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Dion would boost student aid, research funding

Liberals’ PSE plan includes bold move to slash student loan interest


 

Stéphane Dion unveiled his party’s post-secondary education platform today at the University of Western Ontario. The plan, if implemented, would see the largest new money investment in student financial aid since the creation of the Canadian Millennium Scholarship Foundation in the late 90s.

The plan will create over a billion dollars in new grants and shift some federal aid from tax credits to upfront grants. To fund the plan, the Liberals would create a $25 billion endowment, which is similar to the former scholarship and grant body, the Canadian Millennium Scholarship Foundation.

“We have to increase support for students to make sure university and college is accessible to all Canadians. The future productivity and economic success of Canada depends on the investments we make in research and development today,” said Dion.

The Liberals will create, upon full implementation in four years, new targeted grants for 300,000 post-secondary students. 200,000 will be solely needs-based bursaries of $3,500 a year and an additional 100,000 access grants worth $4,000 will be targeted to students from traditionally underrepresented groups such as Aboriginal students.

The new grants are in addition to the new Canada Student Grant Program announced by the Conservatives in the last budget.1

The Liberal will replace the current education and textbook federal tax credits with a series of grants to be paid to students at the same time as they receive GST tax credit cheques. Presently, students cannot take full advantage of the tax credits unless they earn $20,000 dollars a year. Most students make substantially less.

The new funding model will result in full-time students receiving $1000 cash each year when combined with their existing GST credits.

Student lobbying organizations are divided on the Liberal plan. The Canadian Alliance of Student Associations is pleased with the focus on the neediest students; the Canadian Federation of Students is disappointed that the Liberals are not focusing on cutting tuition fees.

“CASA believes the measures proposed by the Liberal Party will help students and families cope with the accelerated costs of education,” said Zach Churchill, national director of CASA. “The proposed plan, if implemented, can significantly enhance access to post-secondary education system, by providing funding to students who need it the most, while helping to lower the epidemic growth of student debt in this country.”

The Liberals announced plans to significantly revamp the Canada Student Loan Program by lowering the federal student loan interest rate to a half point above prime and working with the provinces to support lowering provincial rates to the same level. The Liberals say they will extend the grace period which students do not have to repay their loans following graduation to two years from the present six months.

“The Liberals’ bold plan to slash federal student loan interest rates goes a big step towards reducing skyrocketing student debt, and will save students thousands of dollars over the lifetime of their loans.” says Julian Benedict of the Coalition for Student Loan Fairness. “Eliminating interest during the six month grace period following graduation, and extending the interest-free period to two years, will also help reduce loan defaults by giving borrowers more time to find suitable employment after graduation.”

A Liberal government will also guarantee a minimum student loan of $5,000 dollars for every full-time student. Presently, some students are unable to access student loans due to parental income assessments which do not say their parents should be funding their education; the Liberals hope this solves that problem.

The Liberals will increase research and development at Canada’s universities and in the private sector by providing universities will more funding for research infrastructure and facilities; the “indirect costs” which many universities feel are not properly funded. Dion says he will increase funding for the three federal granting councils by 34 per cent and create a Interdisciplinary Sustainability Fund of $100 million to encourage more collaborative research between different facilities.

The Green Party unveiled their post-secondary platform last week. The NDP and Conservatives have not yet announced their post-secondary platforms.

Correction:
1) Dion stated during a media scrum in Cambridge that needs-based grants would be all “new” money. However, the Liberal plan includes the budgeted CSGP.


 
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Dion would boost student aid, research funding

  1. Pingback: Liberal PSE plan news release online : Macleans OnCampus

  2. Pingback: Dion would boost student aid, research funding : Macleans OnCampus

  3. Joey,

    I was just wondering where you got your info that this would be in addition to the CSGP. I was told by someone in Dion’s office that it would not.

  4. I asked Dion if this funding was new money; he said yes. Only the tax credit is a redistribution according to our back and forth.

    That said, I’m getting the same impression. I’ve contacted the campaign for clarification.

  5. Pingback: An education grab bag : Macleans OnCampus

  6. It will be very interesting to see what the NDP and Conservatives announce in terms of post-secondary education. The Liberals have set the bar quite high in terms of spending.

    The 2 year interest-free grace period is perhaps most thoughtful. The Liberals clearly did their research and saw that statistically, borrowers are most likely to default during the first three months after borrowers commence with repayment (meaning the period directly after their first six months of repayment). Extending this period allows students to start paying down their principal when they can – for many the entry-level job market is a difficult nut to crack. They don’t need the added stress of student loans.

    I think that for many student loan borrowers who have been ignored for decades while tuition received any and all media attention, this shift to address some borrower issues is a welcomed change.

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