Regulations Amending the Canada Student Financial Assistance Regulations: SOR/2024-146

Canada Gazette, Part II, Volume 158, Number 14

Registration
SOR/2024-146 June 21, 2024

CANADA STUDENT FINANCIAL ASSISTANCE ACT

P.C. 2024-798 June 21, 2024

Her Excellency the Governor General in Council, on the recommendation of the Minister of Employment and Social Development, makes the annexed Regulations Amending the Canada Student Financial Assistance Regulations under paragraphs 15(1)(d.1)footnote a, (p)footnote b and (q) of the Canada Student Financial Assistance Act footnote c.

Regulations Amending the Canada Student Financial Assistance Regulations

Amendments

1 Section 14.3 of the Canada Student Financial Assistance Regulations footnote 1 is replaced by the following:

14.3 A certificate of eligibility is to be denied to a qualifying student who is qualified for enrolment or is enrolled as a part-time student and who has a family income that is more than the applicable annual income threshold for their family size in accordance with Table 1 of Schedule 4.

2 Schedule 4 to the Regulations is amended by replacing the references after the heading “SCHEDULE 4” with the following:

(Section 14.3, paragraphs 38(1)(d), (3)(c) and (4)(c), subsections 38.1(2) and (3), paragraphs 38.2(2)(b) and (3)(b) and subsections 40.02(2) and (2.1) and 40.021(1))

3 Tables 7 to 11 of Schedule 4 to the Regulations are replaced by the following:

TABLE 7

Income Threshold for Eligibility for Grants for Loan Year 2024-2025 — Part-time Students

Column 1

Family Size (number of persons)

Column 2

Annual Income Threshold

Column 3

Annual Phase-out Rate
1 $36,811 0.079968
2 $52,059 0.057792
3 $63,760 0.049728
4 $73,624 0.047712
5 $82,313 0.045696
6 $90,170 0.043680
7 or more $97,395 0.042336

TABLE 8

Income Threshold for Eligibility for Grants for Loan Year 2024-2025 — Full-time Students with Dependants

Column 1

Family Size (number of persons)

Column 2

Annual Income Threshold

Column 3

Monthly Phase-out Rate
2 $52,059 0.006421282
3 $63,760 0.005525296
4 $73,624 0.005301324
5 $82,313 0.005077338
6 $90,170 0.004853366
7 or more $97,395 0.004703986

TABLE 9

Income Threshold for Eligibility for Grants for Loan Year 2024-2025 — Part-time Students with One or Two Dependants

Column 1

Family Size (number of persons)

Column 2

Annual Income Threshold

Column 3

Weekly Phase-out Rate
2 $52,059 0.001284262
3 $63,760 0.001105062
4 $73,624 0.001060262
5 $82,313 0.001015462
6 $90,170 0.000970676
7 or more $97,395 0.000940800

TABLE 10

Income Threshold for Eligibility for Grants for Loan Year 2024-2025 — Part-time Students with Three or More Dependants

Column 1

Family Size (number of persons)

Column 2

Annual Income Threshold

Column 3

Weekly Phase-out Rate
4 $73,624 0.001590400
5 $82,313 0.001523200
6 $90,170 0.001456014
7 or more $97,395 0.001411200

TABLE 11

Income Threshold for Eligibility for Grants for Loan Year 2024-2025 — Full-time Students

Column 1

Family Size (number of persons)

Column 2

Annual Income Threshold

Column 3

Monthly Phase-out Rate
1 $36,811 0.01666
2 $52,059 0.01204
3 $63,760 0.01036
4 $73,624 0.00994
5 $82,313 0.00952
6 $90,170 0.00910
7 or more $97,395 0.00882

4 The Regulations are amended by replacing "2023" with "2024" in the following provisions:

Coming into Force

5 These Regulations come into force on August 1, 2024, but if they are registered after that day, they come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues: Recovery from the COVID-19 pandemic, inflationary pressures, rising post-secondary education costs and higher prices for food, housing, and other necessities continue to make it challenging for many students to afford higher education and manage financially. For the 2023-2024 school year Canada Student Grants (grants) were increased by 40% and the weekly limit for Canada Student Loans (loans) was set at $300 for full-time students, while the requirement for credit screening was suspended. These measures are not permanent as grants and loans are set to return to their pre-pandemic (2019-2020) levels on August 1, 2024. Without making more federal financial assistance available, many students will not have access to enough financial assistance to be able to afford post-secondary education.

