Human Resources Committee on April 29th, 2008

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Minister, the last time we were talking about the student grant program you were about to confirm for me that $350 million is for the student grant program, plus the $140 million for the Canada study grants and the Canada access grants will be carried forward on top of the $350 million.

[Monte Solberg, Conservative, Medicine Hat, AB]

I'm saying that people receiving those things won't be any worse off. They'll continue to receive funding until they are finished their studies.

I have confirmed that what I said is correct. We feel that not only does this leave everyone whole, it means that another 105,000 people will be able to benefit from this every year, and it will help increase access, which was--

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

So the Canada access grant and the Canada study grant continue unaffected by the budget.

[Monte Solberg, Conservative, Medicine Hat, AB]

They're rolled into what we're proposing for the student grants, but people will receive funding.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Okay. So it's not $350 million; it's $350 million plus $140 million per year.

For example, about 20% of the recipients of both the Canada study grant and the Canada access grant--perhaps even more, but I think about 20%--were persons with disabilities. And they could receive up to $8,000 a year, recognizing that they have greater need than regular students. Will they continue to be able to get higher amounts of money, $8,000 a year, and not just the $250 a month?

[Monte Solberg, Conservative, Medicine Hat, AB]

Yes, they will get more money. And we're making further improvements so that persons who become disabled after their studies will no longer have to continue to pay student loans. And we'll reveal more of the details with respect to the repayment assistance plan later, but we're making important changes so that vulnerable people aren't caught with a big burden forever.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

You quoted the Canadian Federation of Students endorsing the new Canada student grant program. That's certainly partly correct, but it's a pretty precise picking of an endorsement. If you endorsed everything that CFS did, you'd be a lot better off probably, and I would say the same thing about CASA and the Coalition for Student Loan Fairness.

There are an awful lot of areas where CFS would disagree with you. They do agree they were not fans of the millennium scholarship, and they like what they see in some of the Canada student grants, but they have a lot of questions. So if you have information about this program, and specifically how the Canada access grant and the Canada study grant are going to be incorporated as we go forward, I think that would be very helpful.

One of the issues that many students and educators and researchers and public policy analysts have about the program is that in the budget it says that it's designed to increase post-secondary education participation, particularly of under-represented groups. But the millennium foundation gave up to $3,000 a year. This program gives up to $2,000 a year. So you give to more people, but less to those who specifically need it. That's an issue.

[Monte Solberg, Conservative, Medicine Hat, AB]

I would make the point that, first of all, you would only get the millennium funds if you actually had already decided to go to university, were accepted, and then would apply and would get the funding. It would not be used, therefore, to get you into school, because you would only get it after you had gone to school.

Secondly, there was no guarantee you would get it for more than one year. So it was quite a gamble for a lot of people.

What we're doing is making sure that people have funding they can count on for every year they're in school. And finally, it won't be just for university; it'll be for college and for tech school, which was something that CMSF didn't do.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

No, CMSF did a lot more than the budget would give them credit for. Specifically, this budget indicates that it's a significant intrusion into provincial jurisdiction. Every province in the country supported the extension of the Canada Millennium Scholarship Foundation, including the Province of Quebec, where they don't have the student loan program. So the Canada Millennium Scholarship Foundation went through survey after survey. It went through a number of evaluations and was considered to be a program that was working across this country.

I want to ask you about the student loan changes that you've made. We've heard a lot about the student loan evaluation process and that the study of student loans would bring in some big changes. Probably the most significant change that students were looking for was a change in interest rate. An awful lot of countries in the world are either charging cost of government borrowing or in fact don't even charge interest on student loans. If you want to make a big difference to student debt, did you consider reducing the student loan interest rate, and what considerations did you have in deciding not to?

[Monte Solberg, Conservative, Medicine Hat, AB]

I think the more important change we're proposing is with respect to our repayment assistance plan, which we haven't fully rolled out yet. But the reason I like that approach better than what you're proposing is that it will ensure that no matter what the reason is that people are struggling to repay, they will have easier terms and it will be easier for them to ultimately repay that loan. And ultimately, if they're not able to repay, it will at some point be forgiven. We think that's a better way because it catches all the possibilities that people are struggling with to repay their student loans.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

How much money does the government make on student loans?

[Monte Solberg, Conservative, Medicine Hat, AB]

Nothing. We lose money on student loans.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

How much money do you make on the interest rate on student loans?

[Monte Solberg, Conservative, Medicine Hat, AB]

Well, we don't make any.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

There are always going to be administration costs. One understands that. But do you have any sense of what it would cost you to go to government cost of borrowing?

[Monte Solberg, Conservative, Medicine Hat, AB]

Yes, it's a net loser.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

But do you know what it would cost to go to government cost of borrowing, for example?

[Monte Solberg, Conservative, Medicine Hat, AB]

Not off the top of my head.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Did you consider, though, reducing the interest rate on student loans?

[Monte Solberg, Conservative, Medicine Hat, AB]

You have to put this into context. We just increased the overall support for students to enter school.

First of all, 60% of the public never utilize student loans and are able to go to school without it. For those who don't, we think one of the most important things you can do is deal with the up-front costs.

I'll make two points. We increased the support for post-secondary education last year by $800 million, a 40% increase, which the provinces can use to maintain tuitions, or reduce them if they choose, I guess, but we know in many cases they've actually decided to freeze tuition rates. That's important.

Secondly, these new student grants will ensure that people have the knowledge that they will get cash up front and therefore won't have to have as big a student loan as they would have otherwise.

We think this approach of up-front cash and more realistic terms when people graduate and are struggling to repay is the best approach.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

You didn't consider dropping the rate, though? Did you look at what it would cost to reduce the rate on student loans? Was that part of the evaluation process? That's what students are asking for.

[Monte Solberg, Conservative, Medicine Hat, AB]

It's not the choice we made. We made a different choice that I think is better because it's more universal. It will catch people who are struggling to repay, for whatever reason, whether they've had a personal financial disaster or whatever it is.

[Michael Savage, Liberal, Dartmouth—Cole Harbour, NS]

Okay. I agree that we need to do that, but it's not an either/or. Post-secondary education is an important issue. Taking advantage of the skills of Canadians is worth a little bit of an investment.

[Monte Solberg, Conservative, Medicine Hat, AB]

Yes, and we put a big investment in it.

[The Chair, Conservative, Dean Allison]

That's all the time we have. You actually got two and a half extra minutes. Don't tell anybody, though.