Minister Advocates for Student Loan Changes

Nova Scotia Education Minister Angus MacIsaac is leading a national challenge to the federal government to make changes to student loan rules.

Mr. MacIsaac attended a meeting of the Council of Ministers of Education, Canada, in London, Ont. earlier this week. He asked the group to encourage the federal government to lower the amount of money parents must contribute when their children take out student loans.

"We have hard-working families in Nova Scotia who can't afford to pay as much for their children's education as the federal rules require," said Mr. MacIsaac. "Nova Scotians aren't alone in this difficult position. The rules need to change so that more students across the country can access post-secondary education."

The education ministers agreed to develop models, then make recommendations to the federal government on the parental contribution calculation and other student loan issues.

The federal government runs the Canada Student Loan Program. Provincial governments use the same eligibility requirements for their provincial student loan programs.

Students of parents earning less than $90,000 in total per year are most adversely affected by the federal rules. Under the federal eligibility criteria, the amount parents are expected to contribute is determined by their net income and the number of dependents they have.

For example, a family earning $50,000 net a year with three children would pay $4,318 annually for one child attending university or college. If another child then chose to go to school after the first graduated, the parents' contribution would increase to $13,000. When parents can't invest this much, many students can't get a large enough student loan to pursue post- secondary education.

"I wholeheartedly support this effort to have the federal formula revised because it just isn't working in the majority of cases I see," said Michelle Fougere, a student financial aid counsellor at Saint Mary's University. "This problem is a national concern for people in my position because we see the incredible strain it puts on families, to the point that younger siblings often question whether they should even pursue post-secondary education."

In many cases, parents deplete their savings and accumulate debt to finance post-secondary studies for their children. By the time the younger siblings are ready to attend, they're not eligible for student loans and their parents can no longer borrow.

"The current parental contribution rules are limiting students' access to post-secondary education," said Mr. MacIsaac. "We need the federal government to consider the real expenses of today's families and ensure that the contributions expected of parents are more realistic so that deserving students get sufficient loans."

The federal calculation for parental contribution has not changed since 1995. Until it does, provincial governments can't change their requirements without running two separate assessment systems for federal and provincial loan programs.

Mr. MacIsaac's advocacy efforts are part of the provincial government's commitment to Nova Scotia's post-secondary students. Last week, the minister announced a new $5.1-million student debt reduction program beginning Aug. 1, 2003 and an extra $6 million for universities in 2002-03.