Newfoundland and Labrador to replace student loans with grants

| April 25, 2014
Photo: flickr/anne beaumont

Newfoundland and Labrador has become the first province set to entirely replace its student loans system with needs-based grants. The proposal was included as part of the governing Progressive Conservatives' earlier election platforms, and follows implementation of the removal of interest from student loans, which occurred in August 2009. Since then, Prince Edward Island and Nova Scotia have also eliminated loan interest. 

The Canadian Federation of Students (CFS) has praised the announcement. "The decision to replace provincial student loans with grants in Newfoundland and Labrador is a momentous victory for students. This shift from loan-based student financial assistance to non-repayable grants is something that we haven't seen in other provinces," said Jessica McCormick, National Chairperson of the CFS.

NDP leader Lorraine Michael praised the announcement, emphasizing that both student loan interest removal and a transition to needs-based grants had been part of her party's earlier election platforms.

Budget(s) in context

The new education policy was part of a provincial budget that outlined significant deficit spending and enhancements to a variety of health and social programs. This year's budget numbers lie in stark contrast to last year's highly unpopular one, which included hundreds of layoffs from provincial health authorities, among a range of other cuts, spending delays, new caps and fee increases. Some of those received strong criticism that led to their review and ultimate reversal. Other cuts were lessened or reversed in this year's budget, alongside new spending increases and programs.

Last year's budget was the last of former PC premier Kathy Dunderdale, who took over the party's leadership following Danny Williams' surprise resignation. However, a controversial reformation of information access laws and a perceived lack of leadership during province-wide power outages were among the many missteps that lead to the sharp decline of her personal popularity and that of the PCs themselves. This lead to Dunderdale's departure and the new premiership of Tom Marshall.

Combined with the province's elections set for 2015, the Marshall budget's spending profile caused opposition parties to label it an "election budget."

Lending context

Newfoundland's tuition levels have been low for a number of years due to successive tuition freezes by the PCs. A comparative study by the Canadian Centre for Policy Alternatives projected that Newfoundland's fees will be $2,655 in 2016-2017, compared to $6,969 in Nova Scotia. If their projections prove accurate, Ontario will have the highest fees at $8,756.

In recent years, among universities, only Quebec's tuition rates for in-province students have been lower than Newfoundland's. Manitoba's undergraduate tuition levels also fell well below the national average.

Student groups have worried about the fate of the tuition freeze, but plans to end it had never been officially floated, and upfront, needs-based grants had been partly introduced under Williams by lowering the maximum lending limit. These were introduced shortly after the phase-out of the Canada Millenium Scholarship Foundation, which had often been criticized by student groups for ineffective distribution of aid. The reforms to student aid will also include an increase to student earnings exemptions, which allow students to avoid having employment income clawed back.

Explaining low tuition levels

Newfoundland's historical political culture, its recent oil boom and convenience of timing for the PCs have all been identified as contributing reasons for the province's low tuition levels and a student aid package that is generous by national standards. Student groups have also frequently pointed out the importance of unified advocacy: Newfoundland is the only province where all student unions are members of the CFS. All other provinces have student unions that have left the CFS for the Canadian Alliance of Student Associations, formed partly over opposition to CFS activism over issues that are not directly related to student aid and education policy.

McCormick praised past student activism in Newfoundland, "The victory in Newfoundland and Labrador is a result of years of consistent lobbying and mobilization." She also expressed hope that "other provincial governments will now follow the lead of [Newfoundland] and take immediate action to make post-secondary education more affordable."

Timelines and amounts

The new enhancements will partly take effect this August, when the loan limit will be further reduced. Assessed need past this limit will be given as a non-repayable grant which, depending on the student's individual or family income, may equal or exceed tuitions amounts entirely. Provincial student aid disbursed for the term starting in September 2015 will consist entirely of loans.

A regular undergraduate course load itself at Memorial (MUN) costs $1,275 per half-year term, though student union fees, a recreation fee and mandatory health and dental insurance for those not otherwise covered may bring total costs closer to $1,500. These rates apply to all Canadian students, while eligibility for Newfoundland and Labrador student financial assistance will continue to depend on residency.

It is not known whether the transition from loans to grants will draw students into Newfoundland, but anecdotal evidence has long suggested that the province is drawing significant numbers of students from nearby Nova Scotia, where students are split between many public universities and pay some of the highest tuition in the country. However, at least some research has sought to uncover the motivations of students migrating from other provinces.

Dale Kirby, a MUN professor who is also the education critic for the provincial Liberals, found that "tuition was [a] highly relevant" motivation in a survey of Maritime students at MUN. More than half cited affordability as the primary reason for studying at MUN. Jonathan Williams, past executive director of StudentsNS, also believes low tuition rates an attraction for Nova Scotia students.

Importantly, the unintended consequences of Newfoundland's education reforms also address a unique policy concern for the province: population growth. Newfoundland has a declining birth rate and aging population, and launched a special strategy to address population growth in 2013. Attention to population size has been particularly important for Newfoundland, following massive outmigration after the 1992 cod moratorium, which left 30,000 people out of work.

Minister of Advanced Education, Joan Shea, affirmed connection between economic health and education when asked about tuition last year."[We] have less and less students graduating every year from our high schools [but] we are not having a declining enrolment in our postsecondary school institutions," she told the Globe and Mail last September. "We wanted to make sure in order to move this province forward we needed our young people to be educated, and we felt that an investment in education could not go wrong."

Cory Collins is a writer, artist and behaviour therapist. He has also written for the Island Review, Cordite Poetry Review, People's World and Aslan Media. He lives in St. John's and can be reached via

Photo: flickr/anne beaumont



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