Internal federal documents show concerns over fraud and misuse within Canada's student aid system helped drive recent legislative changes cutting off federal financial assistance to students attending private, for-profit schools outside the country.A briefing binder prepared by the Department of Employment and Social Development Canada warned of "growing concerns" related to fraud, integrity issues and financial risks tied to certain educational institutions, according to documents obtained through access to information."In recent years there have been growing concerns around certain educational institutions related to fraud, integrity and growing financial risk to the Government of Canada and students," the February 5 memo stated.The federal government did not publicly disclose those concerns when Parliament approved amendments to the Canada Student Financial Assistance Act earlier this year.The legislative changes, passed on March 26, make students attending private, for-profit colleges and universities abroad ineligible for Canada Student Loan grants and interest-free loans.Federal records show Ottawa provided $26.8 million in aid last year to approximately 2,000 Canadian students enrolled at for-profit institutions outside Canada.The internal briefing note stated that "concerns have been growing about fraud and misuse of student financial assistance," but did not identify any schools or provide specific examples.Officials wrote that the amendments were intended to "deny federal student financial assistance to students attending private, for-profit international institutions" and reduce the risks associated with schools operating outside direct Canadian oversight.The memo cited concerns regarding educational quality as well as "increased risk of fraud due to lack of direct federal or provincial and territorial oversight."The fraud concerns were not raised publicly by senior officials during parliamentary review of the legislation..Appearing before the Senate social affairs committee on Dec. 3, Jonathan Wallace, director general of student aid, described the proposed changes as a policy measure aimed at encouraging students to attend institutions that provide stronger educational outcomes and better value for taxpayers."This measure is aimed at encouraging students to pursue postsecondary education at institutions that provide the best educational outcomes and best value for money for both students and the Government of Canada," Wallace told senators.Wallace said approximately 220 institutions would be affected by the changes, including schools in the United States and the Caribbean.Among the examples he cited were DeVry University, National American University, Waldorf University, Grand Canyon University, MTI College, the Los Angeles Film School, the Charleston School of Law, Atlantis University, Columbia Southern University and Saint Michael College of Allied Health.He noted that public and non-profit institutions, including Harvard University and Gallaudet University, would remain eligible for federal student aid.Wallace also acknowledged the changes would affect Canadians pursuing medical degrees at private Caribbean institutions, where tuition costs can be substantially higher than at Canadian universities."I think St. George's University tuition for medical school is around US$76,000, which is astronomical," Wallace told senators. "I believe the University of Toronto is $30,000 by comparison."Wallace said the government decided to end funding for students attending private, for-profit international schools in part to reduce financial risk to both students and taxpayers."It was decided in order to reduce the risk to students and then also to the Crown, the government would no longer fund students to go to these institutions," he said.He added that studies and other evidence had documented concerns surrounding the schools affected by the policy change.
