All Posts Tagged With: "Scholarships"

Schools considering cuts to spending, scholarships

With the value of university endowment funds decreasing across Canada, students at post-secondary institutions may soon experience cuts to scholarships, student aid, and program funding.

Many Canadian universities are already reporting million-dollar losses from endowment funds as stock markets around the world plummet. Endowment funds are created entirely by donor contributions. The capital from these charitable donations is invested and the income is distributed annually, providing long-term and relatively stable funding for universities. Donors allocate funds to the areas they are most interested in financing, such as a university’s general mission or scholarships and bursaries.

Canadian universities currently have an estimated $11 billion in endowment funds. On average, Canadian schools invest over half of their endowment and pension funds in world markets, which have dropped more than 30 per cent in 2008, falling 17 per cent in October alone.

According to a Nov. 13 report in the Globe and Mail, some universities have already taken measures to brace themselves for projected further negative economic impacts. Hiring freezes are in place at several institutions, while others have begun to cut their distributions from endowment funds.

For Queen’s University, an institution that boasts a huge endowment fund, the loss could be more than $100 million. As of March 30, the market value of the school’s pooled fund was $632 million. This has dropped to $507 million as of Oct. 31, according to a report in the Queen’s Journal.

McGill University is facing similar losses from their fund, which had $928 million in endowments and has lost approximately 20 per cent – about $185 million – of its value.

The University of New Brunswick’s $170 million endowment fund has devalued by 20 per cent as of October, according to university president John McLaughlin. The school’s two pension funds have also dropped between 15 and 20 per cent.

At a recent meeting of the University of Ottawa’s board of governors, university treasurer Barbara Miazga said on March 31 the total market value of the school’s endowment fund assets was $139 million. By September this had dropped to $133 million.

These losses come at a difficult time for educational funding. Across the country, government cash and tuition-fee increases have failed to keep up with operating expenses and Canadian universities have already begun to cut costs.

Although dealing with the current economic situation will be a challenge for the universities, university administrators say it is not projected to have serious lasting impacts.

“Over the long term, we expect that at some point the economy is going to turn around and markets are going to recover,” says Miazga. “So that’s not where the risk is. The risk is in the short term.”

The greatest danger in the short term, she says, is that scholarships and bursaries to students could be significantly affected.

- with files from Maclean’s OnCampus, originally published in the The Fulcrum

Is giving more students less money really a success?

Many groups in the know are applauding (some more cautiously than others) yesterday’s announcement to replace the Millennium Scholarship Foundation with a government-run grant program. But many questions remain and the changes will lead to some casualties that have been overlooked so far.

As previously reported, Finance Minister Jim Flaherty confirmed the death sentence that has been hanging over the head of the Millennium Scholarship Foundation (MSF) when unveiling plans for a new grant system in the 2008 budget. The MSF’s $350 million annual budget along with the $138 million currently distributed through Canada Access and Study Grants will be rolled together into one big national grant program to be administered by the Canada Student Loan Program.

Although the Liberals are painting the move as a simple rebranding, the end of MSF will certainly change the landscape of student financial aid in Canada—if not only for the seemingly positive changes (the transparency of being a government program) but also for the smaller functions of the Foundation that have been quietly left out.

The Canadian Alliance of Student Associations (the Canadian Federation of Students’ rival) was quick to point out that the Foundation was not only about delivering grants, but also about research. “The Foundation was the only group that was doing research on access issues. Looking at Aboriginal students, low income students, and first generation students,” said Zack Churchill, CASA national director. “We haven’t seen any indication from the government that the federal research will be picked up.”

And while Churchill’s critics might argue that we have, say, StatsCan for post-secondary research, the Foundation’s unique approach to research will surely be missed.

Alex Usher, vice president and director (Canada) of the Educational Policy Institute, said that the government program will likely focus only on financial aid research. “There will nobody speaking for access anymore in terms of research,” he said.

Another Foundation program that was not mentioned in the budget was its merit-based scholarships. MSF awarded $12.6 million in scholarships annually. The scholarships were unique in that they took community involvement into account as well as marks.

Franca Gucciardi, executive director of the Canadian Merit Scholarship Foundation, said that this program was very important in terms of supporting talent and leadership. “As Canadians, we’re good at need, but not as good at merit,” she said.

Although the budget included a new and prestigious merit-based scholarship program for doctoral students, it doesn’t replace merit-based support for undergraduate students. “You don’t get to do your PhD unless someone supports you to do your bachelors,” Gucciardi said.

Although the Educational Policy Institute said the changes were largely a good news story, it found a couple of major holes in the proposed program. The potentially costliest problem is whether independent students are eligible for the grants. As it stands, it appears that independent students (those out of high school for long enough that they are not required to include their parent’s income when applying for grants and loans) will be able to apply.

Because the grants will be based on family income rather than need (costs minus resources), almost every independent student who applies will be eligible because their income will fall below the line. There may be as many as 500,000 independent students currently enrolled in Canada. But the budget for the new grant program only aims to provide funding to 240,000 students. Whoops! This could make the program cost well over $1 billion.

Usher also pointed out that at least two Canada Study Grants seem to be missing from the mix: funding for students with dependents, and female doctoral students. From the Educational Policy Institute’s discussions with Canada Student Loan officials so far, it appears that the $70 million in grants for students with dependents has been rolled into the new grant money. Officials did confirm that grants for students with disabilities will continue to be awarded.

One thing that everyone seems to agree on is that basing the grants on income instead of need is a positive step. The Foundation’s grants were awarded according to the amount of money needed for the student’s educational program minus the student’s resources. Basically, if two students had exactly the same family income, but one chose to go to an expensive university and move away from home and the other chose to attend their community college and live with their parents, the first student would receive more grant money. It meant that students were being rewarded for making more expensive choices.

The new system will not take into consideration the costs of education, but only the family income of the student. The indirect result will be that more money will flow to college students in comparison to university students.

So although student groups can breathe a sigh of relief that the existing money going into grants in Canada won’t be axed along with the Canadian Millennium Scholarship Foundation, they should probably crunch the numbers before declaring victory (as the CFS did oh so quickly). MSF distributed an average of $2000 to 120,000 students each year. The new program plans to hand out grants to 245,000 students next year, but with no new money. So the individual student recipients will be getting less cash. Victory?