Post-secondary education getting more affordable and accessible - students can plan on it

Fixed student contribution simplifies Canada Student Loan eligibility

OTTAWA, Nov. 23, 2016 /CNW/ - Peter Schiefke, Parliamentary Secretary to the Prime Minister (Youth), on behalf of the Honourable MaryAnn Mihychuk, Minister of Employment, Workforce Development and Labour, spoke to students and student leaders at Carleton University today about Education Savings Week. He outlined the government's plan to introduce a fixed student contribution to determine eligibility for financial assistance through the Canada Student Loans Program, part of its commitment to strengthen the middle class, and help those working hard to join it.

Beginning in 2017, students will only be expected to provide a fixed contribution of between $1,500 and $3,000 per academic year (based on their family income and family size).

Today marks the midpoint of Education Savings Week, and Parliamentary Secretary Schiefke highlighted the importance of planning and saving early for post-secondary education. He noted how the Government of Canada supports education savings through incentives like RESPs (Registered Education Savings Plan) and the Canada Learning Bond.

The new fixed student contribution will provide students with the simple predictability of a fixed amount to contribute towards their education costs. The simplified fixed contribution will allow low and middle income students to better save, budget, and plan for their future. They'll no longer need to estimate their earnings or savings, and will know in advance the amount they'll need to contribute toward their education costs. In addition, more students will be able to continue to work and gain valuable job experience without having to worry about a reduction in their level of financial assistance.

The fixed contribution will also benefit adult learners, many of whom may work while studying, or who have spouses whose resources would previously have been considered in determining eligibility.

Canadians facing barriers to employment will be exempt from making any contribution, including Indigenous students, students with permanent disabilities, students with dependent children, and current or former Crown wards.

Budget 2016 provided the first significant changes to the Canada Student Loans Program since 2009. In addition to the fixed student contribution, students in Canada now benefit from a 50 percent increase to Canada Student Grants and an increase to the 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.   

Quotes

"Education is the key to future success and prosperity. Our investments are making post-secondary education more affordable and more accessible for more students. It's going to help grow the Canadian middle class and help Canadians get the skills and experience they need for good jobs."
– The Honourable MaryAnn Mihychuk, Minister of Employment, Workforce Development and Labour

"It is important to our government that youth are aware of the support available for their education and know the support does not stop once they graduate but rather continues to be available throughout their life. Whether someone wants to change jobs, or has to change jobs, it is essential that Canadians have access to the education they need, and the changes to the Canada Student Loan Program can help make that happen."
– Peter Schiefke, Parliamentary Secretary to the Prime Minister (Youth)  

Associated Links

Budget 2016
Canada.ca/Student-Financial-Assistance

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Backgrounder

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BUDGET 2016 – Making Post-Secondary Education More Affordable

Fixed student contribution

For the 2017–18 academic year, the Government of Canada is moving forward with the second phase of Budget 2016 measures designed to simplify the application process for student financial assistance and make the Canada Student Loans Program more transparent and predictable. Beginning August 1, 2017, the Canada Student Loans Program will be introducing a fixed student contribution to determine eligibility for Canada Student Loans and Grants that replaces the current system of assessing student income and financial assets.

Enhancing Canada Student Grants

Budget 2016 also announced enhancements to Canada Student Grants (CSGs) which will help reduce student loan debt in repayment.

As of August 1, 2016, CSG amounts increased by 50 per cent:

• 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.

CSGs provide up-front, non-repayable financial assistance to low- and middle-income students and students with permanent disabilities or dependants. Eligibility is assessed at the time the student applies for student loans.

Increasing the CSGs is expected to benefit over 350,000 students across Canada: 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 announced expanding 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.

Provincial and territorial information for Canada Student Loans and Grants
The Government of Canada works with most provincial or territorial governments to deliver federal and provincial student loans and grants.

• In Ontario, British Columbia, Saskatchewan, New Brunswick and Newfoundland and Labrador, the Government of Canada and the provincial governments work together to provide financial assistance through Integrated Student Loans and Grants.
• In Alberta, Manitoba, Nova Scotia and Prince Edward Island, Canada Student Loans and Grants are available alongside provincial or territorial student financial assistance.
• In Yukon, only Canada Student Loans and Grants and territorial grants are available to permanent residents of Yukon.

Repayment Assistance Plan
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.

Since its introduction in 2009, the Repayment Assistance Plan income thresholds, which currently begin at $20,210 (gross income), have not been adjusted and do not reflect minimum wage increases.

Budget 2016 announced an increase to 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.  This income threshold is for a single individual; for other family sizes, see the table below. 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. This measure will provide assistance of $131.4 million over five years, starting on November 1, 2016.

Annual Family Gross Income Thresholds for RAP Zero Payment by Family Size
Family Size	Current RAP Thresholds	RAP Thresholds as of Nov. 1	Percentage Change
1	$20,210	$25,000	23.7%
2	$31,570	$39,052	23.7%
3	$40,790	$50,457	23.7%
4	$48,110	$59,512	23.7%
5+	$54,830	$67,825	23.7%

In 2013–14, nearly 234,000 borrowers benefited from the RAP, of whom 87 percent did not have to make any payments at all.

Non-participating jurisdictions

Quebec, Nunavut, and the Northwest Territories chose not to participate in the Canada Student Loans Program and receive an alternative payment from the Government of Canada to administer their own student financial assistance measures.

SOURCE Employment and Social Development Canada

For further information: Jean-Bruno Villeneuve, Press Secretary, Office of the Hon. MaryAnn Mihychuk, Minister of Employment, Workforce Development and Labour, jeanbruno.villeneuve @hrsdc-rhdcc.gc.ca, 819-654-5613; Media Relations Office, Employment and Social Development Canada, 819-994-5559, [e-mail]