Does the "fiduciary duty" (i.e. acting in the best interests of the students) of a university's Board of Governors allow it to withhold funds from a student union when that union refuses to provide audited financial statements to the Board?

That's the crux of the current situation at Carleton University, where the Board of Governors is withholding student fees from the Carleton University Students' Association (CUSA) and the Graduate Students' Association (GSA).

The student unions have filed a petition with the Ontario courts in an attempt to force Carleton to give them the fee money.

The university board's position is that, according to the auditors advising them, their fiduciary duty is to make sure money collected is used for the stated purpose.  

The student unions are refusing to make public their audits and are accusing the University of trying to interfere. They say they are only accountable to the students and not to the university .

"The claim that this is about financial accountability is a red herring", stated GSA president Kimalee Phillip in a news release, "this is about political interference plain and simple. They want to silence students' voices on-campus."

In a statement on the University website, the institution says, "The university has no interest in determining or directing how student associations at Carleton University spend their funds. The university is simply asking for CUSA and GSA to be transparent and accountable to the Carleton community with regard to how student fees are disbursed."

I can understand the paranoia of the student associations.

They often disagree with Carleton's administration and an argument could easily be made that it is in the best interests of the institution to "interfere" in the operations of the student unions.

The student unions are a major risk to the institution's reputation. One only needs to remember the most embarrassing incident in Carleton's history.

In 2008,  CUSA voted to boycott the cystic fibrosis fundraiser Shinerama on the grounds that the disease only affects white people.

But even if the university wanted to use its leverage over student fees to control the students unions, it is a weak position. By providing full disclosure, the student unions would take this position away from the university.  

The Board of Governors that collects the fee from students does have a responsibility to ensure the fees are being used for their intended purpose.

The best method of ensuring the funds are being properly used is to read the entire financial audits of the student unions.

If CUSA and the GSA were serious about being transparent to students, they would release their annual audits for public viewing. And doing so would expose if Carleton is using this as a "red herring" or not.

By not making their books public, it looks like the student unions are more interested in playing petty political games and engaging in hyperbole than actually finding a solution to their current disagreement.

For its part, the university is providing funds for necessary services and holding the remainder in trust until such time as financial responsibility is ensured.

Ultimately, the courts will have to decide and create new legal precedent - there are at present no common law rulings dealing with the specifics of defining the limits of a university's "fiduciary duty" in relation to fees collected for student unions or societies.

The closest case we have to cite is Douglas Students' Union v. Douglas College.

In this case,  the Douglas Students' Union failed to complete financial audits for a few years and Douglas College refused to turn over student fees until the audits were completed.

The student union took the institution to court but the court did not rule either way if the actions of Douglas College were legal under the legislation governing student societies in British Columbia.

The court appointed a receiver to oversee the finances of the student union and both sides - the student union and the college - claimed victory in the case.

The situation at Carleton is much different - the student unions are not alleged to have incomplete audits, just that they're not making them public.

It all comes down to the limits of "fiduciary duty" and depending on the judge that hears the case, either side could win.

Student groups are celebrating a "victory" in Ontario today as the provincial government announced a continuation of the tuition status quo and unveiled some incremental changes to the provincial student loans program.

Unless the definition of victory has changed, I don't see why student lobbying organizations are celebrating. Sure, the announcement today only included one cutback - the debt cap for Ontario's neediest students is increasing by $300 per two-term academic year - but it didn't exactly have a lot of substantive benefits for students, either.

In the context of the province's record deficit, it is definitely good news that student aid was not cut and the government continues to cap tuition. However, this good news should not be construed as anything more than student lobbying groups holding the line until after the next provincial election.

Still, "victory" is not a word I'd use to describe today's announcement. Tuition will continue to increase at more than two times the rate of inflation, and the neediest students are about to carry $300 more in provincial student debt each year. The increase to the maximum amount of provincial student loans is only $320 per academic year - less than the amount tuition has increased since 2005.

