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Student debt: Lifting the veil on financial aid

Students are unaware of all the financial aids available to them. With rising food and housing costs, stakeholders are calling for reform and better dissemination of information.


Last month, the Quebec Student Union published a report on university student funding and debt in Quebec, prepared by the Groupe de recherche en économie publique appliquée.It showed that 41.1 per cent of university student loans were obtained through private financial institutions rather than the student financial assistance program. Government-funded student loans, bursary programs and bank loans account for about 88.5 per cent of all student loans, a proportion which varies by program eligibility. Among eligible students, 53.5 per cent of debt is held by government programs, while among ineligible students, 73.7 per cent is held by banks. The report also revealed that students’ top expenses are housing (28.9 per cent), tuition (16.7 per cent), food (15.9 per cent) and transportation (7.2 per cent).

“When parents can’t meet their children’s financial needs, student loans provide crucial support in paying for tuition, books and other expenses,” said Jacinthe Cloutier, a faculty member of the consumer sciences department at Université Laval. Other factors influencing parental purchasing power also have an impact on students. “In recent years in particular, inflation has made it hard for parents to save – for their children or for themselves,” she said.

Debt puts students under constant pressure. “The main result is stress. For some, it’s overwhelming. It keeps them from focusing on coursework, and they end up dropping out. Others hold down two jobs to cover their loans. This could be avoided if they weren’t under such a large financial burden,” Dr. Cloutier said.

On Oct. 20, the Observatoire sur la réussite en enseignement supérieur (ORES) released a report, Accessibilité financière aux études : Quelles conditions pour la réussite étudiante, which analyzed current barriers to financial aid in Quebec higher education and suggested ways to promote student success in a time of inflation and a rising cost of living.

ORES director Julie Gagné highlighted student mental health as “a major concern – especially since the pandemic – that is often connected to other issues.”

Food and housing

Along with a needs-focused structured financial aid system and relevant paid student work, the report identified two other key socioeconomic factors to support student success: access to a healthy diet and affordable housing.

Students who experience food insecurity are three times more likely to suffer from depression and anxiety or to pause coursework. This can lead to lower grades, increases failure rates and can inevitably delay graduation. As a result, half of those students end up not graduating at all. Similarly, 64 per cent of students who rent a place to live spend around 30 per cent of their monthly income on housing. For nearly half, this has an impact on their studies. The housing crisis is worsening this situation, particularly for students renting private apartments outside their budgets. Getting stakeholders to collaborate and identify best practices is crucial, according to Audrey Bouchard-Lachance, who is responsible for knowledge mobilization at ORES. She says that solutions vary by institution and local context. “To meet these needs, institutions must partner with community organizations and build food security and access to housing into their strategic plans.”

ORES believes that university boards and administrations can play an important role by promoting partnerships to build affordable housing, pushing for tax exemptions and developing institutional policies to reduce student food insecurity. It also emphasizes that international student recruiting and campus life services must work together to better align housing strategies. ORES also recommends that Quebec’s department of higher education increase the financial aid allocated to housing and food and focus on ensuring students have a livable income that guarantees equitable access to housing and a healthy diet.

The importance of financial aid advice

University financial aid advisers are a valuable resource. They provide personalized guidance for each student’s specific situation. The Association québécoise des responsables d’aide financière aux étudiant.e.s represents financial aid staff at all Quebec universities and many CEGEPs. According to its president, Yan Martel, the association’s primary objective is “to foster communication between members.” Noting that its members help students achieve financial wellness, he emphasized the importance of “financial literacy, sharing best practices and encouraging the sound management of personal finances.”

Mr. Martel, who is himself a financial aid adviser at Université du Québec à Trois-Rivières, explained that students lack awareness about the available programs and how to apply for them. He believes that it is essential to make this information accessible and understandable to students.

Mr. Martel advocates for explaining the benefits of a university education to students from day one. He recommends empowering each faculty and department to host talks by former students and undertake other initiatives to promote the career prospects their programs offer. “The goal is to help them understand that university education isn’t just a driver of debt. It’s an investment in the future.” He added that programs that have adopted this forward-looking approach have already observed a significant difference in how students see the future.

The role of CCAFE

In Quebec, the Comité consultatif sur l’accessibilité financière aux études (CCAFE) advisory committee provides the minister of higher education with advice on the financial accessibility of education. Its 16 members conduct studies, consult stakeholders, examine financial regulations and guidelines and produce plain language information on subjects like financial aid.

“The committee makes recommendations – some perennial – on how to improve financial aid programs,” said CCAFE coordinator Maryse Tétreault. She too lamented students’ lack of awareness about the resources available to them. “Committee members have underscored that many students are unaware of the government’s financial aid programs or think that the application process is too complicated. This could be one reason for the decrease in applications for financial aid in recent years.”

The president of CCAFE, Éric Tessier, agrees. “Two years ago, the government ran a campaign to inform students that they could be eligible for financial aid. In spite of that, there was a slight drop in financial aid applications, but that appears to have stabilized.” He added, “We are also considering developing case studies to help students understand their eligibility for financial aid.”

According to Ms. Tétreault, the minister also has a role to play in sharing and improving access to information about these programs. “We find that many eligible students don’t apply or never complete the application process. Although that could be due to several reasons, it suggests that simplifying the application form and procedure would allow more students to get the financial aid they’re entitled to.”

While access to financial aid for out-of-province students is already quite limited, the situation could worsen if the Quebec government moves ahead with the tuition fee increase it announced for those students in October. This decision “could affect the financial capacity of institutions to offer financial aid, since some of the fees they have collected since the 2018 deregulation of tuition for foreign students has been earmarked for that type of support,” Mr. Tessier said. “These increases could drive away students, and they fail to resolve the issue of university underfunding,” he said, noting that CCAFE was not consulted on the question. “We nonetheless plan on meeting with university leaders to assess the impact. We’ll look at the revenue generated by these increases and how it can be used to help already enrolled Quebec students.”

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