Modifications to current financing program will no longer take parental or spousal income into account
After the somewhat tedious application process, students were faced with a lengthy wait while the paperwork was processed to see if they were even eligible for funding.
Greg Weadick, Minister of Advanced Education and Technology in Alberta, said that the application process is one of the main issues that will be addressed with the changes to the Alberta student loans program, which was updated in February.
“We’ve tried to find a system that’s simplified, streamlined and cost effective,” he said. “One that allows students the best opportunity to attend school and receive a post-secondary education.”
The new program, which the government said they want to have in effect by summer 2012, consists of three main changes:
• The simplifying and streamlining of the overall funding process
• The establishment of a ‘one-portal-of-contact’ for student inquiries, entitled Student Aid Alberta
• A new, more beneficial remittance program for graduates to help them pay back their loans quicker
In the past, many students were disqualified for financial aid because parental or spousal income was taken into account in the application process. Some of these ineligible students turned to their banks for post-secondary funding in the form of lines of credit.
However, under the new Alberta student loans system, parental and spousal income is no longer considered while reviewing an applicant. This change will increase the accessibility of funding to more than 53,000 students.
Michelle Dennis, vice president external for Mount Royal University’s student association, said that this change will be beneficial.
“Those students who found themselves disqualified because of the previous barriers to accessing student loan programs will find the process less complex,” she said.
However, Lynzey MacRae, public and corporate affairs manager for TD Bank Group in Calgary, said that the programs offered by banks have some benefits that government financing may not have. She also said that they are a good way for students to get involved in both their education, as well as their future.
“A student line of credit is a smart way to ensure students have access to money for their education at a lower interest rate and longer repayment term than a loan or credit card,” she said. “It’s also a good first step to establish financial responsibility and build credit.”
Weadick said that the changes to the financing program will not affect interest rates, which will remain roughly around the prime rate. He also said the program will actually decrease the amount of interest paid by students.
“In the past, in the six months right after a student graduated, we waived the requirement to make actual payments on the loan itself, but we started charging interest on the amount right away,” he said. “We’ve now waived that first six months of interest.”
He added that the Government of Alberta provides roughly $500 million to students each year in the form of scholarships, bursaries, remittances, and student loans.
“Alberta continues to have the largest number of scholarships and grants in the country,” Weadick said.
Around $71 million of the provided funds are in the form of scholarships, which are awards handed out based on academic excellence. Another $159 million are in the form of bursaries, which are monetary grants based on financial need.
He said that one of the main goals of the program is to attract more students to partake in post-secondary education.
“We’d like to see our overall high school completion numbers, as well as our college, university and trades entrances increase because more students will be able to access funds.
“That’s the goal, to try to make it easier for students that want an post-secondary education to get that needed financing.”