There are positive changes in this package. The fact that students can now earn more toward their studies without government claw backs has doubled and been indexed to inflation. There are new grants for part-time students, interest relief on loan repayments for the first six months after graduation, repayment assistance for former students with low earnings, and the Ontario Student Assistance Program (OSAP) formula is being indexed to inflation for non-tuition educational expense.

The battle over the contribution that Ontario's higher education sector will make when the government tackles the deficit has merely been put off until after the 2011 election. If today's announcement is a victory, it is only one battle in a war in which the odds are against the sector.

The provincial Liberals have positioned post-secondary education as an 2011 election issues - it's now time to man the barricades.

Poll: Does keeping Ontario post-secondary tuition increases at 5% for the next two years help students?

Michael Ignatieff is on a cross-country tour this week and the Conservatives are howling "Ignatieff Prorogues Himself.” Ignatieff’s absence from Parliament is of little interest to students, but what he’s saying during his latest cross-country tour is.

Ignatieff told a group of high school students in Newfoundland that he will be proposing changes to the Canada Student Loans Program during the next election. He says he will lower the interest rate on federal student loans and will propose a loan-forgiveness program for graduates working in the public service.

CSLP is in serious need of reform, especially the interest costs placed on students in repayment. The federal government charges a 2.5 per cent above the prime interest rate for student loans. Most provinces charge 1 per cent above prime with a few charging only the prime rate.

A lot of borrowers who are in collection are there as the result of a punishing payment schedule that fails to account for the economic situation facing recent graduates.

Ignatieff states that the federal government needs to take a leadership role in post secondary education by creating a dedicated transfer payment for post secondary education.

To encourage universities to recruit, enroll, and graduate students from lower socio-economic backgrounds, Ignatieff proposes the federal government create financial incentives for schools.

These ideas represent good public policy. For many years, post secondary education policy has been driven by political desires to funnel money into schemes that will deliver votes from upper-middle to upper class families.

During the 2008 federal election campaign, the Liberals proposed replacing current federal tax credits with in-study grants, to provide significant relief for student loan borrowers in their repayment phase, to create more needs-based grants, and to guarantee every student a loan of $5,000.

Ignatieff’s appears to be making post secondary education a major part of his pre-campaign speeches. If he continues, Canada may finally have a serious debate about higher education.

Last week, Statistics Canada released the Consumer Price Index for 2009 showing inflation in Canada for last year averaging 1.3 per cent. This report, which very few students (or sometimes parents) pay attention to, has the greatest impact on student fees of any Statistics Canada measure  - it is the rate used by most universities to decide ancillary fee increases.

At first glance, the CPI report  is great news for students, with the 2009 yearly rate lowest in British Columbia  at 0.4 per cent and highest at 3.0 per cent in P.E.I. and New Brunswick , scheduled increases to indexed student fees will be at an all-time low in some parts of the country.

The indexing of fees to CPI is designed to prevent inflation from eating away at the value of student fee contributions to services and avoids constantly holding referendums to increase flat fees due to inflation.

Until now, the system has worked. CPI usually hovers between 2 and 3 per cent.

The lack of increase is not good news for universities as their human resource costs are not indexed to CPI; they are set by collective agreements. The increases in salary and benefits for employees of ancillary-fee funded services average 2 to 3 per cent at most universities.

The anomaly in CPI, caused by the downward pressure of the recession, has caused an imbalance between revenue and expenses. 

It is for this reason that ancillary fee-funded university services such as career services and athletics are facing larger deficits. There are only two ways for universities to erase these deficits: cut services or increase fees.

Students will have to choose which "solution" they prefer. They can hold referendums to increase their ancillary fees or accept cutbacks to the services they fund.

The most desirable "solution" is to increase fees by an additional 2 per cent this year and leave the fees indexed to CPI continuing into the future. Hopefully, the economy will rebound and CPI will bounce back to a healthier rate.

The alternative is permanent cuts to ancillary-fee funded services, since future fees will never make up for a shortfall this year.