Description: The amendments to the Canada Student Financial Assistance Regulations (the Regulations) will extend temporary increases to available grants and loans for the 2024-2025 academic year, while also permanently eliminating the requirement for first-time federal financial assistance applicants aged 22 or older to pass a credit screening.

Rationale: These regulatory amendments are expected to improve access to and affordability of post-secondary education for the 2024-2025 academic year by increasing available federal financial assistance and by permanently removing an access barrier faced by first-time applicants aged 22 or older.

Issues

Recovery from the COVID-19 pandemic, inflationary pressures, rising post-secondary education costs and higher prices for food, housing, and other necessities continue to make it challenging for many students to afford higher education and manage financially. For the 2023-2024 school year Canada Student Grants (grants) were increased by 40% and the weekly limit for Canada Student Loans (loans) was set at $300 for full-time students, while the requirement for credit screening was suspended. These measures are not permanent as grants and loans are set to return to their pre-pandemic (2019-2020) levels on August 1, 2024. Without making more federal financial assistance available, many students will not have access to enough financial assistance to be able to afford post-secondary education.

Background

Canada Student Financial Assistance Program

The Government of Canada, via the Canada Student Financial Assistance Program (the Program), provides eligible students with grants, loans and repayment assistance to help students from low- and middle-income families access and afford post-secondary education at a designated college, university, or other post-secondary institution. Grants and loans are available to students from British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Newfoundland and Labrador, Prince Edward Island and the Yukon. In these jurisdictions, students receive both federal and provincial financial assistance. Meanwhile, Quebec, Nunavut and the Northwest Territories receive alternative payments from the Government of Canada to administer their own student financial assistance programs.

During the COVID-19 pandemic, the financial impact of post-secondary education-associated costs on low- and middle-income students and their families was significant. In 2020, more than 4 in 10 post-secondary education students surveyed by Statistics Canada were very or extremely concerned about their ability to keep up with their expenses and pay for next term’s tuition or accommodation costs.footnote 2 Coming out of the pandemic, inflationary pressures, rising post-secondary education costs, and higher prices for food, housing, and other necessities have made it difficult for many students to afford higher education and manage financially. Difficulties affording post-secondary education can be expected to have long-term impacts for all, especially in light of labour market trends and increased demand for post-secondary education credentials — between 2020 and 2028, two thirds of Canadian jobs will require some post-secondary education.footnote 3 Furthermore, although tuition costs vary across the country and are based on the program of study, on average, tuition has increased over time. From 2006-2007 to 2019-2020, average tuition for all students in the Program increased by 50% — from $5,600 to $8,400. Over the same period, average living expenses for all students in the Program rose by 37% — from $9,300 to $12,700. Considered together, costs for students rose by 42%.

Despite recent investments in easing the financial burden of post-secondary education for students, overall federal financial assistance has not kept up with inflationary pressures, the rising costs of post-secondary education, and higher prices for food, housing, and other necessities. From 2006-2007 to 2019-2020, average federal funding for students increased by 30% — from $6,000 to $7,700. This has not kept pace with the 42% increase in costs over the same time period.

From 2020-2021 through 2022-2023, federal student grants were temporarily doubled and the weekly loan limit was increased to $350 for full-time students. Prior to that, nearly half of financial assistance recipients had financial need that was greater than the federal financial assistance they were eligible to receive. For the 2023-2024 academic year, grants were increased by 40% and the weekly loan limit was set at $300 for full-time students, while the requirement for credit screening was suspended. The share of students who faced funding gaps was reduced from 55% to approximately 46% when grants were increased by 40% for the 2023-2024 academic year, and the increase to the weekly loan limit from $210 to $300 per week for the 2023-2024 academic year further reduced the funding gap to 28%. However, these increases are not permanent.

