All Posts Tagged With: "CSLP"
New PSE grants neither fair nor efficient
Who will benefit from the new income-based Canada Student Grant Program?
After a short, unkind rant about the Canadian Federation of Students, the Educational Policy Institute’s Alex Usher discusses who will be benefiting from the federal government’s new income-based Canada Student Grant Program:
The top level of our new “access grant” has over twice as many potential clients who are over 22 and have been in school for years as it does students under 22 who are just starting out. Dependent students have to have very poor parents to qualify; all an independent student has to do – even if they are from a very wealthy family – is to not earn $20,000/year.
Forget the obvious issues around budgeting and whether or not HRSD is banking on really low take-up rates for this program. Let’s talk about fairness: is it fair that younger students have less access to this money than older ones? Or, let’s talk about efficient program design: is it efficient for a program that is ostensibly about access to be giving so much of its money to students who have already been in school for a number of years?
At the root of the problem here is an inability to come up with a program design that meets the needs of all students equitably. By applying a single set of criteria across a vastly diverse group of students, CSLP has come up with a student support system which, on aggregate, looks neither especially fair nor efficient.
Student Loans 101
They can be a wise investment. Discover how to get the most out of them.
If you’re a first-year Canadian college or university student, you’re probably not old enough to buy a drink. If you’re under 18, you can’t vote. You can’t get your own credit card. But as early as age 16, you can sign your name to a contract that offers thousands of dollars up front, and, if you read the fine print, promises years’ and even decades’ worth of financial obligations after graduation. It’s called a student loan. Forty per cent of full-time post-secondary students receive government student loans each year. Many don’t understand what they’re getting into—or how, if they’re not careful, they can end up with crippling, life-altering debts.
See also: Student Finance 101
Here’s the big picture: according to the most recent data, 350,000 students borrowed an average of $5,631 in federal loans during the 2005-2006 academic year, a jump of 17 per cent from the year before. The average newly minted bachelor’s degree-holder graduates with over $20,000 in government student loan debt, which will take her 9½ years to pay off.
For many students, attending college or university wouldn’t be possible without student loans. The Canada Student Loan Program (CSLP) offers funding to students whose expenses exceed their resources. In most provinces, when you apply for a CSLP loan, you’ll also automatically be applying for a provincial loan. There are limits on how much you can receive and under what conditions—and the system is designed to supplement your own finances, not cover the entire cost of your education.
The maximum annual amount you can receive varies by province, institution and program; the lifetime maximum limits student loan funding to 340 weeks of study up to $50,000 unless you are a doctoral student or have a permanent disability. In most cases, you will be eligible for a maximum of 60 per cent of what is called your “assessed need” from the Canada Student Loan Program; you may also be eligible for additional funds in provincial loans. To determine your assessed need the CSLP calculates the cost of your tuition, books, housing, food, and other expenses and then subtracts your resources, including savings, assets, part-time work income, parental income, and awards. You can estimate your assessed need with the online calculator at canlearn.ca.
If you’re expecting a loan, have a backup plan. Many students get a nasty surprise when they discover that they won’t be receiving as much funding as they’d hoped for. This can happen for a variety of reasons. For instance, whether or not your parents are helping to support you, parental income matters when applying during the first four years of study. Some students get caught in the middle-class gap: their parents don’t earn enough to help pay for school, but they do earn enough to reduce the size of CSLP loan.
Depending on your financial situation, you may want to consider other forms of debt. Many students get both government loans and a student line of credit from a bank. Lines of credit (LOC) are more flexible than student loans since you can borrow only what you need, when you need it. If your parents co-sign the LOC (which they will likely be required to do), the interest rate on an LOC may be lower than on your student loan.
