Regulations Amending the Canada Student Financial Assistance Regulations: SOR/2018-31

Canada Gazette, Part II: Volume 152, Number 6

Registration

March 7, 2018

CANADA STUDENT FINANCIAL ASSISTANCE ACT

P.C. 2018-192 March 6, 2018

Her Excellency the Governor General in Council, on the recommendation of the Minister of Labour, pursuant to section 15 ^{footnote a} of the Canada Student Financial Assistance Act ^{footnote b}, makes the annexed Regulations Amending the Canada Student Financial Assistance Regulations.

Regulations Amending the Canada Student Financial Assistance Regulations

Amendments

1 (1) The definition student loan agreement in subsection 2(1) of the Canada Student Financial Assistance Regulations ^{footnote 1} is replaced by the following:

student loan agreement means a contract entered into before August 1, 2000 between a qualifying student and a lender that

• (a) is in the prescribed form, and
• (b) includes the student’s social insurance number. (contrat de prêt simple)

(2) The definition direct student loan agreement in subsection 2(2) of the Regulations is replaced by the following:

direct student loan agreement means a contract entered into after July 31, 2000 between a qualifying student and the Minister pursuant to paragraph 12(1)(a), 12.1(1)(a) or 12.2(1)(a) and that

• (a) is in the prescribed form, and
• (b) includes the student’s social insurance number; (contrat de prêt direct simple)

2 Section 12 of the Regulations is replaced by the following:

12 (1) Subject to section 15, a qualifying student to whom a certificate of eligibility as a part-time student has been issued and who has no outstanding student loan or guaranteed student loan made to them as a part-time student is entitled to obtain a student loan if

• (a) they have entered into a direct student loan agreement with the Minister;
• (b) an officer of the designated educational institution or the appropriate authority, as the case may be, has submitted a confirmation of enrolment to the Minister and to the branch of any lender to which the student is indebted under a full-time risk-shared loan agreement or guaranteed student loan agreement; and
• (c) the appropriate authority has submitted a certificate of eligibility to the Minister and to the branch of any lender to which the student is indebted under a full-time risk-shared loan agreement or guaranteed student loan agreement.
  

(2) When the requirements set out in subsection (1) have been met, a qualifying student becomes a part-time student.

3 (1) Subsection 12.1(1) of the Regulations is replaced by the following:

12.1 (1) Subject to section 15, a qualifying student to whom a certificate of eligibility as a part-time student has been issued and who has an outstanding student loan or guaranteed student loan made to them as a part-time student is entitled to obtain a student loan if

• (a) they have entered into a direct student loan agreement with the Minister;
• (b) an officer of the designated educational institution or the appropriate authority, as the case may be, has submitted a confirmation of enrolment to the Minister and to the branch of any lender to which the student is indebted under a risk-shared loan agreement or guaranteed student loan agreement;
• (c) the appropriate authority has submitted a certificate of eligibility to the Minister and to the branch of any lender to which the student is indebted under a risk-shared loan agreement or guaranteed student loan agreement; and
• (d) the student has, on request, paid the Minister or any lender to which the student is indebted any interest payable on any outstanding loan, to the day before the first day of the confirmed period.

(2) The portion of subsection 12.1(2) of the Regulations before paragraph (b) is replaced by the following:

(2) When the requirements set out in subsection (1) have been met, the qualifying student

• (a) again becomes a part-time student on the day on which those requirements are met, if more than six months have elapsed between the last day of the previous confirmed period and the first day of the current confirmed period; and

(3) Subsection 12.1(3) of the Regulations is replaced by the following:

(3) If a student is indebted to the Minister under a direct student loan agreement, a further direct loan made to that student in accordance with this section must be a revision to, and form a part of, that agreement.

4 (1) Subsection 12.2(1) of the Regulations is replaced by the following:

12.2 (1) Subject to sections 12.1 and 15, a borrower continues to be or again becomes a part-time student if

• (a) they have entered into a direct student loan agreement with the Minister;
• (b) an officer of the designated educational institution or the appropriate authority, as the case may be, has submitted a confirmation of enrolment to the Minister and to the branch of any lender to which they are indebted under a risk shared loan agreement or guaranteed student loan agreement;
• (c) the appropriate authority has submitted a certificate of eligibility to the Minister and to the branch of any lender to which the borrower is indebted under a risk-shared loan agreement or guaranteed student loan agreement; and
• (d) the borrower has, on request, paid to the Minister or any lender, as the case may be, any interest payable on any outstanding loan, to the day before the first day of the confirmed period.

(2) The portion of subsection 12.2(2) of the Regulations before paragraph (b) is replaced by the following:

(2) When the requirements set out in subsection (1) have been met, the borrower

• (a) again becomes a part-time student on the day on which those requirements have been met, if more than six months have elapsed between the last day of the previous confirmed period and the first day of the current confirmed period; and

5 Paragraph 14.3(b) of the Regulations is replaced by the following:

• (b) who is qualified for enrolment or is enrolled as a part-time student and who has a family income that is more than the applicable annual income threshold for their family size in accordance with Table 1 of Schedule 4.

6 (1) Paragraph 38(1)(d) of the Regulations is replaced by the following:

• (d) has a family income that is no more than the applicable annual income threshold for their family size in accordance with Table 1 of Schedule 4.

(2) Subsection 38(3) of the Regulations is amended by striking out “and” at the end of paragraph (a), by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b):

• (c) the amount determined by the following formula:
  • A − (B × C)
• where
• A is $1,800,
• B is the result obtained by subtracting the applicable annual income threshold for their family size in accordance with Table 2 of Schedule 4 from the student’s family income, and
• C is the annual phase-out rate set out in column 3 of Table 2 of Schedule 4.

