Description of the Program

Since 1964, the activities of the CSLP have evolved considerably. For instance, the government announced many changes to the CSLP under the 1998 Canadian Opportunities Strategy, which included the creation of new grants (CSGs) for full-time students with dependants, the creation of the Debt Reduction in Repayment (DRR) provision, as well as enhancements to the Interest Relief (IR) provision.

Since the shift to the direct loan regime (in 2000), more changes have been incorporated into the CSLP such as a new CSG for high-needs students with permanent disabilities (2002), changes to in-study exemptions (2003), and new amendments to the IR and DRR provisions (2003).

Some additional changes were announced in the 2004 Budget (which came into effect on August 1, 2005). These changes included increasing the loan limits and the allowances for computer-related costs, reducing expected parental contributions, increasing the income threshold for IR eligibility, increasing the amount of DRR, and implementing new grants (Canada Access Grants).

In the 2005 Budget, it was announced that eligibility for loan forgiveness for direct loans would be extended in the event of death or permanent disability. The 2006 Budget announced that parental contributions would be further reduced starting on August 1, 2007. Further changes were announced in the 2008 Budget, but those changes are beyond the scope of this evaluation.

The current evaluation is focused on examining CSLP activities under the following structure:

 Canada Student Loans (CSLs);

 Canada Study Grants (CSGs) and Canada Access Grants (CAGs); and

 Loan repayment assistance.

2.2.1 Canada Student Loans (CSL)

Under the current legislation, the CSLP provides financial assistance in the form of direct loans to students with demonstrated financial need.15_{These loans are available to students}

enrolled in full-time or part-time studies at a designated PSE institution.16

In order to receive financial assistance in the form of a CSL, students must satisfy initial eligibility criteria.17 _{Upon establishing eligibility, a needs assessment is conducted to determine}

the amount of each student’s financial need. The needs assessment process is designed to take into account provincial differences and the additional needs of certain groups (e.g. students with dependents, students living away from home, students who relocated to pursue PSE).

Provincial and territorial government partners determine both eligibility and level of need using federal criteria. From 1995 to 2004, the maximum weekly federal loan limit that could be received by a student was $165. The federal loan limit was increased to $210 per week at the start of the 2005-2006 loan year.

While a student borrower is pursuing full-time studies, the federal government (through the CSLP) subsidizes the interest that would otherwise accumulate on the loan principal. The borrower is required to begin repayment of the loan within six months after ceasing full-time studies. However, the interest subsidy does not apply to the six month post- study period. This six-month period is called the “grace period”. Students studying part-time might be eligible for the part-time student loans program. The conditions for these loans differ from the full-time student loans program.

2.2.2 Canada Study Grants (CSGs) and Canada Access

Grants (CAGs)

Up until 2008, the CSLP provided non-repayable financial assistance in the form of CSGs and CAGs to PSE students with particularly high levels of need who qualified for

15

The program logic model from the RMAF is contained in Appendix 2.

16

CSLP and the participating provinces define (using certain criteria) a list of private and public institutions that are entitled to participate in the program.

17

In general, to be eligible for student assistance, a student must meet the following criteria: 1) be a Canadian citizen or a permanent resident of Canada, or be designated as a Protected Person; 2) be enrolled in at least 60% of a full course load (40% for students with permanent disabilities); 3) be enrolled in a degree, diploma or certificate program of at least 12 weeks of training and study within 15 consecutive weeks at a designated post-secondary educational institution. There is also a needs-assessment for part-time students.

loans (these two grant programs were discontinued and replaced by the Canada Student Grants Program in 2009).

 CSGs assisted students with permanent disabilities, high-need students with permanent disabilities, high-need part-time students, students with dependants, students from low-income families and female students in doctoral programs in which women are traditionally under-represented.

 CAGs assisted first-year students from low-income families and students with permanent disabilities.

Eligibility for the grants was determined by provincial and territorial partners using federal criteria.

Key informants generally agreed that most of the groups should receive grants because the need of these groups was high (due to a variety of circumstances). However, some argued that it was difficult to find an explicit rationale for the grant for female students in doctoral programs in non-traditional fields. Key informants felt that since females now make up a greater percentage of university students than males, it is likely that any disparity in the numbers of doctoral students will resolve itself. Their views are supported by available data which show that the 17-to-29 year-old full-time participation rate was 15.3% for females compared to 11.4% for males in 2005-2006.18 _{As well, a Canadian}

Education Statistics Council study showed that the doctorate graduate rate for males was 1.1% in 1994 and in 2005, while the doctorate graduate rate for females increased from 0.5% to 0.9% during the same period.19 _{Additional information from the Statistics Canada}

Survey of Earned Doctorates indicates that the proportion of women graduating from Canadian doctoral programs was just over 50% in 2004-2005. In addition, given that many Canadian universities now offer guaranteed funding to doctoral students, it seems unlikely that this group is facing particularly high financial needs.

2.2.3 Loan Repayment Assistance

In addition to providing assistance for access to PSE in the form of loans and grants, the CSLP provides a variety of assistance to student loan borrowers who are having difficulties meeting their repayment obligations. Although IR and loan forgiveness existed prior to 1998, some loan repayment assistance measures were introduced in the 1998 Budget, and most were extended in the 2003 and 2004 Budgets (the Repayment Assistance Plan introduced in 2009 replaced the existing loan repayment assistance provisions).

 Borrowers experiencing financial hardship in repaying their loans were eligible for up to 30 months of IR during the lifetime of their loans. Under IR, the government paid the interest on the loan and the borrower was not required to make any payments on the principal or interest.

18

For further information, see Post-Secondary Enrolment Trends to 2031, Statistics Canada catalogue 81-595-MIE, November 2007.

19

For further information, see Canadian Education Statistics Council, Education Indicators in Canada, Statistics Canada, 81-582, 2007.

 Following 30 months of IR and during the first five years after leaving school, borrowers continuing to experience financial hardship could apply for an additional 24 months of Extended Interest Relief (EIR). This would bring the total to 54 months during which no payment of interest or principal was required.

 Borrowers experiencing financial hardship in repaying their loans could ask for a revision of the terms of repayment.

 Borrowers still experiencing financial difficulties after five years of leaving full-time or part-time study, and who had exhausted IR and EIR, could apply to have their loan principal reduced through DRR. Currently, an individual could receive up to three reductions on their loan principal during their lifetime, for a total of up to $26,000 (depending on their financial circumstances).

 A borrower with a permanent disability could request that their loans be forgiven were they unable to repay the loan without exceptional hardship due to their disability. Loan forgiveness could also occur in the case of death.

Key informants had a positive view towards debt management measures such as IR and DRR. They believed that these measures reduced the likelihood of complete default by the borrower. Key informants also believed that borrowers present a high short-term risk while they are looking for employment after PSE, but present a much lower long-run risk. Therefore, measures that help the borrower get over this initial hurdle will ultimately lead to higher loan repayment overall. Indeed, most studies confirmed that default occurred within three years after loan consolidation.