The Quebec government announced a cap on extra fees charged to students on top of tuition. The move is intended to monitor ancillary fees at universities and close loophole that allowed universities to raise fees despite strict regulation of tuition costs.

Education minister Michelle Courchesne noted that ancillary fees differ by as much as $1000 between schools. Now universities will be required to provide an outline of fees at the beginning of the year and a report at the end of the year. Universities who charge more than $700 in extra fees will only be allowed to raise this by $15 without consent from student government. Schools with lower fees may raise their fee by up to $50.

Student groups applauded the move, but acknowledged that the real problem is the underfunding of universities.

Students in Ontario have also been calling on the government to crack down on ancillary fees. Two college students filed a $200-million class action lawsuit in June, claiming that schools have been charging fees banned by government. Post-secondary institutions in Ontario are banned from charging fees that should be covered by tuition.

A decade after it was created, the Canadian Millennium Scholarship Foundation will be replaced by a new needs-based, non-repayable grant program to be called the Canada Student Grant Program.

The Conservative government says that, after a year-long review of student aid, it found the Foundation had limited success in encouraging more people to attend post-secondary education and did not provide students with predictable year-to-year funding. The new grant program will replace the Foundation which expires in 2009.

The Canada Student Grant Program will distributed according to income levels. Because the grants will be awarded each year of study, students will know how much to expect in support from year to year. The grants will range from approximately $250 per month for low income students to $100 per month for middle income students. 245,000 studens will benefit from the program each year.

Student groups were split on the issue. The Canadian Alliance of Student Associations, the second largest student lobby group in the country, was disappointed in the dissolution of the Foundation, but welcomed the dedication of its funding to a needs-based grant system.

“Today’s announcement marks the end of Canada’s tenure as one of the few western industrialised nations without a national system of grants,” said Amanda Aziz, chairperson of the Canadian Federation of Students. “It was long overdue.”

“We are cautiously optimistic about the delivery mechanism for the announced grant program and will move forward bearing the responsibility of ensuring that the Canada Student Grant Program is delivered in an efficient and transparent manner,” said David Simmonds, president of the Ontario Undergraduate Student Alliance.

The new program will distribute $350 million in student aid when it begins in the fall of 2009. This amount will match the funds currently provided to students by the Canadian Millennium Scholarship Foundation. Funding will increase by $80 million in 2012/13, to $430 million. This additional funding, which the government is describing as new, is above and beyond the current $138 million a year delivered by current federally-administrated grant programs such as Canada Access Grants and Canada Study Grants. The patchwork of federal grant programs will be integrated into the new grants program.

The government says the new grants problem will address concerns about the operation of the Scholarship Foundation.

“The new Canada Student Loans Program is just a rebrand of a Liberal program,” said Liberal post-secondary critic Mike Savage. “The last time they rebranded a program was with the Canada Summer Jobs program. Their rebrand was a disaster and they restored the Liberal program. We hope history doesn’t repeat itself.”

In the budget speech, Flaherty was critical of the Foundation, saying it “had limited success in encouraging more people to go to college or university, and did not provide students with predictable funding from one year to the next.”

The Auditor General has criticized the Foundation model for lacking the same accountability provisions as government department due to their “third-party” status. The government says that the new program, administered by Human Resources and Social Development, will be more transparent.

When created, the Foundation was seen as by some provinces as an intrusion into the provincial jurisdiction of education. The administration of the Foundation required that agreements between the provinces and Foundation be negotiated. Disputes resulted which resulted in delays in getting aid to students. The new grant program will be administered using the current federal student-aid framework. Provinces that do not participate in the Canada Student Loans Program will receive equivalent funding to administer their own needs-based program.

In order to receive the new grants, students will be required to apply for student loan. If they received a loan, they will automatically be considered for the new grant. Low-income students will receive $2,000 for a eight-month school term and middle-income students will receive $800. The grant will be provided up-front to students.

The grants will be guaranteed for all years of an undergraduate or college program. The government hopes by providing the grants up-front and guaranteeing them for the length of a students program that more low-income students will enter into a post-secondary program.

The Canadian Alliance of Student Associations were also concerned that the research functions of the Millennium Scholarship Foundation would fall through the cracks. “The Foundation was the only group that was doing research on access issues. Looking at Aboriginal students, low income students, and first generation students,” said Zack Churchill, national director of the Canadian Alliance of Student Associations. “We haven’t seen any indication from the government that the federal research will be picked up.”

The government says it will ensure that students receiving Foundation bursaries in 2008-09 will be unaffected by the wind-down of the Foundation.

The 2008 federal budget had been widely expected to contain several major initiatives in higher education, but what the Conservative government delivered on Tuesday was instead a modest tinkering with the status quo, with some additional money for research, and housekeeping changes at two major student aid programs.

Finance Minister Jim Flaherty said in the budget speech, “We must ensure that the next generation of Canadians has the opportunity to excel in this increasingly competitive world.”

Post-secondary initiatives announced in the budget will see the Canadian Millennium Scholarship Foundation replaced with a similar program; administrative changes to student loans; new scholarships for graduate students; money to help secure university laboratories and new funding for medical, automotive, and environmental research.

COMPLETE BUDGET 2008 EDUCATION COVERAGE

COMMENT Is giving less money to more students really victory?

