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Liberals’ changes to financial aid for students will take years to implement

Liberal Leader Justin Trudeau held up the party's election platform as he addresses students and staff while touring Mohawk College, in Hamilton, Ont., Wednesday, Oct. 14, 2015. (File)

Paul Chiasson/The Canadian Press

Postsecondary students will be a little bit richer as a result of the Liberal government's first budget, but exactly by how much and when they will reap the full benefits of changes to the federal loan and grant system is still years in the future.

Changes to financial aid include allowing low-income graduates to defer their student loan payments until they make more than $25,000 a year, and providing a 50-per-cent increase to federal grants to $3,000 from $2,000 for low-income students. (Middle-income students will see an increase to $1,200 from $800.)

In addition, the budget signals that the government will introduce a new way of determining aid in 2017, which will simplify how much parents are expected to contribute.

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"The problem is that they've announced that they are going to do it, but we have no idea how that's going to play out in practice," said Patrick Snider, policy analyst for the Ottawa-based Canadian Alliance of Student Associations (CASA).

Some of the full impact of the changes will depend on negotiations with the provinces. Earlier this month, Ontario announced that it was restructuring its financial aid system with the goal of increasing the participation of low-income students. Students will be able to see how much grants and loans will reduce their fees. For those in lower-income brackets, tuition will be covered by grants.

To fund their promises, however, both governments are eliminating tax credits. It's something that helps undergrads while hurting graduate and professional students.

"Tax credits are related to the actual tuition that you pay, but the grant is based on an average of undergraduate fees," said Marcus McCann, a lawyer who began practising in 2015 and fought against high law school fees while he was a student. With law school fees ranging from $15,000 to $35,000 a year, law students could lose thousands of dollars a year in credits, Mr. McCann wrote in a recent blog post.

"There's time for policy makers to have a think on what this means for professional students, including law and medicine," Mr. McCann said.

Graduate students are in a similar position, said Viviane Bartlett, the interim executive director of CASA. Because they usually have income from research or teaching, they were one of the few groups that benefited from tax credits.

"It's great that it's being reinvested in grants, but grad students don't get federal grants," she said.

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Still, the group believes that eliminating tax credits is the right approach. Less than half of undergrads don't have enough income to use the credits the year they earn them, and another third are transferred to other family members.

"After it's all implemented, it will simplify some of the aid," Ms. Bartlett said.

Students will also reap direct and indirect benefits from the new Postsecondary Institutions Strategic Investment Fund, a dedicated $2-billion slice of overall infrastructure spending, and a measure for which the sector had lobbied hard. The budget envisions entrepreneurship and innovation centres, apprenticeship training facilities and research labs being built as a result of the fund and improved environmental sustainability of existing infrastructure.

"Investment in research facilities is significant, so students will have state-of-the-art facilities to learn and work in," said Paul Davidson, the president of Universities Canada.

The fund is similar to the Knowledge Infrastructure Program, which provided up to $2-billion to support physical and technological infrastructure during the Conservative era. Half of the cost of campus infrastructure projects will be covered through the new program.

The budget tries to help students after they graduate too. It introduced a program to match postsecondary institutions with employers offering co-op and internship opportunities. The plan is backed by $73-million over four years.

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"It means not only paid work for students, but significant experiences that are going to help them in their career later on," Ms. Bartlett said.

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About the Author
Postsecondary Education Reporter

Simona Chiose covers postsecondary education for The Globe and Mail. She was previously the paper’s Education Editor, coordinating coverage of all aspects of education, from kindergarten to college and university. She has a PhD in political science from the University of Toronto. More

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