The Ontario government has announced they will reverse a decision by the previous government that provided an increase in grants to mainly low-income students.
The conversion of loans into non-repayable grants by the previous Liberal government was intended to make post-secondary education more affordable for low and middle-income students.
Natalia Valencia is a student at Carleton University. She is thinking of doing a law degree in the future but does not think she will be able to if changes to the grant program occur.
“Our placements (as social work students) are generally unpaid and we pay full-time tuition so I’m genuinely concerned about what’s going to happen when I graduate,” Valencia said.
By converting student loans into grants, the Ontario government lost over $450 million in revenue in 2017-2018. Doug Ford’s Progressive Conservatives will require repayment of these funds for future students.
According to the Ontario government in 2016, students were struggling to pay back loans after graduation, with nearly half of graduates not paying them in time. With this, the Liberal government began their grant program with over $1.6 billion in funding, with over three quarters going to low-income students.
These grants replaced loans provided, which were significantly reduced to under a quarter of the province’s student financial aid.
The Ontario Auditor General’s report on education warned of rising debt from the increased grants, with costs possibly hitting $2 billion by 2020-2021. The report stated there is not enough evidence of increasing student enrollment, with it only increasing by one percent in universities for the initial year of the grant program. This coincides with the Ontario’s Financial Accountability Office predicting in December that the Ontario budget’s deficit will triple to $12.8 billion.
According to Jean-Paul Lam, economics professor at the University of Waterloo and former economist at the Bank of Canada, perception plays a role in crafting this policy.
“For any government it’s a question of priority and a question of choice,” Lam said.
The Liberal government, according to Lam, were willing to go further into deficit to convert student loans into grants. They did so because they wanted to invest in long-term growth to solve some of the low productivity issues in Canada.
But with the Conservative government’s announced intentions to revert back to loans, the Liberals grant program’s effectiveness will be unknown.
“To test whether policy is effective you need to have at least a couple years of data to see if there is a change or not. One year is not enough,” Lam said.
There are those supportive of the Conservative government’s intention, such as Christine Van Geyn, Ontario Director of the Canadian Taxpayers Foundation.
“I don’t think there’s a good fairness argument that students from high-income families should be eligible for grants,” Van Geyn said, as she claimed that students with household incomes up to $175,000 were also eligible.
According to Van Geyn, post-secondary school requires financial commitment.
“There’s a greater expectation that students who are going to university have some obligation to pay for their education in the form of a low interest repayable loan.”
For Ian McRae, the Government Relations and Policy Coordinator for the Canadian Federation of Students, these grants are more than financial. He said the Auditor General’s report did not take quality of life into account.
“How many students were able to drop down to part-time work who were previously working full-time or multiple jobs?” McRae said.
According to him, having grants means less time for students trying to earn extra income and more time focused on studies and mental health.