February 26, 2008

BUDGET 2008: That’s it?

The 2008 federal budget had been widely expected to contain several major initiatives in higher education, but what the Conservative government delivered on Tuesday was instead a modest tinkering with the status quo, with some additional money for research, and housekeeping changes at two major student aid programs.

Finance Minister Jim Flaherty said in the budget speech, “We must ensure that the next generation of Canadians has the opportunity to excel in this increasingly competitive world.”

Post-secondary initiatives announced in the budget will see the Canadian Millennium Scholarship Foundation replaced with a similar program; administrative changes to student loans; new scholarships for graduate students; money to help secure university laboratories and new funding for medical, automotive, and environmental research.

COMPLETE BUDGET 2008 EDUCATION COVERAGE

COMMENT Is giving less money to more students really victory?

COMMENT Good works (Paul Wells)

COMMENT Student loan borrowers keep propping up system (Julian Benedict)

NEWS Millennium Scholarship Foundation to be replaced

NEWS No interest rate cut for student loans

NEWS New funds for university research

NEWS New grad scholarships aim to attract international talent

The Canadian Millennium Scholarship Foundation, which provides $350 million a year in needs and merit based scholarships, is to be replaced in 2009 by a new, $350 million Canada Student Grants Program. Students will see little difference between the two programs. Grants will be given out based on an income assessment. Low-income students will get $2,000 a year and students from middle-income families will receive $800 for each year of study, guaranteed during the entire course of their university or college degree. Under the current Millennium program, students must reapply each year for needs-based grants. The Millennium Foundation’s merit-based scholarships are also to be phased out.

Canada Student Grants funding is budgeted to increase by $80 million by 2012-13, to $430 million.

“This government is good at spreading chunks of money here and chunks of money there with little actual new money involved,” said Liberal post-secondary critic Mike Savage. “There is no talk of expanding the student loans system to assist more students, there is no increase the amount of aid that a student can receive.”

After a year-long review of Canada Student Loans, the government is also changing the way student loans are administered. The budget allocates $23 million over four years to create a new service delivery model. The federal government also says it will work with the provinces to create a one-stop, national website to administer student loans.

An additional $26 million over four years will be used to increase loans to part-time and married students. The budget also says that the government plans to spend $76 million over four years to assist graduates experiencing difficulty repaying their student loans. However, the government did not provide any details on exactly how this money will be used, saying it still has to negotiate agreements with the provinces.

Student groups had called for lower student loan interest rates. The 2008 budget left the federal student loan interest rate unchanged.

Universities will receive $116 million in new research funding next year. The new funding is directed primarily at research with environmental or commercial applications. $80 million will go to Canada’s three major research granting councils. Genome Canada, a not-for-profit corporation that funds genomics and proteomics research will receive an additional $140 million. And $250 million will be spent over the next five years on a new Automotive Innovation Fund, which will sponsor research in the automotive sector.

Five hundred top graduate students will receive support from a new program, the Canada Graduate Scholarships. To encourage top graduate students to stay in Canada, the government will spend $25 million over the next two years to create the scholarship which will be worth up to $50,000 over three years.

To encourage parents to save for a child’s education through a Registered Education Savings plans, the amount of time that a plan may stay open has been extended from 25 to 35 years, and the maximum contribution period has been extended by 10 years.