Next Steps for Student Financial Assistance. Presentation to:

Transcription

1 Next Steps for Student Financial Assistance Presentation to:

2 OSAP Improvements Budget 2005: Ontario Access Grants Increased loan limit to $140 per week Reduced parental contributions Added computer costs in need assessment Ontario Trust for Student Support Budget 2006: Implemented Student Access Guarantee Extended Ontario Access Grants Raised book/supply allowances Budget 2008: Textbook and Technology Grant Ontario Distance Grant Budget 2010: Doubled study period income exemption Increased loan limit to $150 per week Part-Time Student Grants Repayment Assistance Plan Six-month interest-free grace period Inflation adjusted book/supply allowances Increased tuition cap Reduced spousal contribution Increased vehicle asset exemption Automatic SAG dispersal

3 Gaps Aren t Narrowing Ontario Youth University Participation 50% 45% 40% 35% 30% 25% 20% 15% 10% % 22% 20% 18% high income middle-high income low-middle income low income

4 Barriers Financial Informational Motivational

5 Access Strategy Early Outreach Programs Primary and Secondary School Outreach Pathway Mobility Financial Assistance Improvements Online Access Institutional Supports and Transformation

6 School Outreach

7 School Outreach Access to trained guidance counselors to help students plan for postsecondary education Information about post-secondary options, costs, financial assistance and debt management should be incorporated into the secondary school curriculum, including a mock financial aid application Parental engagement strategies Enrichment programs for at-risk students

8 Financial Assistance Improvements

9 Complex Web of Sources Sources of financial support for university students (from various student surveys): % of Students that Used Funding Source to Pay for PSE Median Income Income Source CUSC CUSC Std. Survey Std. Survey YITS from First Year Graduating Canada Ontario Source GOVERNMENT LOANS 33% 31% 36% 38% 41% $6,000 NON-REPAYABLE GOVERNMENT AID 29% 29% $1,500 INSTITUTIONAL FINANCIAL AID: Merit-based university scholarship/grant 36% 35% $2,000 35% 51% 37% Need-based university scholarship/grant 12% 15% $1,250 PRIVATE SOURCES: Private loans from bank 12% 12% $6,000 11% 7% 12% Loans from family 16% 17% $5,000 Personal savings 21% 53% 30% 62% 63% $2,500 Summer employment earnings 50% 41% 84% 82% $3,000 80% In-study employment earnings 26% 35% 40% 38% $2,000 Non-repayable funds from family 43% 69% 50% 48% 51% $5,000 Trust funds, RESPs, RRSPs 3% 14% 7% Investment income 6% 3% Co-op or work-study <1% 8%

10 OSAP The Ontario Student Assistance Program plays the most important role in financial aid as the primary deliverer of grants and loans The process and information provision is getting better (e.g., online calculator, Life After High School) Application rates though leave a lot to be desired (perhaps just 50% of the lowincome quartile)

11 OSAP Administration The OSAP application should serve additionally as an application for institutional financial aid and be modified so that applicants can choose to apply for only nonrepayable aid. The university and college application centres should proactively divert prospective students to the OSAP application. OSAP should provide students with a detailed breakdown of their need assessment in the website s aid estimator and after application. The OSAP telephone help line should be available to anyone, including prospective students.

12 OSAP Administration Institutional payment deadlines need to match with OSAP release dates without financial penalty and cumbersome application processes. OSAP should proactively provide specific information on the process for filing an appeal to every applicant. The First Generation Bursary and Aboriginal Bursary currently require a separate application and are used by a small minority of the target groups; there should be a parallel process automatically disbursed through OSAP. The federal government should automatically grant the Canada Learning Bond to low-income families eligible for the National Child Benefit Supplement.

13 Tax Credits Tuition and education tax credits account for 40% of all federal non-repayable student aid. Ontario alone spends over $300 million annually on the credits. Tax credits are a fundamentally ineffective way to distribute student aid or change student participation. They do not equally benefit individuals across income brackets. Students must front the money and get it back months to years later. Sixty per cent of full-time university students do not earn enough income to use their tax credits in the year they were earned. Average Tax Credit Claimed High Income Quartile $2,000 Middle-High Income Quartile $1,600 Middle-Low Income Quartile $1,300 Low Income Quartile $520

14 New Tuition Grant The newly elected Ontario government is implementing a tuition grant worth 30% of average fees for full-time dependent students with family incomes under $160,000. To be truly impactful, the grant must be: Taken off tuition bills directly to reduce net price Harmonized with the Ontario Access Grants Available to underrepresented mature students Applied for seamlessly and de-coupled from OSAP loans

15 Beyond Just Literacy Are the available grants enough to mitigate debt aversion and price sensitivity? Is the need assessment accurately determining need? Should we be penalizing those that work through school? Should students who do not receive parental contributions be unsupported? Why are part-time students ineligible for most assistance? Should a majority of students have need beyond the maximum assistance? Are students with children, Aboriginal students or professional students adequately supported? Are we targeting underrepresented populations with the right tools?

16 Questions? Thank you for your time