Ontario To Offer Free College Tuition For Many Students From Low-Income Families

February 25, 2016 News

free tuitionChanges in student aid unveiled in the Ontario budget are the most radical shift in decades in how the province delivers loans and grants to college and university students, and show the government wants to get more low-income people into postsecondary education.

The government said in the budget on Thursday that most college students whose family income is less than $50,000 a year will receive free tuition, while grants for university students, who pay higher tuitions, will not offset the entire amount.

The changes eliminate multiple loan and grant programs, and replace a complicated system with one program, the new Ontario Student Grant. Finance Minister Charles Sousa said the cost of the OSG will be “roughly the same” as the current level of $1.3-billion in aid.

“In fact, we’ve put in the budget the ability to further support an increase. We want this to be oversubscribed. We want to have more students who would not otherwise look to postsecondary,” he said.

The government did not give details of the program, including whether students from higher-income families could end up with more debt in years to come. Starting in 2017, students will be able to borrow up to $2500 more a year.

The changes are one of the key planks in this year’s budget and signal that the province is determined to increase the percentage of Ontarians from lower-income and disadvantaged groups who attend college and university.

The province has “one of the highest attainment rates in the world. We need it to be higher to increase Ontario’s prosperity even more,” Mr. Sousa said in his budget speech.

Student groups have long argued aid needs to be easy to use and understand and must give students help when they pay their fees, not at tax time. Lower-income students are particularly discouraged by high upfront tuition costs and often not able to take full advantage of tax credits. Ontario lags behind most provinces in the percentage of first-generation students in university.

“Reallocating tax credits is something where we are not looking at vast new investments, it’s a way of achieving access goals without large new investments,” said Spencer Nestico-Semianiw, the president of the Ontario Undergraduate Student Alliance.

Many of the measures in the budget were proposed in OUSA’s budget submission and in fact appear to go further in some areas – such as entirely eliminating tuition for some income groups.

Students’ jubilation could be short-lived if tuition costs skyrocket, however. The current 3 per cent tuition cap on undergraduate tuition expires in 2017, the same year the new financial aid system comes into place.

Ontario universities have been arguing that tight provincial coffers have left them with the lowest levels of public grants per student in Canada. NDP Leader Andrea Horwath echoed those concerns.

“There is no new money there,” she said. “We are still concerned that commitment to postsecondary education is still bottom of the barrel.”

Changes to aid are not linked to tuition levels, a government official said. But by increasing the accessibility and transparency of grants and loans, the government may find it easier to allow steeper tuition hikes in the future.

At the same time, no student will be worse off under the new system than they are now, the government has promised. Half of families in Ontario earn less than $84,000 and while grants will increase marginally for those close to that line, they will be able to access more loans.

That’s particularly true for higher-income families who will be expected to contribute less to their kids’ education than they do now. A family of four earning $110,000 will see their expected contribution decrease by $6,000 to $4,000 a year. Loans will make up for part of that drop.

If the measures are successful in increasing attendance rates for low-income and other disadvantaged groups such as aboriginal students, they will also help address looming demographic pressures. With the population of 18- to 24-year-olds declining, colleges and universities fear enrolments and their budgets will shrink.

This budget for the first time opens financial aid to mature students regardless of how long they have been out of school and decreases the spousal contribution, further increasing the pool of students who might consider attending postsecondary.

All of the province’s projections are based on the implementation of federal promises on student aid. The Liberals have already said they will move away from tax credits, including cancelling the education and textbook tax credit and putting the funds toward an improved Canada Student Loan program.

Source: theglobeandmail.com