Backgrounder: Canada Student Loans Program

Canada Student Loans Program
The Canada Student Loans Program helps to make post-secondary education more affordable for students from low- and middle-income families by providing supports to students with financial need through grants, loans and repayment assistance measures.

• Canada Student Grants provide non-repayable funding to full- and part-time students and are targeted to students from low- and middle-income families, students with permanent disabilities and students with dependants. Students are automatically assessed for Canada Student Grants when applying for student financial assistance through their province or territory of residence.
• Canada Student Loans are offered by the Government of Canada to help eligible full- and part-time students pay for post-secondary education at designated academic institutions throughout Canada and abroad.
• The Repayment Assistance Plan makes it easier for students who are experiencing financial difficulties to repay their student loans. Under the Repayment Assistance Plan, monthly payments are limited to no more than 20 percent of a borrower’s family income and no borrower has a repayment period of more than 15 years. To remain eligible, borrowers must re-apply every six months.

Budget 2016

Budget 2016 invested more than $2.7 billion over five years to introduce important changes to the Canada Student Loans Program that expanded financial assistance measures for Canadians by:

• Increasing Canada Student Grant amounts by 50 percent, starting on August 1, 2016, which expanded available grant support for students from low- and middle-income families. More specifically, grants were increased from:
  • $2,000 to $3,000 per year for students from low-income families;
  • $800 to $1,200 per year for students from middle-income families; and
  • $1,200 to up to $1,800 per year for part-time students from low-income families.
• Increasing the Repayment Assistance Plan eligibility thresholds, starting on November 1, 2016, to ensure that no student has to repay their Canada Student Loan until they are earning at least $25,000 per year. The threshold increases based on family size, being responsive to the financial realities of Canadians who may be married or in a common-law relationship and have children.
• Introducing a new fixed student contribution, starting on August 1, 2017, eliminating the need for students to report estimates of their future income or their financial assets when applying for grants and loans. Students are instead expected to make a fixed contribution of between $1,500 and $3,000 towards their post-secondary education costs each year, based on their family income and size. This enables students to work and gain valuable work experience without worrying about a reduction in their level of financial assistance and particularly benefits working Canadians, many of whom may work while studying or have accumulated assets.
  • Students facing barriers to employment, including those with children, are exempted from making a contribution, thereby expanding their access to support from the Canada Student Loans Program.
  • As part of this change, the contributions expected of students’ spouses or common-law partners were relaxed, further expanding eligibility for working Canadians who are more likely to be married or in a common-law relationship.
  • Expanding eligibility for Canada Student Grants. Starting on August 1, 2017, the existing income thresholds, which presently vary by province and territory, were replaced with a higher, single national threshold. As family income increases, the amount of grant support received will gradually decline, depending on family size.

Budget 2017: Skills Boost

Budget 2017 introduced measures to provide enhanced student financial assistance and make better use of Employment Insurance flexibilities targeted to working or unemployed Canadians looking to return to school to upgrade their skills. Together, these initiatives comprise Skills Boost.

Student Financial Assistance Measures

Budget 2017 builds on measures implemented as part of Budget 2016, including further enhancements to the supports available to working Canadians by investing $454.4 million over four years to:

• Introduce a three-year pilot project for adult learners that will, starting in the 2018–19 academic year:
  • provide top-up funding of an additional $1,600 per year in grant support to students who have been out of high school for at least 10 years and are returning to full-time post-secondary studies; and
  • give flexibility to assess grant eligibility based on the current year’s income (rather than for the previous year) in recognition of a significant change in financial circumstances.
• Expand eligibility for part-time grants and loans, starting in the 2018–19 academic year, allowing more students from low- and middle-income families to benefit from up to $1,800 in non‑repayable grants per year and up to $10,000 in loans.
• Expand access to grants for students with children, starting in the 2018–19 academic year, allowing more:
  • full-time students with children to receive up to $200 per month per child; and
  • part-time students with children to receive up to $1,920 per year in grants.

To receive Canada Student Grants, students must apply to their province or territory of residence to receive financial assistance for the 2018–19 school year. For example, as of November 8, 2017, students in Ontario can start applying to the Ontario Student Assistance Program (OSAP) to receive both provincial and federal assistance for the 2018–19 academic year. Students who have already applied for OSAP will be eligible for this funding. Students in other jurisdictions (with the exception of the Northwest Territories, Nunavut and Quebec) will be eligible to apply for the student aid components of Skills Boost when their provincial or territorial student financial assistance office launches its application period for the 2018-2019 school year.

Employment Insurance measures

Employment Insurance (EI) regular benefits provides temporary income support to eligible individuals who lose their job through no fault of their own (for example, due to shortage of work) and are available for and able to work, but can't find a job.

As part of Skills Boost, Budget 2017 announced an investment of $132.4 million over four years, starting in 2018–19, and $37.9 million thereafter, to make better use of existing flexibilities within the EI program that allow claimants to pursue training while receiving EI benefits.

Under existing rules, EI claimants can take self-funded training and receive their EI benefits when they continue to meet program requirements (i.e. search and be available for work). They may also be referred to full-time training by designated authorities (i.e. provinces, territories and Indigenous organizations), and continue to receive their EI benefits. This referred training may be self-funded or paid for by the designated authority.

Starting in fall 2018, more opportunities will be provided for those who lose their jobs after several years in the workforce to pursue full-time training at their own expense while continuing to receive their EI benefits.