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Canada Cost of Ontario's new financial-aid system for postsecondary could rise: Minister

Deb Matthews speaks to the media during a provincial health ministers meeting at The Royal York Hotel in Toronto on March, 2013 when she was still Ontario Health Minister. On Monday, Nov. 28, Ms. Matthews delivered her first major speech as Ontario postsecondary education minister to set out her office's priorities for how to improve college and university education in the province.

Peter Power/The Globe and Mail

The Ontario government says it may have to increase postsecondary spending next fall when its new financial aid system is rolled out.

In the spring, the government announced it would redesign financial aid to scrap a complicated package of grants, loans and tax credits and replace it with a single program, the Ontario Student Grant, which reduces tuition up front. The goal is to cover average university and college tuition for students from families earning less than $50,000 a year and to make it easier for students to know what they will pay before they begin their studies. Finance Minister Charles Sousa said the cost of the new package would be roughly the same as the $1.3-billion currently being spent on financial aid.

But on Monday, Deb Matthews, the Deputy Premier and Minister of Advanced Education and Skills Development, said it was "quite possible" the amount would rise.

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"We've made a pretty important commitment," Ms. Matthews said. "This is a high priority for our government, so we are going to make sure that we get it right."

At the same time, the government is considering what to do about the 3-per-cent cap it imposed three years ago on tuition increases for most undergraduate degrees. (Professional and graduate programs have higher caps.) An announcement on allowable increases for 2017 and possibly beyond is expected in January.

Some student groups are concerned tuition could rise quickly if the government removes or increases the cap.

"We have been concerned that we have a government more interested in spinning than in discussing the tuition-fee framework," said Rajean Hoilett, the chairperson of the Canadian Federation of Students – Ontario (CFS).

Ms. Matthews said that if the CFS understood the redesign, it would be "cheering from the rooftops."

"This is an improved student aid program," she said. "It's a far superior system that will have tremendous benefits for low- and middle-income families."

Yet, she also allowed that some students could end up graduating with higher debt loads.

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Those from less advantaged families will receive grants, while wealthier students will be able to access loans – and with those loans, their debt will increase, especially if tuition rises.

"We are making up for that parental contribution with access to student aid," Ms. Matthews said. But "students don't have to take the loan."

Other student groups support the changes, arguing that the new system will make the true cost of postsecondary education instantly visible.

"A high sticker price is an aversion to our students," said Jamie Cleary, the president of the Ontario Undergraduate Student Alliance. "Students are waiting for these changes to be implemented."

The government is also close to putting a new funding formula for universities up for discussion. For years, the province has been negotiating with universities and colleges on how to move away from rewarding increasing enrolment to recognizing particular strengths.

The province also wants to measure and improve student graduation rates, skills and employability. Employers and universities are far apart in their perception of graduates' skills, Ms. Matthews said. Changes to funding will be one way to bring them closer together.

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"The funding that institutions get will depend in part on the outcomes of their graduates," she said.

In addition, the government will be creating roundtables where issues such as skills can be resolved between universities, companies, labour and the government.

Universities welcome the initiative. "Our own universities are doing more co-op learning and experiential learning," said David Lindsay, the president of the Council of Ontario Universities. "I think it's going to become a problem with capacity. Are there enough employers to deliver on all the demands?"

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