A few days ago someone asked me what my wish list would be for the federal 2017 budget. The science/innovation part of my answer will take a couple of posts to summarize (I’ll start addressing some of the issues related to the Science and Innovation Agendas over the next few days); but today I thought I’d give you my thoughts on the student aid part of the equation.
Briefly, I have three wishes. They are, in order:
1) Implement the promise on Aboriginal student funding. In the Liberals’ 2015 manifesto, there was a promise to increase funding to the Post-secondary Student Support Program (the program which provides funding to bands across the country to send their members to post-secondary education) by $50 million per year. For whatever reason (I explored this a bit back here), the Liberals chose not to implement that promise in the last budget. Now, there is lots not to like about this program, and lots of ways it could be improved. But the funding challenges for First Nations students are real, and we shouldn’t give them short shrift because of a desire to wonk around with program design first. Fulfill the promise, increase spending on PSSSP by $50 million, wonk later.
2) Increase Aid Limits for Mature Students. Canada has a not-very-stellar record of adults getting training. Part of it has to do with the way we support them while they are in school. Provincial training programs usually cover programs of less than a year in length, and they tend to provide decent (though not lavish) support for living expenses. If the program’s longer than a year then you tend to get pushed to provincial/federal student aid programs where the basic assumption is that everyone lives like an 18 year-old. That’s wrong. People who return to education from the labour market tend to have houses or live on their own in digs considerably above the student norm. They have credit card debt, they have cars. Yet student loan rules basically says they need to chuck all that an find a roommate to live with.
There’s a way to fix this. As far as calculating student resources, we already have a two-tier system: less four years out of secondary school (or less than two years in the labour market, we assume parents are contributing to a student’s cost of attendance. After that, we don’t, and students become eligible for more money. There is no reason we could not do the same for calculating student resources, giving older students higher allowances (and higher aid limits). I wouldn’t stick the dividing line at four years: I’d probably put the line at doctoral studies or three consecutive years in the labour market or something like that. But either way: if we want to encourage more adults to return to school, something like this is necessary.
3) Improve Repayment Assistance. As I noted last week , over the income range from the mid-$30,000s to $50,000 and at average levels of indebtedness, Canadian student loan borrowers are paying more on a monthly basis than loan borrowers anywhere else in the world (I didn’t actually include the whole word in that post, but trust me the five countries I did show are the ones you need to care about as debt tends to be higher there than in other jurisdictions). There’s a simple solution here: tweak the Repayment Assistance Program (RAP) to limit the amount borrowers have to repay to 15% of income rather than 20% over the repayment threshold of $25,000. For borrowers making less than $25,000 this will make no difference (they still pay zero), and for borrowers making over about $50,000 it won’t change anything either (which is fine because by an large they’re quite capable of repaying loans), but in-between (which is the income-range where most borrowers are for the first couple of years after leaving school) it would make a big difference.
Over to the folks in the Langevin Block.