Assessment of need

To be eligible for federal and provincial or territorial financial assistance, a post-secondary student must apply through their online or in-person provincial or territorial student aid office. Their province or territory will conduct a financial need assessment based on the information the student provides in their application, including their student status, since the need assessment methodology differs based on full- or part-time enrollment. If the student is determined to have at least $1 of financial need, they are eligible for financial assistance.

For full-time students, assessed financial need is determined based on a student’s allowable costs of attending post-secondary education (educational and living expenses) minus their assessed resources. If the result is positive, they are eligible for financial assistance. If the result is negative, they do not qualify for financial assistance. In contrast, for part-time students, assessed financial need is based on a student’s allowable educational costs only. In other words, for part-time students, living expenses and assessed resources are not considered in the calculation.

The Program regularly monitors and discusses the education-related costs of post-secondary education with partners and stakeholders. This ensures the need assessment for all students continues to evolve as the economy changes.

Canada Student Grants

Grants were introduced in 2009 to help students from low- and middle-income families, students with dependants, and students with disabilities. These grants are intended to support students who face the most significant financial barriers in accessing post-secondary education, without increasing their debt. Grants help foster access to post-secondary education, especially for those who are debt adverse, and assist in keeping debt loads manageable.

Grants have made up an increasing share of federal support between 2006-2007 and 2019-2020. In 2006-2007, Grants represented 7% of total federal aid disbursed, rising to 53% in 2021-2022, when grants were temporarily doubled. Grants are provided to students first, with additional unmet need covered by loans. Full-time students who apply for student financial assistance and have at least $1 of assessed financial need are automatically assessed for grants and may be eligible to receive more than one type of grant for an academic year, depending on their circumstances.

Canada Student Loans

Loans were made available to students starting in 1964. From 1964 until 1995, these loans were categorized as “guaranteed Canada Student Loans” and were issued by financial institutions. From 1995 to 2000, financial institutions issued “risk-shared Canada Student Loans” and the Government of Canada paid these financial institutions the equivalent of 5% of each disbursement to cover the risk of defaults. From 2000 onwards, the Government of Canada has issued direct loans, bearing the entire risk of unpaid loans.

Loans provide students with access to liquidity to pay for tuition and living expenses, without dramatically increasing the cost to Government (approximately 33 cents per dollar loaned, with the elimination of interest accrual). Loans are designed with the understanding that post-secondary education will position students for success in the labour market, yielding benefits to the individual and Canada. Graduates are expected to be well positioned to pay back their loans, mitigating costs to taxpayers and ensuring Program sustainability.

While the maximum loan support available to students did not increase between 2006 and 2019, grants made up an increasing share of federal support, rising from an average of 7% to 32%. This change was largely driven by permanently increasing grants for low- and middle-income full- and part-time students by 50% in 2016-2017 and expanding grant access through a more progressive threshold starting in 2017-2018. Greater grant support has helped to keep federal student debt levels relatively stable ($13,550 per student in 2019-2020, compared to $12,250 per student in 2006-2007); however, federal investments not keeping pace with inflation means that many students do not have access to the financial assistance they need. Loans play an essential role in providing upfront support to students who might otherwise not be able to afford post-secondary education. Since the weekly loan limit was last increased in 2005, the real dollar value of $210 per week has decreased. Notwithstanding the temporary increases since that time, the original value has continued to decline as costs of living and education rise, putting pressure on students to find other sources of income to meet their financial need.

Full-time loan amounts are capped at 60% of a student’s assessed need, up to a weekly maximum of $210. However, the maximum weekly limit has seen temporary increases since the 2019-2020 academic year due to the implementation of temporary enhancements (currently $300 for the 2023-2024 academic year). The loan for Part-time Students does not have a set weekly limit. Instead, it has an outstanding lifetime limit of $10,000.

Extending the temporary increase to the weekly loan limit to $300 for full-time students will decrease the need for students to borrow and manage loans or lines of credit from private lenders. These private funding sources often offer less favourable lending terms than the Government of Canada, such as interest accumulation, repayment obligations while still in school, and no repayment support. An extension of the temporary increase to grants and loans will also decrease the need for students to work excessive hours while studying to pay education-related costs. Increasing available grants and loans for two more academic years will provide additional upfront support to students with unmet financial need.

