Ontario in dock for pocketing undergraduate funds

March 3, 2000

MONTREAL

Three Ontario students have returned cheques from a Canadian grant programme, claiming their provincial government is pocketing funds intended to ease their debt.

More students may soon join Sarah Dean, Mirwan Fayed and Colleen Handy and return the cheques, mostly for C$3,000 (Pounds 1,285), to the Canada Millennium Scholarship Foundation. The C$2.5 billion ten-year fund was created three years ago by the federal government to help bring down debt. It recently began mailing its first cheques to over 90,000 university and college students.

The fund's creation was a welcome relief to Ontario students, many of whom owe C$28,000 after four years of study. But Ontario has a safety-net programme to prevent a student's debt from rising by more than C$7,000 a year, and the Ontario government has decided to deduct the federal cheques from the gross amount rather than the real debt.

Recipients will be no better placed at the end of the year and most will be worse off, since the scholarship money is taxable and the levelling programme is not.

"In the private sector we call this embezzlement, but in the public sector we call it creative accounting," said Joel Harden, chair of the Canadian Federation of Students in Ontario.

Ontario's ministry of training, colleges and universities said the scholarships are part of a federal programme in which it had no say. It said the fact that students are being taxed on that money is also a federal issue.

Ms Dean, a fourth-year student at Laurentian University in Sudbury, Ontario, said: "How can that money go to the province when the cheque has my name on it?" Her annual tuition and ancillary fees rose from C$2,500 in 1995 to C$4,070 this year. "It's the government that benefits from this, not the students," said Ms Dean, who wrote to the scholarship fund, rejecting her C$3,000 cheque.

Ministry spokesperson Dave Ross said the money in question would be invested in higher education. "The money will go back into the system and will end up benefiting post-secondary students."

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