7 (1) Subsection 38.1(1) of the Regulations is amended by striking out “and” at the end of paragraph (d), adding “and” at the end of paragraph (c) and repealing paragraph (e).

(2) Subsection 38.1(2) of the Regulations is replaced by the following:

(2) The grant, for each dependant for each month of study, is the lesser of $200 and the amount determined by the following formula:

• A − (B × C)

where

• A is $200,
• B is the result obtained by subtracting the applicable annual income threshold for their family size in accordance with Table 3 of Schedule 4 from the student’s family income, and
• C is the monthly phase-out rate set out in column 3 of Table 3 of Schedule 4.

(3) The description of B in subsection 38.1(2) of the Regulations is replaced by the following:

• B is the result obtained by subtracting the applicable annual income threshold for their family size in accordance with Table 3 of Schedule 4 from the student’s family income from the previous year, and

8 (1) Paragraph 38.2(1)(c) of the Regulations is replaced by the following:

• (c) needs an amount as determined under subsection 12(2) of the Act in excess of the maximum amount payable to the student under subsection 38(3);
  

(2) Subsection 38.2(1) of the Regulations is amended by striking out “and” at the end of paragraph (e), adding “and” at the end of paragraph (d) and repealing paragraph (f).

(3) Subsection 38.2(2) of the Regulations is replaced by the following:

(2) The grant for each loan year is the lesser of

• (a) the amount the qualifying student needs as determined under subsection 12(2) of the Act;
• (b) in the case of an eligible student who has
  • (i) one or two dependants, the amount determined by the following formula, to a maximum of $40 per week of study:
    • (A − (B × C)) × D
  • where
  • A is $40,
  • B is the result obtained by subtracting the applicable annual income threshold for their family size in accordance with Table 4 of Schedule 4 from the student’s family income,
  • C is the weekly phase-out rate set out in column 3 of Table 4 of Schedule 4, and
  • D is the number of weeks of study, and
  • (ii) three or more dependants, the amount determined by the following formula, to a maximum of $60 per week of study:
    • (A − (B × C)) × D
  • where
  • A is $60,
  • B is the result obtained by subtracting the applicable annual income threshold for their family size in accordance with Table 5 of Schedule 4 from the student’s family income,
  • C is the weekly phase-out rate set out in column 3 of Table 5 of Schedule 4, and
  • D is the number of weeks of study; and
    • (c) $1,920.

9 (1) The description of A in the French version of subsection 40.02(2) of the Regulations is replaced by the following:

• A représente 375 $;

(2) The descriptions of B and C in subsection 40.02(2) of the Regulations are replaced by the following:

• B is the result obtained by subtracting the applicable annual income threshold for their family size in accordance with Table 6 of Schedule 4 from the student’s family income, and
• C is the monthly phase-out rate set out in column 3 of Table 6 of Schedule 4.

(3) The description of B in subsection 40.02(2) of the Regulations is replaced by the following:

• B is the result obtained by subtracting the applicable annual income threshold for their family size in accordance with Table 6 of Schedule 4 from the student’s family income from the previous year, and

(4) Subsections 40.02(3) to (5) of the Regulations are replaced by the following:

(3) In addition to the grant given in accordance with subsection (2), a student is entitled to receive financial assistance in the amount of $200 for each month of study if at least 10 years have passed between leaving secondary school and the confirmed period.

(5) Subsection 40.02(3) of the Regulations is repealed.

10 The Regulations are amended by adding the following after section 40.02:

40.021 (1) Beginning in 2018, the annual income thresholds set out in column 2 of Tables 1, 2, 3, 4, 5 and 6 of Schedule 4 are adjusted on August 1st of each year by the annual percentage increase to the Consumer Price Index for the previous calendar year, rounded to the nearest dollar. The adjustment applies for that loan year.

(2) If the thresholds determined in accordance with subsection (1) are less than those applicable for the previous loan year, no adjustment is to be made and the thresholds applicable for the previous loan year continue to apply for that loan year.

(3) For the purpose of subsection (1), the Consumer Price Index is the annual all-items Consumer Price Index for Canada published by Statistics Canada.

11 Schedule 3 to the Regulations is repealed.

12 Schedule 4 to the Regulations is replaced by the Schedule 4 in the schedule to these Regulations.

Coming into Force

13 (1) Subject to subsections (2) and (3), these Regulations come into force on August 1, 2018.

(2) Sections 2 to 4 of these Regulations come into force on April 1, 2018.

(3) Subsections 7(3), 9(3) and (5) of these Regulations come into force on August 1, 2021.

SCHEDULE

SCHEDULE 4

(Paragraphs 14.3(b) and 38(1)(d) and subsections 38(3) and 38.1(2), paragraph 38.2(2)(b) and subsections 40.02(2) and 40.021(1))

TABLE 1

Income Threshold for Eligibility for Financial Assistance — Part-time Students

Column 1 Family size (number of persons)	Column 2 Annual Income Threshold
1	$61,513
2	$86,031
3	$102,638
4	$112,817
5	$122,229
6	$131,177
7 or more	$138,897

TABLE 2

Income Threshold for Eligibility for Grants — Part-time Students

Column 1 Family size (number of persons)	Column 2 Annual Income Threshold	Column 3 Annual phase-out rate
1	$30,000	0.057120
2	$42,426	0.041280
3	$51,962	0.035520
4	$60,000	0.034080
5	$67,082	0.032640
6	$73,485	0.031200
7 or more	$79,373	0.030240

TABLE 3

Income Threshold for Eligibility for Grants — Full-time Students with Dependants

Column 1 Family size (number of persons)	Column 2 Annual Income Threshold	Column 3 Monthly phase-out rate
2	$42,426	0.00458663
3	$51,962	0.00394664
4	$60,000	0.00378667
5	$67,082	0.00362667
6	$73,485	0.00346669
7 or more	$79,373	0.00335999

