CASFAA is the national professional association representing financial aid administrators at Canada's colleges and universities. We are responsible for the delivery of student financial aid programs, including the Canada student loans program. Because of our roles within our educational institutions, we are uniquely positioned to directly witness not only the success of the Canada student loans program, but also the gaps that seriously compromise the academic potential of our students.
The changes to the Canada student loans program in 2005 in the form of increased loan limits, a relaxation of parental contribution expectations, and a new grant program for low-income dependent students have enhanced the program and provided encouragement for many students and their families. We believe, however, that more needs to be done to improve access to post-secondary education and to encourage and support the successful completion of programs, particularly for low-income students and students who have traditionally been under-represented in post-secondary studies.
The recently implemented grant for low-income families is a building block for the academic success of many students who might not otherwise have undertaken post-secondary studies. This grant currently covers up to 50% of tuition for first-year students only. Many research studies have emphasized that grants targeted to low-income students are more effective in promoting access and success than are loans and that they greatly support retention and encourage the timely completion of studies. We therefore recommend that the Canada access grant be extended to students in subsequent years of their programs, up to a maximum of four years.
Government has spent increasingly on student assistance through fiscal measures introduced to the tax system, such as exemptions on awards, credits for tuition fees and books, an allowance for each month of enrolment, contributions through RESPs, and Canada education savings grants. These credits are distributed almost entirely without regard to financial need, disproportionately benefiting families with higher incomes. They do little to assist high-need students and under-represented groups, such as students from low-income families, students with disabilities, aboriginal students, adult learners, and students from rural areas, in entering our post-secondary system.
We believe that means-tested aid that is accessible through a simplified application process and that delivers funds at the time expenses are to be incurred represents the most effective use of taxpayer dollars. We would recommend that the government review its education-related tax credits and give serious consideration to redirecting a portion of the funding towards means-tested programs that support high-need and under-represented groups.
Since 2000, the Canada Millennium Scholarship Foundation has delivered more than $1.5 billion to students across Canada. The foundation provides $350 million per year in grants to high-need and low-income students. Many students from all jurisdictions have seen significant reductions in their debt load through grants delivered either as upfront funding that decreases the amount they are required to borrow or as direct paydowns on their student loan debts.
The foundation is scheduled to cease operation in 2010. The removal of the funds administered by the foundation from the aid system at large will be devastating to the many students who have benefited from this assistance. Further, the foundation has produced and continues to provide a wealth of vital research on student financial assistance in Canada.
We strongly encourage the government to continue the foundation's mandate beyond 2010. If the foundation's mandate is not renewed, we recommend that the federal government provide additional non-repayable assistance at the level currently being disbursed by the foundation, and that such funds reflect the needs of the various jurisdictions.
Under Canada student loan needs assessment calculations, parents and students are expected to contribute to the students' educational costs based on their respective incomes. The reality is that many parents are unable or unwilling to assist the students. We would recommend that students be permitted to seek alternative sources of income, such as work. So we would recommend an increase in the Canada student loan in-study work exemption to $100 per week from the current $50, that all institutional awards be exempted from the needs assessment, and that a federal work-study program for students be created.
We would also like to recommend that the weekly limit of $210 be increased and reviewed on a regular basis, at a minimum of every three years, and also that there be an increase in the weekly lifetime limits so that students in graduate and doctoral programs receive funding to complete their programs.