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CAUT Bulletin Archives

May 1997

Student Aid: Where do we go from here?

It has been over fifty years since the Canadian government signed the Universal Declaration of Human Rights which declared that access to higher education should be available equally to all, based on merit. In accordance with the UN Declaration, CAUT has always maintained the position that a university education is a public good and that society has an economic and social interest in making resources available to realize these goals. To this end, CAUT has supported the principle that there should be no tuition charged at accredited universities and colleges.

In the present fiscal climate, these rights/goals can seem almost utopian. Yet when polled, a majority of Canadians would agree that post-secondary education should be available to all those who qualify. Nevertheless, many governments in Canada want to revert to an earlier period when higher education was not a right. Neither for that matter, was secondary education.

Since 1995, reductions of more than $4 billion in transfer payments to the provinces have meant program cutbacks and tuition increases. In 1996, the government increased loan limits to Canada Student Loan participants. In 1997, the government introduced interest relief for up to 30 months for recent graduates who demonstrate financial need.

CAUT is working with AUCC, CFS, CASA and the student aid administrators which has developed a pckage of realistic changes to federal student aid policy. What we need is a commitment from the federal government.

The Present

Provincial and federal governments have never worked together to determine what it would take to make post-secondary education available to everyone who qualified. The approach to accessibility has been more ad hoc, with increasing emphasis placed upon providing aid to individuals. In this context, the role of a comprehensive national student aid plan takes on great importance. The purpose of the plan would be to implement a mix of loans, grants and targeted initiatives that promote equal opportunity.

It is important that any student aid plan be national in scope but recognizing that Quebec has developed a separate plan. Canada’s economy still relies on its strong natural resource base. There is no getting around reality: some provinces are more endowed with marketable natural resources than others. No matter how creative or well-implemented provincial programs may be, some provinces do not have the resources to ensure that their citizens receive the same opportunities that are available to residents in other provinces.

A comprehensive student aid plan needs to look at the different stages of an individual’s life and create interventions that address need at these various stages. A comprehensive plan could take the form of a targeted grant program for students who are about to enroll or who are presently enrolled in a program, a system of deferred/back-end grants programs that provide relief to recent graduates who are faced with large debt-to-income ratios and reformed fiscal measures that make the tax system more education friendly.

Targeted Grants

The federal government presently administers three special opportunity grants programs (SOGs). It is a new initiative with grants targeted to part- time students, students with disabilities and female doctoral students. Presently, the federal government provides the financing and the provinces assess the individuals and administer the funds.

It is suggested that the SOGs program be expanded to include other categories. Research in the United States has shown that up-front grants have a significant effect on retention of low-income, full-time students who are in their first or second year of a university program. Following the US example, providing a program of grants for high need first year students will most likely improve retention and encourage other qualified students with limited resources to apply for university.

Another high need category is single parents. Single parents as a group tend to have the highest debt levels. Moreover, a post-secondary education is an important asset for many of these students as they try to escape from poverty and build a better future for their families.

Work Study

Canada needs a national work study program. The Consortium on Renewing Student Assistance in Canada envisions a program that would have the federal and provincial governments working in partnership to provide a system of matching grants and wage subsidies. Not only is work study an important form of financial assistance, it also allows students to gain valuable job experience.

It is imperative, however, that any work study program contain parameters. For example, there should be a limit on the numbers of hours a student can work per week. Research indicates that after ten hours of work a week, a student’s academic performance deteriorates. In addition, any work study program should be carefully designed not to displace existing workers. Furthermore, institutions should have the flexibility to set student wage levels, as labour markets and the cost of living can vary significantly across Canada.

Deferred Grants

Deferred or back-end grants address the problem of increasingly unmanageable debt-to-earnings ratios and unstable incomes after graduation. Students who graduate with unmanageable debt would apply for a one time lump-sum grant to reduce the total principle owing. The one time grant would reduce the student’s debt to a point where no further assistance would be required. These grants are a way of targeting aid to students with high debt-to-earnings ratios and avoid inequities that are found in existing loan remission programs.

Tax Measures

In its most recent budget, the government announced tax reform measures that make it possible to save more money in tax deferred registered education savings plans and to include other university fees in the total non-refundable tuition tax credit. These changes make our tax system more education friendly. Not included in these measures however, are provisions that would allow interest paid on student loans to be tax deductible. Not only would these deductions make debt loads more manageable but it might also encourage individuals, who are reluctant to go into debt to finance their education, to see post-secondary education as an important investment in their future.

The present Canada Student Loans Program continues until 1999. However, the new government should authorize a wideranging review before then which should hear from loan recipients and student aid offivers across the country.