The TRU Students’ Union has called on the federal government to change how the public funds of financial aid are used.
In August, TRUSU made a submission to a federal government budget committee calling for an expansion of the Canada Student Grants program and for changes to how the program is funded.
Currently, federal grant programs focus heavily on loan remissions, tax credits, and RESPs despite growing support from students and professors for need-based grants, which they say are more efficient and effective in meeting the desired outcomes of financial aid.
TRUSU’s expected outcomes of financial aid are programs that “support sufficient and equitable participation, timely completion [of studies], and full transition from studies into the workforce,” including that the rate of transition “should be 100 per cent.”
“We’re aiming to enhance our federal financial aid system with no further costs to government,” TRUSU vice-president external Cole Hickson said. “We want to highlight need-based grants as the most efficient and effective form of financial aid, and then work to make them more available to students.”
TRUSU’s proposal asks that the federal government’s public investment into RESPs and tuition tax credit programs be phased out and that those dollars instead be invested into expanding the existing need-based grants.
The eight page report submitted to the House Standing Committee on Finance details the benefits and drawbacks of the current systems as well as the potential of need-based grants.
TRUSU’s position is that RESPs “help where it’s needed least,” and they fail to meet the desired outcomes of financial aid as they target students who would otherwise already attend higher education. A 2015 report on federal RESPs shows that 70 per cent of families with household incomes of $125,000 or more have RESPs, far higher than those in lower income brackets.
“RESPs disproportionately benefit higher income families, contrary to the purpose of financial aid,” Hickson said.
TRUSU’s report shows tax credits as “overly complex and often unused” as students rarely make use of them until after they have either graduated or dropped out. Tax credits also do little to benefit low-income students who need the most help.
The Trudeau Liberal government has taken steps towards shrinking the program in their 2016 budget by phasing out tax credits on education and textbooks in 2017.
As stated in the 2016 federal budget, “These credits are not targeted based on income and often provide little direct support to students at the time they need it most.”
TRUSU’s proposal acknowledges the steps already being taken but asks for a continuation of the shrinkage by removing the largest education tax credit: tuition.
In 2016, the federal finance department increased the value of the federal need-based grants program for low and middle income students by 50 per cent, providing a grant of $3,000 for low-income and $1,200 for middle-income students. Further it stressed the importance of targeting based on income and support needed to ensure equity and participation.
Only three provinces, B.C., Manitoba, and Prince Edward Island, don’t make use of need-based grants.
The campaign to take resources from tax credits and RESPs and fund need-based grants is TRUSU’s latest attempt to increase student participation at TRU while also solving a problem many students are faced with.