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In the early to mid-1990s, the federal government made massive cuts to post-secondary education transfer payments to the provinces. Most provinces passed on the cost of those cuts to students in the form of higher tuition fees. At the time, the Federation articulated the view that rising fees would result in reduced access to post-secondary education. Now, in 2003, a wide variety of studies substantiate the view that an increase in fees precipitates declining rates of participation among low and middle income Canadians.

Announced in the 1998 education budget, the Millennium Scholarship Foundation was a belated acknowledgement by the federal government of the student debt crisis in Canada. In the face of average debt levels of $25,000 the Millennium Scholarship Foundation was to be the centrepiece of the federal government's student debt reduction strategy. At the time of its introduction, Finance Minister Paul Martin declared in the House of Commons that the Foundation would help those in greatest need and reduce average student debt by $12,000. However, three years after its implementation the Foundation has proved to be largely a public relations exercise that has led to no appreciable decrease in student debt.

While all students in Canada have faced dramatic fee increases over the last decade, tuition fees for international students have become particularly burdensome in recent years. In 2002, average graduate tuition fees for international students reached $10,181, more than double the already high fees paid by Canadian citizens. At some universities, international graduate students pay up to $26,000 a year in tuition fees, and this figure rises to over $28,000 when professional programs such as medicine and law are included. These high differential fees are an unfair burden and a barrier to post-secondary education for international students. Ultimately, such fees will threaten Canada's ability to attract and retain the talented people needed to prosper in the future.

An 'income contingent' repayment loan scheme (ICR) is not a student aid plan but rather a funding model for post-secondary education. It is based on the belief that the individual is the primary beneficiary of a post-secondary education and should bear the full cost. The ICR is neither a progressive and fresh alternative to the Canada Student Loans Program nor is it intended to improve access to post-secondary education.

According to documents obtained under the Access to Information Act, the federal government is considering the implementation of income contingent student loan repayment.