TABLE 4

Income Threshold for Eligibility for Grants — Part-time Students with One or Two Dependants

Column 1 Family size (number of persons)	Column 2 Annual Income Threshold	Column 3 Weekly phase-out rate
2	$42,426	0.00091733
3	$51,962	0.00078933
4	$60,000	0.00075733
5	$67,082	0.00072533
6	$73,485	0.00069334
7 or more	$79,373	0.00067200

TABLE 5

Income Threshold for Eligibility for Grants — Part-time Students with Three or More Dependants

Column 1 Family size (number of persons)	Column 2 Annual Income Threshold	Column 3 Weekly phase-out rate
4	$60,000	0.00113600
5	$67,082	0.00108800
6	$73,485	0.00104001
7 or more	$79,373	0.00100800

TABLE 6

Income Threshold for Eligibility for Grants — Full-time Students

Column 1 Family size (number of persons)	Column 2 Annual Income Threshold	Column 3 Monthly phase-out rate
1	$30,000	0.0119
2	$42,426	0.0086
3	$51,962	0.0074
4	$60,000	0.0071
5	$67,082	0.0068
6	$73,485	0.0065
7 or more	$79,373	0.0063

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the regulations.)

Executive summary

Background

Budget 2017

The CSLP provides financial assistance to PSE students in the form of grants and loans. Delivered in partnership with 10 provinces and territories (P/T), the CSLP provides up to 60% of a calculated financial need in grants and loans, while participating P/Ts cover the remaining need. When students leave school, the CSLP provides repayment assistance to those facing financial difficulty to ensure their student debt remains affordable as they transition into the labour force.

In 2009, the CSLP introduced CSGs to provide targeted, upfront non-repayable assistance to students underrepresented in PSE, including students from low- and middle-income families, students with dependants, and students with permanent disabilities. CSG amounts are prescribed in Part VI of the CSFAR.

In Budget 2016, the Government of Canada committed to making the following enhancements to CSGs to improve access to PSE for low- and middle-income families: (1) on August 1, 2016, the former CSG for Low-Income Students (CSG-LI), CSG for Middle-Income Students (CSG-MI), and the CSG for Part-Time Studies (CSG-PT) were increased by 50%; and (2) on August 1, 2017, the new CSG-FT^{footnote 2} was introduced along with a new single progressive eligibility threshold that will see grant amounts gradually decrease based on family income and family size.

Budget 2017 announced further enhancements to the CSLP that will build upon the Budget 2016 commitments by expanding eligibility for the CSG-PT, CSG-PTDEP, CSG-FTDEP, and CSL-PT. These proposals include amendments to the CSFAR that will expand eligibility for the CSG-PT, CSG-PTDEP, CSG-FTDEP and CSL-PT by replacing the previous income thresholds set out in Schedule 3 to the CSFAR with five single progressive national thresholds similar to those used to determine eligibility for the CSG-FT.

As of August 1, 2018, eligibility for the CSG-PT, CSG-PTDEP, and CSG-FTDEP will be based on family income and family size in alignment with the “slope” model now used to determine eligibility for the CSG-FT. CSL-PT eligibility will also be expanded by aligning eligibility with the “cut-off” income threshold for the CSG-FT.

In addition, non-repayable top-up funding will be available for adult learners who qualify for the CSG-FT and who have been out of secondary school for at least 10 years. This top-up funding will form part of a three-year initiative to test new approaches in support of adult learners.

Regulatory amendments have also been made to remove references to “previous year” family income as used to determine eligibility for CSGs targeted to full-time students. This change will allow the appropriate authorities designated^{footnote 3} for each P/T by the Minister to determine the period for which family income may be calculated when assessing a student’s eligibility for CSGs over the next three years. It will also afford the appropriate authorities the same flexibility they currently have when conducting need assessments for CSL eligibility. These amendments will assist adult learners in particular, and are intended to operate alongside the amendments to make available non-repayable top-up funding as a supplement to the CSG-FT. These two measures together comprise a three-year initiative to test new approaches in support of adult learners, as proposed in Budget 2017.

The above amendments comprise the Government of Canada’s Budget 2017 commitments to build a culture of lifelong learning to help Canadians meet the needs of a changing labour market by pursuing education and upgrading their skills. These commitments are expected to be in place for the 2018–2019 loan year.

PT-MSFAA

In tandem with the proposals made in Budget 2017 to expand eligibility for the CSG-PT, CSG-PTDEP, CSG-FTDEP and CSL-PT, and make available supports targeted to adult learners, regulatory amendments to the CSFAR are being made to introduce a PT-MSFAA that will be available to part-students online at a later date.

Under the current CSFAR, students applying for CSL-PT must confirm their enrolment by obtaining the wet signature of an officer of the designated educational institution or the appropriate authority, provide certain consents and certifications, and enter into a new student loan agreement for each new loan disbursement. In 2011, regulatory amendments were made to the CSFAR to facilitate the introduction of an electronic confirmation of the enrolment process, as well as a FT-MSFAA that covered all necessary consents and certifications to streamline the process for full-time students.

Consistent with the broader Government of Canada objective of making it easier for Canadians to access federal services online, the CSLP is working to implement an online functionality for all direct ^{footnote 4} CSL-PT and Canada Student Loans for Full-Time Students (CSL-FT). The implementation timeline will coincide with the CSLP’s planned transition to a new service provider contract, which seeks to both modernize and streamline the online student experience at each stage of the SFA cycle, including application, disbursement, and repayment.

To implement the electronic delivery of CSL-PT, sections 12, 12.1 and 12.2 of the CSFAR will be amended to allow for the introduction of an electronic confirmation of the enrolment process for part-time students. These same sections will also be amended to allow for the introduction of a PT-MSFAA, thereby fully aligning the delivery of CSL-PT with CSL-FT. The amendments are operational in nature and there are no associated changes that will impact the eligibility of part-time students or the amount of CSL-PT assistance that may be awarded. Furthermore, part-time students who do not wish to enter into a PT-MSFAA online will still have the option of completing a paper-based PT-MSFAA.