Credit screening

Credit screening was introduced by the Program in 1999 as a risk mitigation measure with the objective of preventing default on loans. Since 1999, the Program has required first-time applicants who are 22 years or older to undergo credit screening. Applicants are denied federal grants and loans if they (1) missed payments on at least three debts, where each debt was higher than $1,000 and more than 90 days overdue, in the 36 months before applying, and (2) had control over the circumstances that led to the missed payments.

First-time applicants aged 22 or over were targeted for credit screening because they were more likely to have been out of the education system for significant lengths of time and to have previously accessed credit than younger applicants. When credit screening was introduced by the Program, a review/appeal process was considered an essential component of the measure. Through this process, individuals who could demonstrate that their poor credit history was a result of circumstances beyond their control (such as essential home repairs, uninsured medical, dental or optical expenses, caring for children with disabilities, caring for elderly/infirm relatives, and legal fees) have been able to have their eligibility for a loan reconsidered.

Furthermore, the requirement for credit screening is administratively burdensome. Prior to 2023-2024, approximately 80 000 applicants underwent credit screening annually. Less than 1% of those screened were initially rejected for student financial assistance due to poor credit, and 85% of those who appealed were ultimately approved. While the requirement for credit screening was temporarily waived for the 2023-2024 academic year, this change was not made permanent.

Since the introduction of credit screening, the Program has introduced other measures to reduce the risk of loan default. For example, the Regulations stipulate that borrowers who are 90 or more days in arrears on loan payments are restricted from receiving additional federal financial assistance from the Program. There are also limits on the number of study periods for which a borrower can receive financial aid. Furthermore, the introduction of the Repayment Assistance Plan in 2009 has helped borrowers manage their repayment and avoid default to keep their loan in good standing. For borrowers who do go into default, there are a number of activities that are available to recover the debt (e.g. legal action, income tax set-offs), but borrowers also have the option to rehabilitate their loans. Budget 2019 increased the eligibility for loan rehabilitation to help more borrowers access supports, such as the Repayment Assistance Plan, and begin making affordable payments on their debt. The most recent publicly available datafootnote 4 demonstrates that the introduction of grants and repayment assistance, coupled with increased and targeted communications by the service provider, as well as major enhancements in student financial supports in recent years have contributed to a decline in the default rate for federal student loans over a 10-year period, from 14% in 2010-2011 to 7% in 2019-2020.

Objective

The objective of these regulatory amendments is to improve access to and affordability of post-secondary education for the 2024-2025 academic year by extending increases to federal financial assistance and by permanently removing the credit screening requirement for first-time applicants aged 22 or older.

Description

These regulatory amendments will increase funding and remove barriers to post-secondary education by:

Regulatory development

Consultation

The Program regularly engages with stakeholders, including student groups, and PTs, through the National Advisory Group on Student Financial Assistance (NAGSFA) and the Intergovernmental Consultative Committee on Student Financial Assistance (ICCSFA). Through these groups, the Program discusses the affordability of and access to post-secondary education. Through these discussions, the Program heard the following feedback regarding these regulatory amendments.

Consultations prior to Budget 2023

In June 2021, ICCSFA met to discuss the affordability of and access to post-secondary education generally. During this conversation and following further in-depth analysis done by the Policy Development subcommittee, ICCSFA approved the subcommittee’s recommendation to end the use of credit screening when assessing applications for student financial assistance. It viewed credit screening as a barrier to accessing student financial assistance for first-time applicants aged 22 or older.

In November 2022, ICCSFA met again and requested a broader range of affordability measures be put in place to support students. The discussion touched on the temporary measures in response to COVID-19 and PTs shared that these enhancements were positive, particularly the increase in available student financial assistance through increased grants and loans. At the end of the meeting, PTs agreed that increasing available student financial assistance provided to students through grants and loans would be a positive way to address affordability pressures faced by students.

