Higher Education Strategy Associates

A Great Day for Student Assistance

I was going to stay off the blog this whole week (I need a reading week, too!), but there was a budget in Ontario yesterday.  A weird and wonderful (if somewhat under-documented) budget, which is going to change the way we think about student aid, tuition, and affordability in Canada for decades to come.

Here are the basics: all of Ontario’s different grants and loan remission programs are being merged together into one big up-front grant program (all the provincial education tax credits are getting merged in there too, though I haven’t seen that actually mentioned in there).

There is absolutely no new money here – in fact, there’s actually a slight reduction because some of the tax credit dollars are going to be diverted to institutions.  It is simply a re-casting and re-profiling of existing money, which – crucially – takes all those hidden, opaque and often-delayed subsidies and turns them into grants available at the time when tuition is due.   But what that means is that all those students who currently receive more in subsidies than they pay in tuition will actually be able to “see” this for the first time.  It’s mainly an exercise in re-packaging.

But boy, what a re-packaging.  The government is now announcing what we here at HESA have been saying for some time: in “net” terms, tuition is free for low-income students.  And now, all of a sudden, you have the government, the Toronto Star, and the Canadian Federation of Students all saying tuition is “free” for low-income dependent students.  It isn’t, of course.  Fees are the same as they always were, and the offsets are reasonably similar, too.  In most cases, students aren’t getting a whole lot of new money (to the extent students are getting extra cash, it seems to be mainly those in the $50-100K family income range, but it’s hard to tell because a lot of this is still pretty sketchy, and dependent on the federal Liberals following through on their promise to revamp tax credits and grants as well).  Ignore the hype: this is not about bold new investments, it’s about changing perceptions through simplification.

And yet, the biggest change on the perception front was something that was not actually in the budget, but rather was signalled to stakeholders in the budget lock-up.  Starting in 2018-19, OSAP will be moving its processes forward in time so that students can have student aid decisions at the same time they get acceptance letters.  This means that institutions will be able to do “net billing”.  So whereas, now, students get acceptance letters, a bill for tuition, but then have to wait several weeks to find out what kind of aid they will get, in future they will receive a letter saying “Welcome to University of X; tuition is $6,500, and you have qualified for $7,000 in grants”.  The difference this will make to perceptions of affordability is enormous, and it’s a hugely positive step.  Every other province should adopt this step, immediately.

Not everybody wins.  From what I can tell, students from families above $110,000 in income or so will be slightly worse off due to the disappearance of tax credits, as will some part-time and independent students.  The first of these shouldn’t bother anybody, but the latter should.  And if you’ll allow me a small kvetch, yesterday’s announcement is probably too focussed on traditional-aged students (whose parents vote), and not enough on the mature students who are probably the least well-served by the current aid system.

But that’s for another day.  For the moment, let’s just admire this as a bold piece of policy, which renders transparent an already-generous student aid regime and thereby makes it that much more effective.  Congratulations are due to the folks at the Ministry of Training, Colleges and Universities for cleaning away a couple of decades of kludges, and bringing some much-needed coherence to student aid policy.

And to their counterparts in Newfoundland, Nova Scotia, New Brunswick, Prince Edward Island, Quebec, Manitoba, Saskatchewan, Alberta, and British Columbia: this is the future. What are you waiting for?

This entry was posted in Budgets, Canada, Policy, Politics, Student Aid and tagged , . Bookmark the permalink.

7 Responses to A Great Day for Student Assistance

  1. Jeff says:

    I assume that this is building on top of the 30% off they set up a few years ago?

    • Zachary says:

      Seems that way, though the restrictions of that system are gone – previously you were only eligible for that program for four consecutive years, directly from high school. Now you get four years of the total grant package and won’t lose it if you pause your studies, delay entry into university, etc.

  2. BigOnUni says:

    *Thrilled*. This is a step towards real equity (not mere equality) in opportunity for kids who never would have even imagined PSE way back in grade 7, when most kids lock in much of their academic futures. Perception, as you say, matters more than anything here to me, and to those low income 7th graders into the future.

  3. G. Down says:

    What would be a further enhancement to this shift would be monthly disbursements throughout the study period. Back in the day one of the challenges that pushed StudentAid BC to shift from up-front grants to loan forgiveness was students who received a large grant cheque and then needed to withdraw early in the term. Collection on the due and payable grant overaward was given to the same department that pursued welfare fraud. We saw way too many bad situations. If students only get enough loan & grant at the start of term for tuition and one prorated month of the remaining amount, it would avoid those scenarios.

  4. Geoff Wichert says:

    Nice piece! I especially appreciated the affirmation of those within MTCU who created this “bold piece of policy.” (N.B. I’m not a gov’t insider, but an appreciative outsider) There are often legitimate reasons to criticize the work of governments, but let’s at least give credit and praise where it’s due. I hope some folks have this blog proudly posted on their office doors today.

  5. Rachelle says:

    Yes, congrats to the policy folks for making this happen and to HESA (and previously MESA & Millennium) for putting this issue on the agenda. I hope they find a viable way to bring mature (“independent”) students into this soon.

    It’s been funny listening to the media trying to turn this into a negative (“But there’s no new money, right?” “This is just about perception, right?”). Yes, it’s about perception, and that’s very, very important in low-SES students’ decision-making.

    I’m wondering if we’ll see more of this group willing to try university rather than college now that the sticker shock is gone.

  6. Joe says:

    Now if we can just do something about the perception some people continue to push that student loans to cover remaining expenses are on the same order of magnitude as a mortgage. Or perhaps they have some insider knowledge about how to buy a house for $40,000? As someone who entered university from foster care with almost no advising, I wonder if I would have been put off going by some of this rhetoric (which we fortunately didn’t really have back then). It would also be good just to get past the obsession with tuition and start dealing more seriously with the need for advising in high school, assistance with moving, mentoring, active labor market and income smoothing measures beyond school, etc.

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