Indigenous Apprentices

The CAL was introduced in January 2015 to provide financial support to apprentices registered in a Red Seal trade to help with the costs of the technical training needed to complete their apprenticeship program. The Minister is responsible for the administration of CAL under the Apprentice Loans Act (ALA) and ALR. Currently, the definition of “apprentice” in the ALR does not include persons registered as Indians under the Indian Act who do not have Canadian citizenship.

Registered Indians are individuals who are officially registered with the federal government as Indians (i.e. Indigenous peoples), according to the terms of the Indian Act. The Indian Register is the official record identifying all Registered Indians in Canada and neither requires nor reflects Canadian citizenship. It is therefore possible that a person may be a Registered Indian, but not necessarily be a Canadian citizen. For example, a person who was born outside Canada to a Canadian parent in the second or subsequent generation might not be a citizen due to the first generation limit on citizenship.

The recent passage of the BIA included an amendment to the CSFAA to include persons registered as Indians under the Indian Act, regardless of citizenship in the definition of “qualifying student.” This amendment will come into force on August 1, 2018, and was made to ensure that Indigenous students who are registered as Indians under the Indian Act, but who do not have Canadian citizenship, can access CSL and CSG funding through the CSLP. Similar amendments are being made to the definition of “apprentice” in the ALR to ensure consistency with the Canada Student Financial Assistance Act. No amendments to the ALA are necessary.

Issues

Budget 2017

There has been a shift in the Canadian labour market due to the impacts of globalization, an aging population, slowing labour force growth and continuously evolving technology. These changes have seen many traditional jobs become mechanized or redundant, and there has been a rising trend of precarious work that is leading to more Canadians undertaking non-standard employment and needing to hold multiple jobs at the same time. To adapt to the new realities of the changing labour market, Canadians will need to upgrade their skills throughout their lives.

Although the CSLP provides significant financial supports to students who are transitioning from secondary school to PSE, there have been few specially targeted supports for those who are already in the labour market and may decide to return to PSE to upgrade their skills. For instance, CSGs and CSLs are available to eligible students, regardless of age; however, adult learners face different financial realities than traditional students and are often disqualified from financial aid eligibility as a result of their income and assets. In addition, adult learners face challenges with respect to the financial pressures of maintaining their homes and supporting their families while simultaneously pursuing PSE.

To help address these challenges and support adult learners, Budget 2017 committed to expand eligibility for the CSG-PT, CSG-PTDEP, CSG-FTDEP and CSL-PT, as well as to test new approaches to make it easier for adult learners to access CSLP supports over a three-year period.

The previous eligibility system for the CSG-PT, CSG-PTDEP, CSG-FTDEP and CSL-PT was based on a complex set of calculations using various family incomes as measured by a range of indices, with most varying by jurisdiction. The income thresholds set out in Schedule 3 to the CSFAR made it difficult to predict how much non-repayable assistance students would be eligible to receive each year, as marginal increases in family income of even one dollar over the thresholds may have resulted in significantly less funding being awarded to students or even no CSG at all. As a result of the amendments, Schedule 3 to the CSFAR will be removed and replaced with the new CSG and CSL-PT threshold models.

Amendments to the CSFAR will also make available non-repayable top-up funding for adult learners who qualify for the CSG-FT and who have been out of secondary school for at least 10 years. Over a three-year period, this additional funding will provide $200 per month of study for a total of $1,600 over the course of a standard eight-month study period.

In addition, as part of the three-year initiative to test new approaches to support adult learners, the CSFAR will be amended to remove explicit references to “previous year” family income from the relevant sections of the CSG-FT and CSG-FTDEP, thereby allowing the appropriate authorities designated for each P/T to determine the family income period to be used when assessing eligibility for these grants. This will be of particular benefit to adult learners who may have experienced a significant drop in their income from the previous year as a result of unforeseen or unavoidable changes in their employment status.

PT-MSFAA

Currently, students enrolled in part-time studies who qualify for a CSL or CSG must provide their wet signature each time they complete a combined Canada Student Loan Agreement/Certificate of Eligibility for each new disbursement of SFA. This repetitive process is a remnant from the time when banks delivered student funding and is unnecessarily burdensome.

In 2008, the Government of Canada announced the Service Delivery Vision (SDV), a multi-year strategy to streamline, modernize, and simplify the delivery of SFA in Canada. Pursuant to this commitment, the CSFAR were amended in June 2011 to allow for the implementation of a FT-MSFAA. While this prior amendment was a step towards reducing the administrative burden of full-time students, a similar regulatory amendment is required to allow for the implementation of a PT-MSFAA. This regulatory amendment seeks to align the delivery of CSL-PT with CSL-FT by introducing a PT-MSFAA that will be made available to part-time students online in the future.

Indigenous Apprentices

Persons who are registered as Indians under the Indian Act, but who are not Canadian citizens, have not been eligible for CAL funding as they have not been included in the definition of “apprentice” in the ALR. This issue is of particular importance in Indigenous communities that straddle the Canadian–American border, such as Akwesasne, Sault St. Marie, Fort Frances, Lac la Crois, Rainy River, Walpole Island, and Windsor.

The Government of Canada is committed to support that post-secondary education, including apprenticeship training, be accessible and affordable for all Indigenous students who are eligible. To address this issue, the definition of “apprentice” in the ALR will be amended to include persons registered as Indians under the Indian Act, regardless of citizenship.

