Ch-ch-ch-changes

You may get a surprise in the mail this year. Upon opening that fateful letter that tells you how much student loan funding you’ll receive, you might find yourself the recipient of a non-repayable grant from the Federal government that you never asked for. If free money seems to good to be true, fear not: it’s part of a new Canada Student Grant Program that is being implemented for the first time this semester and means that you will receive extra dough you won’t have to pay back later.

In the 2008 budget, the federal government announced big changes to federal student aid, including a new national grant program, the scrapping of the Millennium Scholarship Foundation (the previous source of national bursaries and scholarships) and new programs to help student loan borrowers having trouble repaying their loans after graduation. So how exactly do these changes affect you?

Starting this year, when you apply for a national student loan, you are automatically applying for a grant as well. Full-time students who are deemed by the Canada Student Loan Program to be from low-income families will receive an extra $250 per month up to a maximum of $3000 per year. Those from middle-income families will receive $100 per month up to a maximum of $1,200 per year. To find out what your family’s income level is click here.

An important distinction between the previous bursary program and the new grant program is that grant funding is determined according to your family’s income, not your need (expenses minus resources). This means that no matter whether you have savings from your summer job or you borrowed money from your uncle, you will get the grant as long as your family’s income is low enough. It may seem like an inconsequential difference, but it affects who gets these grants.

In other words, while getting a part-time job or otherwise improving your financial circumstances decreases the amount of funding you qualify for in the form of student loans, it does not affect your grant funding. Take this example: Student A is from a low-income family and, after subtracting his meager savings from his total university costs, he needs $3,500. He will receive $2,000 in grants and $1,500 in student loans. Student B is also from a low-income family and, having sold her car and working her butt off during the summer, she only needs $1,400. She will receive a $2,000 grant and won’t have to take out student loans. If you qualify, you get the grant—simple as that.