OTTAWA, July 28, 2016 /CNW/ - For too many Canadians, rising costs have made post-secondary education less affordable. Fewer are able to save for education, and those who receive financial assistance often find it difficult to repay their loans. Increases to Canada Student Grants and changes to the Repayment Assistance Plan offer real help to Canada's middle-class and those working hard to join it.
Beginning August 1, Canada Student Grant amounts will increase by 50 percent in time for the 2016–17 school year, helping over 350,000 students. The grants will increase from $2,000 to $3,000 per year for full-time students from low-income families; from $800 to $1,200 per year for students from middle-income families; and from $1,200 to $1,800 per year for part-time students from low-income families. This will allow students to focus on their education while working to fulfill their greatest potential without having to worry about taking on even more debt.
Additionally, beginning November 1, the Government of Canada will ease the rules on its Repayment Assistance Plan by ensuring that no borrower will be required to make any repayment until he or she is earning at least $25,000 per year. This will allow students to complete their studies with the confidence of knowing that debt repayments will not become an overwhelming burden.
Further enhancements to student financial assistance are also in store for the 2017–18 school year.
"The future prosperity of our country depends on young Canadians getting the education and training needed to succeed in the job market. As a result of these new measures, post-secondary education will be more affordable, and students will be better positioned to transition into the workforce after graduation."
– The Honourable MaryAnn Mihychuk, Minister of Employment, Workforce Development and Labour
- The increase to Canada Student Grants will provide assistance of $1.53 billion over five years.
- The increase to the Repayment Assistance Plan eligibility thresholds will provide assistance of $131.4 million over five years.
- The regulatory proposal to Increase Canada Student Grants and Repayment Assistance Plan Eligibility Thresholds was published in the Canada Gazette, Part II, on July 13, 2016.
BUDGET 2016 – Making Post-Secondary Education More Affordable
Enhancing Canada Student Grants
Canada Student Grants (CSGs) provide up-front, non-repayable financial assistance to low- and middle-income students and students with permanent disabilities or dependents. Eligibility is assessed at the time the student applies for student loans.
Budget 2016 proposed to increase CSG amounts by 50 percent:
- from $2,000 to $3,000 per year for full-time students from low-income families;
- from $800 to $1,200 per year for full-time students from middle-income families; and
- from $1,200 to $1,800 per year for part-time students from low-income families.
Increasing the CSGs would benefit over 350,000 students: approximately 247,000 low-income students; 100,000 middle-income students; and 16,000 part-time students per year. This measure will provide assistance of $1.53 billion over five years, starting in 2016–17.
Budget 2016 also proposed to expand eligibility for CSGs to help even more students receive non-repayable assistance through an investment of $790 million over four years. The new eligibility thresholds are expected to be in place for the 2017–18 academic year, following consultations with provinces and territories. Under the new model, the existing low- and middle-income thresholds will be replaced with a single progressive threshold under which grant amounts will gradually decline based on income and family size.
Making student debt more manageable
For Canada Student Loan borrowers having difficulty making their payments following their studies, the Repayment Assistance Plan (RAP) can offer help. The RAP makes it easier for borrowers to manage their student loans by paying back what they can reasonably afford, based on their family income and size. Students must apply for the RAP in order to receive this support.
Budget 2016 proposed to increase the loan repayment threshold under the Canada Student Loans Program's Repayment Assistance Plan to ensure that no borrower who applies will have to repay their Canada Student Loan until they are earning at least $25,000 per year. Students earning more than this amount may also be eligible for reduced payments. Students who think they may face difficulties repaying their loans should contact the National Student Loans Service Centre to learn more: https://csnpe-nslsc.cibletudes-canlearn.ca. This measure will provide assistance of $131.4 million over five years, starting in 2016–17.
Introducing a flat-rate student contribution
Budget 2016 proposed to introduce a flat-rate student contribution to determine eligibility for Canada Student Loans and Grants to replace the current system of assessing student income and financial assets.
This change will allow students to work and gain valuable labour market experience without having to worry about a reduction in their level of financial assistance. It will also benefit adult learners, many of whom may work while studying or have significant financial assets. This measure will provide assistance of $267.7 million over four years, starting in 2017–18, and $73 million per year thereafter.
The Government will work collaboratively with provinces and territories to finalize the flat-rate contribution model in time for implementation in the 2017–18 academic year.
The Canada Student Loan Program (CSLP) promotes accessibility to post-secondary education for students who demonstrate financial need. The CSLP reduces financial barriers through the provision of Canada Student Loans and Canada Student Grants, as well as for borrowers in repayment with the Repayment Assistance Plan. The Program ensures that Canadians have an opportunity to gain the knowledge and skills required for successful participation in the economy and society.
Budget 2016 proposed a package of reforms to the CSLP that will make post-secondary education more affordable for students from low- and middle-income families and ensure that student debt loads are manageable. These measures will also simplify the application process for student financial assistance, making the Canada Student Loans Program more transparent and predictable.
SOURCE Employment and Social Development Canada
For further information: John O'Leary, Director of Communications, Office of the Hon. MaryAnn Mihychuk, P.C., M.P., Minister of Employment, Workforce Development and Labour, 819-654-5611; Media Relations Office, Employment and Social Development Canada, 819-994-5559, [email protected]