Objectives

Budget 2017

The objectives of the regulatory amendments are in response to Budget 2017 commitments and will

1. expand eligibility for the CSG-PT, CSG-PTDEP and CSG-FTDEP by aligning eligibility with the “slope” model currently used for the CSG-FT, which sees grant amounts gradually decrease based on family income and family size;
2. expand eligibility for CSL-PT in alignment with the “cut-off” income threshold for the CSG-FT;
3. for 3 years, make available non-repayable top-up funding of $200 per month of study ($1,600 per loan year) for adult learners who qualify for the CSG-FT and who have been out of secondary school for at least 10 years, in addition to any CSG-FT award they receive; and
4. for 3 years, allow the appropriate authorities designated for each P/T to determine the family income period to be used when assessing a student’s eligibility for these grants.

These measures also complement the Budget 2016 commitments that increased CSGs by 50%, established the CSG-FT, and expanded eligibility for low- and middle-income students. In addition, the proposed regulatory amendments to expand eligibility for the CSG-PT, CSG-PTDEP, CSG-FTDEP and CSL-PT will make determining grants and part-time loans eligibility more predictable and transparent for students and their families.

To further align with the amendments made to implement the Budget 2016 commitments to both establish and expand eligibility for the CSG-FT, the proposed regulatory amendments to implement the Budget 2017 commitments to expand eligibility for the CSG-PT, CSG-PTDEP, CSG-FTDEP and CSL-PT include a reference to the Consumer Price Index (CPI) to allow the proposed thresholds to be adjusted annually to keep up with inflation and reflect the real income of students.

PT-MSFAA

The objective of this regulatory amendment is to support the Government of Canada’s commitment to streamline and simplify the delivery of SFA in Canada by allowing for the implementation of a PT-MSFAA that will be available online. It will also contribute to the operational consistency by aligning the delivery of CSL-PT with CSL-FT, and is an important modernization initiative to ensure regulatory alignment in advance of the CSLP’s transition to a new online service delivery platform.

Indigenous Apprentices

The Minister is responsible for the administration of the CAL. The integration of the CSL and CAL regimes is reflected in the CSFAR and ALR, such that changes to one loan regime will impact the other. Thus, the objective of this regulatory amendment is to ensure that Indigenous students who are registered as Indians under the Indian Act, and who do not have Canadian citizenship, can apply for CAL. The change to the definition of “qualifying student” in the CSFAA will come into force on August 1, 2018, as per BIA, and will expand the definition to include persons registered as Indians. These Indigenous students will then be eligible to apply for CSLs and CSGs. This corresponding amendment to the definition of “apprentice” in the ALR will provide the same access to Indigenous apprentices registered as Indians under the Indian Act, regardless of citizenship.

Description

The regulatory amendments to the CSFAR are as follows:

1. Eligibility for the CSG-PT, CSG-PTDEP and CSG-FTDEP will be expanded by aligning with the progressive eligibility thresholds model introduced for the new CSG-FT, which has grant amounts scale based on family income and family size.
2. Eligibility for CSL-PT will be expanded by aligning the thresholds corresponding to family income and family size with the “cut-off” income amounts established for the CSG-FT eligibility thresholds.
3. An ambulatory reference to the CPI to annually index the proposed eligibility thresholds for the CSG-PT, CSG-PTDEP, CSG-FTDEP, and CSL-PT will be included to ensure the thresholds continue to reflect the real income of students.
4. A new provision will be added to the CSFAR to make available non-repayable top-up funding for adult learners who qualify for the CSG-FT and have been out of secondary school for at least 10 years.
5. Explicit references to total family income from the “previous year” will be removed from paragraph 38.1(1)(e), subsection 40.02(2), and the heading of Column 2 in the “Eligibility Thresholds for the Grant for Full-Time Students” table in Schedule 4. Total family income will continue to be used; however, the period used will be determined by the appropriate authority designated by the Minister.

PT-MSFAA

The regulatory amendments to the CSFAR are as follows:

• Part II of the CSFAR will be amended to allow for a PT-MSFAA that will be available to part-time students online. This amendment required changes to the wording of sections 12, 12.1, and 12.2 to remove the requirement for wet signatures and for students to submit their confirmation of enrolment to the Minister and branch of the lender if the student has any outstanding risk-shared and/or guaranteed student loans. Moving forward, CSL-PT will be accessible through an electronic format and the responsibility for submitting confirmations of enrolment will rest with the designated educational institution or the appropriate authority.

Indigenous Apprentices

The proposed regulatory amendments to the ALR are as follows:

• The definition of “apprentice” in the ALR will be expanded to include persons registered as Indians under the Indian Act, regardless of citizenship. This change will ensure access to CAL funding to Indigenous apprentices who are Registered Indians but are not Canadian citizens, in alignment with recent legislative amendments made to the definition of “qualifying student” in the CSFAA.

Regulatory and non-regulatory options considered

The regulatory amendments made to expand eligibility for the CSG-PT, CSG-PTDEP, CSG-FTDEP and CSL-PT could not be addressed by means other than regulatory amendments. Likewise, making available top-up funding for adult learners and allowing the appropriate authorities for each P/T to determine the period for which family income would be used require regulatory amendments.

The changes required to allow for a PT-MSFAA that will be available to students online also require regulatory amendments.

In addition, a regulatory amendment is required to include persons registered as Indians under the Indian Act, but who are not Canadian citizens in the definition of “apprentice” in the ALR.

As a result, non-regulatory options were not considered.

Benefits and costs

Aligning eligibility for CSGs for part-time students and for full- and part-time students with dependants with the previously expanded CSG eligibility and single progressive eligibility threshold for full-time students introduced in Budget 2016 will both improve support for adult learners by expanding and simplifying eligibility rules as well as allow students greater flexibility in moving between part- and full-time studies without facing two distinct sets of rules. The incremental impacts presented below reflect the difference between the outcomes of maintaining the current financial aid structure and procedures under a baseline scenario (i.e. not implementing these regulatory amendments) and the outcomes of implementing the proposed amendments.

