New post-secondary financial aid system could cost more than expected

New changes to the financial aid system for post-secondary could mean a possible increase in costs.

Earlier this year, the Liberal government announced that it had intentions of changing the way the financial aid system works.

Deb Matthews, Deputy Premier and Minister of Advanced Education and Skills Development, mentioned that it was “quite possible” the amount would increase.

“We’ve made a pretty important commitment,” Matthews said in an interview with the Globe and Mail. “This is a high priority for our government, so we are going to make sure that we get it right.”

They have already made changes to help low income students deal with their crippling debts by allowing them to defer the repayment of their student debt until they make over $25,000 a year and additionally, they introduced a 50 per cent increase on federal grants for low and middle-income students.

This increased the amount given in federal grants from $2,000 to $3,000 for low-income students, and from $800 to $1,200 for middle- income students.

The government has also stated their intentions of changing the complicated financial aid process. The current system in place, which includes a confusing set of grants, loans, and tax credits, will be replaced by a much more simple process.

Instead of delivering each portion individually, the new system, named the Ontario Student Grant, will deduct these earnings directly from the cost of tuition.

Additionally, they have stated that they would like to simplify the understanding of parent contributions in the new year as well.

The changes that the government are implicating help encourage lower- income and middle-income students attend post secondary, but the question remains: what will these new changes cost?

While lower and middle-income students will benefit from the changes made to the financial aid process, students whose families that make over $50,000 a year will not see the same benefits.

Students and families in the lower income brackets will have their tuition paid for in grants, while students from the higher income bracket will have access to loans. This means that higher income students will have to deal with increases in their debts while lower and middle-income students will reap the benefits.

The government has also been considering a change in their imposed cap on tuition pricing. Currently, the cap sits at three per cent, but some students are worried that this may change in the near future; if the government changes this cap, some students are worried that the cost of tuition could quickly rise.

Furthermore, the government has been discussing a possible change in the way that funding is given to colleges and universities.

Currently, universities and colleges receive rewards for increased enrolment, but the government would like to see a push towards rewarding results of graduates.

To put it in perspective, funding will largely be determined by the outcomes of its graduates. This way colleges and universities can focus on delivering quality teachings to their students, as oppose to focusing on enrolment.

Although these changes appear to signal a cost increase, there has been no solid answers delivered on exactly how much.