Investments in Provincial Student Loan Program announced

The Government of Newfoundland and Labrador is making a number of further investments that will improve financial assistance to post-secondary students.

Tom Hedderson, Minister of Education, today announced a series of changes to the province�s loans programming. Effective August 1, 2005, the Provincial Student Loan Limits will increase from $110 to $140 per week. The Debt Reduction Grants Program will be enhanced and applied against new weekly provincial loan limits. Additional improvements will see more students from low- and middle-income families qualify for loans, by lowering the amounts some parents are expected to contribute, and by increasing the number of families whose children will qualify. There will be more assistance to students repaying their loan, whereby the income thresholds for interest relief eligibility will be increased by five per cent. The minister also intends to request that the Canadian Millennium Scholarship Foundation pilot a program to provide enhanced financial support for dependent students from low-income families.

"These investments are yet another example that we are committed to strengthening the quality of education in Newfoundland and Labrador. We believe that interest and motivation, rather than financial resources, should determine post-secondary opportunities. Education must be as open and accessible as possible," said Minister Hedderson. "We will be releasing the White Paper soon. In the meantime, we are announcing a positive change to the provincial student loan program, so that students will have adequate time to apply under these improved loan and grants programs."

The initiatives stem from the White Paper on Public Post-Secondary Education. A white paper is an official document that presents policy proposals, sometimes in a technical manner. A consultations and research process was initiated on June 29, 2004. Government has received the final report and intends to release it to the public in the coming weeks.

Media contact: Alex Marland, Communications, (709) 729-0048, 690-6047

NOTE TO EDITORS: Information concerning the launch of the white paper, including the Terms of Reference, is available online at //www.gov.nl.ca/releases/2004/edu/0629n01.htm. Information about Student Aid is available online at //www.edu.gov.nl.ca/studentaid/

OVERVIEW

Since the NL Student Loans Program was created in 1994, the Government of Newfoundland and Labrador�s goal has been to ensure that a lack of financial resources does not deny the opportunity to pursue educational opportunities (whether at a private education institution, a community college or university) to those with the motivation and capacity to pursue them.

Increase in Provincial Student Loan Limits

• A $110 weekly loan maximum for students was established in 1994.
• Effective August 1, 2005 this loan ceiling will increase to $140/week.
• The increase takes into account rising costs, the growing need for study tools, and the challenges facing students with dependants.
• Based on available data, it is estimated that 6,360 students will qualify for more support.
   

Apply the Debt Reduction Grants Program to the Higher Provincial Loan Limit

• The Newfoundland and Labrador Student Debt Reduction (NLSDR) Program was introduced in March 2002 as a debt management tool for students.
• Debt reduction grants are calculated based on a semester and/or academic year basis and are paid out when the student successfully completes his/her academic program.
• This change will mean that grants will be applied to the higher provincial loan limit. While Newfoundland and Labrador borrowers will receive more money with the higher loan limit, students� provincial debt will not increase because the grant will be applied to the higher loan.
• About 800 to 1,000 students now qualify for the grants annually. This same number of students will continue to receive the grant, but at a higher level.

Reduction in Expected Parental Contributions

• Some parents are expected to contribute financially to their children�s post-secondary education. This is taken into consideration to identify the loan amount a student qualifies for.
• The amount that some parents are expected to contribute is being lowered in the assessment of needs calculation.
• This reduction takes into account that the cost of post-secondary education as a percentage of family income has risen for moderate- and middle-income families.
• Students from these families whose children are not currently eligible for NL Student Loans or who are only eligible for limited assistance will have access to additional financial support.
• It is estimated that 800 students from families with incomes in the $60,000 to $100,000 range will see better loan access. Half of these students would have been unable to access loans previously.

Improved Debt Management

• For some former students, the transition from school to workplace can be difficult. Debt management measures exist to help with this transition, such as the government paying the interest on a student loan (interest relief).
• The income level of former students is a determining factor in whether they qualify for interest relief.
• The eligibility for relief is being relaxed by introducing a five per cent increase in the income thresholds used to determine eligibility.
• It is estimated that 750 former students will now qualify for this assistance.

Canadian Millennium Scholarship Foundation Pilot Program

• The Canadian Millennium Scholarship Foundation was established in 1998 by the federal government. The foundation administers post-secondary bursaries and awards.
• Newfoundland and Labrador�s Minister of Education will request that, on a trial basis, the foundation introduce a program to improve the financial assistance available for dependent students from low-income families.
   

2005 06 17                     3:25 p.m.