The number of affected students is estimated by comparing the difference between the total number of students completing PSE each year under the amendments and under the baseline scenario. All monetized costs and benefits are estimated on an annual basis over a 10-year period from 2018–2019 to 2027–2028, as 2018–2019 is the expected first year of implementation and assumed to be the first year in which students would be impacted. A discount rate of 7%, selected in accordance with Treasury Board Secretariat (TBS) guidance on cost-benefit analysis, has been applied to all monetized impacts.

To ensure accuracy, benefits related to the proposed regulatory amendments are assessed separately for full-time students and part-time students; however costs are assessed together.

Costs related to amendments allowing the PT-MSFAA to be available online and to expand the definition of “apprentice” used to determine eligibility for the CAL to include persons registered as Indians under the Indian Act, regardless of citizenship, are considered minimal based on TBS’ policy and are not included in the analysis.

Costs

The cost to the Government of Canada for providing additional CSGs and CSLs under the proposed amendments is based on estimates using CSLP administrative data and is expected to be $538 million for a 10-year period. This is calculated in the following steps:

1. The total additional grants and loans disbursed to students is $453 million, estimated based on CSLP administrative data.
2. To account for the fact that some loans will now be replaced by grants, the total disbursements of additional grants and loans is reduced by $23 million.
3. Finally, to account for the cost of alternative payments to non-participating jurisdictions, an additional 25% or $108 million is added.

Students pursuing PSE as a result of the proposed regulatory amendments will incur annual tuition costs and the opportunity costs of attending PSE. The cost to participating students is expected to amount to $69 million, comprising of $27 million in tuition costs and $42 million in foregone earnings.

Benefits

Monetized

Direct benefits immediately available to these newly eligible students are equal to the net costs incurred by the Government of Canada as a result of these proposed amendments, which are $538 million. This amount includes $108 million transferred through non-participating provinces and territories.

The proposed amendments also carry future benefits for all those attending PSE. Individuals who complete PSE receive higher starting wages and higher median earnings over their lifetimes compared to individuals who did not complete PSE. It is estimated that the proposed amendments to expand CSG eligibility for part-time students and for full- and part-time students with dependants will enable approximately 22 more students to complete their studies in the first year following implementation and about 494 more students over a 10-year period. Amendments to support adult learners (top-up funding and flexibility for appropriate provincial and territorial authorities to determine family income) are estimated to enable approximately 245 more students to complete their studies in the first year following implementation and around 745 more students over the three-year period these changes are in place. For a conservative estimate, this analysis takes into account that some of these populations may intersect.

The benefits to this group were monetized by examining the earnings differential between full-time employees that have completed PSE and high school graduates over the 10-year period. Earnings differential by level of study were estimated using data obtained from the 2006 Census, in particular median earnings for full-year, full-time employees between the ages of 25 to 34. The difference in median earnings relative to persons with high school diplomas is $13,264 (in 2018 dollars). Based on this, it is assumed there will be a $13,000 annual income gain in the first year after PSE completion and a 1.7% annual growth of real income was applied for subsequent years, reflecting an increase in premium due to experience and skills acquisition over time. Using this information, it is estimated that this group will gain a combined $85 million in future earnings. It should be noted that the income gain resulting from PSE attainment accrues for the duration of a student’s lifetime.

Quantitative

The proposed amendments are expected to benefit the newly eligible students from within the current CSLP population as well as new students outside of the CSLP who would become eligible.

Within the CSLP population, 24 000 low- and middle-income students will directly benefit from simplifying and expanding CSG eligibility. The expanded eligibility thresholds for CSGs and CSLs are expected to result in the following estimated number of newly eligible students respectively in the first year of implementation:

• CSG-PTDEP — 400
• CSG-FTDEP — 12 400
• CSG-PT — 5 300
• CSL-PT — 5 900

By the third and final year following implementation, amendments related to the adult learner “top-up” funding and those related to permitting appropriate provincial and territorial authorities flexibility in determining the period used to calculate family income when assessing eligibility are estimated to benefit 47 000 new and 7 000 CSLP current borrowers respectively as a result of students receiving additional funding.

The proposed amendments are also expected to benefit individuals not currently within the CSLP. These would include, but are not limited to, students who currently delay their PSE entry or those who rely on their own savings, earnings or more expensive private credit to finance their PSE. As a result of the proposed amendments, these individuals would be incentivized to pursue PSE without delay or to use less expensive student financial assistance through the CSLP. These new clients are estimated to be roughly 1% of the current CSLP population, based on historical amendments to the CSLP of similar nature and magnitude.

Qualitative

A review of available literature suggests that those who attend PSE experience lower rates of unemployment as well as shorter unemployment periods. They also live longer, healthier lives and pass additional benefits on to their children in the form of better cognitive development, health, and future potential earnings.

Attending PSE creates positive externalities, meaning that the benefits of attaining PSE credentials accrue to others beyond the individual student. Businesses benefit from having a more skilled and productive workforce. Studies have also shown that increasing the level of PSE attainment in society can lead to greater innovation and economic growth, increase civic engagement, lower income inequality, and less reliance on public services such as foster care and juvenile diversion programs.

Results

The results of this analysis are presented in the cost-benefit statement outlined below in Table 1. Overall, the net benefit of implementing the proposed amendments is $16 million, with a benefit-cost ratio of 1.03:1, and does not account for quantitative benefits beyond a 10-year period or additional qualitative benefits to students, businesses, and Canadian society. Consequently, this analysis concludes that the benefits of implementing these regulatory amendments to enhance supports provided by the CSLP outweigh the costs to the Government of Canada and student borrowers.

