Regulations Amending the Canada Student Financial Assistance Regulations: SOR/2025-113
Canada Gazette, Part II, Volume 159, Number 8
Registration
SOR/2025-113 March 23, 2025
CANADA STUDENT FINANCIAL ASSISTANCE ACT
P.C. 2025-453 March 23, 2025
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)(p)footnote a and (q) of the Canada Student Financial Assistance Act footnote b.
Regulations Amending the Canada Student Financial Assistance Regulations
Amendments
1 Tables 7 to 11 of Schedule 4 to the Canada Student Financial Assistance Regulations footnote 1 are replaced by the following:
TABLE 7
| Column 1 Family Size (number of persons) |
Column 2 Annual Income Threshold |
Column 3 Annual Phase-out Rate |
|---|---|---|
| 1 | $37,701 | 0.079968 |
| 2 | $53,318 | 0.057792 |
| 3 | $65,302 | 0.049728 |
| 4 | $75,405 | 0.047712 |
| 5 | $84,304 | 0.045696 |
| 6 | $92,351 | 0.043680 |
| 7 or more | $99,751 | 0.042336 |
TABLE 8
| Column 1 Family Size (number of persons) |
Column 2 Annual Income Threshold |
Column 3 Monthly Phase-out Rate |
|---|---|---|
| 2 | $53,318 | 0.006421282 |
| 3 | $65,302 | 0.005525296 |
| 4 | $75,405 | 0.005301324 |
| 5 | $84,304 | 0.005077338 |
| 6 | $92,351 | 0.004853366 |
| 7 or more | $99,751 | 0.004703986 |
TABLE 9
| Column 1 Family Size (number of persons) |
Column 2 Annual Income Threshold |
Column 3 Weekly Phase-out Rate |
|---|---|---|
| 2 | $53,318 | 0.001284262 |
| 3 | $65,302 | 0.001105062 |
| 4 | $75,405 | 0.001060262 |
| 5 | $84,304 | 0.001015462 |
| 6 | $92,351 | 0.000970676 |
| 7 or more | $99,751 | 0.000940800 |
TABLE 10
| Column 1 Family Size (number of persons) |
Column 2 Annual Income Threshold |
Column 3 Weekly Phase-out Rate |
|---|---|---|
| 4 | $75,405 | 0.001590400 |
| 5 | $84,304 | 0.001523200 |
| 6 | $92,351 | 0.001456014 |
| 7 or more | $99,751 | 0.001411200 |
TABLE 11
| Column 1 Family Size (number of persons) |
Column 2 Annual Income Threshold |
Column 3 Monthly Phase-out Rate |
|---|---|---|
| 1 | $37,701 | 0.01666 |
| 2 | $53,318 | 0.01204 |
| 3 | $65,302 | 0.01036 |
| 4 | $75,405 | 0.00994 |
| 5 | $84,304 | 0.00952 |
| 6 | $92,351 | 0.00910 |
| 7 or more | $99,751 | 0.00882 |
2 The Regulations are amended by replacing "2024" with "2025" in the following provisions:
- (a) section 10.1;
- (b) the portion of subsection 38(4) before paragraph (a);
- (c) the portion of subsection 38.1(3) before the formula;
- (d) the portion of subsection 38.2(3) before paragraph (a);
- (e) subsection 40.01(4); and
- (f) the portion of subsection 40.02(2.1) before the formula.
Coming into Force
3 These Regulations come into force on August 1, 2025, 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, 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 and 2024–2025 academic years, Canada Student Grants (grants) were temporarily increased by 40% and the weekly limit for Canada Student Loans (loans) was set at $300 for full-time students. These measures are not permanent, as grants and loans are set to return to their pre-pandemic (2019–2020) levels on August 1, 2025. 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 2025–2026 academic year.
Rationale: These regulatory amendments are expected to improve access to and affordability of post-secondary education for 684 000 students during the 2025–2026 academic year by increasing available federal financial assistance. These measures are crucial in contributing to better economic outcomes, and lower income inequality for eligible students.
