What we examined (see Focus of the audit)

This audit focused on whether Employment and Social Development Canada and the Canada Revenue Agency efficiently managed financial assistance to post-secondary students and the risks to the public purse, while helping students attend colleges and universities. The audit also focused on whether the Financial Consumer Agency of Canada collaborated with stakeholders to strengthen students’ financial literacy.

Why we did this audit

This audit is important because the value of student loans that are not repaid to the federal government is significant, and according to the Chief Actuary of Canada, the value is expected to increase. Non-repayment of loans is a cost and could be a burden for taxpayers.

Overall message

Overall, we found that Employment and Social Development Canada needed to improve its management of some aspects of student financial assistance. In the 2018–19 fiscal year, the amount associated with non-repayment of student loans reached half a billion dollars. In addition, Employment and Social Development Canada needed to perform a more comprehensive evaluation of student financial assistance, to capture its full impact and the interactions among its programs.

The department did not take enough steps to ensure that borrowers understood their financial obligations. Also, the department did not properly verify borrowers’ eligibility for the Repayment Assistance Plan.

Although the Canada Revenue Agency was responsible for recovering student loans in default, we found that the agency did not have all the tools to perform this task effectively. As of 31 March 2019, the value of outstanding student loans in default amounted to $2.4 billion.

What we found about …

Financial assistance for students

• The management of some aspects of student financial assistance needed improvement

Entities Responses to Recommendations

The audited entities agree with our recommendations and has responded (see List of Recommendations).

Related information

Report of the	Auditor General of Canada
Type of product	Performance audit
Topics	Education and Training Financial Management and Government Spending Taxation
Entities	Employment and Social Development Canada Canada Revenue Agency Financial Consumer Agency of Canada
Completion date	20 December 2019
Tabling date	8 July 2020
Related audits	Chapter 2—Federal Loans and Grants for Post-Secondary Education—Human Resources and Social Development Canada and Canada Millennium Scholarship Foundation, 2007 May Report of the Auditor General of Canada

For more information

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