Our life is frittered away by detail. Simplify, simplify, simplify! I say, let your affairs be as two or three, and not a hundred or a thousand; instead of a million count half a dozen, and keep your accounts on your thumb-nail.
Canada’s system of student aid need assessment is much too complicated. Not only do we have a ludicrous number of different tax rates, but we have all sorts of weird little measures to engineer micro-equity between students. The result is a complicated system that can’t be explained to students.
How bad is it? Bad enough that some provinces don’t even bother explaining to students on their notices of assessment how they come up with the final figure. It’s not difficult: there’s a cost number, a resource number and a need number which is equal to the costs minus resources. But some governments got weary of explaining how they came to these figures (or why aid didn’t equal need if the latter was above the weekly-maximum).
This is awful for a couple of reasons. The first is that it’s a terrible lesson in civics. At least with tax forms, filling them in gives you an understand of why you have to pay as much as you do. Student loans are just a big black box: governments ask for personal financial information and then spit out an aid number without explaining how they got there. Student aid is the first contact most young people have with a government program and all the opacity doesn’t do the cause of active government any favours.
But the more important reason is that the lack of clarity makes it difficult for students to understand their eligibility for aid (the fact that they aren’t allowed to apply until after they’ve already made their choice of institution is an additional bad idea). Given how much we hector students about financial literacy and preparation, governments’ inability to reciprocate by providing more clarity around potential aid is a bit problematic.
These problems are extremely easily solved. Just reduce student aid to two factors: family income (parents plus kids), and tuition. That way, you could just give students a simple grid; income on one axis, tuition on the other, and voila! Need assessment so simple it would fit on a postcard. For completeness, you’d probably want one such grid for each student category (dependent at home, independent away from home, etc), but the outcome is the same – no-fuss, easy-to-communicate student aid.
Some students would undoubtedly get less under this system (some might also get more)– but what we’d lose from rough justice, we’d gain in program transparency and clarity. That’s a good deal, though: simplifying student aid will make it more understandable to precisely those on-the-margin students we most want to help.
Tweet this post
How about the equally arcane and bizarre practice in Nova Scotia of never showing the student their entire aid package in one place. Separate letters come for all matters related to your Canada Student Loan and Nova Scotia Student Loan and Grant amounts awarded. And they each flow through two separate repayment systems.
So you apply once to the province, but have to complete paperwork with your institution to verify your enrolment status twice. Then you send your pre-study employment verification only once and then wait for two sets of paperwork to come from the feds and the province to let you know that your second installments have come through. After you are out for six months, you get two complete sets of paperwork to start repaying your loan amounts, and if you happen to be unlucky enough to be in a co-op program with alternating semesters of study and work, you generally get 2 repayment notices and 2 new loan assessments all at the same time in separate mailings.
Confused – I sure am. You have to be both a lawyer and a tax accountant to wade through all the poorly written documentation and figure out how, when and to whom you respond to keep the new money flowing in and holding on to your interest free status for last year’s loans. Two of my darling offspring are still in university, still use my address as a mail drop and continue to rely on me to provide legal and tax advice and help them keep their paperwork flowing appropriately. I have received 12 pieces of mail in the last 3 months — 6 each from the CSLP and the NSSLP or their respective lenders.
Surely this is costing many students millions in unprocessed loans and grants and unnecessary interest on loans that shouldn’t be going into repayment yet. There’s got to be a simpler way! How about focusing the business process on the borrower, not the lenders and the governments.