On June 6th, 2011, the Honourable Jim Flaherty tabled the 2011 Federal Budget in the House of Commons.
During this time of economic uncertainty, OUSA has articulated repeatedly that investments in improving the accessibility and quality of post-secondary education can be positively linked to future prosperity. While the Budget did not contain a bold new direction for post-secondary education in Canada, several new investments were made in student financial assistance, internationalization and the federal research agenda. Below, we have listed several items of note for Ontario students.
- The in-study work exemption on the Canada portion of student loans has been raised from $50 to $100 per week.
Many students are unaware of the fact that students receiving public loans and grants are given a limitation on allowable income during the school year. This income is called the “in-study work exemption.” Income generated in excess of the per-week limitation is clawed back from one’s total financial assistance. Given the fact that rising tuition costs can be linked to increased in-study employment for students, this limitation has been a classic barrier to the affordability of post-secondary education. This change had fortunately already been in place on the provincial portion of OSAP loans since last year (the exemption is actually $103 per week). Matching the in-study work exemption increases means that Ontario students can now work close to ten hours each week at minimum wage without affecting the total amount of financial assistance received on both the federal and provincial portions of their loan.
- The expected income contributions for part-time student loans and grants will be harmonized with the full-time student expected contributions.
All students must submit statements of income when applying for Canada Student Loans and Grants. As one might expect, the program expects students to contribute a portion of their pre-study and in-study income to the costs of their education. As well, contributions are expected from parental income for dependent students (those out of high school for less than four years). Until 2011, this need assessment expected more from part-time students than full-time, due to the higher tendency of part-time students to work during the study period. With these rates harmonized, more part-time students will be eligible for Canada Student Loans and Grants. For a more fulsome analysis of why supporting part-time students is important, you can see this blog from February.
- Part time students will no longer accumulate in-study interest on their student loans.
While studying, full-time student loans do not accumulate interest. Part-time students however, have been subject to accumulating interest while in-study, despite a tendency to take longer to complete their studies. The Department of Finance estimates that in-study interest costs part-time students $5.6 million per-year. The elimination of this interest is welcome news, reducing overall part-time student debt.
- Tax credit and RESP eligibility for students studying abroad has been expanded.
Currently, students enrolled internationally have to study for thirteen weeks to be considered eligible for Tuition, Education and Textbook Tax Credits or for assistance payments from Registered Education Savings Plans. The Budget proposes that this requirement be reduced to three weeks, harmonizing it with the domestic study requirement. Though this expansion of eligibility provides more monetary assistance to students hoping to pursue study-abroad opportunities, it does not necessarily equalize access to these opportunities. OUSA’s historic criticism of Tuition, Education and Textbook Tax Credits explicates our concern over their expansion.
- A new International Education Strategy will be created. Studies have shown that international students are often more likely to choose their study destination based upon perceptions of the host country, rather than province or institution. The federal government will be focusing on promotion, advertising and marketing initiatives to attract more international students to Canadian institutions. As this strategy is developed, students are hopeful that it will prompt examination and improvement in the federal, provincial and institutional supports provided to international students. Programs such as the Prime Minister’s Initiative for International Education in the United Kingdom effectively market to international students through the advertisement of robust student supports offered nationally, including publically subsidized health-care.
- Debt forgiveness for new family physicians, nurses and nurse practitioners who agree to work in under-served rural and remote communities.
- The federal government will test ways to help workers with foreign credentials subsidize the costs associated with the foreign credential recognition process.
Despite the lack of a much-needed pan-Canadian education strategy and more funding for post-secondary education to address high tuition and student debt, the expansion of financial assistance will certainly make a difference in the lives of students, particularly the one in five Ontario students who study part-time.
-Chris Martin
Director of Research
