Canadian post-secondary students applying for government loans for the 2017-18 school year will no longer have to worry about working a job outside of school reducing the financial assistance they’re eligible to receive.
The federal government’s 2016 budget provided for changes to the Canada Student Loans Program that will introduce a “fixed student contribution” to replace the current system that assesses student income and financial assets.
Under the current Canada Student Loans Program—which hasn’t seen a significant update since 2009—students are required to declare their assets and projected income for the next year in their application for a government loan.
Parliamentary Secretary of Youth Peter Schiefke said the current program actually disenfranchises students who choose to work while attending school.
“The more money they make, the less money they’re able to qualify for as far as loans are concerned,” Schiefke said.
Based on family income and family size, post-secondary students applying for financial aid will only be expected to provide between $1,500 and $3,000 per academic year—with government loans covering the remainder of their declared schooling expenses.
“We want to make sure that students aren’t punished because they’re going out and getting supplemental revenue, getting a part-time job, either because they have to for financial reasons, or because they take part in a co-op program, or they were offered a job somewhere in their field,” Schiefke said.
The update to the Canada Student Loans Program will roll out on Aug. 1, 2017. It will be adopted by the Ontario Student Assistance Program (OSAP) and other government-funded financial aid systems across the country.
The 2016 budget also provided for changes to Canada Student Grants (CSG) and the Repayment Assistance Plan (RAP) for Canada Student Loan borrowers.
As of Aug. 1, 2016, CSG amounts increased by 50 per cent—making more non-repayable financial assistance available to low- and middle-income students.
As for changes to the RAP, borrowers used to have begin repayment of their Canada Student Loans once they started making $20,000 per year. That threshold has now increased to $25,000 annually.
