Denmark's generous 'pay-it-forward' philosophy toward university funding has not caught on in Canada, but Ontario's targeted approach is a step in that direction

Anne Lorenzen has just finished her master's degree in political science at the University of Copenhagen with zero student debt.

Not only does Denmark pay young people to attend postsecondary education, it also gives them a sort-of-salary to do so.

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Danish students receive about $900 (U.S.) a month to attend university – on top of free tuition – to help with housing and the general cost of living. Funding begins when students turn 18 and is covered for a term of six years. There is no requirement to pay back any of the money, even if a student drops out. Federal taxes foot the bill.

"So it's kind of like a pay-it-forward type of feel, so everyone pays for people's education and then you know you can just do it," Ms. Lorenzen says.

The 27-year-old adds, however, that the cost of living in Copenhagen exceeds the government's stipend. She has a part-time job to cover the rest, "but it's definitely enough [money] for tuition, which is always nice." For years Canada has been looking at how to cut university costs as many graduates are saddled with debt loads many times higher than the average first-year salary. According to Statistics Canada's preliminary data, students enrolled in full-time undergraduate programs in the 2016/2017 academic year paid $6,373 in tuition, up 2.8 per cent from the previous year.

In the past 15 years, tuition for university students has increased, on average, more than five times the inflation rate and at "their current rate of increase, tuition fees are estimated to exceed all other student expenses combined in five years," the Canadian Federation of Students reports.

But Ontario's Liberal government recently offered up its solution – a targeted approach to the rising costs of postsecondary education.

The Ontario Student Grant, which would allow most students from families with annual incomes of less than $50,000 to access free tuition upfront, was announced in the provincial government's budget in February 2016. The announcement fuelled a social debate about who deserves free university and where the cut-off should be, with several students from higher-income families quoted in the media as finding the measures unfair and even offensive or contributing to the oversupply of university graduates in an already saturated market.

Critics of the targeted system want Canada to follow the lead of countries such as Finland and Denmark, which embrace universal funding and do not charge tuition fees and, in Denmark's case, actually pays their students a monthly stipend to attend. But Canadian experts say that a targeted approach is the way forward and that Ontario's proposed system could easily be adopted by other provinces and territories.

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Kelly Foley, professor of economics at the University of Saskatchewan and co-author of a research paper titled "Why More Education Will Not Solve Rising Inequality (and May Make It Worse)," calls Ontario's tuition announcement "the smartest financial aid decision that has been made in recent history."

A universal approach, such as the ones observed in many Scandinavian countries is not a practical system for Canada, according to Dr. Foley. Targeting youth from lower-income families not only allows those students who may have been "sitting on the fence about attending school" more reasons to pursue postsecondary education, but also allows universities to access a deeper pool of ability.

For her, the real inequality occurs when someone in the lower-income bracket is expected to pay for those from high-earner families who can already afford to send their children to university.

"When you say free tuition for everybody, then you're saying that those people [as taxpayers] should pay for people from privileged backgrounds," Dr. Foley says.

Michael McDonald, executive director at the Canadian Alliance of Student Associations (CASA), says Ontario's approach is easily understood and is accessible by prospective students and their parents, which is something that didn't exist in the previous system.

"When you look at the system, you see that it's a merger of other financial devices to make something simpler, easier to understand, and it provides money upfront to students, which is really critical," Mr. McDonald says.

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"Being able to provide the idea that their tuition will be free ensures that a lot of students from other backgrounds who might not have considered attending college or university are now more willing to do so because they understand very clearly what student assistance is going to be able to provide them," he adds.

For Ms. Lorenzen, it's about the knowledge from a young age that one can go to university without the burden of high costs. This encouraged her and her highschool classmates to go.

"I don't think there's anyone from … my high school that doesn't have a [postsecondary] University education."