COMMENT Good works (Paul Wells)

COMMENT Student loan borrowers keep propping up system (Julian Benedict)

NEWS Millennium Scholarship Foundation to be replaced

NEWS No interest rate cut for student loans

NEWS New funds for university research

NEWS New grad scholarships aim to attract international talent

The Canadian Millennium Scholarship Foundation, which provides $350 million a year in needs and merit based scholarships, is to be replaced in 2009 by a new, $350 million Canada Student Grants Program. Students will see little difference between the two programs. Grants will be given out based on an income assessment. Low-income students will get $2,000 a year and students from middle-income families will receive $800 for each year of study, guaranteed during the entire course of their university or college degree. Under the current Millennium program, students must reapply each year for needs-based grants. The Millennium Foundation’s merit-based scholarships are also to be phased out.

Canada Student Grants funding is budgeted to increase by $80 million by 2012-13, to $430 million.

“This government is good at spreading chunks of money here and chunks of money there with little actual new money involved,” said Liberal post-secondary critic Mike Savage. “There is no talk of expanding the student loans system to assist more students, there is no increase the amount of aid that a student can receive.”

After a year-long review of Canada Student Loans, the government is also changing the way student loans are administered. The budget allocates $23 million over four years to create a new service delivery model. The federal government also says it will work with the provinces to create a one-stop, national website to administer student loans.

An additional $26 million over four years will be used to increase loans to part-time and married students. The budget also says that the government plans to spend $76 million over four years to assist graduates experiencing difficulty repaying their student loans. However, the government did not provide any details on exactly how this money will be used, saying it still has to negotiate agreements with the provinces.

Student groups had called for lower student loan interest rates. The 2008 budget left the federal student loan interest rate unchanged.

Universities will receive $116 million in new research funding next year. The new funding is directed primarily at research with environmental or commercial applications. $80 million will go to Canada’s three major research granting councils. Genome Canada, a not-for-profit corporation that funds genomics and proteomics research will receive an additional $140 million. And $250 million will be spent over the next five years on a new Automotive Innovation Fund, which will sponsor research in the automotive sector.

Five hundred top graduate students will receive support from a new program, the Canada Graduate Scholarships. To encourage top graduate students to stay in Canada, the government will spend $25 million over the next two years to create the scholarship which will be worth up to $50,000 over three years.

To encourage parents to save for a child’s education through a Registered Education Savings plans, the amount of time that a plan may stay open has been extended from 25 to 35 years, and the maximum contribution period has been extended by 10 years.

After a year long review, the Conservative government announced only administrative changes to the Canada Student Loans Program in the 2008/09 federal budget.

Although sources close to government expected an interest rate cut, the Conservative government did not set student loan interest at prime. The federal rate will remain 2.5 per cent above prime, unlike Nova Scotia and Alberta that have recently announced plans to lower their provincial student loan interest rate to either prime or below prime.

The 2008 budget included plans to reform the administration of student loans but did not provide many details.

Monte Solberg, Minister of Human Resources and Social Development Canada, said in November to expect major policy changes. The announcements came as a disappointment to student loan advocates who participated in this year’s review.

“The federal budget completely ignores the key issue of reducing sky-high interest rates on borrowers in repayment. Our interest rates remain amongst the highest in the G8,” said Julian Benedict, co-founder of the Coalition for Student Loan Fairness. “The plan also ignores Canadians’ call for a national student loan Ombudsperson Office.”

The government plans to implement a “new service delivery vision” for student loans and increase the ability of students to manage their loans online from initial application until final repayment. The government will spend $23 million over four years to achieve this. The goal is to create a national portal for student loans where students from any province can apply for their loans and upon graduation, students will be able to use the site as a “one-stop” service to repay and track their loans.

The government says that students who presently deal with multiple payment points, such as students who currently negotiate their loans directly with the banks, will be able to make one payment to the website. One of the findings of the year-long review was that the current system is too complicated and many students are facing difficulty navigating the direct loan programs.

“Given all the time they had since forming government, I expected something more substantial and meaningful that just some administrative tweaking,” said NDP post-secondary critic Denise Savoie. “We are looking at the budget, but the devil is in the details and this budget was short on those details.”

The only non-administrative tweaks that were announced were the decrease of the expected spousal contribution and the increase to the amount of loans given to part-time students. These changes will cost the government $26 million over four years to implement.

Part-time students will now be able to receive up to $10,000 a year in student loans to fund their studies and will no longer be required to make monthly interest payments on their loans while studying. The government says that only about 2000 part-time students currently receive loans and they hope by making the changes, more adults will enter into part-time studies.

The government plans to spend $76 million over four years to assist graduates experiencing difficulty repaying their student loans. The government did not provide any details of what this support will entail saying they need to negotiate agreements with the provinces. The government says that only 50 per cent of students who qualify for interest relief are actually receiving it due to the complicated application process. The primary goal of the changes is to negotiate agreements with the provinces, which will result in students most in need of repayment support being able to easily access new support programs. The government is looking to create a system which will allow students facing difficulty repaying their loans to set their maximum payment to a percentage of their income.

The federal student loan program has received considerable criticism in recent months stemming from media reports claiming that the system is “broken.” For instance, Maclean’s reported that two thirds of applicants are being denied the student loan disability assistance program even if they receive disability support from their provincial government.

Critics also drew attention to the program’s interest rates and alleged poor customer service and communication. Some borrowers have been forced to file freedom of information requests to get information about their own loans. Others brought complaints directly to their MPs after not being able to resolve them directly with the program. This has lead to critics calling for a student loan ombudsperson.

Solberg’s review was announced in the 2007 federal budget. Although critics feared that the scope was too narrow — addressing only bureaucratic efficiencies.

-with a report from Erin Millar