CFS Calls For End of RESPs and Millennium Scholarships

ST. JOHN'S, NFLD. (CUP) -- The Canadian Federation of Students is urging the federal government to replace the Registered Education Savings Plan and the Millennium Scholarship Foundation with a national grants system. They call both pub- licly funded debt-reduction programs inad- equate and say that the government is channelling post-secondary money towards wealthy families.

The Registered Education Savings Plan (RESP) permits parents to save a maximum of $4,000 per year to prepare for their child's post-secondary education. Provided the money is later used to pay tuition fees, the government will not tax savings up to $42,000. In addition, the fed- eral government introduced the Canada Education Savings Grant (CESG) in 1998. This program adds to parents' contribution by 20 per cent for the first $2000 saved in an RESP, a yearly maximum of $400.

Ian Boyko, national chair of the Canadian Federation of Students (CFS), says the RESP and CESG programs consti- tute grants to upper middle-class families who can afford to save, instead of benefit- ing students without the means to pay for their education.

By forgoing tax revenue on RESPs and making contributions to them, the government is misdirecting public funds that should be spent on lower-

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income families, says Boyko. "All savings- based plans benefit those who are richer and can afford to save more."

"Our tax dollars and public fund- ing shouldn't be being channelled towards people who can afford to save that much.

It should be going in the other direction, to people who have no savings and won't be able to assist their chil- dren into goingto % post-second-

The CFS presented its recom- mendation in a brief to the federal government's finance commit- tee earlier this year. 7: Created * in 1998, the as Millennium Scholarship Foundation (MSF) was the result of a $2.5-billion investment by the Canadian government. The foundation awards bursaries ranging from $1,000 to $4,500 to students who demon- strate financial need and academic merit.

The grants are administered through provincial governments, who eval- uate candidates and distribute the money. As well, the MSF is currently conducting a research study on accessibility, which is being funded by $1-million from the feder- al government.

Boyko says the incorporation of the MSF program into the provincial framework was careless and undermined the fund's mandate. Although the federal

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contributions were meant to supplement, not replace, financial aid already coming from the provinces, some governments have not been honouring that policy, Boyko says.

"In Nova Scotia, the provincial government used that money to eliminate its loan remission program so, really, ee s no net gain for stu-

dents in the province of Nova Scotia," he said. "In

, ~ Ontario, although

t's signed the non-binding prekrnlanih s reinvest the Millennium Scholarship money into financial assis- tance .. . [their] Millennium Scholarship money is now being spent on everything from bursaries to toilet seats, which isn't the intent. So the actual impact on student debt is minimal."

Furthermore, Boyko said the stud- ies being conducted by the foundation, although necessary, highlight facts that emphasize the positive effects the Canadian government has had on educa- tion. :

"It's through this research pro- gram that [the foundation's] true colours have shown, in that they're merely acting now as an instrument of the federal gov-

ernment to justify higher tuition fees and higher student debt," said Boyko.

But Erin Stevenson, communica- tions director with the Canadian Alliance of Student Associations (CASA), said the benefits of the MSF outweigh its faults.

"There have been some problems in the past with the Millennium Scholarship but, overall, I don't think that people can walk away from the millions upon hundreds of millions of dollars that they're putting into students' pockets," she said.

Stevenson also says the federal . government does not exercise a great influ- ence over the foundation's research initia-

.. tives, as it is an independent organization.

"I can understand people's con-

&. cerns, but the Millennium Scholarship

} Foundation is an arms-length founda- tion. So they don't answer to the feder- al government and they take upon their F own research — it's not to back up any

' figures that the government's coming out

with," said Stevenson.

To address the problems it sees within the RESP and MSF programs, the CFS suggests that a nation-wide grants program be established with the money now being used for the existing programs.

Under the proposal, grants would be awarded through the Canada Student Loans program based on financial need. Any students currently benefiting from the present programs could apply for a grant under the new system — provided they demonstrate adequate need. The CFS rec- ommendations were presented to the feder- al government prior to the unveiling of the Liberals' budget.

"The response from government was scepticism, because the federal Liberals know very well that they have a strong voting support base in the upper-~ middle income demographic," Boyko said.

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