For those of you who didn’t read our post Ch-ch-ch-changes, we’ve got news: Canadian student loans and grants changed a lot this year, and if you depend on them to fund your education, you are most definitely affected. Check out the post to find out how. In response to that article, we received the following question:
My question is about the new grant system and OSAP in general. I was awarded a Millennium excellence award this year. Since Millennium is merit-based, how much should it affect OSAP and will it eliminate the grant I may receive? I’m a mature student and before school would have been receiving around the low to middle income level on my own.
There are a couple of different issues at play here. First is whether scholarships affect how much funding you’ll qualify for through student loans (OSAP) and the Canada Student Grant Program. The difference between how these are calculated may seem insignificant, but it makes a big difference. Student loans are determined according to your need, while grants are calculated according to your income.
What that means is that when figuring out how much loan funding you qualify for, the government will add up your expenses (living costs, tuition, etc) and subtract all of your resources (income, scholarships, savings, assets etc). The difference between those two numbers is what you qualify for. (That doesn’t guarantee you’ll receive the full amount you need so have a back-up plan!) So, in the case of student loans, your scholarship will decrease the amount you can get.
The Canada Student Grant Program, on the other hand, is interested only in your family income. I spoke to a couple of different people at the Canada Student Loan Service Centre and their answers were not entirely consistent (I guess they are still figuring out exactly how the program works too!) but the best answer I got was that they base the grant calculations on your family income as you reported it on your student loan application. The first $3,000 of your scholarship is not taxable, so you don’t have to include that in your income or on your tax return, but any amount over $3,000 is considered income. So, if your scholarship is over $3,000, it will affect your eligibility for grants, but much less so. After they figure out your income level, they decide whether you are low-income or middle-income and if you are, you will get the grant, simple as that. So to find out if you qualify, add up you and your spouse’s (if you have one) income and check out this chart.
The second part of your your question that is relevant here is that you are a mature student. When the Canada Student Grant Program was first announced, many post-secondary observers noted that making grants income-based would effectively make most mature students qualify. I went to Alex Usher at the Educational Policy Institute to find out if that is indeed the case now that the details of the program are implemented. He confirmed that.
By the way, Usher thinks that it is a problem that most mature students qualify for grants. Here is what he wrote to me in an email: “Yes, it’s problematic in the sense that it will drive up program costs substantially without necessarily improving access (most of those students will already have been in PSE for some time).”
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