Issues
Recovery from the COVID-19 pandemic, 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 and the 2024–2025 academic years, Canada Student Grants (grants) were temporarily increased by 40% and the weekly limit for Canada Student Loans (loans) was set at $300 for full-time students. These measures were not permanent, as grants and loans are set to return to their pre-pandemic (2019–2020) levels on August 1, 2025. 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 Canada Student Financial Assistance Act (the Act) and the Canada Student Financial Assistance Regulations (the Regulations) govern the provision of financial assistance issued to students as of August 1, 1995. 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 the following provinces and territories, namely, 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 on students was significant. Specifically, it affected low- and middle-income students and their families in their ability to pay for post-secondary education-associated costs. 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, 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 considering 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 the rising costs of post-secondary education, 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 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. For the 2023–2024 and the 2024–2025 academic years, grants were increased by 40% from pre-pandemic levels and the weekly loan limit was set at $300 for full-time students. In addition, the requirement for credit screening for first-time applicants aged 22 and older was permanently eliminated on August 1, 2024.
According to Program administrative data, a one-year extension to the 40% increase in grants would reduce the share of students with unmet federal financial need from 62% to 56%. Temporarily extending the increase in the weekly loan limit by an additional year would further reduce the share of students with unmet federal need to 36%.
Assessment of need
To be eligible for federal and provincial and territorial financial assistance, a post-secondary student must apply through their online or in-person provincial and 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 costs related to 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. Grant amounts are governed by and prescribed in the Regulations.
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 2022–2023, when grants were temporarily doubled. Grants are provided to students first, with additional unmet need covered by loans. Full-time students who apply for 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. A one-year extension to the 40% increase in grants will maintain current levels of upfront grant supports for students and will not increase student debt levels.
In addition, literature suggests that grants increase persistence in post-secondary education and degree attainment. In particular, research indicates that additional grant funding of $1,000 improves persistence and attainment by approximately 1.5 to 2 percentage points.footnote 4
The 2021 evaluation of the CSFA Program found that without access to any government loans and grants, 23% of borrowers would not have pursued post-secondary education at all. In addition, almost half (44%) of borrowers indicated that they would have delayed their studies.footnote 5
Extending the 40% increase in grants for the 2025–2026 academic year will guarantee that this progress in affordability is sustained for another academic year. It is expected to benefit approximately 593 000 students in 2025–2026.
Canada Student Loans
Loans were made available to students starting in 1964 under the Canada Student Loans Act and the Canada Student Loan Regulations. 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. Loan amounts are governed and prescribed by the Regulations. Loans provide students with access to liquidity to pay for tuition and living expenses, without dramatically increasing the cost to Government. 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 ($15,090 per student in 2022–2023, compared to $12,250 per student in 2006–2007); however, federal investments are not keeping pace with the high costs of living. This means that many students do not have access to sufficient supports to meet their financial needs. 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 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 2024–2025 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 by an additional academic year 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 current temporary measure will also decrease the need for students to work long hours while studying to pay education-related costs. Extending the increase of the weekly loan limit amount is expected to benefit 367 000 students in 2025–2026.
Like an extension to the grant increase, an extension to the weekly loan limit will provide upfront supports for students, specifically those with an unmet financial need, to help them access and afford post-secondary education.
This is important given the increasing need for skilled workers entering the labour market, especially those with post-secondary education.footnote 6 Approximately 5.9 million recent graduates (e.g. high school, apprenticeship, college, university graduates) are projected to enter the labour market between 2024 and 2033.footnote 6 According to Employment and Social Development Canada’s estimates from the Canadian Occupational Projection system, 75% of new jobs created by economic expansion are projected to be in occupations generally requiring post-secondary education, or in management occupations.footnote 6 Occupations requiring a university degree, or a college or apprenticeship diploma are expected to experience a labour shortage between 2024 and 2033.footnote 6
There is also an earnings premium associated with post-secondary education. According to a 2023 Statistics Canada study,footnote 7 the income growth for individuals with a bachelor’s degree or higher was greater than for those with a high school diploma or equivalent.
Objective
The objective of these regulatory amendments is to improve access to and affordability of post-secondary education for the 2025–2026 academic year.
