Want to improve the quality of higher education and make sure every Canadian has access to university or some form of post-secondary education Then, as I argued in my last column, the last thing politicians should do is make tuition "free." All that would do is squeeze institutions who need more (not less) money for more student spaces, capital needs, and better funding for instructors and research.

A more sensible approach to funding higher education would ensure everyone who wants post-secondary education gets it (universal access) without restricting the money needed by universities to not only do the job, but to excel.

That approach must include tying loan repayment (available to every Canadian who wants one) to the future income of the post-secondary graduate. For those who graduate with large student loans but choose (or can only find) relatively low-paying jobs, large chunks of the loan could be forgiven and/or re-paid over longer stretches (ten to twenty years.) For those, say an MBA graduate who will earn very good money quite quickly, the entire loan would have to be re-paid. That would be fair to potential students, as everyone who wants a loan would be eligible for one.

It would also be fair to taxpayers, as such a system would enable students to bear a greater share of the true cost of their education compared to now (where the subsidy from taxpayers and university donors is often in the magnitude of seventy to eighty percent.) Moreover, since repayment of the loan would occur through the tax system, default rates and outright fraud would likely drop significantly. As it is, defaults on student loans cost Canada's taxpayers $250 million last year and about 10 percent of student loans are presently in default. That compares to a normal default rate for individuals at banks of about one percent, or half a percentage point for business loans.

Some student leaders have argued that it is the bank's fault or taxpayers' fault for not giving students more money in the first place. Poppycock. The average student gets an up-front cut on the cost of their educational investment, generous loan terms, interest-free status for part of the loan, tax deductions and credits, and more generous repayment terms that a small businessperson could only dream of. Certainly some graduates get into financial trouble (as do other Canadians,) but most university graduates are headed for much lower unemployment rates and vastly higher above-average earnings vis-à-vis the general population.

True, some of the abuses were cleaned up when the banks administered the student loan system over the past five years. But it is likely taxpayers will be tapped more often for higher default rates as Ottawa is taking back the system's administration (through HRDC - the same folks who brought you the billion-dollar boondoggle.)

Offering loans to all, tying loan re-payment to future income where one repays all, a portion, or none, offering generous repayment terms, and administering it through the tax system - that would be a smart investment in higher education for all Canadians. It would provide funding for students, fairness for taxpayers, encourage institutional responsiveness and accountability for tuition and tax dollars, and provide flexibility for post-secondary institutions to meet the challenges of the twenty-first century.