On November 6th, 2013, CASA's Board Chair, Amanda Nielsen, presented students' recommendations to the federal government's Standing Committee on Finance.
"Good evening, Mr. Chair, committee members, and fellow presenters.
It is my pleasure this evening to present the pre-budget priorities of the Canadian Alliance of Student Associations on behalf of our 24-member associations across Canada. We represent about 300,000 folks from coast to coast.
Canada's students are the nurses, teachers, tradespeople and managers of the future. As Canada's economy continues to grow and change, it is increasingly vital for more individuals to access education and training at Canada's post-secondary institutions. Indeed, as we continue to recover from the global recession, immediate access to knowledge and skills is crucial for people making mid-career transitions and for those who seek to return to the workforce after periods of unemployment. Further, Canada's population is aging and this change will necessitate that every Canadian worker is as productive as possible in the years to come. Taken together, these realities point to the importance of a post-secondary education system that is more accessible and of the highest quality.
On behalf of CASA, I submit the following recommendations for federal action as a means to eliminate barriers to retraining and give Canadians an opportunity to pursue stable and meaningful employment.
In budget 2011, the Canada student loans program was changed by increasing the in-study income exemption from $50 a week to $100 a week. This opened financial assistance to more students and increased aid to students to help them work and make ends meet. With the rise in costs of education, working while studying has increasingly become the norm for students. In 2011, 60% of students who graduated reported working an average of 18 hours a week, a pretty significant number of hours.
Under the current policy, an average working student who pursues financial assistance will see nearly $2,900 removed from their financial assistance package every year. They'll need to guess what their income will be each year, losing financial support if they guess too high and suffering repayment penalties if they guess too low. This could then deprive them of loan support in the following year. In Canada nobody should be punished for earning an income, especially students who need additional income to pay for school and to obtain employment experience to make a successful transition into the workforce.
The federal government should exempt all in-study income from the Canada student loans program's assessment of resources. We estimate that this would cost $25 million annually and would eliminate the guesswork and red tape for students when they are applying for student loans.
In 2011-12, nearly 43,000 applicants were denied access to a student loan. At the same time, 29% of loan recipients had greater financial assistance than the government would provide. Our research at CASA has shown that as many as 14% of students are relying on additional private loans to fund their education. This is a result, of course, of rising education costs and flat-level loan amounts.
The Canada student loans program hasn't updated its weekly loan limit for students since 2004, so it has been a while. CASA recommends that the federal government increase its CSLP weekly loan limit from $210 a week to $245 a week. This reflects increased costs for students with the highest financial need. Making this change would give students $150 million per year in their pockets, while costing the government a non-recoverable cost of $44 million per year.
Finally, for people making mid-life career changes and those adapting to new technologies, often there is a need to retrain. According to Canada student loans program figures, individuals over the age of 25, mature learners, account for 34% of post-secondary students today. That being said, they only account for 20% of student loan recipients, so there is a gap. It is evident through this that the Canada student loans program could be better geared toward mature learners who have been shown to have higher levels of financial need, when they do qualify at all.
Asset assessment policies are particularly discouraging for mature learners when deciding whether or not to return to school. The standing Canada student loans program policy requires that individuals liquidate the majority of their personally held savings and assets. Returning learners who need assistance must use every dollar of their RRSP that exceeds $2,000 per year to pay for school. That is $790 less than the average annual RRSP contribution for Canadians. Further, CASA recommends an exemption of $10,000 in personally held financial assets. This change would remove a crucial barrier to retraining. In Canada nobody should have to choose between their retirement and making a contribution to the workforce.
Thank you very much. I look forward to your questions later."