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Institutional aid revealed

Millennium study provides details on the amount of need-based aid and merit scholarships institutions award to undergraduate students

BY ROSANNA TAMBURRI | SEP 08 2008

Between 20 and 23 percent of undergraduates enrolled at Canada’s universities receive merit scholarships from their institution, according to a new study on student financial assistance.

The report by the Canada Millennium Scholarship Foundation found that 31 universities and 11 colleges for which data is available – and whose enrolment accounts for about three-quarters of Canadian undergraduate students – spent $144 million on merit scholarships and $114 million on need-based aid in 2006-07. These amounts exclude aid to graduate students and flow-through from the country’s research granting councils.

For 13 of Canada’s large universities, 19 percent of undergraduates received a need-based bursary averaging about $2,000. The same group of universities provided merit scholarships to 23 percent of undergraduates, averaging $1,750.

The other universities in the group studied by the Millennium Foundation provided less aid. About 11 percent of undergraduates at these 18 institutions received need-based bursaries averaging $1,200, and 20 percent were awarded merit scholarships averaging $1,375.

It was the first time the foundation has included data on institutional financial assistance. The report noted that although the data provides a good snapshot of how much support institutions give to students, it isn’t complete. Many institutions lacked the capacity to provide comprehensive figures on what they spend on student assistance.

“Though institutions receive the majority of their funds from public sources (or from students themselves), they are under no obligation to report their own support for students in a more comprehensive manner,” the report said.

Ross Finnie, a professor at the University of Ottawa’s graduate school of public policy and international affairs, said the figures, although incomplete, are useful in rounding out the financial aid picture in Canada. “Those are substantial numbers,” he said. Institutional aid is important for students in financial need who, for whatever reason, slip through the cracks and fail to qualify for government assistance, he added. “It lends a flexibility to the system.”

Canadian postsecondary students received more than $7 billion in 2006-07 from federal and provincial government loans, grants, scholarships, tax credits and savings grants. Of that, more than $4 billion was allotted to need-based financial assistance, more than ever before.

The amount of government financial aid on a per-recipient basis also rose, its first significant, real increase in a decade. In 2006-07, student aid recipients got an average of $8,576 in loans and grants from federal and provincial governments. And the proportion of aid provided as non-repayable grants and loan remissions reached 30 percent, double what it was 15 years ago.

This shows that the student financial aid picture is improving, said Joseph Berger, the foundation’s policy and research officer and one of the authors of the report: “Need-based aid is more generous now than it has been in a long, long time and that’s really positive.” Professor Finnie agreed, saying the figures confirm that “the student financial aid system is working well.”

According to the report, the improvement was due to several program changes introduced in recent years: an increase in the maximum student loan limit, a reduction in the amount of financial support students are expected to receive from their parents, and the introduction in 2005-06 of the Millennium Access bursaries and the Canada and Ontario access grants.

On the other hand, governments still dole out a significant amount of student aid in the form of educational tax credits and savings grants, which tend to benefit middle- and high-income earners, noted Mr. Berger. In 2006-07, federal and provincial governments provided $2.5 billion in tax credits and savings grants.

“When we’ve got students from relatively modest backgrounds graduating with $24,000 of debt and their wealthier peers are collecting tax credits that they don’t necessarily need, I think we need to call that into question,” said Mr. Berger.

The report found that less than 12 percent of low-income families eligible to receive the Canada Learning Bond – a federal government subsidy administered through Registered Education Savings Plans – have received one, despite the fact that the program doesn’t require a matching contribution. “We were stumped as to why it’s so low,” said Mr. Berger. “Perhaps there needs to be more outreach to get the word out.”

The foundation was created in 1998 to administer $2.5 billion in scholarships and grants and to conduct research on student finances and financial aid policies. The foundation plans to issue several more studies before its mandate expires at the end of 2009.

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