Similarly, student stakeholder groups like the Canadian Alliance of Students Associations have been advocating for some time for supportive measures to relieve inflationary pressures on students through increased funding.footnote 8 In particular, the Canadian Alliance of Student Associations has argued that doubling grants in the past three years has made a difference and its end would represent a hardship for students, especially in the context of current cost of living challenges/increases.footnote 9

Consultations following Budget 2023

In Budget 2023, the Government of Canada committed to work with students in the year ahead to develop a long-term approach to student financial assistance. The measures implemented on August 1, 2023 (namely, a one-year 40% increase to grants, an increase to the weekly loan limit, and a one-year waiver of the credit screening requirement) were received positively by PTs. In addition, public feedback from student stakeholder groups like the Canadian Alliance of Student Associations was positive.footnote 10

Despite the positive feedback to the Budget 2023 measures described above, PTs and student groups have expressed that temporary measures are a real challenge. All stakeholders consulted emphasized the critical importance of predictability in funding to inform students’ planning and decision-making regarding post-secondary education. A move to long-term, stable, predictable funding was sought by all groups.

All stakeholder groups advocated for more funding to meet affordability pressures faced by students, including rising tuition and living costs. Several stakeholders asked that, at a minimum, the increased grant and loan funding provided in 2023-2024 be made available in future years. Some suggested that grants should be indexed to inflation, and others requested that grants be doubled. Many also asked for changes to the Program’s need assessment to reflect higher costs of living for students. One stakeholder asked that the need assessment consider the additional costs faced by mature students. Another stakeholder advocated for the elimination of loans and a transition to a grants-only system.

Some groups called on the Government to permanently eliminate credit screening and no group objected to this. Stakeholders who provided views on this recommendation cited credit screening as a barrier to accessing post-secondary education for mature students.

CBA Consultations

The Program did not engage in consultations specific to the cost-benefit analysis.

Modern treaty obligations and Indigenous engagement and consultation

The regulatory amendments are not expected to have differential impacts on Indigenous peoples or implications for modern treaties, according to Government of Canada obligations in relation to rights protected by section 35 of the Constitution Act, 1982, modern treaties and international human rights obligations. These regulatory amendments have been assessed for modern treaty implications following the Cabinet Directive on the Federal Approach to Modern Treaty Implementation. The assessment found no immediate impacts on modern treaty obligations. The regulatory amendments do not directly target Indigenous peoples. Nevertheless, Indigenous students could still benefit from the measures. According to the Program’s data, Indigenous peoples are more likely to have unmet financial need compared to the general student population.

Instrument choice

Maintaining the 40% increase to maximum grant amounts from pre-pandemic levels, maintaining the increase to the weekly loan limit to $300, and permanently eliminating the credit screening requirement for first-time applicants aged 22 or older could not be addressed by means other than regulatory amendments. The Canada Student Financial Assistance Act (The Act) provides that eligibility for grants and loans and the amounts of grants and loans are prescribed by the Regulations. As a result, non-regulatory options were not considered.

Regulatory analysis

Benefits and costs

A cost-benefit analysis was conducted to assess the incremental impacts to stakeholders of the following one-year extension to grants and loans measures for the 2024-2025 academic year and permanent elimination of credit screening, compared to a baseline scenario in which these regulatory amendments are not made. The complete cost-benefit analysis is available upon request.

The stakeholders most directly affected by these regulatory amendments are student recipients of financial aid and the Government of Canada. Provincial and territorial partners of the Program and Canadian society at large are also affected indirectly.

Key data sources for this cost-benefit analysis include internal Program administrative data, external literature on post-secondary education persistence, and actuarial forecasts provided by the Office of the Chief Actuary that are based on demographic information, economic conditions, and policy parameters of the Program as of July 31, 2022.

Cost-benefit statement
Monetized costs

The cost to the Government of Canada under the regulatory amendments for providing additional grants and loans is based on estimates using Program administrative data and the Office of the Chief Actuary projections.

The cost of providing increased grant amounts to students (587 000 students in 2024-2025) under the regulatory amendments is the dollar-for-dollar amount of additional grants and the cost of alternative payments paid to non-participating jurisdictions on these additional grant disbursements.