A sensitivity analysis testing a number of major assumptions such as the discount rate, unemployment rate, income gain, and real income growth was conducted and did not materially affect the net benefit of implementing the proposed amendments. This analysis assumes a 7% discount rate. Alternative discount rates ranging from 3–10% were also tested, leading to benefit-cost ratios ranging from 1.04:1 to 1.02:1.

Table 1 — Cost-benefit statement

Cost-benefit statement

		First Year: 2018–2019	…	Final Year: 2027–2028	Total (PV)	Annualized Value
A. Quantified impacts (in million Can$, 2018 present value)
Benefits
Increase in transfers to individuals	Individuals	$82		$21	$538	$77
Future potential earnings over 10‑year period	Students	$0		$11	$85	$12
Costs
Tuition cost	Students	$0		$2	$27	$4
Opportunity cost of PSE studies	Students	$0		$3	$42	$6
Increase in transfers to individuals	Government of Canada	$84		$17	$453	$64
CSLP savings due to additional grants disbursed	Government of Canada	($5)		$0	($23)footnote 5	($3)
Transfer to non-participating provinces	Government of Canada	$0		$4	$108	$12
Net benefits					$16	$2.2
B. Quantified impacts in non $ (counts)
Positive impacts — Greater availability of skilled workers (number of borrowers who could not pursue studies without these amendments)	Business	0		97	1 460	Not applicable
C. Qualitative impacts Individuals: Greater health and longevity. Intergenerational effects (improved health, impact of education on child development and future earnings of children). Businesses: Gain in productivity. Canadian society: More innovation and economic growth. Greater civic engagement (volunteerism and charitable contributions). Reduction of income inequality.

Gender-based analysis

As the CSLP provides SFA to students with assessed needs irrespective of gender, both female and male students that are eligible will receive equally enhanced supports. Proportionately, however, Budget 2017 measures are expected to benefit Canadian women in particular, who often strive to improve their career prospects while balancing family responsibilities. Women represent nearly two thirds of the CSLP’s part-time recipients, while approximately four out of five students receiving CSGs targeted to students with dependent children are women. Results of a simulation study indicate that more female students will benefit from these regulatory amendments than their male counterparts when these measures are implemented. More specifically, among the newly eligible recipients of the CSG-FTDEP, almost 3 out of 4 will be females (74%).

CSG-FTDEP Recipients

	ALL Full-time Clients	Existing CSG-FTDEP Recipients	Newly Eligible CSG-FTDEP Recipients
Female	59%	79%	74%

Females will account for 61% of the newly eligible beneficiaries of the top-up funding that will be available to adult learners.

CSG-FT Recipients

	ALL Full-time Clients	Existing CSG-FT Recipients	Newly Eligible Adult CSG Recipients
Female	59%	58%	61%

Females will account for 60% of newly eligible beneficiaries associated with allowing appropriate authorities to determine the period in which family income is calculated.

CSG Recipients

	ALL Full-time Clients	Existing CSG Recipients	New Eligible CSG Recipients
Female	59%	59%	60%

Among the newly eligible beneficiaries of the CSG-PTDEP, 79% will be females.

CSG-PTDEP Recipients

	ALL Part-time Clients	Existing CSG-PTDEP Recipients	Newly Eligible CSG-PTDEP Recipients
Female	62%	82%	79%

64% of the newly eligible beneficiaries of the CSG-PT will be females.

CSG-PT Recipients

	ALL Part-time Clients	Existing CSG-PT Recipients	Newly Eligible CSG-PT Recipients
Female	62%	57%	64%

Finally, 69% of newly eligible beneficiaries of the enhanced CSL-PT will be females.

CSL-PT Recipients

	ALL Part-time Clients	Existing CSL-PT Recipients	Newly Eligible CSL-PT Recipients
Female	62%	60%	69%

“One-for-One” Rule

The “One-for-One” Rule does not apply, as there is no change in administrative costs for businesses.

Small business lens

The small business lens does not apply, as there are no costs for small businesses.

Consultation

To help better inform policy development related to SFA issues, Employment and Social Development Canada (ESDC) engages in regular consultation with P/T partners and stakeholder groups, including the Intergovernmental Consultative Committee on Student Financial Assistance (ICCSFA) and the National Advisory Group on Student Financial Assistance (NAGSFA).

The ICCSFA is a P/T forum jointly managed and mandated by the Council of Ministers of Education, Canada (CMEC) and the Government of Canada via the CSLP. The committee is comprised of federal and P/T student aid officials and actively works to improve the coordination and complementarity of federal and P/T activities and programs related to SFA.

The NAGSFA is a national stakeholder advisory body designed to address broad PSE issues and SFA policy, and is comprised of stakeholders such as PSE student associations, educational organizations, student financial aid administrators and members of the academic community.

Budget 2017

ESDC had worked with P/T partners following Budget 2016 on the design parameters to expand eligibility for non-repayable grant funding targeted to low- and middle-income students, which led to the new single progressive eligibility thresholds for the CSG-FT. During this consultative process, P/Ts also indicated their support to have all CSGs align with these new eligibility thresholds. The Budget 2017 commitments to expand eligibility for the CSG-PT, CSG-PTDEP, CSG-FTDEP and CSL-PT reflect the interest of P/Ts in aligning eligibility for all CSGs and building upon Budget 2016 commitments.

Overall, P/Ts were supportive of the proposals to introduce a new single progressive eligibility threshold for CSG-PT, CSG-PTDEP, CSG-FTDEP and CSL-PT, as well as the introduction of measures targeted to adult learners, including the making available of non-repayable top-up funding for adult learners who qualify for the CSG-FT and who have been out of secondary school for at least 10 years, and allowing P/Ts to use family income from a period determined by the appropriate authority designated by the Minister to assess eligibility for CSGs targeted to full-time students.

