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CAUT Bulletin Archives

May 1997

Party Policies on Student Aid

The Fedeeral government has for many years contributed to student aid through the Canada Student Loans Program (CSLP). Because of rising tuition and fees, student debt levels in Canada are currently among the highest in OECD. An increasing number of students depend on the CSLP. Last year, students received $619 million in assistance from the CSLP.


  1. Does your party favour continued federal funding of the Canada Student Loans Program at its present level? Or would your party increase federal contributions for student aid? If so, how and to what level?

  2. Borrowing money to finance a university education can create a huge burden for borrowers when they graduate. Does your party support measures that would allow interest on student loans to be tax deductible (much like small business loans)?

  3. Does your party support means tested federal grants (as distinct from loans) to targeted groups of students who are clearly in need of financial assistance? University stakeholders have called for such means tested grants for needy first year students (where drop out rates are the highest) and for single parents. Would your party support this approach?

  4. Does your party support the continuation of the current federal student aid regulations whereby unemployed or severely underemployed graduates may receive relief from loan payments for up to 36 months?

  5. Does your party see any final limit to the amount of money students should contribute through tuition fees, to the "real" cost of their post-secondary education? Should the proportion of student contributions be at 10%, 20%, 50% or some other figure?

  6. What would your party do to increase the number of women studying science and engineering at the university level?


There is general recognition, both inside and outside of the country, that Canada has a high-quality, accessible post-secondary education system. A key factor in maintaining and increasing this accessibility has been the Canada Student Loans Program (CSLP). The Liberal government has initiated several changes in order to assist students and their families. In 1994 provision was made to increase loan limits by 57 per cent. From 1995 to 2000, students will benefit from loans and grants valued in excess of $6 billion, which represents an increase of $2.5 billion over the previous five years. New grants have been made available to needy part-time students, women in doctoral studies in non-traditional disciplines, and students with permanent disabilities requiring special equipment and services in order to stay in school.

The 1996 Budget provided an additional $80 million in direct federal tax assistance for higher education by increasing both the education credit and the limit on transfers of the tuition fee and education credit by 25 per cent.

The 1997 Budget built upon these initiatives by targeting support for three groups: students and their families; students facing high debt loads after graduation; and parents saving for their children’s post-secondary education. Federal support for post-secondary education, aside from the CSLP, will increase by $137 million in 1998-99, growing to $202 million in 1999-2000, and to about $275 million annually thereafter.

In addition, the amount used to establish the post-secondary education tax credit will increase from $100 per month to $150 per month for 1997, and to $200 per month for 1998 and thereafter. Students will be able to carry forward unused tuition and post-secondary education credits indefinitely, to be applied against future tax liability.

The annual contribution level to RESPs was doubled to $4,000 in the 1997 Budget. The lifetime limit remains unchanged at $42,000. In addition, parents will be allowed to transfer RESP income into their RRSPs if there is room and if their children choose not to pursue post-secondary studies. Parents who prefer not to transfer the income to an RRSP will be permitted to receive the investment income directly, subject to a charge.

To assist students who face hardship in repaying their loans, the interest-free period has been extended from up to 18 months to up to 30 months. During this maximum 30-month interest-free period the federal government will pay the interest charges at a cost of $20 million annually. Combined with the initial six months when no payments are required, this means unemployed graduates will have up to three years of help in managing their loans.

By 1998, these measures will mean that the average post-secondary student will receive roughly $1,200 in combined federal and provincial tax assistance each year — up from $900, a 33 per cent increase.

A new Liberal government will expand assistance to students with dependents by providing grants of up to $3,000 per year to assist them with their education costs. This $60 million annual investment will help up to 20,000 students continue their studies. Forty per cent of these students are already at the federal loan limit, making them among the neediest students in Canada.

New Democrats

1. Canada’s NDP supports the maintenance of the Canada Student Loan Program at levels that meet the needs of Canada’s students.

2. Canada’s NDP supports a tax system that treats Canadians paying off student loans in a supportive and equitable manner.

3. For many Canadians, both those entering higher education directly out of high school and those up-grading their skills, a loan is not sufficient. High rates of youth unemployment mean it is very often impossible for young Canadians to earn enough to support themselves during their studies, even with the assistance of student loans. Single parents, those with disabilities, and others, have a difficult time earning enough in any situation. Canada's NDP is therefore proposing a student assistance program, directed to those in financial need, to give all qualified students access to post-secondary education.

4. Yes

5. Canada’s NDP stands for an education policy that works towards a steady reduction in tuition fees over time.

6. Canada has a shameful record when it comes to providing women with the training and opportunities available to men. Canada has the second highest incidence of low-paid employment for women (34.3 per cent) among OECD countries, and an economy where only 20 per cent of women have full-time, full-year jobs which pay more than $30,000 a year. Making sure that more women have access to the kind of training that will give them better opportunities, including training in science and engineering, must be an important goal for Canada’s education system.

Canada’s NDP supports developments in primary, secondary and post-secondary education to generate an educational culture in the sciences that is welcoming and accommodating to women. Women in science and engineering programs, as in other fields, need to be supported with quality, affordable daycare, financial assistance for single mothers attending post-secondary institutions, and maternity leave from academic programs.

Progressive Conservatives

A Jean Charest government will help make it possible for more students to go to universities and colleges by:

  • starting a $100 million Canadian merit scholarship program that will open the doors to higher education for 25,000 needy students with the top marks in a scholarship exam covering core subjects;
  • working with interested provinces to help coordinate and institute universal student assistance programs backed financially by the private sector. Assistance will be made available to EVERY student. Students will pay the loans back after graduation, with the payments determined by their personal level of income; and
  • giving provinces the flexibility and tools to properly fund post-secondary education through the tax points transfer.

Reform Party

1. We support the existing Canada Student Loans Program and do not plan to change either its source or level of funding.

2. Preston Manning has taken a personal interest in this issue, and has become a leading advocate of the concept of income-contingent student loan repayments. Under this arrangement, the rate at which student loans are paid back would be determined, either entirely or in part, by the income level of the former student.

3. Reformers believe that entrance to university should be determined exclusively by academic merit. Access to public funds, whether in the form of grants or of loans, should be determined by an objective measure of need, rather than on the basis of targeting any particular group.

4. This provision could be addressed as an aspect of a new income-contingent loan repayment scheme.

5. Our preferred approach would be for provincial governments to make the final decision as to whether to use a portion of the $4 billion annual increase in post-secondary education and health care transfers proposed by Reform to place a permanent cap on tuition fees.

6. We believe that entrance to academic programs should be determined entirely by academic merit and the interests of perspective students. We note that as traditional gender roles change the number of women entering engineering and science programs will continue to increase.