Last month, the Government of Alberta announced some fairly radical changes to its student financial aid program, to wit:

– The province will no longer count student income, RRSPs and, crucially, parental income in the calculation of revenue. Instead, all students will be expected to make a $1,500 contribution to their education, except for single parents, who will be exempt.

– The province is introducing completion grants, as the Herald explains: “$1,000 for a technical certificate, $1,500 for a diploma and $2,000 for an undergraduate or graduate degree.”

– It’s introducing a $1,000 retention grant for students who graduate and work in high-demand occupations, including nurses, doctors and social workers.

– To pay for all this, the province is ditching its loan remission program, an annual savings of $69 million.

Some of these ideas may seem familiar to student aid nerds. A few years ago, New Brunswick introduced a completion grant and also ditched parental contributions from the student aid calculation, only to reintroduce them this year. Hardcore nerds may also remember a Nova Scotia deputy minister arguing for the elimination of student income clawbacks at a CASFAA conference in 2008. Alberta’s Education Minister Greg Weadick argues – correctly – that these changes will help simplify the complex student aid process. And while that’s a good thing, the trade-off presents significant challenges for accessibility.

The bottom line is straightforward – it’s a shift away from need-based aid, much like the one HESA’s Alex Usher and Sean Junor anticipated five years ago. The province will issue more loans to students whose need was hitherto low or nonexistent, and a lot of small grants that are essentially need-blind.  And as a result it will also provide many fewer large grants to students with high need.

What explains this trade-off, beyond the desire for a simpler student aid system? Perhaps the fact that demand for student aid in Alberta is way up in the last few years. According to the Canada Student Loans Program, the number of borrowers in Alberta increased by 19% between 2008-09 and 2009-10 (data for 2010-11 are not yet available, but it is reasonable to assume demand for loans continued to increase).  More loans means more remission, and that means that the government may have felt that under the status quo, costs were about to rise  very quickly.

Student loans may be cheaper than grants or remission, especially with interest rates as low as they are. But a significant increase in borrowers can really stretch a budget, especially when remission programs kick in automatically. “Simplification” may be the selling point on these changes, but the true motivating force is even simpler: dollars and cents.