The cost of providing increased loan amounts to students (297 000 students in 2024-2025, of which 82,000 are loan-only beneficiaries) under the regulatory amendments includes the cost of loan disbursements for the Government of Canada. This cost includes the cost of government borrowing (approximately 65% of the loan cost), a risk provision for defaults (approximately 26% of the loan cost) and a risk provision for the Repayment Assistance Plan for loans that will be repaid by the federal government under this plan (approximately 9% of the loan cost).

The cost of removing credit screening is also captured and includes total grants and loans disbursed to students newly eligible for Program funding.

The total monetized costs are estimated at $1,088 million (present value) over the next 10 years.

Impacted stakeholder Description of cost Base year: 2024-25 Second year: 2025-26 Fifth year: 2028-29 Final year: 2033-34 Total (PV) Annualized present value
Federal government Cost of increasing grants $736M $0M $0M $0M $736M $105M
Cost of increasing loans $322M $0M $0M $0M $322M $46M
Cost of eliminating credit screening $4M $4M $4M $4M $29M $4M
All stakeholders Total costs $1,062M $4M $4M $4M $1,088M $155M

Note: Numbers may not add up due to rounding.

Increased grants transfers

The regulatory amendments will result in post-secondary students receiving more non-repayable funding during their studies. The larger amount of grants represents a direct transfer to students. Students who are in a province that does not participate in the Program will also benefit from the regulatory amendments through the transfer of additional alternative payments, to their province or territory.

Future earnings potential from reducing the number of students dropping out of post-secondary education

By increasing grants and loans to students for the 2024-2025 academic year, and permanently waiving the credit screening requirement for first-time applicants aged 22 or older, the Government of Canada will help reduce funding gaps and also encourage students to complete post-secondary education.footnote 11footnote 12 These measures, in turn, will improve affordability and lead to higher future earning potential. Based on Census 2021 findings, higher education generates an earnings premium when comparing incomes of high school graduates and post-secondary attendees. Future earnings potential is monetized for two groups of students — those who would have dropped out from post-secondary studies for financial reasons and those who now have access to the Program due to the waiving of the credit screening requirement. The earning benefits accrued by those otherwise unable to complete post-secondary education under the baseline scenario where grants revert to 2019-2020 levels are offset by the tuition fees under the regulatory scenario, as this is an additional cost for students who would not have decided to pursue post-secondary education studies without these regulatory amendments. These benefits are also netted of taxes as these can be considered a separate benefit to the federal government.

Additional federal income taxes from future potential earnings

While there is an upfront cost for the federal government in providing grants and loans to students, those who complete post-secondary education studies who would not have done so without financial support can gain higher future potential earnings. As a result, the federal government can collect a higher amount of income tax from these future potential earnings, which tends to offset the initial cost of providing financial support to students.

The total monetized benefits are estimated at $1,744 million (present value) over the next 10 years.

Monetized benefits
Impacted stakeholder Description of benefit Base year: 2024-25 Second year: 2025-26 Fifth year: 2028-29 Final year: 2033-34 Total
(PV)		 Annualized present value
Student beneficiaries Transfers in cash (grants only) $869M $2M $2M $2M $883M $126M
Reducing the number of students dropping out of post-secondary education — future potential earnings −$106M $98M $100M $103M $546M $78M
New students due to eliminating credit screening — future potential earnings $0M −$5M $13M $47M $113M $16M
Federal government Additional federal income taxes from future potential earnings $20M $21M $27M $37M $201M $29M
All stakeholders Total monetized benefits $783M $116M $141M $189M $1,744M $248M

Note: Numbers may not add up due to rounding.

Summary of monetized costs and benefits
Impacts Base year: 2024-25 Second year: 2025-26 Fifth year: 2028-29 Final year: 2033-34 Total
(PV)		 Annualized present value
Total benefits $783M $116M $141M $189M $1,744M $248M
Total costs $1,062M $4M $4M $4M $1,088M $155M
NET IMPACT −$279M $112M $137M $185M $656M $93M

Note: Numbers may not add up due to rounding.

Quantified (non-$) and qualitative impacts

Positive impacts

Small business lens

Analysis under the small business lens concluded that the regulatory amendments will not impact Canadian small businesses.

