Canada to hike cost-of-living requirement for international students

If you are planning to study in Canada, it is going to be more expensive in the upcoming year. The Canadian government on Thursday revised the cost of living requirement threshold for international students to 20,635 Canadian dollars (CA$), up from the earlier CA$ 10,000.

Starting January 1, 2024, new study permit applicants to Canada will need to demonstrate financial resources of CA$ 20,635 in addition to their first-year tuition and travel costs. According to the Canadian government, the latest cost of living requirement represents 75 per cent of the low-income cut-off (LICO), the poverty line in Canada’s urban areas. LICO changes every year depending on inflation. 

 

What is the cost of living financial requirement?

International Students applying for Canadian study visas have to demonstrate financial preparedness by showing a minimum cost of funds to cover their living expenses in addition to tuition and travel. This can be done through various documents such as proof of bank statement, Guaranteed Investment Certificate (GIC), letter of financial support from a sponsor or scholarship or award letter. 

“By far the most popular way is to get a GIC from an approved bank for CA$ 10,000 (roughly Rs 6 lakh). The Canadian government has a list of Indian and Canadian banks that are authorised to issue a GIC to aspiring applicants. This amount is dispersed every quarter directly into the student's account after they reach Canada,” said Maria Mathai, Founder and Director of MMA Services,  a Delhi-based firm specialising in overseas studies. 

She further explained that applicants can also demonstrate the cost of living requirement by taking an education loan from the approved list of Indian banks or demonstrating sufficient financial net worth to cover their living costs by way of their and their family’s financial assets. 

“We are revising the cost-of-living threshold so that international students understand the true cost of living here. These long-overdue changes will protect international students from financially vulnerable situations and exploitation,” said Marc Miller, Minister of Immigration, Refugees and Citizenship. 

Point to note: CA$ 10,000 cost of living requirement for study permit applicants has not changed since the early 2000s.

What the revised cost of living threshold means for Indian students? 

Canada has emerged as one of the most favoured study destinations for Indian students. In 2022, over 3.6 lakh students opted to study in Canada,  up from just 2.6 lakh in 2021. Over five years (since 2018), Canada has increased its numbers from India by over 86 per cent.

Source: Indian Students Mobility Report 2023, M.M Advisory Services

According to one report, this number stands somewhere between 2.6 lakh this year till October. 

The cost of education in Canada for an average student varies based on the programme, school, and location. 

“University tuition typically ranges around CA$ 36,100 per year for international undergraduate students and CA$ 21,100 per year for international graduate students. Living costs are estimated to be around CA$ 15,000 per year for university students,” said Amit Singh, Founder, of UniScholars.
 

To illustrate the impact of the recent increase, Singh provided an example: Let's assume the average first-year tuition is CA$ 36,100, travel costs are CA$ 2,000, and the cost of living is CA$ 15,000. The total would be CA$ 53,100. With the new LICO requirement, the total cost for a single applicant would be CA$ 73,735, compared to the previous CA$ 63,000.

According to Mathai, this decision is likely going to be a factor more for the diploma-bound students – especially students who go to colleges for one-year programs. 

“Those PG diploma courses tuition fees are about Rs 9 lakh - Rs 12 lakh for the year. So far, the student had to have Rs 6 lakh additional as GIC security to cover living costs. With the new requirement, that security deposit is now more than Rs 12 lakh. The total cost for them now is Rs 14 lakh - Rs 18 lakh,” said Mathai. 

She further explained that undergraduate (UG) student will not experience a significant increase in their costs. UG programs typically span four years, with a tuition fee of at least Rs 15 lakh per year. Therefore, the total cost for this student has increased from Rs 66 lakh (Rs 60 lakh in tuition and Rs 6 lakh security deposit) to Rs 72 lakh. 

Most Master's and PhD courses are fully funded (except for MBA programs), so this announcement will not significantly impact those students.

The move will impact diploma-seeking students the most. 

Will this affect the number of Indian students applying for Canada?

The recent revision in the cost of living comes amid the ongoing diplomatic tension between India and Canada.

“Seventy per cent of the student visa volume to Canada was for diploma courses, the diplomatic issue has reduced Canada's capacity to process those visas. Now, the number of visa applicants for this program is likely to reduce because of the security deposit for living costs increase. To that extent, it will reduce the pressure on visa processing volumes for both diploma and university students,” said Mathai. 

However, the reduced pressure on the visa process is expected to come at a cost.
 

“Hiking up the minimum cost of living for visa application means a student might have to arrange these additional funds by themselves, much before credit (education loan) shows up, as the latter is likely to take a while to adapt to this change," said Akshay Chaturvedi, Founder & CEO of Leverage Edu. He further added that Canada has also been a big hit because it lets students earn while they learn, so whenever they do something like this, they are bound to lose some student flow.  

Canada’s Immigration, Refugees and Citizenship Canada (IRCC) has extended a policy allowing certain international students to work beyond the standard 20-hour-per-week limit for off-campus employment.

"The waiver on the 20-hour-per-week limit on the number of hours international students are allowed to work off campus while class is in session will be extended to April 30, 2024. International students already in Canada, as well as applicants who have already applied for a study permit as of December 7, 2023, will be able to work off campus more than 20 hours per week until that time.We continue to examine options for this policy in the future, such as expanding off-campus work hours for international students to 30 hours per week while class is in session”," said Marc Miller, Minister of Immigration, Refugees and Citizenship of Canada

“The extension of the 20-hour-per-week work limit for off-campus work provides students with increased flexibility to manage their finances, contributing to the overall appeal of studying in Canada,” said Amit Singh. 

Canada is among the preferred destinations for people from Punjab to study and settle down

In Punjab, Moga-based immigration consultancy services representative Rashpal Singh Sosan told PTI the expense to send students to Canada will rise by around Rs 6.50 lakh in the immediate aftermath of the Canadian government's decision to hike the cost-of-living financial requirement -- known as the Guaranteed Investment Certificate (GIC).

Parents will now have to arrange for more funds to send their children to Canada, he added.

With the new rules being implemented from January 1, many students and their parents are approaching immigration consultancies to expedite their files related to studies in Canada before December 31 to save themselves from the impact of the GIC hike.

Rahul Dangar, the representative of a Kapurthala-based immigration consultancy, told PTI that more than 40 students have approached their centre to expedite their cases since the Canadian government's announcement on the increase in cost-of-living financial requirement.

With inputs from PTI