"Public post-secondary institutions in British Columbia receive about one-half of their total revenue from the provincial government in the form of grants from AVED. The rest they receive from tuition, ancillary services, federal grants, donations, endowments, investments and research revenue."
Governmental funding for public post-secondary education in British Columbia is done through base funding and strategic funding. Base funding amounts to just under 90% of total government funding . This funding is allocated based on the number of full-time equivalent (FTE) student spaces each institution is allocated. Institutions receive on average $7,200 per FTE for the majority of their programs. Institutions are able to choose which programs they offer and which they will fund. The second part of higher education funding is strategic funding, designed to create spaces for high priority areas with significant labour market demand, such as health and nursing. This type of funding is associated with increasing the number of graduates from high priority programs, expanding online access, and establishes permanent British Columbia Leadership Chairs and British Columbia Regional Innovation Chairs via the Leading Edge Endowment Fund. In most cases, only a small percentage of operating grants (between two and seven percent) is disbursed through strategic mechanisms.
In the report, Campus 2020: Thinking Ahead, the creation of a Higher Education Price Index is recommended to reflect education costs so that each institution can set its own tuition levels independently, but subject to the limits imposed by the provincial government. Regarding the issue of funding higher education in British Columbia, "research-based allocation" of resources will increase the efficiency of these funds. In relation to the system, more funding is necessary to focus on the specific targets of post-secondary achievement by progressively introducing outcome and performance measurements and accountability into the budgeting process.
Tuition fees vary across specific program areas, and detailed information on tuition rates is available from each institution directly. The average tuition for domestic students paid by undergraduate students in 2006-07 was $4,636, which was claimed to be the fourth-lowest in Canada. Domestic students are defined as both Canadian citizens and Permanent Residents. Foreign and International students were required the unsubsidized cost of training, which could total as much as three to five times the tuition fees paid by domestic students.
In 2002, the provincial government de-regulated tuition fees. Higher education institutions, freed from a six-year tuition freeze, and in need of funding to operate their institution, almost immediately raised tuition costs so much that, "de-regulating tuition fees has priced post-secondary education out of the reach for thousands of potential students. As those fees continue to rise, students have been forced to drop out all together, drop back from full-time to part-time or take on large levels of debt. The average student debt in 2007 was close to $30,000 according to the Canadian Federation of Students."
Since de-regulation tuition fees have increased, doubling on average for undergraduate students and nearly tripling for graduate and international students. In 2005, the provincial government re-regulated tuition fees, capping increases to the rate of inflation. The government also altered its student aid provisions, eliminating student grants while enhancing loan remission. As a result, with funding falling short of institutional needs, operating costs of post-secondary institutions were shifted on to students via tuition increases, through the sale of endowment lands to developers for market housing, or relying more on corporation and private donations to maintain programs and build or restore facilities.