One-for-one rule

The one-for-one rule does not apply to this regulatory proposal. There will be no change in administrative burden and no administrative cost that will impact businesses.

Regulatory cooperation and alignment

These regulatory amendments are not related to any commitment under a formal regulatory cooperation forum. The Program has consulted with PT stakeholders and they have been supportive of the measures.

Strategic environmental assessment

In accordance with the Cabinet Directive on Strategic Environmental and Economic Assessment, a preliminary scan concluded that a strategic environmental assessment is not required.

Gender-based analysis plus

These regulatory amendments are generally expected to support and benefit various groups including women, persons with disabilities, and students with dependants pursuing post-secondary education, and self-identifying Indigenous students. There were no unintended adverse impacts identified resulting from the gender-based analysis plus (GBA+) conducted.

Grants target low- and middle-income students, and therefore the regulatory amendments are expected to significantly benefit students from the low- and middle-income category. Research consulted points to the fact that students from families in the lower income quintiles are less likely to pursue higher education than their peers from high-income families.footnote 23 Reducing economic barriers for low-income students through non-repayable grants can encourage post-secondary education persistencefootnote 24, result in improved grades, increased enrolment, attainment and graduation.footnote 25footnote 26footnote 27 The provision of interest-free loans will help reduce funding gaps for students and support post-secondary education completion.

Increases to grants and loans for the 2024-2025 academic year will make post-secondary education more affordable for the following populations that experience significant additional barriers. In 2021-2022, 60% of loan recipients were women and 61% of grant recipients were women indicating that the regulatory amendments are likely to benefit more women than men. The regulatory amendments will support parents attending post-secondary education, since administrative data from the 2021-2022 year shows that a significant majority of students with dependants are low-income students (74%), with nearly 97% facing unmet need.

Program data indicates that approximately 9% of students in the program have a disability. Since the Canada Student Grant for Students with Disabilities is provided to all students with disabilities, regardless of income, the increase in grant funding will positively affect all students with a disability.

A significant proportion of Indigenous students are likely to benefit from the amendments to increase grants. Program data shows that approximately 7% of Program students self-identified as Indigenous in 2021-2022 and of the total Indigenous student beneficiaries, approximately 83% received grants.footnote 28

According to the 2021-2022 Program data, 63% of student financial assistance recipients were under 25, and 37% of recipients were over the age of 25. The regulatory amendments will benefit Canadian youth under 25, and also graduate students over the age of 25 who typically do not qualify for full-time grants, by providing access to additional funding for these recipients to pursue their studies. Finally, waiving the credit screening requirement will facilitate access to student financial assistance for older first-time applicants. Adult learners are more likely to attend diploma or certificate programs at a significantly higher rate than the general Program student population (65% for adult learners compared to 29% overall).

Implementation, compliance and enforcement, and service standards

Implementation

These regulatory amendments will come into force on August 1, 2024, for the 2024-2025 academic year.

Compliance and enforcement

The Act requires the Program to table an actuarial report in Parliament at least once every three years. This report provides an estimate of Program costs and revenues, a 25-year forecast of future Program costs and revenues, and an explanation of the methodology and actuarial and economic assumptions used to produce the figures presented in the report. The Act also requires an annual report on the Program to be tabled in Parliament. The annual report provides detailed Program statistics (including the value of the portfolio) and outlines key objectives, initiatives, and accomplishments achieved over a given academic year.footnote 29

The Act provides authority for the Program to ensure that grants and loans are not provided to students who are not eligible. Subsection 17(1) of the Act provides for a fine of up to $1,000 for students who knowingly provide any false or misleading information, including by omission, in an application or other document. Also, section 17.1 of the Act allows for any such student to be denied additional federal financial assistance as well as certain other Program benefits, including, but not limited to, repayment assistance.

Contact

Erin Hetherington
Director
Program Policy
Canada Student Financial Assistance Program
Employment and Social Development Canada
Email: DSC.DGA.PCAFE.MCPP-SEC.CSFAP.LB.ESDC@hrsdc-rhdcc.gc.ca