Three changes to student loans you should be aware of before applying for financial assistance this summer

With June&rsquo;s arrival upon us, students across the province will soon be applying for financial aid for the upcoming 2015-16 academic year. If you&rsquo;re a student trying to budget and estimate how much financial aid you&rsquo;ll be granted for this upcoming year, here are some important changes to the Ontario Student Assistance Program (OSAP) and the Canada Student Loans Program that came out of last month&rsquo;s provincial and federal budgets to keep in mind. <em>Imprint </em>spoke to Feds vice-president education Stephane Hamade to find out how these changes will affect the students at large.</p>

In-study income

In-study income will no longer be part of the assessment process when being considered for financial assistance under the Canadian Student Loans Program.

Previously, students could earn $50 a week before having this money count against them in their loans assessment process. In the 2014 federal budget, this amount was increased to $100, and under the new proposed budget would be removed altogether.

“It used to be that you would be able to get less loans if you worked while you were in school,” Hamade said. “There’s a clear disincentive for working, if you worked over eight hours [a week] you would start to lose money on your loans. It’s very difficult to hold some jobs, some jobs don’t let you work less than that amount of hours so students … would either face a clawback [on student loans received] … or just not be able to work.”

Hamade credits the removal of in-study income to Feds lobbying, which is now done independently from the Canadian Alliance of Student Associations.

“We met with Peter Braid and several other MPs from all parties to discuss our concerns with the in-study income limit,” Hamade said. “They clearly took our concerns under advisement and we’re very happy with this change in the budget.”

This change to the Candian Student Loans Program will not come into effect until the 2016-2017 academic year and does not apply to scholarship, bursary, award, RESP, or government income. Despite this change at the federal level, earned income will remain a requirement at the provincial level when getting assessed for OSAP.

OSAP loans and grants

OSAP loans and grants can now be decoupled, meaning students who want to apply for grants can now do so without incurring further student debt.

Previously, in order to receive grants (with the exception of the 30 per cent tuition rebate), students would need to apply for OSAP to be eligible. Now, the loan and grant process has been decoupled to let students choose what debt they want to incur, if any. This decoupling, according to Hamade, was an initiative of the Ontario Undergraduate Student Alliance (OUSA). 

“A lot of the changes that I mentioned earlier regarding income limit, indexing loans to inflation, decoupling loans and grants, were all things that OUSA has previously asked for from the government and [are] things OUSA has a policy on. And there is a clearly significant role that OUSA plays in many of these changes becoming reality.”

Maureen Jones, director of Student Awards and Financial Aid, said via email that students now have the option of contacting the financial aid office — prior to their funding being released — to indicate wether or not they only want the grants without incurring the loans.

"Students will have the opportunity to ask for the loans to be released within their term of study if they find later that they can't meet their costs," she added. 

The decoupling of OSAP loans and grants will come into effect just in time for the upcoming 2015-2016 academic year. 

Vehicle declaration

Students with cars will no longer be required to declare their vehicles as an asset when applying for OSAP.

Hamade believes the change will benefit those students who live at home and commute, instead of penalizing students who own vehicles valued above the previously set $5,000 exemption limit.

“Vehicle assessment is a change that we [OUSA] thought [of] two years ago, and now we’re seeing provincially… It’s very helpful for accessing university if you live further away and still want to live at home,” he said. “It used to be that you’d lose a lot of your OSAP if your vehicle [was] of a certain value and that will no longer be a concern now.”

This change will also come into effect in time for the upcoming 2015-2016 academic year.


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This article has been edited since publication to include a quote from Maureen Jones, to add that the changes to in-study income won't come into effect until 2016-2017 academic year, and to clarify that the application for OSAP loans and grants won't be seperated but decoupled.


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