Description
The Canada Student Financial Assistance Regulations will be amended to indicate that the amounts for the loan year starting on August 1, 2025, are as follows:
- Canada Student Grant for Full-Time Students a maximum of $525 for each month of study;
- Canada Student Grant for Part-Time Students, a maximum of $2,520 for each academic year;
- Canada Student Grant for Students with Disabilities,footnote 8 $2,800 for each academic year;
- Canada Student Grant for Full-Time Students with Dependants, a maximum of $280 for each dependant for each month of study; and
- Canada Student Grant for Part-Time Students with Dependants, a maximum of $2,688 for each academic year.
The weekly loan limit for full-time studentsfootnote 9 is $300 for the 2025–2026 academic year, starting on August 1, 2025.
Regulatory development
The Program regularly engages with stakeholders, including student groups, and provinces and territories, 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. The Program heard the following feedback regarding these regulatory amendments through these discussions.
Consultations prior to Budget 2024
In November 2022, ICCSFA requested a broad range of affordability measures be put in place to support students. The discussion touched on the temporary measures in response to COVID-19 and provinces and territories shared that these enhancements were positive, particularly the increase in available financial assistance through increased grants and loans. Student stakeholder groups like the Canadian Alliance of Student Associations and provinces and territories agreed that increasing available financial assistance would be a positive way to address affordability pressures faced by students.
Similarly, student stakeholder groups like the Canadian Alliance of Student Associations have been advocating for some time for supportive measures to relieve the high costs of living for students through increased funding. In Budget 2023, the Government of Canada committed to work with students in the year ahead to develop a long-term approach to financial assistance. The measures implemented on August 1, 2023 (namely, a one-year 40% increase to grants and the weekly loan limit increase from $210 to $300) were received positively by provinces and territories. 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, provinces and territories 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.
Student associations, post-secondary educational institutions, and student financial aid administrators have all advocated for more funding to meet affordability pressures faced by students, including rising tuition and living costs. Specifically, they asked that at minimum, the increased grant and loan funding provided in 2023–2024 be made available in future years. In addition, the Canadian Alliance of Student Associations suggested that grants should be indexed to inflation, and the Canadian Federation of Students requested that grants be doubled. Many student associations also asked for changes to the Program’s need assessment to reflect higher costs of living for students. The Canadian Federation of Students requested 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.
Consultations following Budget 2024
In Budget 2024, the Government of Canada granted another one-year extension to the 40% increase in grants and the weekly loan limit. Provinces, territories, and student groups were generally satisfied with the Budget 2024 measures, although all stakeholders consulted were concerned to see another temporary extension. ICCSFA and NAGSFA student associations indicated that temporary measures create uncertainty for students when trying to financially plan for their studies, and for educational institutions that often fill financial gaps.
Most provinces and territories, student associations, and post-secondary educational institutions advocated for the permanent implementation of the increase to financial supports described above. In addition, organizations such as the Canadian Federation of Students and the Canadian Association of University Teachers advocated for additional increases to the maximum amounts available per year in grants, while others, including the Canadian Alliance of Student Associations and the Atlantic Science Enterprise Centre, renewed their suggestion that grants should be indexed to inflation. In general, all stakeholders expressed concern that allowing grants and loans to return to their pre-pandemic (2019–2020) levels would negatively impact the financial wellbeing of students.
Cost-benefit analysis consultations
The Program did not engage in consultations specific to the cost-benefit analysis.
Modern treaty obligations and Indigenous engagement and consultation
As required by the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, an assessment of modern treaty implications was conducted. The assessment found no immediate impacts on existing Modern Treaty obligations.
The regulatory amendments do not directly target Indigenous peoples. Nevertheless, Indigenous students could still benefit from the measures. According to Program data, Indigenous peoples are more likely to have unmet financial need compared to the general student population.
Instrument choice
Maintaining the increase to maximum grant amounts by 40% compared to pre-pandemic levels and the increase to the weekly loan limit from $210 to $300 for the 2025–2026 academic year could not be addressed by means other than regulatory amendments. 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 on stakeholders due to a one-year extension to the increase in grants and loans for the 2025–2026 academic year compared to a baseline scenario in which these regulatory amendments are not made. A total of 684 000 students are expected to benefit from the regulatory changes. 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, 2023.
