The federal government has announced plans to raise the legal limit for outstanding Canada student loans from $15 billion to $19 billion.

The move comes in the wake of an actuarial report on the loans program released in 2010 that predicted the limit would be reached in January 2013.

The government says the regulatory amendment is necessary to respond to projected increases in post-secondary enrolment rates, as well as to ensure students continue to have access to federal loans for another 10 years.

But students aren’t impressed by the announcement.

“A generation of students and their families are already saddled with billions of debt as a result of skyrocketing tuition fees,” said Roxanne Dubois, national chairperson for the Canadian Federation of Students. “It’s time for the federal government to step up and implement a new strategy that will not bankrupt the next generation.”

She said the government budgets more than $2.5 billion annually in education-related tax credits and regressive savings schemes that don’t improve access to post-secondary education and that shifting the money to upfront grants would be more than enough to replace the equivalent billions of dollars the government disburses in student loans.

The current limit on aggregate amount of outstanding loans, set at $15 billion, was increased from the previous $5 billion ceiling through an amendment in 2000.

“Rather than indiscriminately raising the student loan limit every 10 years or so, the government should look for ways to improve the level of non-repayable assistance available to students,” said CAUT executive director James Turk.

“We recommend that the level of grants for students be increased sufficiently, so that the $15 billion loan cap need not be raised.”

Government numbers show that Canada student grants have already had an impact on the amount of student loans given out, as the average value of loans decreased from about $5,700 in 2008–2009 to $5,200 in 2009–2010.