's more likely to go to university -- or stay in until graduation -- because she'll pay zero per cent instead of three per cent after she graduates? Can you name one student who will get a better education because he knows he won't be paying loan interest? Can you name one faculty at any provincial college or university that will have better teaching or research because of forgone student-loan interest?

The honest answer to these questions is: There isn't one, there isn't one, and there isn't one.

It sounds like social justice, but it smells like weak, photo-opportunity politics. And here's the kicker: Any former student with a loan who remains in Manitoba will ultimately pay more for the privilege, only it'll be hidden in their tax bill. All things being equal, a dollar of public spending is a dollar of public spending. But all things aren't equal: One dollar of public debts -- or forgone student debts -- isn't the same as another.

The moment a student steps out into the job market and bears the burden of paying his loans, he or she will also be paying income taxes. The tax burden in Manitoba falls on lower-income earners more so than it does in other provinces. In other words, Manitoba's tax regime penalizes just the sort of income earners who recently graduated with student loans.

And that's the twisted genius of Selinger's proposal: It's a win today, and a cost tomorrow. Manitoba will still be in a deficit when the costs of this plan appear. Whether the final cost is $1 million or $100 million, every new program dollar Manitoba spends is likely to be a borrowed dollar. So Selinger's offering students a tax liability on 10-, 20- and 30-year bonds -- at roughly four per cent interest -- in exchange for interest forgiveness on five- to 15-year student loans repayable at three per cent. It's Selingernomics: forgive interest on short-term debts for the next generation, financed by long-term debts payable by the same generation.

Manitoba is one of the few provinces that offers interest-free student loans. That's no accident. No other government in Confederation has yet been cynical enough to take future dollars that could go to real student aid or real education improvements and burn them on a headline-friendly micro-policy instead. Is it surprising that a premier who's running a leadership campaign to keep his own job would be the first to cross that line?

Brian Kelcey served in senior political posts at Winnipeg city hall and in the Ontario legislature.