Cost-Benefit Statement
- Number of years: 10 (2025–2026 to 2034–2035)
- Price-level year: Nominal values are used
- Present value base year: 2025
- Discount rate: 7%
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 (593 000 students in 2025–2026) under the regulatory amendments is the net 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 (367 000 students in 2025–2026, of which 92 000 are loan-only beneficiaries) under the regulatory amendments includes the cost of loan disbursements for the Government of Canada. This cost includes a risk provision for defaults, a risk provision for the Repayment Assistance Plan for loans that will be repaid by the federal government under this plan, and alternative payments paid to non-participating jurisdictions. The breakdown between these components of the cost varies over time and thus have not been included.
The cost of processing additional applications payable by the Government of Canada created by improved retention rates resulting from increased federal funding is calculated. The cost of processing the additional applications for the third-party service provider is calculated. An opportunity cost to reflect the time borrowers spend filling out their application is also calculated.
The total monetized costs are estimated at $1,074 million (present value) over the next 10 years.
| Impacted stakeholder | Description of cost | Base year: 2025–26 | Second year: 2026–27 | Fifth year: 2029–30 | Final year: 2034–35 | Total (present value) | Annualized present value |
|---|---|---|---|---|---|---|---|
| Federal government | Cost of increasing grants | 870 | 0 | 0 | 0 | 870 | 124 |
| Cost of increasing loans | 204 | 0 | 0 | 0 | 204 | 29 | |
| Cost of additional applications | 0.1 | 0 | 0 | 0 | 0.1 | 0 | |
| Service provider | Cost of additional applications | 0.1 | 0 | 0 | 0 | 0.1 | 0 |
| Students | Cost of filling application | 0.1 | 0 | 0 | 0 | 0.1 | 0 |
| All stakeholders | Total costs | 1,074 | 0 | 0 | 0 | 1,074 | 153 |
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 or territory 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 extending the increases to grant and loan amounts for the 2025–2026 academic year to students, the Government of Canada will help reduce funding gaps and encourage students to complete post-secondary education.footnote 11footnote 12 In turn, these measures 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 students in their final year of study in the 2025–2026 academic year who would have dropped out from post-secondary studies for financial reasons. The earning benefits accrued by those otherwise unable to complete post-secondary education under the baseline scenario if 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 continued post-secondary education 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 increased 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 $1,761 million (present value) over the next 10 years.
| Impacted stakeholder | Description of benefit | Base year: 2025–2026 | Second year: 2026–2027 | Fifth year: 2029–2030 | Final year: 2034–2035 | Total (present value) | Annualized present value |
|---|---|---|---|---|---|---|---|
| Student beneficiaries | Transfers in cash (grants only) | 925 | 0 | 0 | 0 | 925 | 132 |
| Reducing the number of students dropping out of post-secondary education — future potential earnings | −86 | 106 | 113 | 125 | 658 | 94 | |
| Federal government | Additional federal income taxes from future potential earnings | 18 | 19 | 23 | 32 | 177 | 25 |
| All stakeholders | Total monetized benefits | 857 | 125 | 136 | 157 | 1,761 | 251 |
Note: Numbers may not add up due to rounding.
| Impacts | Base year: 2025–2026 | Second year: 2026–2027 | Fifth year: 2029–2030 | Final year: 2034–2035 | Total (present value) | Annualized present value |
|---|---|---|---|---|---|---|
| Total benefits | 857 | 125 | 136 | 157 | 1,761 | 251 |
| Total costs | 1,074 | 0 | 0 | 0 | 1,074 | 153 |
| Net impact | -217 | 125 | 136 | 157 | 687 | 98 |
Note: Numbers may not add up due to rounding.
