Budget 2008 and Student Financial Assistance
Investing in People
Improving Canada’s competitive position means developing the best-educated, most skilled and most flexible workforce in the world. That is why Budget 2008 is:
- Supporting Canadian students with a $350-million investment in 2009–10, rising to $430 million by 2012–13, in a new, consolidated Canada Student Grant Program that will reach 245,000 college and undergraduate students per year when it takes effect in the fall of 2009.
- Committing $123 million over four years starting in 2009–10 to streamline and modernize the Canada Student Loans Program.
- Enhancing the flexibility of Registered Education Savings Plans by increasing the time they may remain open to 35 years from 25 years, and by extending the maximum contribution period by 10 years.
Questions and answers—Budget 2008 and Student Financial Assistance
Q. What is being done to help students finance their education?
A. Advantage Canada recognized that a high quality education system—from early childhood development to higher education to ongoing learning—is critical for Canada’s prosperity. The Government’s action to implement the Advantage Canada framework is delivering important benefits through:
- $350 million investment in 2009-10— rising to $430 million in 2012-13—for a new, consolidated Canada Student Grant Program.
- $123 million over 4 years to streamline and modernize the Canada Student Loans Program, building on the $20 million a year provided in Budget 2006.
- Making Registered Education Savings Plans more attractive by increasing limits and flexibility.
- $800 million per year, starting in 2008-09 and growing by 3 per cent annually, for provinces and territories to strengthen the quality and competitiveness of Canada’s post-secondary education system, building on the $1 billion provided in Budget 2006 for post-secondary education infrastructure.
- Through Industry Canada, $28 million over two years in this Budget for new scholarships for Canadian and international doctoral students, and support for Canadian graduate students to study abroad. This builds on the additional 1,000 Canada Graduate Scholarships provided for in Budget 2007.
- A Textbook Tax Credit amount of $65 per month of full-time study, or $520 for a typical full-time academic year, and a full exemption of scholarship, fellowship and bursary income.
Q. How will this Budget help students seeking loans through the Canada Student Loans Program?
A. Budget 2008 commits $123 million over four years starting in 2009-10 to streamline and modernize the Canada Student Loans Program, improving access to loan funding in support of post-secondary education.
New investments include:
- $23 million over four years for a new service delivery vision that will expand online services and enable students to manage their loans online from application through repayment.
- $26 million over four years to narrow the gap between contributions from spouses and parent of students by reducing spousal contributions, and to make federal student loans more attractive to part-time students.
- $74 million over four years for a consolidated Repayment Assistance Program more responsive to the economic situation of borrowers by providing greater assistance for borrowers experiencing difficulty in repayment, including those with disabilities, to ensure that their payments remain manageable.
Q. Why is the Government introducing the Canada Student Grant Program?
A. The new Canada Student Grant Program will be simple, transparent, predictable and broad-based, providing certainty and predictability for Canadian families:
- Students from low-and middle–income families will qualify based on clearly defined income thresholds.
- Defined monthly grants of $250 for low-income students and $100 for middle-income students will be provided—this predictable financial assistance will have a direct impact on their decision to pursue post-secondary education.
- The new predictable grant will be paid through all years of an undergraduate or college program so that students and their families will be able to plan the funding of their education.
- In the first year, the new grant is expected to reach 245,000 college and undergraduate students, an increase of over 100,000 students currently receiving debt remission and grants.
This new design is aimed at increasing post-secondary education participation and completion rates—particularly of under-represented groups—so that much-needed talent and energy can be engaged in Canada’s future.
Q. Why is the Government replacing the Canada Millennium Scholarship Foundation (CMSF) with the Canada Student Grant?
A. The CMSF was established with an endowment in 1999 for a ten-year period. It is set to expire. A review of student financial assistance found that the Foundation had limited success in encouraging more people to go to college or university and did not provide students with predictable funding from one year to the next.
This is why the Government is introducing a new, simplified and predictable grant in the 2009-10 academic year to replace the CMSF and the patchwork of federal student grants.
For more information please visit http://www.hrsdc.gc.ca/.