PSE and student stakeholder groups are consistently engaged by ESDC through bilateral consultation and collectively via NAGSFA. Following the announcement of Budget 2017, the ESDC engaged directly with NAGSFA to discuss the measures related to the CSLP. Overall, stakeholders were supportive of the proposals to expand the eligibility thresholds for the CSG-PT, CSG-PTDEP, CSG-FTDEP and CSL-PT, as well as to introduce measures in support of adult learners.

PT-MSFAA

The regulatory amendment to introduce a PT-MSFAA that will be available to part-time students online was pursued as a result of consultations with P/Ts and stakeholders. In 2011, ICCSFA and NAGSFA were consulted in the development of regulations that allowed for the implementation of a FT-MSFAA. Since then, P/Ts and stakeholders have continued their support for the implementation of a PT-MSFAA. As a result, no adverse concerns are anticipated from P/Ts and stakeholders about this proposal.

Indigenous Apprentices

This amendment falls within the Government of Canada’s commitment to supporting Indigenous students and no P/T or stakeholder concerns are anticipated.

Rationale

Budget 2017

The regulatory amendments to the CSFAR will benefit part-time students, as well as full- and part-time students with dependants, by expanding eligibility for the CSG-PT, CSG-PTDEP, CSG-FTDEP and CSL-PT. The amendments accomplish these goals by establishing a “slope” model for expanded eligibility, in alignment with the new CSG-FT, thereby allowing more part-time students, full- and part-time students with dependants, and adult learners to qualify for both CSLs and CSGs.

It is expected that these regulatory amendments introducing new eligibility thresholds for the CSG-PT and CSL-PT will make an additional 10 000 part-time students eligible for both non-repayable and repayable financial assistance. In addition, the new eligibility thresholds for the CSG-PTDEP and CSG-FTDEP are expected to expand eligibility for non-repayable funding to approximately 13 000 full- and part-time students with dependent children each year.

Furthermore, these amendments will ensure that students realize a net benefit from expanded eligibility such that many will be assessed to receive more in grant and loan funding while no student will receive less.

The amendments will also further benefit adult learners by making available non-repayable top-up funding to students who qualify for the CSG-FT and who have been out of secondary school for at least 10 years, and by allowing CSGs targeted to full-time students to be assessed using family income from a period determined by the appropriate authority designated by the Minister.

PT-MSFAA

The regulatory amendments to introduce a PT-MSFAA that will be available online will benefit part-time students by aligning the delivery of CSL-PT under the newly online PT-MSFAA with the delivery of CSL-FT under the online FT-MSFAA. Together with the expansion of the eligibility thresholds for the CSG-PT, this enhancement to the delivery of CSL-PT is anticipated to benefit approximately 10 000 new part-time students, in addition to those currently enrolled in part-time studies.

Indigenous Apprentices

The regulatory amendments to the ALR to expand the definition of “apprentice” will benefit Indigenous apprentices who are registered as Indians under the Indian Act, but do not have Canadian citizenship. The amendment to the ALR will also align the definition of “apprentice” with the definition of “qualifying student” to take effect in the CSFAA.

Implementation, enforcement and service standards

Budget 2017

The new eligibility thresholds for the CSG-PT, CSG-PTDEP, CSG-FTDEP and CSL-PT, as well as the measures being introduced in support of adult learners, are expected to be in place on August 1, 2018, in time for the beginning of the 2018–2019 loan year.

Grant assessment will continue to be carried out as part of the needs assessment process that is administered on behalf of the CSLP by the participating P/Ts. Specifically, PTs determine eligibility, maintain necessary records regarding eligibility, and include assessed grant amounts on each applicable student’s certificate of eligibility / student loan agreement. This information is then transmitted to the National Student Loans Service Centre (NSLSC).

The NSLSC has the responsibility of inputting the information received from the P/Ts into the loan servicing system. They also apply the appropriate business edits before sending the grant amount information to the CSLP. The grants are disbursed upon confirmation of enrolment prior to the course fees coming due. The full-time and part-time federal disbursement file is then transmitted to the CSLP via the Government Telecommunications and Informatics Services (GTIS) system. The NSLSC must also maintain all necessary records in order to address recipients’ questions. GTIS is a secure electronic data transfer system used to transfer files between the CSLP and the NSLSC.

Service standards will not be affected by the changes, reflecting existing P/T needs assessment timelines and pre-established commitments on the part of CSLPs service provider.

PT-MSFAA

The regulatory amendments allowing for the implementation of a PT-MSFAA that will be available to part-time students online are expected to be in place in the coming months. This timeline is to ensure the amendments associated with the PT-MSFAA are effective in preparation of the CSLP’s transition to a new online service delivery platform.

Indigenous Apprentices

The regulatory amendment expanding the definition of “apprentice” in the ALR to include persons registered as Indians under the Indian Act, regardless of citizenship, is expected to come into force on August 1, 2018, in time for the beginning of the 2018–2019 loan year.

Performance measurement and evaluation

To support effective management and accountability to Canadians, federal SFA programs will continue to be monitored to ensure effective program performance and integrity. The resulting data will continue to be included in the CSLP’s Actuarial Report and Annual Report, both of which are tabled in Parliament as per the CSFAA. These reports can also be accessed online by the general public.

The effect of expanding eligibility for CSGs and CSLs targeted to part-time students, CSGs targeted to full- and part-time students with dependants, as well as the Budget 2017 commitment to introduce new approaches to make it easier for adult learners to qualify for CSLs and CSGs, will be incorporated into existing performance measurement and evaluation mechanisms. The impact of enhancing the delivery of CSL-PT by moving to a PT-MSFAA that will be available to part-time students online will also be included.

Likewise, updating the definition of “apprentice” to include Indigenous apprentices that are registered as Indians under the Indian Act, regardless of their citizenship, will be included in performance measurements and evaluations for the purposes of the CAL.

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