Quantified (non-dollar) and qualitative impacts
Positive impacts
- Benefits to students who receive additional or new funding due to the increases to grants and loans:
- Increased availability of skilled workers
- The regulatory amendments will increase availability of workers with post-secondary education by significantly reducing funding gaps. The increases to grants and loans are expected to create approximately 7 000 skilled workers over 10 years by enabling students at-risk of dropping out in their final year of study in 2025–2026 for financial reasons to afford to complete their final term and obtain their post-secondary education credential.
- Decreased unemployment rates and shorter unemployment periods for those who complete post-secondary education due to increased funding
- Enabling Canadians to afford entering or completing post-secondary education studies will create benefits of lower unemployment ratesfootnote 13 and shorter unemployment periods.footnote 14 It is expected that students who graduate due to these regulatory amendments will have increased employment opportunities compared to those without post-secondary education during current and future periods of economic vulnerability.
- Enhanced health and longevity
- The regulatory amendments are expected to enable more students to access and complete post-secondary education, and literature has consistently associated higher levels of educational attainment with enhanced health outcomes.footnote 15 The connection between education and health is multi-factorial. For example, higher levels of education create greater awareness of health risks, enable access to resources that promote healthier lifestyles, and facilitate access to careers with safer working conditions.footnote 16
- Intergenerational effects of parental education on children
- The regulatory amendments are not only expected to have positive impacts on direct beneficiaries, but also on children of those who are newly able to obtain post-secondary education credentials as a result of accessing greater amounts of financial assistance.footnote 17 Studies have found that higher educational attainment creates indirect positive benefits for future generations; for example, children of post-secondary education educated adults are more likely to attend post-secondary education themselves.footnote 18
- Increased availability of skilled workers
- Benefits to Canadian society and businesses:
- Reduced income inequality, as those who would most benefit from the Program are people who have lower income.
- Investments in financial assistance facilitates post-secondary education completion, resulting in graduates paying higher income taxes due to Canada’s progressive tax system, which eventually increases social mobility.footnote 19 Additionally, increases in educational attainment help offset the recent increases to income inequality driven by technological advancements and automation in Canada.footnote 19
- Greater productivity to businesses and society due to potentially more people gaining post-secondary education credentials
- Skilled workers are not only more productive, but they increase business production through “human capital spillovers” that also enhance the productivity of less educated colleagues who learn from them.footnote 20 Additionally, evidence suggests that people with higher education are more likely to engage in entrepreneurship and contribute innovative ideas in the workplace, which has a direct positive effect on economic welfare by contributing to science and technological development in Canada.footnote 21
- Reduced income inequality, as those who would most benefit from the Program are people who have lower income.
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 provincial and territorial partners, and they have been supportive of the measures.
Effects on the environment
In accordance with the Cabinet Directive on Strategic Environmental and Economic Assessment, a preliminary scan concluded that a strategic environmental and economic assessment is not required.
Gender-based analysis plus
These regulatory amendments are expected to support and benefit various groups including low- and middle-income individuals, women, persons with disabilities, 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 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 categories. 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 22 Reducing economic barriers for low-income students through non-repayable grants can encourage post-secondary education persistence,footnote 23 result in improved grades, increased enrollment, attainment and graduation.footnote 24,footnote 25,footnote 26 The provision of interest-free loans will help reduce funding gaps for students and support post-secondary education completion.
Extending the increases to grant and loan amounts for the 2025–2026 academic year will make post-secondary education more affordable for the following populations that experience significant additional barriers. In 2022–2023, Program data indicated that 60% of loan and/or grant recipients were women, suggesting 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 2022–2023 year shows that a significant majority of students with dependants are low-income students (76%), with nearly 98% having unmet need.
According to 2022–2023 Program data, 10% 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 large proportion of Indigenous students are likely to benefit from the amendments to increase grants. Program data shows that approximately 6% of Program students self-identified as Indigenous in 2022–2023. According to 2022–2023 Program data, approximately 87% of total Indigenous student beneficiaries received grants.
According to 2022–2023 Program data, 61% of financial assistance recipients were under the age of 25, and 39% of recipients were over 25. The regulatory amendments will benefit Canadian youth under 25, and 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.
Implementation, compliance and enforcement, and service standards
Implementation
These regulatory amendments will come into force on August 1, 2025, for the 2025–2026 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.
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